EBIX INC00008145492020FYfalse1111133.33P3Y00008145492020-01-012020-12-31xbrli:shares00008145492021-04-23iso4217:USD00008145492020-06-3000008145492019-01-012019-12-3100008145492018-01-012018-12-31iso4217:USDxbrli:shares00008145492020-12-3100008145492019-12-310000814549us-gaap:CommonStockMember2017-12-310000814549us-gaap:AdditionalPaidInCapitalMember2017-12-310000814549us-gaap:RetainedEarningsMember2017-12-310000814549us-gaap:AccumulatedOtherComprehensiveIncomeMember2017-12-310000814549us-gaap:NoncontrollingInterestMember2017-12-3100008145492017-12-310000814549us-gaap:AccountingStandardsUpdate201409Memberus-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2017-12-310000814549us-gaap:AccountingStandardsUpdate201409Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2017-12-310000814549ebix:AccountingStandardsUpdate201409ASC34040Memberus-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2017-12-310000814549ebix:AccountingStandardsUpdate201409ASC34040Membersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2017-12-310000814549us-gaap:RetainedEarningsMember2018-01-012018-12-310000814549us-gaap:NoncontrollingInterestMember2018-01-012018-12-310000814549us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-01-012018-12-310000814549us-gaap:CommonStockMember2018-01-012018-12-310000814549us-gaap:AdditionalPaidInCapitalMember2018-01-012018-12-310000814549us-gaap:CommonStockMember2018-12-310000814549us-gaap:AdditionalPaidInCapitalMember2018-12-310000814549us-gaap:RetainedEarningsMember2018-12-310000814549us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-310000814549us-gaap:NoncontrollingInterestMember2018-12-3100008145492018-12-310000814549us-gaap:RetainedEarningsMember2019-01-012019-12-310000814549us-gaap:NoncontrollingInterestMember2019-01-012019-12-310000814549us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-12-310000814549us-gaap:CommonStockMember2019-01-012019-12-310000814549us-gaap:AdditionalPaidInCapitalMember2019-01-012019-12-310000814549us-gaap:CommonStockMember2019-12-310000814549us-gaap:AdditionalPaidInCapitalMember2019-12-310000814549us-gaap:RetainedEarningsMember2019-12-310000814549us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310000814549us-gaap:NoncontrollingInterestMember2019-12-310000814549us-gaap:RetainedEarningsMember2020-01-012020-12-310000814549us-gaap:NoncontrollingInterestMember2020-01-012020-12-310000814549us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-12-310000814549us-gaap:CommonStockMember2020-01-012020-12-310000814549us-gaap:AdditionalPaidInCapitalMember2020-01-012020-12-310000814549us-gaap:CommonStockMember2020-12-310000814549us-gaap:AdditionalPaidInCapitalMember2020-12-310000814549us-gaap:RetainedEarningsMember2020-12-310000814549us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310000814549us-gaap:NoncontrollingInterestMember2020-12-31xbrli:pure0000814549ebix:PMLJVMember2020-01-012020-12-310000814549ebix:PMLJVMember2018-01-012018-12-310000814549ebix:PMLJVMember2019-01-012019-12-31iso4217:INRebix:revenue_stream0000814549us-gaap:CertificatesOfDepositMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310000814549us-gaap:CertificatesOfDepositMember2020-12-310000814549us-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel1Member2020-12-310000814549us-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel2Member2020-12-310000814549us-gaap:FairValueInputsLevel3Memberus-gaap:CertificatesOfDepositMember2020-12-310000814549us-gaap:MutualFundMember2020-12-310000814549us-gaap:MutualFundMemberus-gaap:FairValueInputsLevel1Member2020-12-310000814549us-gaap:MutualFundMemberus-gaap:FairValueInputsLevel2Member2020-12-310000814549us-gaap:FairValueInputsLevel3Memberus-gaap:MutualFundMember2020-12-310000814549us-gaap:FairValueInputsLevel1Member2020-12-310000814549us-gaap:FairValueInputsLevel2Member2020-12-310000814549us-gaap:FairValueInputsLevel3Member2020-12-310000814549ebix:ContingentAccruedEarnOutAcquisitionConsiderationMember2020-12-310000814549ebix:ContingentAccruedEarnOutAcquisitionConsiderationMemberus-gaap:FairValueInputsLevel1Member2020-12-310000814549ebix:ContingentAccruedEarnOutAcquisitionConsiderationMemberus-gaap:FairValueInputsLevel2Member2020-12-310000814549ebix:ContingentAccruedEarnOutAcquisitionConsiderationMemberus-gaap:FairValueInputsLevel3Member2020-12-310000814549us-gaap:CertificatesOfDepositMemberus-gaap:FairValueMeasurementsRecurringMember2019-12-310000814549us-gaap:CertificatesOfDepositMember2019-12-310000814549us-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel1Member2019-12-310000814549us-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel2Member2019-12-310000814549us-gaap:FairValueInputsLevel3Memberus-gaap:CertificatesOfDepositMember2019-12-310000814549us-gaap:MutualFundMember2019-12-310000814549us-gaap:MutualFundMemberus-gaap:FairValueInputsLevel1Member2019-12-310000814549us-gaap:MutualFundMemberus-gaap:FairValueInputsLevel2Member2019-12-310000814549us-gaap:FairValueInputsLevel3Memberus-gaap:MutualFundMember2019-12-310000814549us-gaap:FairValueInputsLevel1Member2019-12-310000814549us-gaap:FairValueInputsLevel2Member2019-12-310000814549us-gaap:FairValueInputsLevel3Member2019-12-310000814549ebix:ContingentAccruedEarnOutAcquisitionConsiderationMember2019-12-310000814549ebix:ContingentAccruedEarnOutAcquisitionConsiderationMemberus-gaap:FairValueInputsLevel1Member2019-12-310000814549ebix:ContingentAccruedEarnOutAcquisitionConsiderationMemberus-gaap:FairValueInputsLevel2Member2019-12-310000814549ebix:ContingentAccruedEarnOutAcquisitionConsiderationMemberus-gaap:FairValueInputsLevel3Member2019-12-310000814549us-gaap:DerivativeMember2020-01-012020-12-31ebix:product_service_group0000814549country:IN2020-01-012020-12-310000814549country:IN2019-01-012019-12-310000814549country:IN2018-01-012018-12-310000814549country:US2020-01-012020-12-310000814549country:US2019-01-012019-12-310000814549country:US2018-01-012018-12-310000814549country:AU2020-01-012020-12-310000814549country:AU2019-01-012019-12-310000814549country:AU2018-01-012018-12-310000814549srt:LatinAmericaMember2020-01-012020-12-310000814549srt:LatinAmericaMember2019-01-012019-12-310000814549srt:LatinAmericaMember2018-01-012018-12-310000814549srt:EuropeMember2020-01-012020-12-310000814549srt:EuropeMember2019-01-012019-12-310000814549srt:EuropeMember2018-01-012018-12-310000814549country:CA2020-01-012020-12-310000814549country:CA2019-01-012019-12-310000814549country:CA2018-01-012018-12-310000814549country:SG2020-01-012020-12-310000814549country:SG2019-01-012019-12-310000814549country:SG2018-01-012018-12-310000814549country:ID2020-01-012020-12-310000814549country:ID2019-01-012019-12-310000814549country:ID2018-01-012018-12-310000814549country:PH2020-01-012020-12-310000814549country:PH2019-01-012019-12-310000814549country:PH2018-01-012018-12-310000814549country:AE2020-01-012020-12-310000814549country:AE2019-01-012019-12-310000814549country:AE2018-01-012018-12-310000814549country:NZ2020-01-012020-12-310000814549country:NZ2019-01-012019-12-310000814549country:NZ2018-01-012018-12-310000814549country:MU2020-01-012020-12-310000814549country:MU2019-01-012019-12-310000814549country:MU2018-01-012018-12-310000814549ebix:IndianLedMember2020-01-012020-12-310000814549ebix:IndianLedMember2019-01-012019-12-310000814549ebix:IndianLedMember2018-01-012018-12-310000814549ebix:EbixCashExchangesMember2020-01-012020-12-310000814549ebix:EbixCashExchangesMember2019-01-012019-12-310000814549ebix:EbixCashExchangesMember2018-01-012018-12-310000814549ebix:InsuranceExchangesMember2020-01-012020-12-310000814549ebix:InsuranceExchangesMember2019-01-012019-12-310000814549ebix:InsuranceExchangesMember2018-01-012018-12-310000814549ebix:RCSMember2020-01-012020-12-310000814549ebix:RCSMember2019-01-012019-12-310000814549ebix:RCSMember2018-01-012018-12-3100008145492021-01-012020-12-3100008145492022-01-012020-12-3100008145492023-01-012020-12-3100008145492024-01-012020-12-3100008145492025-01-012020-12-310000814549us-gaap:BilledRevenuesMember2020-12-310000814549us-gaap:UnbilledRevenuesMember2020-12-310000814549us-gaap:BilledRevenuesMember2019-12-310000814549us-gaap:UnbilledRevenuesMember2019-12-31ebix:segmentebix:reporting_unit0000814549ebix:EbixHealthJVMember2020-01-012020-12-310000814549us-gaap:CustomerRelationshipsMemberebix:EbixHealthJVMember2020-01-012020-12-310000814549us-gaap:CustomerRelationshipsMembersrt:MinimumMember2020-01-012020-12-310000814549us-gaap:CustomerRelationshipsMembersrt:MaximumMember2020-01-012020-12-310000814549us-gaap:DevelopedTechnologyRightsMembersrt:MinimumMember2020-01-012020-12-310000814549us-gaap:DevelopedTechnologyRightsMembersrt:MaximumMember2020-01-012020-12-310000814549ebix:AirportContractsMembersrt:MaximumMember2020-01-012020-12-310000814549ebix:StoreNetworksMembersrt:MaximumMember2020-01-012020-12-310000814549ebix:DealerNetworksMembersrt:MinimumMember2020-01-012020-12-310000814549ebix:DealerNetworksMembersrt:MaximumMember2020-01-012020-12-310000814549ebix:BrandMembersrt:MaximumMember2020-01-012020-12-310000814549us-gaap:TrademarksMembersrt:MinimumMember2020-01-012020-12-310000814549us-gaap:TrademarksMembersrt:MaximumMember2020-01-012020-12-310000814549us-gaap:NoncompeteAgreementsMembersrt:MaximumMember2020-01-012020-12-310000814549us-gaap:DatabasesMembersrt:MaximumMember2020-01-012020-12-310000814549us-gaap:CustomerRelationshipsMember2020-12-310000814549us-gaap:CustomerRelationshipsMember2019-12-310000814549us-gaap:DevelopedTechnologyRightsMember2020-12-310000814549us-gaap:DevelopedTechnologyRightsMember2019-12-310000814549ebix:DealerNetworksMember2020-12-310000814549ebix:DealerNetworksMember2019-12-310000814549ebix:AirportContractsMember2020-12-310000814549ebix:AirportContractsMember2019-12-310000814549ebix:StoreNetworksMember2020-12-310000814549ebix:StoreNetworksMember2019-12-310000814549us-gaap:TrademarksMember2020-12-310000814549us-gaap:TrademarksMember2019-12-310000814549ebix:BrandMember2020-12-310000814549ebix:BrandMember2019-12-310000814549us-gaap:NoncompeteAgreementsMember2020-12-310000814549us-gaap:NoncompeteAgreementsMember2019-12-310000814549us-gaap:OrderOrProductionBacklogMember2020-12-310000814549us-gaap:OrderOrProductionBacklogMember2019-12-310000814549us-gaap:DatabasesMember2020-12-310000814549us-gaap:DatabasesMember2019-12-310000814549us-gaap:CustomerRelationshipsMember2020-12-310000814549us-gaap:CustomerRelationshipsMember2019-12-310000814549ebix:EZDataMemberus-gaap:CustomerRelationshipsMember2009-01-012009-12-310000814549ebix:EZDataMemberus-gaap:CustomerRelationshipsMember2020-09-300000814549ebix:EZDataMemberus-gaap:CustomerRelationshipsMember2020-07-012020-09-300000814549ebix:ASC34040Member2018-01-012018-01-010000814549ebix:ASC34040Member2018-01-012018-12-310000814549us-gaap:BuildingMember2020-01-012020-12-310000814549us-gaap:BuildingImprovementsMember2020-01-012020-12-310000814549us-gaap:ComputerEquipmentMember2020-01-012020-12-310000814549us-gaap:FurnitureAndFixturesMember2020-01-012020-12-310000814549us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2020-01-012020-12-310000814549us-gaap:LandImprovementsMember2020-01-012020-12-310000814549ebix:TrimaxMember2020-05-042020-05-040000814549ebix:AsureEdgeMember2020-10-310000814549ebix:AsureEdgeMember2020-10-012020-10-310000814549ebix:WallstreetCanadaMember2019-08-232019-08-230000814549ebix:EsselMember2019-01-012019-01-010000814549srt:MaximumMemberebix:EsselMember2019-01-010000814549ebix:ZilliousMember2019-01-010000814549ebix:ZilliousMember2019-01-012019-01-010000814549ebix:ZilliousMembersrt:MaximumMember2019-01-010000814549ebix:FinalAllocationMemberebix:EsselMember2019-01-010000814549ebix:FinalAllocationMemberebix:ZilliousMember2019-01-010000814549ebix:FinalAllocationMemberebix:WallstreetCanadaMember2019-08-230000814549ebix:FinalAllocationMember2019-12-310000814549ebix:TrimaxMemberebix:FinalAllocationMember2020-05-040000814549ebix:AsureEdgeMemberebix:FinalAllocationMember2020-10-010000814549ebix:FinalAllocationMember2020-12-310000814549ebix:AssureEdgeAndTrimaxMember2020-01-012020-12-310000814549ebix:EsselForexZilliousAndWallstreetCanadaMember2019-01-012019-12-310000814549ebix:AssureEdgeAndTrimaxMember2020-12-310000814549ebix:EsselForexZilliousAndWallstreetCanadaMember2019-12-310000814549us-gaap:CustomerRelationshipsMember2020-01-012020-12-310000814549us-gaap:CustomerRelationshipsMember2019-01-012019-12-310000814549us-gaap:DevelopedTechnologyRightsMember2020-01-012020-12-310000814549us-gaap:DevelopedTechnologyRightsMember2019-01-012019-12-310000814549ebix:AgentNetworkMember2020-12-310000814549ebix:AgentNetworkMember2020-01-012020-12-310000814549ebix:AgentNetworkMember2019-12-310000814549ebix:AgentNetworkMember2019-01-012019-12-310000814549ebix:AirportContractsMember2020-01-012020-12-310000814549ebix:AirportContractsMember2019-01-012019-12-310000814549ebix:StoreNetworksMember2020-01-012020-12-310000814549ebix:StoreNetworksMember2019-01-012019-12-310000814549ebix:BrandMember2020-01-012020-12-310000814549ebix:BrandMember2019-01-012019-12-310000814549ebix:BranchNetworkMember2020-12-310000814549ebix:BranchNetworkMember2020-01-012020-12-310000814549ebix:BranchNetworkMember2019-12-310000814549ebix:BranchNetworkMember2019-01-012019-12-310000814549us-gaap:CustomerRelationshipsMemberebix:FinalAllocationAdjustmentMember2020-12-310000814549us-gaap:CustomerRelationshipsMemberebix:FinalAllocationAdjustmentMember2020-01-012020-12-310000814549us-gaap:CustomerRelationshipsMemberebix:FinalAllocationAdjustmentMember2019-12-310000814549us-gaap:CustomerRelationshipsMemberebix:FinalAllocationAdjustmentMember2019-01-012019-12-310000814549ebix:RegionsBankMemberus-gaap:RevolvingCreditFacilityMember2014-08-050000814549ebix:RegionsBankMember2020-12-310000814549ebix:RegionsBankMemberebix:SecuredTermLoanMember2020-03-300000814549ebix:CitiBankMemberebix:SecuredSyndicatedCreditFacilityMemberus-gaap:RevolvingCreditFacilityMember2020-12-310000814549ebix:CitiBankMemberebix:SecuredSyndicatedCreditFacilityMemberus-gaap:RevolvingCreditFacilityMember2020-01-012020-12-310000814549ebix:CitiBankMemberebix:SecuredSyndicatedCreditFacilityMemberus-gaap:RevolvingCreditFacilityMember2019-12-310000814549ebix:RegionsBankMemberebix:SecuredSyndicatedCreditFacilityEighthAmendmentMemberus-gaap:RevolvingCreditFacilityMember2019-01-012019-12-310000814549ebix:RegionsBankMemberebix:SecuredSyndicatedCreditFacilitySecondAmendmentMemberebix:SecuredTermLoanMember2020-12-310000814549ebix:SecuredSyndicatedCreditFacilityNinthAmendmentMemberebix:RegionsBankMemberebix:SecuredTermLoanMember2020-12-310000814549ebix:SecuredSyndicatedCreditFacilityNinthAmendmentMemberebix:RegionsBankMemberebix:SecuredTermLoanMember2020-01-012020-12-310000814549ebix:RegionsBankMemberebix:SecuredSyndicatedCreditFacilityEighthAmendmentMemberebix:SecuredTermLoanMember2019-12-310000814549ebix:SecuredSyndicatedCreditFacilityNinthAmendmentMemberebix:RegionsBankMember2020-12-310000814549ebix:SecuredSyndicatedCreditFacilityNinthAmendmentMemberebix:RegionsBankMemberus-gaap:RevolvingCreditFacilityMember2020-12-310000814549ebix:SecuredSyndicatedCreditFacilityNinthAmendmentMemberebix:RegionsBankMember2019-12-310000814549ebix:SecuredSyndicatedCreditFacilityNinthAmendmentMemberebix:RegionsBankMemberus-gaap:RevolvingCreditFacilityMember2019-12-310000814549ebix:SecuredSyndicatedCreditFacilityNinthAmendmentMemberebix:RegionsBankMemberebix:SecuredTermLoanMember2019-12-31ebix:complaint00008145492013-05-012013-05-3100008145492013-06-102013-06-100000814549us-gaap:SettledLitigationMember2019-04-052019-04-05iso4217:USDebix:Person0000814549srt:MaximumMember2020-01-012020-12-310000814549srt:MaximumMember2020-12-310000814549country:INsrt:MaximumMember2020-01-012020-12-310000814549country:IN2020-12-310000814549country:IN2019-12-31ebix:plan0000814549ebix:EmployeeandNonemployeesMember2020-01-012020-12-310000814549ebix:EmployeeandNonemployeesMember2019-01-012019-12-310000814549ebix:EmployeeandNonemployeesMember2018-01-012018-12-310000814549us-gaap:EmployeeStockOptionMember2020-01-012020-12-310000814549us-gaap:EmployeeStockOptionMember2019-01-012019-12-310000814549us-gaap:EmployeeStockOptionMember2018-01-012018-12-310000814549ebix:WithinPlansMember2017-12-3100008145492017-01-012017-12-310000814549ebix:WithinPlansMember2018-01-012018-12-310000814549ebix:WithinPlansMember2018-12-310000814549ebix:WithinPlansMember2019-01-012019-12-310000814549ebix:WithinPlansMember2019-12-310000814549ebix:WithinPlansMember2020-01-012020-12-310000814549ebix:WithinPlansMember2020-12-310000814549ebix:NonvestedOptionSharesMember2017-12-310000814549ebix:NonvestedOptionSharesMember2018-01-012018-12-310000814549ebix:NonvestedOptionSharesMember2018-12-310000814549ebix:NonvestedOptionSharesMember2019-01-012019-12-310000814549ebix:NonvestedOptionSharesMember2019-12-310000814549ebix:NonvestedOptionSharesMember2020-01-012020-12-310000814549ebix:NonvestedOptionSharesMember2020-12-310000814549ebix:ExercisePriceRangeOneMember2020-01-012020-12-310000814549ebix:ExercisePriceRangeOneMember2020-12-310000814549ebix:A41.60ExercisePriceRangeMember2020-01-012020-12-310000814549ebix:A41.60ExercisePriceRangeMember2020-12-310000814549ebix:A42.56ExercisePriceRangeMember2020-01-012020-12-310000814549ebix:A42.56ExercisePriceRangeMember2020-12-310000814549ebix:A49.22ExercisePriceRangeMember2020-01-012020-12-310000814549ebix:A49.22ExercisePriceRangeMember2020-12-310000814549ebix:A52.92ExercisePriceRangeMember2020-01-012020-12-310000814549ebix:A52.92ExercisePriceRangeMember2020-12-310000814549ebix:A53.90ExercisePriceRangeMember2020-01-012020-12-310000814549ebix:A53.90ExercisePriceRangeMember2020-12-31ebix:Installment0000814549us-gaap:RestrictedStockMember2020-01-012020-12-310000814549us-gaap:RestrictedStockMember2017-12-310000814549us-gaap:RestrictedStockMember2018-01-012018-12-310000814549us-gaap:RestrictedStockMember2018-12-310000814549us-gaap:RestrictedStockMember2019-01-012019-12-310000814549us-gaap:RestrictedStockMember2019-12-310000814549us-gaap:RestrictedStockMember2020-12-310000814549ebix:DepreciationAndAmortizationTimingDifferenceMember2020-12-310000814549ebix:DepreciationAndAmortizationTimingDifferenceMember2019-12-310000814549ebix:ShareBasedCompensationTimingDifferenceMember2020-12-310000814549ebix:ShareBasedCompensationTimingDifferenceMember2019-12-310000814549ebix:AccrualsAndPrepaidsMember2020-12-310000814549ebix:AccrualsAndPrepaidsMember2019-12-310000814549ebix:BadDebtTimingDifferenceMember2020-12-310000814549ebix:BadDebtTimingDifferenceMember2019-12-310000814549ebix:AcquiredIntangibleAssetsTimingDifferenceMember2020-12-310000814549ebix:AcquiredIntangibleAssetsTimingDifferenceMember2019-12-310000814549ebix:NetOperatingLossCarryforwardsNolMember2020-12-310000814549ebix:NetOperatingLossCarryforwardsNolMember2019-12-310000814549us-gaap:ValuationAllowanceTaxCreditCarryforwardMember2020-12-310000814549us-gaap:ValuationAllowanceTaxCreditCarryforwardMember2019-12-310000814549us-gaap:DomesticCountryMember2020-12-310000814549us-gaap:DomesticCountryMember2019-12-310000814549us-gaap:StateAndLocalJurisdictionMember2020-12-310000814549us-gaap:StateAndLocalJurisdictionMember2019-12-310000814549us-gaap:ForeignCountryMember2020-12-310000814549us-gaap:ForeignCountryMember2019-12-3100008145492017-02-060000814549us-gaap:ComputerEquipmentMember2020-12-310000814549us-gaap:ComputerEquipmentMember2019-12-310000814549us-gaap:BuildingMember2020-12-310000814549us-gaap:BuildingMember2019-12-310000814549us-gaap:LandMember2020-12-310000814549us-gaap:LandMember2019-12-310000814549us-gaap:LandImprovementsMember2020-12-310000814549us-gaap:LandImprovementsMember2019-12-310000814549us-gaap:LeaseholdImprovementsMember2020-12-310000814549us-gaap:LeaseholdImprovementsMember2019-12-310000814549us-gaap:FurnitureAndFixturesMember2020-12-310000814549us-gaap:FurnitureAndFixturesMember2019-12-310000814549srt:MinimumMember2020-01-012020-12-310000814549us-gaap:ForeignPlanMember2020-01-012020-12-310000814549us-gaap:ForeignPlanMember2019-01-012019-12-310000814549us-gaap:ForeignPlanMember2018-01-012018-12-310000814549country:IN2018-12-310000814549country:US2020-12-310000814549country:US2019-12-310000814549country:US2018-12-310000814549country:AU2020-12-310000814549country:AU2019-12-310000814549country:AU2018-12-310000814549srt:LatinAmericaMember2020-12-310000814549srt:LatinAmericaMember2019-12-310000814549srt:LatinAmericaMember2018-12-310000814549srt:EuropeMember2020-12-310000814549srt:EuropeMember2019-12-310000814549srt:EuropeMember2018-12-310000814549country:CA2020-12-310000814549country:CA2019-12-310000814549country:CA2018-12-310000814549country:SG2020-12-310000814549country:SG2019-12-310000814549country:SG2018-12-310000814549country:ID2020-12-310000814549country:ID2019-12-310000814549country:ID2018-12-310000814549country:PH2020-12-310000814549country:PH2019-12-310000814549country:PH2018-12-310000814549country:AE2020-12-310000814549country:AE2019-12-310000814549country:AE2018-12-310000814549country:NZ2020-12-310000814549country:NZ2019-12-310000814549country:NZ2018-12-310000814549country:MU2020-12-310000814549country:MU2019-12-310000814549country:MU2018-12-310000814549ebix:PrimarilyINDIAMember2020-01-012020-12-310000814549ebix:PrimarilyINDIAMember2019-01-012019-12-310000814549ebix:PrimarilyINDIAMember2018-01-012018-12-310000814549ebix:RegionsBankMember2020-01-012020-12-310000814549ebix:RegionsBankMember2019-01-012019-12-310000814549ebix:RegionsBankMember2018-01-012018-12-310000814549ebix:RegionsBankMember2020-12-310000814549ebix:RegionsBankMember2019-12-310000814549ebix:BMOMember2020-01-012020-12-310000814549ebix:BMOMember2019-01-012019-12-310000814549ebix:BMOMember2020-12-310000814549ebix:BMOMember2019-12-310000814549ebix:EbixVayamJVMemberebix:VayamMember2020-01-012020-12-310000814549ebix:EbixVayamJVMemberebix:VayamMember2019-01-012019-12-310000814549ebix:EbixVayamJVMemberebix:VayamMember2020-12-3100008145492020-01-012020-03-3100008145492020-04-012020-06-3000008145492020-07-012020-09-3000008145492020-10-012020-12-3100008145492019-01-012019-03-3100008145492019-04-012019-06-3000008145492019-07-012019-09-3000008145492019-10-012019-12-3100008145492018-01-012018-03-3100008145492018-04-012018-06-3000008145492018-07-012018-09-3000008145492018-10-012018-12-310000814549ebix:EbixVayamJVMember2016-02-070000814549ebix:EbixVayamJVMember2016-02-072016-02-070000814549ebix:EbixVayamJVMemberebix:VayamMember2019-12-310000814549ebix:EbixHealthJVMember2015-09-010000814549ebix:EbixHealthJVMember2015-09-012015-09-010000814549ebix:IHCMemberebix:EbixHealthJVMember2020-01-012020-12-310000814549ebix:IHCMemberebix:EbixHealthJVMember2019-01-012019-12-310000814549ebix:IHCMemberebix:EbixHealthJVMember2020-12-310000814549ebix:IHCMember2020-01-012020-12-310000814549ebix:IHCMember2019-01-012019-12-310000814549ebix:IHCMember2020-12-310000814549srt:MinimumMemberebix:ContinuingMedicalEducationProductsMember2020-01-012020-12-310000814549ebix:ContinuingMedicalEducationProductsMembersrt:MaximumMember2020-01-012020-12-310000814549ebix:PropertyandCasualtyExchangeMember2020-01-012020-12-310000814549ebix:EbixCashExchangesMember2020-01-012020-12-310000814549srt:MinimumMember2020-12-310000814549us-gaap:BankOverdraftsMembercountry:INsrt:MinimumMember2020-01-012020-12-310000814549us-gaap:BankOverdraftsMembercountry:INsrt:MaximumMember2020-01-012020-12-310000814549us-gaap:CustomerConcentrationRiskMember2020-01-012020-12-310000814549us-gaap:SubsequentEventMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-04-092021-04-090000814549us-gaap:SubsequentEventMemberus-gaap:BaseRateMember2021-04-092021-04-090000814549us-gaap:SubsequentEventMember2021-04-092021-04-090000814549us-gaap:SubsequentEventMember2021-03-152021-03-150000814549us-gaap:AllowanceForCreditLossMember2019-12-310000814549us-gaap:AllowanceForCreditLossMember2018-12-310000814549us-gaap:AllowanceForCreditLossMember2017-12-310000814549us-gaap:AllowanceForCreditLossMember2020-01-012020-12-310000814549us-gaap:AllowanceForCreditLossMember2019-01-012019-12-310000814549us-gaap:AllowanceForCreditLossMember2018-01-012018-12-310000814549us-gaap:AllowanceForCreditLossMember2020-12-310000814549us-gaap:ValuationAllowanceOperatingLossCarryforwardsMember2019-12-310000814549us-gaap:ValuationAllowanceOperatingLossCarryforwardsMember2018-12-310000814549us-gaap:ValuationAllowanceOperatingLossCarryforwardsMember2017-12-310000814549us-gaap:ValuationAllowanceOperatingLossCarryforwardsMember2020-01-012020-12-310000814549us-gaap:ValuationAllowanceOperatingLossCarryforwardsMember2019-01-012019-12-310000814549us-gaap:ValuationAllowanceOperatingLossCarryforwardsMember2018-01-012018-12-310000814549us-gaap:ValuationAllowanceOperatingLossCarryforwardsMember2020-12-31
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2020
OR
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-15946
Ebix, Inc.
(Exact name of registrant as specified in its charter)
Delaware   77-0021975
(State or other jurisdiction of incorporation)   (I.R.S. Employer Identification Number)
     
1 Ebix Way    
Johns Creek, Georgia   30097
(Address of principal executive offices)   (Zip Code)
Registrant’s telephone number, including area code: (678) 281-2020
Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading symbol (s) Name of each exchange on which registered
Common Stock, par value $0.10 per share EBIX The Nasdaq Stock Market

Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes þ No o
Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes o No þ
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 þ No o


Table of Contents
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer o Accelerated filer þ Non-accelerated filer o Smaller reporting company
        (Do not check if a smaller reporting company)  
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under section 404(b) of the Sarbanes-Oxley Act (15U.S.C 7262(b0) by the registered public accounting firm that prepared or issued its audit report.                     
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No þ
As of April 23, 2021, the number of shares of Common Stock outstanding was 30,942,871. As of June 30, 2020 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of Common Stock held by non-affiliates, based upon the last sale price of the shares as reported on the Nasdaq Global Capital Market on such date, was approximately $500 million (for this purpose, the Company has assumed that directors, executive officers are affiliates, as well as holders of more than 10% of the Company’s common stock that have indicated some intent to exercise control).





EBIX, INC.
INDEX TO ANNUAL REPORT ON FORM 10-K
  Page
  Reference
2
   
13
   
31
 
31
 
31
 
32
   
33
 
35
 
36
 
46
 
53
 
104
 
106
 
109
 
109
 
113
   
124
 
126
 
127
   
128
 
129
132
   
133
 Exhibit 101



SAFE HARBOR REGARDING FORWARD-LOOKING STATEMENTS

As used herein, the terms “Ebix,” “the Company,” “we,” “our” and “us” refer to Ebix, Inc., a Delaware corporation, and its consolidated subsidiaries as a combined entity, except where it is clear that the terms mean only Ebix, Inc.
    This Form 10-K contains forward-looking statements and information within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include statements regarding future economic conditions, operational performance and financial condition, liquidity and capital resources, acceptance of the Company's products by the market, potential acquisitions and management's plans and objectives. Words such as “may,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “seek,” “plan,” “project,” “continue,” “predict,” “will,” and other words or expressions of similar meaning are intended by the Company to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements are based on our current expectations about future events or results and information that is currently available to us, involve assumptions, risks, and uncertainties, and speak only as of the date on which such statements are made.
    Our actual results may differ materially from those expressed or implied in these forward-looking statements. Factors that may cause such a difference, include, but are not limited to:
the willingness of independent insurance agencies to outsource their computer and other processing needs to third parties;
our ability to raise additional financing to support our capital requirements;
the impact of restrictive covenants in our senior secured syndicated credit facility;
our ability to make new business acquisitions and integrate such acquired businesses into our operations;
pricing and other competitive pressures and the Company's ability to gain or maintain share of sales as a result of actions by competitors and others;
our ability to develop new products and respond to rapid technological changes;
disruptions in internet connections and the protection of information transmitted over the internet;
changes in estimates in critical accounting judgments;
the effective protection of our intellectual property;
changes in or failure to comply with laws and regulations, including accounting standards,
taxation requirements (including tax rate changes, new tax laws and revised tax interpretations) in domestic or foreign jurisdictions;
exchange rate fluctuations and other risks associated with investments and operations in foreign countries (particularly in Singapore, Australia and India wherein we have significant operations);
volatility in equity markets, including market disruptions and significant interest rate fluctuations, which may impede our access to, or increase the cost of, external financing; and
international conflict, including terrorist acts.

    These and other risks are described in more detail in Part I Item 1A, "Risk Factors", as well as in other reports subsequently filed with the SEC.
    Except as expressly required by the federal securities laws, the Company undertakes no obligation to update any such factors, or to publicly announce the results of, or changes to any of the forward-looking statements contained herein, to reflect future events, developments or changed circumstances, or for any other reason.
    Readers should carefully review the disclosures and the risk factors described in this and other documents we file from time to time with the SEC, including future reports on Forms 10-Q and 8-K, and any amendments thereto.
    You may obtain our SEC filings at our website, www.ebix.com under the “Investor Information” section, or over the internet at the SEC's web site, www.sec.gov.




Table of Contents
PART I


Item 1. BUSINESS
Company Overview
    Ebix, Inc. (“Ebix”, the “Company,” “we” or “our”), a Delaware corporation, was founded in 1976 as Delphi Systems, Inc. In December 2003, the Company changed its name to Ebix, Inc. The Company is listed on the Nasdaq Global Market ("Nasdaq").
    The Company has its worldwide headquarters in Johns Creek, Georgia, and also has domestic and international operations spread across over 50 offices. The countries in which the Company has operating facilities and offices, include, among others, Australia, Brazil, Canada, India, Indonesia, New Zealand, Philippines, Singapore, the United Kingdom ("U.K."), United Arab of Emirates and the United States of America ("United States" or "U.S."). In these locations, Ebix employs skilled technology and business professionals who provide products, services, support and consultancy services to thousands of customers in approximately 70 countries across six continents.

    The Company’s technology vision is to focus on the convergence of all insurance and financial exchange channels, processes and entities for seamless data flow. The Company's products feature fully customizable and scalable on-demand software designed to streamline the way insurance professionals manage distribution, marketing, sales, customer service, and accounting activities.
    Ebix's goal is to be a leading facilitator of insurance and financial transactions in the world. The Company strives to work collaboratively with clients to develop innovative technology strategies and solutions that address specific business challenges and requirements. Ebix combines the newest technologies with its capabilities in consulting, systems design and integration, IT and business process outsourcing, applications software, and web and application hosting to meet the individual needs of organizations. In the Insurance sector, the Company’s main focus is to develop and deploy a wide variety of insurance and reinsurance exchanges on an on-demand basis, while also providing Software-as-a-Service ("SaaS") enterprise solutions in the area of customer relationship management ("CRM"), front-end & back-end systems, outsourced administrative and risk compliance.
    The Company’s EbixCash Exchanges (“EbixCash”) division has developed into an integral and leading source of our revenue and profits. With a "Phygital” strategy that combines over 320,000 physical distribution outlets in India and many Associations of Southeast Asian Nations (“ASEAN”) countries, to an Omni-channel online digital platform, the Company’s EbixCash Financial exchange portfolio encompasses leadership in the areas of domestic & international money remittance, foreign exchange (Forex), travel, pre-paid & gift cards, utility payments, software solutions for lending and wealth management, etc. in India and other markets. EbixCash’s Forex operations have emerged as a leader in India’s airport Forex business with operations in 20 international airports, including Delhi, Mumbai, Hyderabad, Chennai and Kolkata, combined conducting over $4.8 billion in gross transaction value per year (pre-COVID-19). EbixCash’s inward remittance business in India processes approximately $5 billion in gross annual remittance volume (pre-COVID-19) and is the clear market leader. EbixCash, through its travel portfolio of Via and Mercury, is one of Southeast Asia’s leading travel exchanges, with over 200,000 agents, 25 branches and over 9,800 corporate clients, combined processing an estimated $2.5 billion in gross merchandise value per annum (pre-COVID-19).
The Company’s E-learning solutions are provided to schools across the breadth of India with the goal of educating students in classrooms through high quality 2-D and 3-D animation and multimedia learning.
    During the year ended December 31, 2020, approximately 91% of Ebix revenues came from EbixCash and Insurance Exchanges. International revenue accounted for 73.4% and 68.6% of the Company’s total revenue for the twelve months ended December 31, 2020 and 2019, respectively.

Acquisition & Integration Strategy

    While not entirely critical to our future profitability or liquidity, the Company views acquisitions as an integral part of its growth strategy, an efficient way to further expand its reach, and an effective utilization of the operating cash generated from the Company's business. We are strategic and selective when making acquisitions. We look to make complementary accretive acquisitions as and when the Company has sufficient liquidity, stable cash flows, and, if necessary, access to financing at attractive interest rates.

2

    The Company seeks to acquire businesses that complement Ebix's existing products and services. Any acquisition made by Ebix typically will fall into one of two different categories: (i) the acquired company has products and/or services that are competitive to our existing products and services; or (ii) the acquired company's products and services are either a complement to or an extension of our existing products and services or our core business competencies.

    In cases where an acquired company's products and services are competitive to our existing products and services, upon acquisition, the Company immediately strives towards the goal of providing a single product or service in the functional area with a common code base around the world, rather than having multiple products addressing the same need. In each case, the Company immediately works towards assimilating the best of breed functionality on a common architecture. The Company's goal remains to provide easy-to-use solutions for our customer base, while ensuring that any product or service integrates seamlessly with other existing or outside functionalities. Regardless of whether the acquired company's product/service is retired, or the existing Ebix product/service is retired, the Company is focused on maximizing operational efficiency for our business while creating cutting-edge products and services that make future product sales more robust and maintenance more efficient.

    Once an acquisition is consummated, the infrastructure, human resources, sales, product management, development, and other common functions are integrated with our existing operations to ensure that efficiencies are maximized and redundancies eliminated. We generally do not maintain separate sales, development, product management, implementation or quality control functions following the closing of any acquisition. The Company integrates and, where appropriate, centralizes certain key functions, such as product development, information technology, marketing, sales, finance, administration, and quality assurance, immediately after an acquisition to ensure that the Company can maximize cost efficiencies. Simultaneously with the integration of any acquired company, the Company's resources and infrastructure are leveraged to work across multiple functions, products and services, making it neither practical nor feasible to precisely track and disclose separately the specific earnings impact from the business combinations we have executed after they have been acquired. Consequently, the concept of “acquisitive growth” versus “organic growth” becomes obscured given the dynamics and underlying operating principals of Ebix's acquisition, integration, and growth strategy. This tactic is a key part of our business strategy that facilitates high levels of efficiency, operating income margins and consistent end-to-end vision for our business. Our plan is to make niche acquisitions in the insurance, international financial exchange, e-learning, and healthcare sectors, integrate them seamlessly into the Company and make them efficient by implementing Ebix's standardized processes, with the goal of increasing operating profits and cash flows for the Company.

    In many of the acquisitions made by the Company there are contingent consideration terms associated with the achievement of certain designated revenue targets for the acquired Company. This structure allows us to follow through with our integration strategy, while enabling the acquired company to be eligible for revenue-based contingent purchase consideration. Accordingly, we are able to maximize operational productivity while allowing the principals of the acquired company to maximize the potential economics from the sale process.

    The Company's integration strategies are targeted at improving the efficiency of our business, centralizing key functions, exercising better control over our operations, and providing consistent technology and product vision across all functions, entities and products. This is a key part of our business philosophy designed to enable Ebix to operate at a high level of efficiency and facilitate a consistent end-to-end strategic vision for the industries we serve.

Recent Strategic Business Acquisitions

During the year ended December 31, 2020 the Company completed two business acquisitions, as follows:

Trimax- Effective May 4, 2020, Ebix acquired from bankruptcy India-based Trimax, which provides IT and integration services to state-owned transport corporations, operates data centers, and is an IT infrastructure solution provider, for approximately $9.9 million of upfront consideration. Additionally, Ebix issued preferred shares in Trimax to the selling shareholders that can be sold five years from the closing of the acquisition based on an independent valuation performed by a Big 4 valuation firm. The maximum potential value of the preferred shares is approximately $9.9 million. The valuation and purchase price allocation remains preliminary and will be finalized as soon as practicable but in no event longer than one year from the effective date of this transaction.

AssureEdge- Effective October 1, 2020 the Company acquired a 70% interest in AssureEdge Global Services (“AssureEdge”) for a total purchase price of approximately $5.0 million, including net working capital acquired. AssureEdge is pan-India based business process outsourcing ("BPO") company, with a variety of BPO offerings via six contact centers across India. It serves a number of industries and clients that have cross-selling value for EbixCash services. The valuation and purchase price allocation remains preliminary and will be finalized as soon as practicable but in no event longer than one year from the effective date of this transaction.
3


    During the year ended December 31, 2019 the Company completed three business acquisitions, as follows:
    Wallstreet Canada - Effective August 23, 2019, Ebix acquired Canada-based Wall Street Finance (Canada) Ltd. ("Wallstreet Canada"), a foreign exchange and outward remittance service provider, for approximately $2.1 million of upfront consideration inclusive of net acquired working capital.
    Essel Forex - Effective January 1, 2019, Ebix acquired the assets of India-based Essel Forex Limited ("Essel Forex"), for approximately $8.7 million, plus possible future contingent earn-out payments of up to $721 thousand based on revenues. Ebix funded the entire transaction in cash using its internal cash reserves. Essel Forex is a large provider of foreign exchange services in India with a wide spectrum of related products, including sales of all major currencies, travelers’ checks, demand drafts, remittances, money transfers and prepaid cards primarily for corporate clients. The earn-out period expired on December 31, 2019 and the acquired business did not meet the requisite revenue target, so no earn out payment was due or paid.
    Zillious - Effective January 1, 2019, Ebix acquired an 80% controlling stake in India-based Zillious Solutions Private Limited ("Zillious") for $10.1 million plus possible future contingent earn-out payments of up to $2.2 million based on agreed to milestones in the acquisition agreement. Zillious is an on-demand SaaS travel technology solution in the corporate travel segment in India. The Company determined that the fair value of the contingent earn-out consideration was zero as of September 30, 2020 and at December 31, 2020.
Industry Overview
    The insurance and financial industry markets have initiatives to reduce paper-based processes and facilitate efficiencies of both the back-end and the consumer-end (front-end) sides of processes. This evolution has involved all industry constituents and is directly impacting the manner in which various products are distributed. Management believes that both industries will continue to experience significant change and increased efficiencies through online exchanges as reduced paper-based processes are becoming increasingly a norm across world markets.
Products and Services
    The Company reports as a single segment. The Company’s revenues are derived from three product/service groups. Presented in the table below is the breakout of our revenue streams for each of those product/service groups for the years ended December 31, 2020, 2019, and 2018:
For the Year Ended
December 31,
(In thousands) 2020 2019 2018
EbixCash Exchanges 388,293  319,953  217,457 
Insurance Exchanges 178,111  190,067  192,604 
Risk Compliance Solutions 59,205  70,595  87,765 
Totals $ 625,609  $ 580,615  $ 497,826 
    Information on the geographic dispersion of the Company’s revenues and long-lived assets is furnished in Note 14 to the consolidated financial statements, included in Part II Item 8 of this Form 10-K. See Item 1A (Risk Factors) for discussion of certain risks related to our foreign operations.
    The Company’s product and service strategy focuses on: (a) expansion of connectivity between all entities via its EbixCash and EbixExchange family of products in the financial, foreign currency exchange, travel, life, health, workers compensation, risk management, annuity and property and casualty ("P&C") sectors; (b) worldwide sales and support of P&C back-end insurance and broker management systems; (c) worldwide sale, customization, development, implementation and support of its P&C back-end insurance carrier system platforms; (d) risk compliance solution services, which include insurance certificate origination, certificate tracking, claims adjudication call center, consulting services and back office support; and (e) e-governance/e-learning solutions in emerging world markets. Ebix also provides software development, customization, and consulting services to a variety of entities in the insurance industry, including carriers, brokers, exchanges and standards-making bodies.
4

    Ebix’s revenue streams come from three product/service channels, as discussed in the following paragraphs. The Company derives its revenues primarily from our financial transaction fees, software subscription and transaction fees, software license fees, risk compliance solution services fees, and professional service fees, including associated fees for consulting, implementation, training, and project management provided to customers with installed systems and applications.
EbixCash Exchanges ("EbixCash")

    EbixCash revenues are primarily derived from the sales of prepaid gift cards and consideration paid by customers for financial transaction services, including services like transferring or exchanging money. The significant majority of EbixCash revenue is for a single performance obligation and is recognized at a point in time. These revenues vary by transaction based upon channel, send and receive locations, the principal amount sent, whether the money transfer involves different send and receive currencies, and speed of service, as applicable.

    EbixCash also offers several other services, including payment services and ticketing and travel services for which revenue is impacted by varying factors. EbixCash acts as the principal in most transactions and reports revenue on a gross basis, as EbixCash controls the service at all times prior to transfer to the customer, is primarily responsible for fulfilling the customer contracts, has the risk of loss, and has the ability to establish transaction prices.

    The main services from which EbixCash derives revenue are as follow:

Gift Cards

    EbixCash sells general purpose prepaid gift cards to corporate customers and consumers that can be later redeemed at various merchants. The gift cards are co-branded between EbixCash and its card-issuing banking partner(s) and are affiliated with major payment associations such as VISA, Mastercard, and Rupay. The gift cards are sold to a diversified set of corporate customers from various industries. The gift cards are used by corporate customers to disburse incentives to the end users, which are primarily their employees, agents and business associates. The gift cards sold by EbixCash are not reloadable, cannot be used at ATMs or for any other cash-out or funds transfer transactions, and are subject to maximum limits per card (currently INR10,000 or approximately $140). Gift cards issued by EbixCash are valid for a period of 15 months from the date of issuance for virtual cards and three years for physical cards. EbixCash has entered into arrangements with banks and financial institutions to settle payments to merchants based on utilization of the gift cards.

The Company has end-to-end responsibilities related to the gift cards sold, from the activation and ongoing utilization of the gift cards to customer service responsibilities to risk of loss due to fraud on the gift cards sold. EbixCash acts a principal in the sale of gift cards and, thus, gift card revenue is recognized on a gross basis (full purchase value at the time of sale) with the corresponding cost of the gift cards recorded as cost of services provided. Unredeemed gift cards at December 31, 2020 are not significant to the financial results of the Company and are recorded as deferred revenues in the financial results.

EbixCash Travel Exchanges

    EbixCash Travel revenues are derived from commissions and transaction fees received from various travel providers and international exchanges involved in the sale of travel to the consumer. EbixCash Travel revenue is for a single performance obligation and is recognized at a point in time. Travel revenues include: (i) reservation commissions, segment fees from global travel exchange providers, and transaction net revenues (i.e., the amount charged to travelers less the amount owed to travel service providers) in connection with our reservation services; (ii) ancillary fees, including travel insurance-related revenues and certain reservation booking fees; and (iii) credit card processing rebates and customer processing fees. EbixCash Travel services include the sale of hotel rooms, airline tickets, bus tickets and train tickets. EbixCash’s Travel revenue is also derived from ticket sales, wherein the commissions payable to EbixCash Travel, along with any transaction fees paid by travel providers and travel exchanges, is recognized as revenue after completion of the service. The transaction price on such services is agreed upon at the time of the purchase.

    EbixCash Travel revenue for the corporate MICE (Meetings, Incentives, Conferences, and Exhibitions) packages is recognized at full purchase value at the completion of the obligation, with the corresponding costs recorded under direct expenses. For MICE revenues, EbixCash Travel acts as the principal in transactions and, accordingly, reports revenue on a gross basis. EbixCash Travel controls the service at all times prior to transfer to the customer, is responsible for fulfilling the customer contracts, has the risk of loss, and has the ability to establish transaction prices.

5

EbixCash Money Transfer

    For the EbixCash money transfer business, EbixCash has one performance obligation whereupon the customer engages EbixCash to perform one integrated service. This performance obligation typically occurs instantaneously when the beneficiary entitled to receive the money transferred by the sender visits the EbixCash outlet and collects the money. Accordingly, EbixCash recognizes revenue upon completion of the following: (i) the customer’s acknowledgment of EbixCash’s terms and conditions and the receipt of payment information; (ii) the money transfer has been processed; (iii) the customer has received a unique transaction identification number; and (iv) funds are available to be picked up by the beneficiary. The transaction price is comprised of a transaction fee and the difference between the exchange rate set by EbixCash to the customer and the rate available in the wholesale foreign exchange market, as applicable, both of which are readily determinable at the time the transaction is initiated.

Foreign Exchange and Outward Remittance Services

    For EbixCash’s foreign exchange and payment services, customers agree to terms and conditions for all transactions, either at the time of initiating a transaction or signing a contract with EbixCash to provide payment services on the customer’s behalf. In the majority of EbixCash’s foreign exchange and payment services, EbixCash makes payments to the recipient to satisfy its performance obligation to the customer, and therefore, EbixCash recognizes revenue on foreign exchange and payment when this performance obligation has been fulfilled.

Consumer Payment Services

    EbixCash offers several different bill payment services that vary by considerations, including among other factors: (i) who pays the fee to EbixCash (consumer or biller); (ii) whether the service is offered to all potential consumers, or only to those for which EbixCash has a relationship with the biller; and (iii) whether the service utilizes a physical agent network offered for consumers’ convenience, among other factors. The determination of which party is EbixCash’s customer for revenue recognition purposes is based on these considerations for each of EbixCash’s bill payment services. For all transactions EbixCash’s customers agree to EbixCash’s terms and conditions, either at the time of initiating a transaction (where the consumer is determined to be the customer for revenue recognition purposes) or upon signing a contract with EbixCash to provide services on the biller’s behalf (where the biller is determined to be the customer for revenue recognition purposes). As with consumer money transfers, customers engage EbixCash to perform one integrated service - collecting money from the consumer and processing the bill payment transaction. This service provides the billers real-time or near real-time information regarding their customers’ payments and simplifies the billers’ collection efforts. The transaction price on bill payment services is contractual and determinable. Certain biller agreements may include per-transaction or fixed periodic rebates, which EbixCash records as a reduction to revenue.

EbixCash Technology Services
    
    EbixCash also offers on-demand technology to various providers in the area of lending, wealth and asset management, and travel across the world.

Insurance Exchanges
    
    Insurance Exchanges revenues are primarily derived from consideration paid by customers related to our SaaS platforms, related services and the licensing of software. A typical contract for our SaaS platform will also include services for setup, customization, transaction processing, maintenance, and/or hosting. Determining whether products and services are considered distinct performance obligations that should be accounted for separately may require significant judgement. Set-up and customization services, related to our SaaS platforms, are not considered to be distinct from the usage fees associated with the SaaS platform and, accordingly, are accounted for as a single performance obligation. These services, along with the usage or transaction fees, are recognized over the contract duration, which considers the significance of the upfront fees in the context of the contract and which may, therefore, exceed the initial contracted term.
    Contracts generally do not contain a right of return or refund provisions. Our contracts often do contain overage fees, contingent fees, or service level penalties which are accounted for as variable consideration. Revenue accounted for as variable consideration is immaterial and is recognized using the “right to invoice” practical expedient when the invoiced amount equals the value provided to the customer.
Software-as-a-Service
6


    The Company allocates the transaction price to each distinct performance obligation using the relative stand-alone selling price. Determining the stand-alone selling price may require significant judgement. The stand-alone selling price is the price at which an entity has sold or would sell a promised good or service separately to a customer. The Company determines the stand-alone selling price based on observable price of products or services sold separately in comparable circumstances, when such observable prices are available. When standalone selling price is not directly observable, the Company estimates the stand-alone selling price using the market assessment approach by considering historical pricing and other market factors.

Software Licenses
    Software license revenues attributable to a software license that is a separate performance obligation are recognized at the point in time that the customer obtains control of the license.
Subscription Services

    Subscription services revenues are associated with performance obligations that are satisfied over specific time periods and primarily consist of post-contract support services. Revenue is generally recognized ratably over the contract term. Our subscription contracts are generally for an initial three-year period with subsequent one-year automatic renewals.

Transaction Fees
    
    Transaction revenue is comprised of fees applied to the volume of transactions that are processed through our SaaS platforms. These are typically based on a per-transaction rate and are invoiced for the same period in which the transactions were processed and as the performance obligation is satisfied. The amount invoiced generally equals the value provided to the customer, and revenue is typically recognized when invoiced using the as-invoiced practical expedient.

Professional Services

    Professional service revenue primarily consists of fees for setup, customization, training, or consulting. Professional service fees are generally on a time and materials basis or a fixed fee. Revenues for time and materials are recognized as such services are rendered while fixed fee revenues are recognized based on the input method driven by the expected hours to complete the project measured against the actual hours completed to date. Professional services, particularly related to SaaS platforms, may have significant dependencies on the related licensed software and may not be considered a distinct performance obligation.

Risk Compliance Services ("RCS")

    RCS revenues consist of two revenue streams - Certificates of Insurance ("COI") and Consulting Services. COI revenues are derived from consideration paid by customers for the creation and tracking of certificates of insurance. These are transactional-based revenues. Consulting Services revenues are driven by distinct consulting service engagements rendered to customers for which revenues are recognized using the output method on a time and material basis as the services are performed.

COI Creation and Tracking

    The Company provides services to issue and track certificates of insurance in the U.S. and Australian markets. Revenue is derived from transaction fees for each certificate issued or tracked. The Company recognizes revenue at the issuance of each certificate or over the period the certificate is being tracked.

Consulting Services

    The Company provides consulting services to clients around the world for project management and development. Consulting services fees are generally earned on either a time and materials or a fixed fee basis. Revenues for time and materials are recognized using an output method as the services are rendered, while fixed fee revenues are recognized based on the input method driven by the expected hours to complete the project measured against the actual hours completed to date.

Product Development
7

The Company focuses on maintaining high quality product development standards. Product development activities include research and the development of platform and/or client specific software enhancements, such as adding functionality, improving usefulness, increasing responsiveness, adapting to newer software and hardware technologies, or developing and maintaining the Company’s websites.
The Company has spent $35.3 million, $45.3 million, and $39.1 million during the years ended December 31, 2020, 2019 and 2018, respectively, on product development initiatives. The Company’s product development efforts are focused on the continued enhancement and redesign of the EbixCash, Insurance Exchange, broker systems, carrier systems, and RCS product and service lines to keep our technology at the cutting edge in the markets we compete. Development efforts also provide new technologies for insurance carriers, brokers and agents, and the redesign, coding and development of new services for international and domestic markets.
Competition
We believe Ebix is the only company worldwide in insurance and financial software markets that provides services in all three of our above listed revenue channels. Conversely, though, this also means that in each of these areas Ebix has different competitors. In fact, in most of these areas Ebix has a different competitor locally in each region in which it operates. In our Insurance Exchange and EbixCash operations Ebix often has a different competitor on each line of exchange in each country, but the scale of these entities is often very limited.
     The Company has centralized worldwide product development, intellectual property rights development and software and system development operations in Dubai, Singapore, and India. With its strong focus on quality, our Indian operations deliver cutting-edge solutions for our customers across the world. India is rich in technical skills and the cost structure is significantly lower as compared to the U.S. Ebix continues to expand its India operations as a learning center of excellence, with a strong focus on hiring skilled professionals with expertise in insurance systems and software applications. This focus on building this knowledge base, combined with the ability to hire more professional resources in India's lower cost structure, has enabled Ebix to consistently protect its knowledge base and to deliver projects in a cost-effective fashion. The following is a closer and more detailed discussion of our competition in each of these three main channels.
EbixCash

With a "Phygital” strategy that combines over 320,000 physical distribution outlets in India and many Associations of Southeast Asian Nations (“ASEAN”) countries, to an Omni-channel online digital platform, the Company’s EbixCash Financial exchange portfolio encompasses leadership in the areas of domestic & international money remittance, Forex, travel, pre-paid & gift cards, utility payments, software solutions for lending and wealth management, etc. in India and other markets. EbixCash’s Forex operations have emerged as a leader in India’s airport foreign exchange business with operations in 20 international airports, including Delhi, Mumbai, Hyderabad, Chennai and Kolkata, combined conducting over $4.8 billion in gross transaction value per year (pre-COVID-19). EbixCash’s inward remittance business in India processes approximately $5 billion in gross annual remittance volume (pre-COVID-19) and is the clear market leader. EbixCash, through its travel portfolio of Via and Mercury, is one of Southeast Asia’s leading travel exchanges, with over 200,000 agents, 25 branches and over 9,800 corporate clients, combined processing an estimated $2.5 billion in gross merchandise value per annum (pre-COVID-19).

EbixCash Forex (EbixCash World Money): EbixCash’s Forex operations have emerged as a dominant leader in India’s Forex industry, with operations in 20 international Indian airports and 10 ports serving hundreds of corporate customers, hotels, Duty Free Shops, temples, educational institutes etc.

EbixCash World Money is now the largest non-bank foreign exchange operation in India in all business segments, including the retail, corporate and bank notes businesses. The company holds a more than 30% market share in the student segment (part of retail), wherein students' overseas education expenses are processed by EbixCash World Money. EbixCash World Money is the largest non-bank corporate Forex provider in the country with more than 2,200 corporate relationships. Competition is fragmented and is comprised of banks such as ICICI Bank and HDFC Bank, along with money exchange companies such as Thomas Cook.

Currently, EbixCash is the single largest money exchange operator at airports in India. EbixCash World Money is also the largest bank note aggregator amongst non-banks, dealing in over 80 different currencies, the highest by any non-bank entity in the business segment.

The EbixCash inward remittance business continues to hold a dominant position in India and is the principal agent for large Money Transfer Operations ("MTOs") such as Western Union, Moneygram, Ria, and Transfast. EbixCash processed
8

more than six million transactions in 2020. EbixCash is the largest network partner for Western Union globally and an exclusive partner for Moneygram in India. EbixCash also processes over 65% of all Ria transactions in India through its agent network.
EbixCash Travel & Holidays: EbixCash Travel and Holidays is a 360-degree holiday and travel solutions enterprise with a holistic focus on delivering exceptional travel experience in all genres such as holiday, travel, airline, luxury train travel/holidays, buses, cabs, MICE, sporting events, and others.
Indian travel business enterprises are categorized in the regional and national domain as focused on either a channel, a genre, a product or a demography, and by whether or not allied products, such as Forex & insurance, are offered. MakeMytrip, a relatively new entrant in the pan India holidays space, compared to Thomas Cook & SOTC has consistently focused on online bookings for holiday/vacation travel. Contrarily, Thomas Cook and SOTC have invested to strengthen their offline presence and market penetration. Thomas Cook is a leading holiday/vacation player that offers Forex services. SOTC has also been active in the holiday/vacation travel market. Most other players have limited scale compared to EbixCash Travel, Thomas Cook and SOTC.
Insurance Exchanges
    Ebix operates a number of insurance exchanges and the competition for each of those exchanges varies within each of the regions in which Ebix operates.
    Life Insurance Exchange: Ebix operates a straight-through processing end-to-end Life Exchange service that has three life insurance exchanges in the U.S.: WinFlex, TPP, and LifeSpeed. WinFlex is an exchange for pre-sale life insurance illustrations between brokers and carriers. TPP is an underwriting and highly customized electronic application platform for Life insurance, and LifeSpeed is an order entry platform for life insurance. Each of these exchanges is presently deployed in the U.S. and the Company is also continuing to deploy them in other parts of the world. Ebix has two main competitors in the life exchange area: iPipeline and Insurance Technologies. Ebix differentiates itself by virtue of having an end-to-end solution in the market, with all exchanges being interfaced with other broker systems and customer relationship management ("CRM") services such as SmartOffice. We believe Ebix’s exchanges also have the largest aggregation of life insurance brokers and carriers transacting business in the United States.
Annuity Exchange: Ebix operates a straight-through processing end-to-end Annuity Exchange service that has three annuity insurance exchanges in the U.S.: AnnuityNet, AMP and AN4. These exchanges are platforms for annuity transactions between brokers, carriers, broker general agents (“BGAs”), and other entities involved in annuity transactions. These exchanges are mainly deployed in the U.S.; however, the Company endeavors to deploy it in other parts of the world, such as Latin America and Australia. Ebix has deployed its AN4 service that was fully developed internally by Ebix, is highly scalable and customizable, and can be delivered over the cloud. Ebix has one main competitor in the annuity exchange area, iPipeline. Ebix differentiates itself from this competitor by virtue of having an end-to-end solution offering in the market with its exchanges being interfaced with broker systems and customer relationship management (CRM) services such as SmartOffice. Ebix exchanges transact the largest amount of annuity premiums of any single exchange in the U.S.
    SmartOffice: Ebix’s customer relationship management exchange, SmartOffice, is designed to address the specific needs of insurance companies, general agents, banks, financial advisors and investment dealers. Smart Office is tightly integrated into the EbixExchange Life, Health, P&C and Annuity exchanges as a means to make end-to-end enterprise-wide information exchange seamless for our clients. This insurance industry specific domain expertise gives Ebix a competitive advantage in the CRM area over our competitors, such as Salesforce.com, iPipeline, and Redtail.
    Employee Benefits: Ebix currently provides employee benefit and health insurance exchange services using four platforms: Facts, LuminX, HealthConnect and EbixEnterprise. EbixEnterprise, which we developed internally, is the most recent Enterprise Health Exchange being deployed by Ebix across all 50 states. These platforms are sold to health carriers and third party administrators. These platforms provide a full range of services, such as employee enrollment, claims adjudication, accounting, employee benefits administration accounting and compliance. The HealthConnect insurance quoting portals service the individual and small group marketplace. Ebix has a number of competitors of varying sizes in this area. Trizetto is currently the largest employee benefits software player in the market in the US, while there are other smaller size competitors, such as BenefitFocus and Ultimate Software.
    A.D.A.M. Health Solutions: Ebix provides multimedia health content, training, patient education, and continuing education that targets large diversified websites, doctors, consumer health portals, country governments, hospitals, healthcare, biomedical, medical device, pharmaceutical, and education organizations. A.D.A.M.’s competitors are a variety of health content companies, such as Healthwise, Staywell, Elsevier and Santovia, who are primarily focused on the U.S. markets. 
9

A.D.A.M. content is available in English, Spanish, as well as other languages in Asia, Europe, the Middle East and South America.

Risk Compliance Services (RCS)
    Ebix’s focus in this channel pertains to business process outsourcing services that include providing domain intensive project management, system consulting services and claims adjudication/settlement services to clients across the world. Additionally, Ebix RCS has the market leading business for the creation and tracking of certificates of insurance issued in the U.S. and Australian markets. The RCS Channel also consists of Broker and Carrier P&C systems.
    Ebix's RCS channel focuses on helping its clients outsource any specific service or manpower to the Company on an onsite or offshore basis. Ebix's RCS COI business services are enabled by the Company’s SaaS-based proprietary software. Ebix’s RCS COI service offerings currently cater to Fortune 500 companies in the U.S. Ebix’s RCS COI service offering has one main competitor in the U.S., Applied Systems. Due to the highly fragmented market, the Ebix RCS COI service offering also has a number of smaller competitors, such as Datamonitor, CMS, and Exigis.
    Ebix operates P&C exchanges in Australia, New Zealand, the U.K., and the U.S. All of these exchanges are targeted to the areas of personal and commercial lines, and facilitate the exchange of insurance data between brokers and insurance carriers. Ebix continues to deploy these exchanges in the United States, Asia, Europe, Latin America, and Africa. There is presently little competition in the P&C exchange area in Australia and New Zealand. Our competitive differentiation exists by virtue of having an end-to-end solution offering in the market allowing our exchanges to be interfaced with multiple broker systems.
    Ebix has four P&C broker system offerings worldwide: Ebix Evolution, eGlobal, WinBeat and EbixASP. The competition for these broker systems varies within each of the regions in which Ebix provides such products and services.
    Ebix Evolution and eGlobal are sold throughout the world. Both systems are multilingual and multi-currency and support country-specific legislative and taxation requirements. These systems are available in a number of languages, such as English, Chinese, Japanese, French, Portuguese, and Spanish. Both Ebix Evolution and eGlobal are targeted to the medium and large P&C brokers around the world, and are available for Cloud or On-Premise deployment. Competition tends to be different in each country, with no single competitor having a global offering. The two systems compete with home grown systems and regional players in each country. Their competitive advantage and uniqueness stems from its multilingual and multi-currency functionality, as well as end-user customization support. Both systems have a uniform common code base globally that allows Ebix to easily tailor features and functionality to customer needs (ease of activating/deactivating functionality).
    WinBeat is a Policy Management System (back-end broker system) targeted to the general insurance broking sector and is primarily sold in Australia. WinBeat is targeted at small- to medium-sized P&C brokers. The product at present is available only in English and can be deployed in a few hours with minimal training. WinBeat competes in Australia with local vendors, such as Brokers Advantage and Steadfast Insight. Ebix has deployed WinBeat to emerging insurance markets, such as Papua New Guinea and some of the Pacific Islands, with possible future deployment to other regional markets in the future.
    Ebix's broker systems (Ebix Evolution, eGlobal and WinBeat) customer base spans over 600 of the approximately 750 P&C brokers in Australia, an 80% market penetration of the P&C broker systems.
    EbixASP is Ebix’s P&C broker systems offering for the U.S. markets. The service is designed around the ACORD insurance standards used in the U.S. EbixASP has two main competitors in the U.S., specifically Vertafore and Applied Systems.
In the Carrier P&C Systems, Ebix has two system offerings for P&C carriers, Ebix-Advantage and Ebix Advantage Web. Ebix-Advantage is targeted at small, medium and large P&C carriers in the United States that operate in the personal, commercial and specialty line areas of insurance. Ebix AdvantageWeb is designed for the international markets and is targeted at the small, medium and large P&C carriers in the international markets that operate in the personal, commercial and specialty line areas of insurance. Ebix-AdvantageWeb is designed to be multi-currency and multilingual and is deployed in Brazil, the U.K. and the U.S. Competition to both these products comes from large companies, such as CSC, Guidewire, Xchanging, Accenture and specialty medical malpractice players like Delphi.
Intellectual Property
    Ebix seeks protection under federal, state and foreign laws for strategic or financially important intellectual property developed in connection with our business. We regard our software as proprietary, adhere to open architecture industry
10

standards and attempt to protect our software with copyrights, trade secret laws and restrictions on the disclosure and transferring of title. Certain intellectual property, where appropriate, is protected by contracts, licenses, registrations, or other protections. Despite these precautions, it may be possible for third parties to copy aspects of the Company’s products or, without authorization, to obtain and use information which the Company regards as trade secrets.
Employees
    As of December 31, 2020, the Company had 9,802 employees worldwide and is presented in the table below. None of the Company’s employees are presently covered by a collective bargaining agreement. Management considers the Company's relations with its employees to generally be good.
Number of Employees
India 8,640 
United States 476 
Latin America 369 
Australia 100 
Indonesia 62 
Philippines 60 
Europe 45 
Singapore 16 
United Arab Emirates 14 
Canada 10 
New Zealand 10 
9,802 
Human Capital
The Company's workforce is global in nature, with the majority of our employees in India. We are subject to various employment laws and regulations based on the country in which our employees are located. The CEO and other global senior leaders of Ebix shared human resource responsibilities include providing effective programs related to staffing, employee recruiting and development, compensation and benefits, and compliance. We compensate employees through a competitive compensation program that includes base salary or hourly wage, health and life insurance, retirement benefits, paid time off and long-term incentives for key management. As each country’s employment environment is different we may use different competitive recruitment and retention tools to meet the rules and regulations and market dynamics to serve the needs of our business.

Our success is dependent upon our ability to attract, develop, and retain qualified employees. We are committed to building a culture of diversity, professional growth, and high performance through offering our employees challenging and engaging growth opportunities that contribute to their overall career development. We also strive for a culture where different viewpoints are valued and individuals are treated fairly so that the Company can attract and retain the best talent.

Diversity and Inclusion: The Company believes that its rich culture of diversity and inclusion enables it to create, develop and fully leverage the strengths of its workforce to exceed customer expectations and meet its growth objectives. The Company places a high value on diversity and inclusion, recruiting and retaining staff with diverse backgrounds, experiences or characteristics who share a common interest in professional development, improving corporate culture and delivering sustained business results.

During 2020 the company implemented procedures to ensure employee safety due to the COVID-19 pandemic. The company made operational changes which allowed for a more flexible and mobile workforce around the globe. In some cases, in locations where it was strategically and operational appropriate we have moved to a full time work from home environment. Some of the safety focus responses to the COVID-19 pandemic in 2020 around the world were:

• Adding work from home flexibility in multiple locations around the globe;
• Adjusting attendance policies to encourage those who are sick to stay home;
• Increasing cleaning protocols across all locations;
11

• Initiating communication regarding impacts of the COVID-19 pandemic, including health and safety protocols and procedures;
• Implementing temperature screening of employees;
• Establishing new physical distancing procedures for employees who need to be on site;
• Providing additional personal protective equipment and cleaning supplies;
• Implementing protocols to address actual and suspected COVID-19 cases and potential exposure;
• Prohibiting all domestic and international non-essential travel for all employees; and
• Requiring masks to be worn in all locations where allowed under local law.

Information About Executive Officers
    The following persons serve as our executive officers as of April 23, 2021:
Name Age Position Officer Since
Robin Raina 54 Chairman, President, and Chief Executive Officer 1998
Steven M. Hamil 52 Corporate Executive Vice President & Chief Financial Officer 2020
Graham Prior 64 Corporate Executive Vice President International Business & Intellectual Property 2012
Leon d'Apice 64 Corporate Executive Vice President & Managing Director - Ebix Australia Group 2012
James Senge Sr. 60 Senior Vice President EbixHealth 2012
    There are no family relationships among our executive officers, nor are there any arrangements or understandings between any of those officers and any other persons pursuant to which they were selected as officers.
    ROBIN RAINA, 54, has been Ebix’s CEO since September 1999. He has been a Director at Ebix since 2000 and Chairman of the Board at Ebix since May 2002. Mr. Raina joined Ebix, Inc. in October 1997 as our Vice President—Professional Services and was promoted to Senior Vice President—Sales and Marketing in February 1998. Mr. Raina was promoted to Executive Vice President, Chief Operating Officer in December 1998. Mr. Raina was appointed President effective August 2, 1999, Chief Executive Officer effective September 23, 1999, and Chairman in May 2002. Mr. Raina holds an industrial engineering degree from Thapar University in Punjab, India.
    
    STEVEN M. HAMIL, 52, serves as the Company's Corporate Executive Vice President and the Company's Global Chief Financial Officer. He joined the Company in this position in April 2020. Prior to joining the Company and since 2013, Mr. Hamil served at Regions Financial Corporation as a Senior Vice President and Managing Director in the technology, media and communications and defense and governments services banking group. Prior to this position he served as Senior Vice President and Senior Client Manager at BBVA USA and its predecessor company, Compass Bancshares Inc., from 2010 to 2013. From 2000 to 2009, Mr. Hamil held multiple positions at Wachovia Capital Markets, LLC, the latest being a Director within the Loan Syndications/Leverage Finance group. Earlier in his career, Mr. Hamil was the Senior Vice President of Finance and Chief Accounting Officer at Movie Gallery, Inc., and held positions at Bank of America Corporation and Ernst & Young Global Limited. Mr. Hamil is a certified public accountant (inactive - State of Alabama) and holds both a B.S. in Business Administration (Accounting) from the University of Alabama (summa cum laude) and a Masters of Business Administration from Duke University's Fuqua School of Business.

    GRAHAM PRIOR, 64, was made an executive officer of the Company in 2012. He serves as Corporate Executive Vice President International Business & Intellectual Property. Mr. Prior has been employed by Ebix since 1996 when the Company acquired Complete Broking Systems Ltd for which Mr. Prior was a part owner. Mr. Prior has been working within the insurance technology industry since 1990 and is currently responsible for the Company’s international operations in Singapore,
12

New Zealand, Australia, Europe, Africa and Asia. Mr. Prior is also responsible for the Company’s worldwide product development initiatives.
    
    LEON d’APICE, 64, was made an executive officer of the Company in 2012. He serves as the Company’s Corporate Executive Vice President and Managing Director – Ebix Australia Group. Mr. d’Apice, has been employed with Ebix since 1996 when the Company acquired Complete Broking Systems Ltd for which Mr. d’Apice was also a part owner. Mr. d’Apice has been in the information technology field since 1977 and is currently responsible for all of the operations of Ebix’s Australia business unit.
    
    JAMES SENGE, SR., 60, was made an executive officer of the Company in 2012. He serves as the Company’s Senior Vice President EbixHealth. Mr. Senge has been employed with Ebix since 2008 when the Company acquired Acclamation Systems, Inc. ("Acclamation"). Mr. Senge had been employed by Acclamation since 1979. During his over 30 years with Acclamation/Ebix Mr. Senge has been involved with all facets of the EbixHealth division, including being responsible for the strategic direction and day to day operations of the divisions. Mr. Senge’s focus is on expanding the Company’s reach into the on-demand, end to end technology solutions for the health insurance and healthcare markets. Mr. Senge works from Ebix’s Pittsburgh, Pennsylvania office.

General
    Our principal executive offices are located at 1 Ebix Way Johns Creek, Georgia 30097, and our telephone number is (678) 281-2020.
    Our official web site address is http://www.ebix.com. We make available, free of charge, at http://www.ebix.com, the charters for the committees of our board of directors, our code of conduct and ethics, and, as soon as practicable after we file them with the SEC, our annual reports on Form 10-K, our quarterly reports on Form 10-Q and current reports on Form 8-K. Any waiver of the terms of our code of conduct and ethics for the chief executive officer, the chief financial officer, any accounting officer, and all other executive officers will be disclosed on our Web site. The reference to our web site does not constitute incorporation by reference of any information contained at that site.
Certain materials we file with the SEC may also be read and copied at or through the Internet website maintained by the SEC at www.sec.gov.


Item 1A. RISK FACTORS

The following risks and uncertainties are not the only ones facing us. Additional risks and uncertainties, including risks and uncertainties of which we are currently unaware or which we believe are not material also could materially adversely affect our business, financial condition, results of operations or cash flows. In any case, the value of our common stock could decline, and you could lose all or a portion of your investment. See also, “Safe Harbor Regarding Forward-Looking Statements.”

Summary

Below is a summary of the risk factors that make an investment in our securities speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this summary of risk factors, and other risks that we face, can be found below starting with “Risks Related To Our Business and Industry” and should be carefully considered, together with other information in this Form 10-K.

•    Our business may be materially adversely impacted by U.S. and global market and economic conditions, particularly adverse conditions in the insurance and financial services industries.
•    We may not be able to secure additional financing to support capital requirements when needed.
•    Our Credit Facility contains provisions that could materially restrict our business.
•    Any future acquisitions that we may undertake could be difficult to integrate, disrupt our business, dilute stockholder value and adversely impact our operating results.
13

Table of Contents
•    We may not be able to develop new products or services necessary to effectively respond to rapid technological changes.
•    The markets for our products and services are and will likely become even more highly competitive, and our competitors may be able to respond quicker to new or emerging technology and changes in customer requirements.
•    Our current customers might not purchase additional software solutions, renew maintenance agreements or purchase additional professional services, or they might switch to other product or service offerings (including competitive products).
•    Supporting our existing and growing customer base could strain our personnel resources and infrastructure, and if we are unable to scale our operations and increase productivity, we may be unable to successfully implement our business plan.
•    Our product development cycles and sales cycle are variable and often lengthy, depend upon many factors outside our control, and require us to expend significant time and resources prior to generating associated revenues.
•    We generally regard our intellectual property and software as critical to our success, and we may not be able to effectively or efficiently protect our intellectual property.
•    If we infringe on the proprietary rights of others, our business operations may be disrupted, and any related litigation could be time consuming and costly.
•    We depend on the continued services of our senior management and our ability to attract and retain other key personnel.
•    If we do not effectively manage our geographically dispersed workforce, we might not be able to run our business efficiently and successfully.
•    COVID-19 has disrupted, and may continue to disrupt, our business and financial performance.
•    Our revenue from our gift card business grew significantly during the COVID-19 pandemic and may not continue at that level after the lockdowns are lifted as the risks of the pandemic decrease.
•    Cybersecurity threats continue to increase in frequency and sophistication and a successful cybersecurity attack could interrupt or disrupt our information technology systems or cause the loss of confidential or protected data, which could disrupt our business, force us to incur excessive costs or cause reputational harm.
•    A substantial portion of our assets and operations are located outside of the U.S. and we are subject to regulatory, tax, economic, political and other uncertainties in other foreign countries in which we operate.
•    Our international business activities and processes expose us to numerous and often conflicting laws and regulations, policies, standards or other requirements and sometimes even conflicting regulatory requirements, and to risks that could harm our business, financial position, profit, and cash flows.
•    We conduct money transfer transactions in some regions that are politically and economically volatile, which could increase our cost of operating in those regions.
•    A significant change or disruption in international migration patterns could adversely affect our business, financial condition and results of operations.
•    Changes in the method pursuant to which LIBOR rates are determined and potential phasing out of LIBOR after 2021 may affect our financial results.
•    New legislation that would change U.S. or foreign taxation of business activities, including the imposition of tax based on gross revenue, could harm our business and financial results
•    Our financial position and operating results may be adversely affected by the changing U.S. Dollar rates and fluctuations in other currency exchange rates.
•    The rapid spread of contagious illnesses can have an adverse effect on our business and results of operations.
•    Principal shareholders may be able to exert control over our future direction and operations.
•    Provisions in our articles of incorporation, bylaws, Delaware law as well as the Amended SAR Agreement with Mr. Robin Raina may make it difficult for a third party to acquire us, even in situations that may be viewed as desirable by our shareholders.
•    If we fail to maintain an effective system of internal controls, we may not be able to accurately determine our financial results or prevent fraud which could cause our stockholders to lose confidence in our financial results, which could harm our business and the market value of our common shares.
•    The nature of our business requires the application of complex revenue and expense recognition rules that require management to make estimates and assumptions and the current legislative and regulatory environment affecting GAAP is uncertain which could affect our financial statements going forward.
•    We may be exposed to risks relating to the resignation of our prior registered public accounting firm.
•    The costs and effects of litigation, investigations or similar matters involving us or our subsidiaries, or adverse facts and developments related thereto, could materially affect our business, operating results and financial condition.
•    Government investigations may require significant management time and attention, result in significant legal expenses or damages and cause the Company's business, financial condition, results of operations and cash flows to suffer.
14

Table of Contents
•    Federal Trade Commission laws and regulations that govern the insurance industry could expose us or the agents, brokers and carriers with whom we conduct business in our online marketplace to legal penalties.
•    Potential liabilities under the Foreign Corrupt Practices Act could have a material adverse effect on our business.
•    We are not in compliance with the requirements of Nasdaq for continued listing, and if Nasdaq does not concur that we have adequately remedied our non-compliance with Nasdaq Listing Rule 5250(c)(1), our common stock may be delisted from trading on Nasdaq, which could have a material adverse effect on us and our shareholders.
•    Quarterly and annual operating results may fluctuate, which could cause our stock price to be volatile.


Risks Related To Our Business and Industry

Our business may be materially adversely impacted by U.S. and global market and economic conditions, particularly adverse conditions in the insurance and financial services industries.

For the foreseeable future, we expect to continue to derive most of our revenue from products and services we provide to the insurance and financial services industries. Given the concentration of our business activities in these industries, we may be particularly exposed to certain economic downturns affecting these industries. U.S. and global market and economic conditions have been, and continue to be, disrupted and volatile particularly in the face of the ongoing coronavirus disease 2019 (“COVID-19”) pandemic. General business and economic conditions that could affect us and our customers include fluctuations in economic growth, debt and equity capital markets, liquidity of the global financial markets, the availability and cost of credit, investor and consumer confidence, and the strength of the economies in which our customers operate. A poor economic environment (including as a result of continuing negative impacts of COVID-19) could result in significant decreases in demand for our products and services, including the delay or cancellation of current or anticipated projects, or could present difficulties in collecting accounts receivables from our customers due to their deteriorating financial condition. Our existing customers may be acquired by or merged into other entities that use our competitors' products or may decide to terminate their relationships with us for other reasons. As a result, our sales could decline if an existing customer is merged with or acquired by another company, and either has a poor economic outlook or discontinues operations.


We may not be able to secure additional financing to support capital requirements when needed.

We may need to raise additional funds in the future to fund new product development, further organic growth initiatives, acquire new businesses, or for other purposes. Any required additional financing may not be available on terms favorable to us, or at all. If adequate funds are unavailable on acceptable terms, we may be unable to meet our strategic business objectives or compete effectively, and the future growth of our business could be adversely impacted. The Company maintains a senior secured syndicated credit facility, dated as of August 5, 2014, among Ebix, Inc., as borrower, its subsidiaries party thereto from time to time as guarantors, Regions Bank, as administrative agent and collateral agent, and the lenders party thereto from time to time (as amended from time to time, the "Credit Facility"). Subsequent to the resignation of our prior registered public accounting firm, RSM US LLP ("RSM") and the Company’s inability to file this Form 10-K by its due date, the Company and the requisite lenders under the Credit Facility entered into Amendment No. 11 and Amendment No. 12 to the Credit Facility in March 2021 and April 2021, respectively, to provide, among other things, certain covenant relief and we may need to seek additional relief in the future. Failure to comply with the covenants contained in our Credit Facility or the occurrence of certain other events described in the Credit Facility (if not waived or further amended) could give rise to an event of default and, if not cured, entitle the lenders to accelerate the indebtedness outstanding thereunder and terminate our ability to borrow in the future under the Credit Facility. Any event of default under our Credit Facility could have a material adverse impact on the Company.

In addition, if additional funds are raised by our issuing equity securities, stockholders may experience dilution of their ownership and economic interests, and the newly issued securities may have rights superior to those of our common stock. If additional funds are raised by our issuance of debt, we may be subject to significant market risks related to interest rates, and operating risks regarding limitations on our activities.

Our Credit Facility contains provisions that could materially restrict our business.

Our Credit Facility contains certain covenants, including with respect to (i) certain permitted restricted payments and investments, and (ii) certain reporting requirements. These covenants include, among others, limitations on making acquisitions, loans or other investments, disposition of assets, payment of dividends and other restricted payments. The Credit Facility also requires us to comply with a maximum consolidated net leverage ratio and a minimum fixed charge coverage ratio,
15

Table of Contents
which we may not be able to achieve. In addition, the requisite lenders under the Credit Agreement must make a good faith determination of whether there had been a "Material Circumstance" (as defined and further described in Amendment No. 12), which determination (if any) may only be made within a specified period described by Amendment No. 12 and is subject to certain cure rights of the Company. These covenants may limit our ability to plan for or react to market conditions or meet capital needs or could otherwise restrict our activities or business plans. These restrictions also could adversely affect our ability to make strategic acquisitions, fund investments or engage in other business activities that could be in our interest. The Company’s failure to meet these covenants or comply with these restrictions could have a material adverse effect on our business, financial condition and results of operations. See “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Credit Facility” and Note 22 to the Notes to Consolidated Financial Statements for additional discussion of our Credit Facility and its covenants.

Further, our ability to comply with these covenants may be affected by events beyond our control that could result in an event of default under our Credit Facility, or documents governing any other existing or future indebtedness. A default, if not cured or waived, may permit acceleration of our indebtedness. In addition, our lenders could terminate their commitments to make further extensions of credit under the Credit Facility. If our indebtedness is accelerated, we cannot be certain that we will have sufficient funds to pay the accelerated indebtedness or that we will have the ability to refinance accelerated indebtedness on terms favorable to us or at all.

Our future growth may depend in part on acquiring other businesses in our industry.

We expect continued growth, in part, by making business acquisitions. In the past, we have made accretive acquisitions to broaden our product and service offerings, expand our operations, and enter new geographic markets. We may continue to make selective acquisitions, enter into joint ventures, or otherwise engage in other appropriate business investments or arrangements that we believe will strengthen the Company. However, the continued success of our acquisition program will depend on our ability to find and buy attractive businesses at a reasonable price, to obtain any lender consents required under our Credit Facility, to access the requisite financing resources, if needed, and to integrate acquired businesses into our existing operations. Our ability to do so is not assured and may be limited by a number of factors, including the covenants in our Amended Credit Facility.

Any future acquisitions that we may undertake could be difficult to integrate, disrupt our business, dilute stockholder value and adversely impact our operating results.

Future business acquisitions subject the Company to a variety of risks, including those risks associated with an inability to efficiently integrate acquired operations, higher incremental cost of operations, outdated or incompatible technologies, labor difficulties, or an inability to realize anticipated synergies, whether within anticipated time frames or at all. One or more of these risks, if realized, could have an adverse impact on our operations. Among the integration issues related to acquisitions are:

potential incompatibility of business cultures;
potential delays in integrating diverse technology platforms;
potential need for additional disclosure controls and internal controls over financial reporting;
potential difficulties in coordinating geographically separated organizations;
potential difficulties in re-training sales forces to market all of our products across all of our intended markets;
potential difficulties implementing common internal business systems and processes;
potential conflicts in third-party relationships; and
potential loss of customers and key employees and the diversion of the attention of management from other ongoing business concerns.

We may not be able to develop new products or services necessary to effectively respond to rapid technological changes.

To be successful we must adapt to rapidly changing technological and market needs, by continually enhancing and introducing new products and services to address our customers' changing demands. The marketplace in which we operate is characterized by rapidly changing technology, evolving industry standards, frequent new product and service introductions, shifting distribution channels, and changing customer demands. We could incur substantial costs if we need to modify our services or infrastructure in order to adapt to changes affecting our market, and we may be unable to effectively adapt to these changes.

16

Table of Contents
The markets for our products and services are and will likely become even more highly competitive, and our competitors may be able to respond quicker to new or emerging technology and changes in customer requirements

We operate in highly competitive markets. In particular, the online insurance distribution market, like the broader electronic commerce market, is rapidly evolving and highly competitive. Our insurance software business also experiences competition from certain large hardware suppliers that sell systems and system components to independent agencies and from small independent developers and suppliers of software, who sometimes work in concert with hardware vendors to supply systems to independent agencies. Pricing strategies and new product introductions and other pressures from existing or emerging competitors could result in a loss of customers or a price rate increase or decrease for our services different than past experience. Our internet-facilitated businesses may also face indirect competition from insurance carriers that have subsidiaries which perform in-house agency and brokerage functions.

Some of our current competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial and marketing resources than we do. In addition, we believe we will face increasing competition as the online financial services industry develops and evolves. Our current and future competitors may be able to:


undertake more extensive marketing campaigns for their brands and services;
devote more resources to website and systems development;
adopt more aggressive pricing policies; and
make more attractive offers to potential employees, online companies and third-party service providers.

We operate in a price sensitive market and we are subject to pressures from customers to decrease our fees for the services and solutions we provide. Any reduction in price would likely reduce our margins and could adversely affect our operating results.

    The competitive market in which we conduct our business could require us to reduce our prices. If our competitors offer discounts on certain products or services in an effort to recapture or gain market share or to sell other products, we may be required to lower our prices or offer other favorable terms to compete successfully. Any of these changes would likely reduce our margins and could adversely affect our operating results. Some of our competitors may bundle products and services that compete with us for promotional purposes or as a long-term pricing strategy or provide guarantees of prices and product implementations. In addition, many of the services and solutions that we provide and market are not unique or proprietary to us and our customers and target customers may not distinguish our services and solutions from those of our competitors. All of these factors could, over time, limit or reduce the prices that we can charge for our services and solutions. If we cannot offset price reductions with a corresponding increase in the number of sales or with lower spending, then the reduced revenue resulting from lower prices would adversely affect our margins and operating results.

Our current customers might not purchase additional software solutions, renew maintenance agreements or purchase additional professional services, or they might switch to other product or service offerings (including competitive products).

We rely on our existing customer base to generate additional business through the purchase of new software solutions as well as maintenance, consulting and training services. Existing customers might cancel or not renew their maintenance contracts, decide not to buy additional products and services, switch to on-premises models or accept alternative offerings from other vendors.

Our future success depends in part on our ability to sell additional features and services, and more subscriptions or enhanced offerings of our services to our current customers. This may also require increasingly sophisticated and costly sales efforts. Similarly, the rate at which our customers purchase new or enhanced services depends on a number of factors, including general economic conditions and our customers’ reaction to any price changes related to these additional features and services. If our efforts to up-sell to our customers are not successful our business may suffer.


If our customers do not renew their subscriptions for our services or reduce the number of paying subscriptions at the time of renewal, our revenue will decline and our business will suffer. If we cannot accurately predict subscription renewals or upgrade rates, we may not meet our revenue targets which may adversely affect the market price of our common stock.

Our customers have no obligation to renew their subscriptions for our services after the expiration of their initial subscription period, and historically some customers have elected not to do so. In addition, our customers may renew for fewer
17

Table of Contents
subscriptions, renew for shorter contract lengths or switch to lower cost and/or less profitable offerings of our services. We cannot accurately predict attrition rates given our diverse customer base and large number of multi-year subscription contracts. Our attrition rates may increase or fluctuate as a result of a number of factors, including customer dissatisfaction with our services, decreases in customers’ spending levels, decreases in the number of users at our customers, pricing increases or changes in general economic conditions.

Because we recognize revenue from subscriptions for our services over the term of the subscription, downturns or upturns in new business may not be immediately reflected in our operating results.

We generally recognize revenue from customers ratably over the terms of their subscription agreements, which are typically twelve to thirty-six months. As a result, most of the revenue we report in each quarter reflects the subscription agreements entered into during previous quarters. Consequently, a decline in new or renewed subscriptions in any one quarter may not be reflected in our revenue results for that quarter; however, any such decline will negatively impact our revenue in future quarters. Accordingly, the effect of significant downturns in sales and market acceptance of our services, and potential changes in our attrition rate, may not be fully reflected in our results of operations until future periods. Our subscription model also makes it difficult to rapidly increase our revenue through additional sales in any period, as revenue from new customers must be recognized over the applicable subscription term.

Supporting our existing and growing customer base could strain our personnel resources and infrastructure, and if we are unable to scale our operations and increase productivity, we may be unable to successfully implement our business plan.

    We continue to experience significant growth in our customer base and personnel, which has placed a strain on our management, administrative, operational and financial infrastructure. We anticipate that additional investments in our internal infrastructure, data center capacity, research, customer support, and development will be required to scale our operations and increase productivity in order to address the needs of our customers, further develop and enhance our services, and expand into new geographic areas. Any additional investments required to service our customers will increase our cost base, which will make it more difficult for us to offset any future revenue shortfalls by reducing expenses in the short term.

We regularly upgrade or replace our various software systems. If the implementations of these new applications are delayed, or if we encounter unforeseen problems with our new systems or in migrating away from our existing applications and systems, our operations and our ability to manage our business could be negatively impacted.

    Our success depends, in part, upon the ability of our senior management to manage our projected growth effectively. To do so, we must continue to increase the productivity of our existing employees and to hire, train and manage new employees as needed. To manage the expected domestic and international growth of our operations and personnel, we need to continue to improve our operational, financial and management controls, our reporting systems and procedures, and our utilization of real estate. If we fail to successfully scale our operations and increase productivity, we will be unable to execute our business plan.

Our product development cycles are lengthy, and we may incur significant expenses before we generate revenues, if any, from new products.

Because our products are complex and require rigorous testing, development cycles can be lengthy. Moreover, development projects can be technically challenging and expensive. The nature of these development cycles may cause us to experience delays between the time we incur expenses associated with research and development and the time we generate revenues, if any, from such expenses. If we expend a significant amount of resources on research and development and our efforts do not lead to the successful introduction or improvement of products that are competitive in the marketplace, this could materially and adversely affect our business and results of operations. Additionally, anticipated customer demand for a product we are developing could decrease after the development cycle has commenced. Such decreased customer demand may cause us to fall short of our sales targets, and we may nonetheless be unable to avoid substantial costs associated with the product’s development. If we are unable to complete product development cycles successfully and in a timely fashion and generate revenues from such future products, the growth of our business may be harmed.

Our sales cycle is variable and often lengthy, depends upon many factors outside our control, and requires us to expend significant time and resources prior to generating associated revenues.

The typical sales cycle for our solutions and services is lengthy and unpredictable, requires substantial pre-purchase evaluations by a significant number of persons in our customers’ organizations, and often involves a significant operational decision by our customers. Our sales efforts involve educating our customers and industry analysts and consultants about the use and benefits of our solutions.
18

Table of Contents

We generally regard our intellectual property and software as critical to our success, and we may not be able to effectively or efficiently protect our intellectual property.

We rely on copyright laws and licenses and nondisclosure agreements to protect our proprietary rights, as well as the intellectual property rights of third parties whose content we license. However, it is not possible to prevent all unauthorized uses of these rights. We cannot provide assurances that the steps we have taken to protect our intellectual property rights, and the rights of those from whom we license intellectual property, are adequate to deter misappropriation or that we will be able to detect unauthorized uses and take timely and effective steps to remedy unauthorized conduct. In particular, a significant portion of our revenue is derived internationally, including in jurisdictions where protecting intellectual property rights may prove to be more challenging than in the U.S. To prevent or respond to unauthorized uses of our intellectual property, we might be required to engage in costly and time-consuming litigation and we may not ultimately prevail.

If we infringe on the proprietary rights of others, our business operations may be disrupted, and any related litigation could be time consuming and costly.

Third parties may claim that we have violated their intellectual property rights. Any such claim, with or without merit, could subject us to costly litigation and divert the attention of key personnel. To the extent that we violate a patent or other intellectual property right of a third party, we may be prevented from operating our business as planned, and we may be required to pay damages, to obtain a license, if available, to use the right or to use a non-infringing method, if possible, to accomplish our objectives. The cost of such activity could have a material adverse effect on our business.

We depend on the continued services of our senior management and our ability to attract and retain other key personnel.

Our future success is substantially dependent on the continued services and contributions of our senior management and other key personnel, particularly Robin Raina, our President, Chief Executive Officer, and Chairman of the Board. Since becoming Chief Executive Officer in 1999, Mr. Raina's strategic direction and vision for the Company and the implementation of such direction have been instrumental in our profitable growth. The loss of the services of any of our executive officers or other key employees could harm our business. Our future success also depends on our ability to continue to attract, retain and motivate highly skilled employees. The inability to attract and retain key skilled personnel could harm our business.

If we do not effectively manage our geographically dispersed workforce, we might not be able to run our business
efficiently and successfully.

    Our success is dependent on the appropriate alignment of our internal and external workforce planning processes, adequate resource allocation and our location strategy with our general strategy. We have employees located in India, the U.S., Brazil, Australia, Indonesia, the Philippines, the U.K., Singapore, the United Arab Emirates, Canada and New Zealand. Managing such a diverse and widely spread work force can be difficult and demanding for management. It is critical that we manage our internationally dispersed workforce (both internal and external) effectively, taking short- and long-term workforce and skill requirements into consideration. Changes in headcount and infrastructure needs, as well as local legal or tax regulations, could result in a mismatch between our expenses and revenue. Failure to manage our geographically dispersed workforce effectively could hinder our ability to run our business efficiently and successfully and could have an adverse effect on our business, financial position, profit, and cash flows.

Risks Related to the Ongoing COVID-19 Pandemic

COVID-19 has disrupted, and may continue to disrupt, our business and financial performance.

On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic. Since then, the outbreak of COVID-19 throughout the world, including North America, Europe and Asia, has adversely impacted the U.S. and global economies. We have experienced and expect to continue to experience disruptions to our business due to COVID-19. Governmental authorities and public health officials have recommended and mandated varying countermeasures to slow the outbreak, including shelter-in-place orders, restrictions on travel, and the closure of local government facilities and parks, schools, restaurants, many businesses and other locations of public assembly.

At this time, the full impact of COVID-19 on our business cannot be fully predicted due to numerous uncertainties and future developments, including the duration and severity of the outbreak in individual geographies we operate, travel restrictions and business closures, the effectiveness of vaccines and other actions taken to contain the disease, the timing of economic and operational recovery, and other unpredictable consequences. This impact has included and might continue to
19

Table of Contents
include, but is not limited to: (i) changes in our revenues and customer demand - our revenues and profitability were materially impacted during 2020 compared to the prior year periods, and we expect they will continue to be materially adversely affected, particularly as a large percentage of EbixCash's revenue is derived from travel-related services; and (ii) our workforce - the COVID-19 outbreak has also caused us to reduce and furlough employees in order to right size our EbixCash business. These actions have created risks, including but not limited to, our ability to manage the size of our workforce given uncertain future demand.

Our business, particularly EbixCash, is generally subject to and impacted by, international, national and local economic conditions and travel demands. The COVID-19 pandemic has resulted in and may continue to result in a material adverse effect on the demand for worldwide travel, and therefore, has had and may continue to have a material adverse effect on our business and results of operations. Additionally, continued unemployment has and may continue to negatively influence consumer spending. We do not expect economic and operating conditions for EbixCash to improve until consumers are able and fully willing to travel.

We believe that business disruption relating to the COVID-19 pandemic will continue to negatively impact the global economy and may materially affect our businesses as outlined above for at least the next six months, each of which would continue to adversely impact our business and results of operations. To the extent that the COVID-19 outbreak continues to adversely affect our business and financial performance, it may also have the effect of heightening many of the other risks identified in this Risk Factors section.

We may not realize any or all of our estimated cost savings, which may have a negative effect on our results of operations.

Throughout the COVID-19 crisis, we have identified and taken advantage of several areas that present opportunities for cost savings and efficiencies to potentially improve our results of operations while our business is being impacted, including improved working capital management, primarily through a reduction in staffing, compensation, and other discretionary expenses. However, there can be no assurance that these cost savings and efficiencies will continue. These and any future spend reductions, if any, may also negatively impact our other initiatives or our efforts to grow our business in a recovery, which may negatively impact our future results of operations and increase the burden on existing management, systems and resources.

Our revenue from our gift card business grew significantly during the COVID-19 pandemic and may not continue at that level after the lockdowns are lifted as the risks of the pandemic decrease.

During 2020, our revenue from the payment solutions offerings in India (primarily prepaid gift cards), increased by more than $200 million year over year to approximately $256 million, a 590% year-over-year growth. The increased demand for prepaid gift cards in India was primarily due to: (i) COVID-19, which has facilitated increased online and electronic commerce due to restrictive lockdowns in 2020; (ii) changes in regulations by the Reserve Bank of India related to debit cards, which has shifted demand in the market towards prepaid gift cards; and (iii) the Company's increased marketing efforts around the prepaid gift card business. There can be no assurance that this level of revenue will continue once the lockdowns are lifted and economies begin to open back up from the effects of COVID-19 or if there are new regulations adopted that impact the use of gift cards or debit cards.

Earnings for future periods may be impacted by impairment charges for goodwill and intangible assets related to COVID-19.

We carry a significant amount of goodwill and identifiable intangible assets on our consolidated balance sheets. Goodwill is the excess of purchase price over the fair value of the net assets of acquired businesses. We assess goodwill, indefinite-lived and definite-lived intangible assets for impairment each year, or more frequently if circumstances suggest an impairment may have occurred. We have concluded that there was no impairment of goodwill or definite-lived intangibles in 2020; however, the Company determined in the 4th quarter 2020 as part of its annual goodwill and intangible impairment analysis that the IHC customer indefinite-lived intangible had been impaired. The Company record a $6.2 million impairment expense (see Note 1 to the Notes to Consolidated Financial Statements for detailed disclosure information). If we determine that a significant impairment has occurred in the value of our intangible assets, right of use assets or fixed assets related to the disruption of business caused by COVID-19 in 2021 or beyond, we could be required to write off a portion of our assets, which could adversely affect our consolidated financial condition or our reported results of operations.


Risks Related to Our Conduct of Business on the Internet

20

Table of Contents
Our software solutions are deployed through cloud-based implementations, and if such implementations are compromised by data security breaches or other disruptions, our reputation could be harmed, and we could lose customers or be subject to significant liabilities.

Our software solutions typically are deployed in cloud-based environments, in which our products and associated services are made available using an internet-based infrastructure. In cloud deployments, the infrastructure of our customers’ third-party service providers may be vulnerable to hacking incidents, other security breaches, computer viruses, telecommunications failures, power loss, other system failures and similar disruptions. Any of these occurrences, whether intentional or accidental, could lead to interruptions, delays or cessation of operation of the servers of our customers’ third-party service providers, and to the unauthorized use or access of our software and proprietary information and sensitive or confidential data stored or transmitted by our products. The inability of our customers’ service providers to provide continuous access to their hosted services, and to secure their hosted services and associated customer information from unauthorized use, access or disclosure, could cause us to lose customers and to incur significant liability, and could harm our reputation, business, financial condition and results of operations.

We face risks in the transmittal of individual health-related and other personal information.

We face potential risks and financial liabilities associated with obtaining and transmitting personal account information that includes social security numbers and individual health-related information. Any significant breakdown, invasion, destruction or interruption of our information technology systems and infrastructure by employees, others with authorized access to our systems, or unauthorized persons could negatively affect operations. There can be no assurance that we will not be subject to cyber security incidents that bypass our security measures, result in the loss or theft of personal health information or other data subject to privacy laws or disrupt our information systems or business. While we have invested in the protection of our data and information technology to reduce these risks, there can be no assurance that our efforts will prevent breakdowns or breaches in our systems. Additionally, the controls implemented by third-party service providers may not prevent or timely detect such system failures. Our property and business interruption insurance coverage may not be adequate to fully compensate us for losses that may occur. The consequences of the outlined risk above would include damage to our reputation and additional costs to address and remediate any problems encountered, as well as litigation and potential financial penalties.

Any disruption of our internet connections could affect the success of our internet-based products and services.

Any system failure, including network, software or hardware failure, that causes an interruption in our network or a decrease in the responsiveness of our website could result in reduced user traffic and reduced revenue. Continued growth in internet usage could cause a decrease in the quality of internet connection service. Websites have experienced service interruptions as a result of outages and other delays occurring throughout the worldwide internet network infrastructure. If these outages, delays or service disruptions frequently occur in the future, usage of our web-based services could grow slower than anticipated or decline and we may lose revenues and customers. If the internet data center operations that host any of our websites or web-based services were to experience a system failure, the performance of our website or web-based services would be harmed. These systems are also vulnerable to damage from fire, floods, and earthquakes, acts of terrorism, power loss, telecommunications failures, break-ins and similar events. The controls implemented by our third-party service providers may not prevent or timely detect such system failures. Our property and business interruption insurance coverage may not be adequate to fully compensate us for losses that may occur. In addition, our users depend on internet service providers, online service providers and other website operators for access to our website. These providers could experience outages, delays and other difficulties due to system failures unrelated to our systems.

Cybersecurity threats continue to increase in frequency and sophistication. A successful cybersecurity attack could interrupt or disrupt our information technology systems or cause the loss of confidential or protected data, which could disrupt our business, force us to incur excessive costs or cause reputational harm.

The size and complexity of our information systems make such systems potentially vulnerable to service interruptions or to security breaches from inadvertent or intentional actions by our employees or vendors, or from intentional attacks by malicious third parties. Such attacks are increasingly sophisticated and are made by groups and individuals with a wide range of motives and expertise. While we have invested in the protection of data and information technology, there can be no assurance that our efforts will prevent or quickly identify service interruptions or security breaches. Any such interruption or breach of our systems could adversely affect our business operations and result in the loss of critical or sensitive confidential information or intellectual property, and could result in financial, legal, business and reputational harm to us. Our cyber liability insurance may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of our systems.
21

Table of Contents

Consumer fraud could adversely affect our business, financial condition and results of operations.

Malicious third parties are using increasingly sophisticated methods to engage in illegal activities such as identity theft, fraud and paper instrument counterfeiting. As we make more of our services available over the internet and other digital media, we subject ourselves to new types of consumer fraud risk due to more complex requirements relating to consumer authentication with internet services. Additionally, the COVID-19 pandemic has led to increased cyber and payment fraud risk, as cybercriminals attempt to profit from the disruption, given increased online banking, e-commerce and other online activity. We use a variety of tools to protect against fraud; however, these tools may not always be successful. Allegations of fraud may result in fines, settlements, litigation expenses and reputational damage.

Our industry is under increasing scrutiny from federal, state and local regulators in the U.S. and regulatory agencies in many other countries in connection with the potential for consumer fraud. If consumer fraud levels involving our services were to rise, it could lead to further regulatory intervention and reputational and financial damage. This increased regulatory scrutiny, in turn, could lead to additional government enforcement actions and investigations, reduce the use, renewal and/or acceptance of our services or increase our compliance costs and, thereby, have a material adverse impact on our business, financial condition and results of operations.

Uncertainty in the marketplace regarding the use of internet users' personal information, or legislation limiting such use, could reduce demand for our services and result in increased expenses.

Concern among consumers and legislators regarding the use of personal information gathered from internet users could create uncertainty in the marketplace. This concern could reduce demand for our services, increase the cost of doing business as a result of litigation costs or increased service delivery costs, or otherwise harm our business. Many state insurance codes limit the collection and use of personal information by insurance agencies, brokers and carriers or insurance service organizations.


Risks Related To Foreign Operations

Our international operations are subject to a number of risks that could affect our revenues, operating results, and growth.

We market our products and services internationally and plan to continue to expand our internet-based services to locations outside of the U.S. We currently conduct operations in Australia, Canada, New Zealand, Brazil, Dubai, India, Indonesia, the Philippines, New Zealand, Singapore and the U.K., have product development activities in India, Singapore and Dubai and call center services in India. Our international operations are subject to other inherent risks which could have a material adverse effect on our business, including:

the impact of recessions in foreign economies on the level of consumers' insurance shopping, financial transactions and purchasing behavior;
greater difficulty in collecting accounts receivable;
difficulties and costs of staffing and managing foreign operations;
reduced protection for intellectual property rights in some countries;
burdensome regulatory requirements;
trade and financing barriers, and differing business practices;
potentially adverse tax consequences; and
economic instability or political unrest such as crime, strikes, riots, civil disturbances, terrorist attacks and wars.

A substantial portion of our assets and operations are located outside of the U.S. and we are subject to regulatory, tax, economic, political and other uncertainties in other foreign countries in which we operate.

We have significant offshore operations in foreign countries, including Australia, Brazil, Canada, Dubai, India, Indonesia, New Zealand, Singapore, the Philippines and the U.K. Wages in these countries have historically increased at a faster rate than in the U.S. The continuation of this trend in the future will result in increased labor costs that could potentially reduce our operating margins. Also, there is no assurance that in future periods competition for skilled workers will not drive salaries higher in these countries, thereby resulting in increased costs for our technical professionals and potentially reduced operating margins.

22

Table of Contents
Some of these countries have experienced problems that commonly confront the economies of developing countries, including high inflation, erratic gross domestic product growth and shortages of foreign exchange. Government actions concerning these countries’ economies could have a material adverse effect on private sector entities like us. In the past, certain Governments have provided significant tax incentives and relaxed certain regulatory restrictions to encourage foreign investment in specified sectors of the economy, including the software development services industry. Programs that have benefited us include, among others, tax holidays, liberalized import and export duties and preferential rules on foreign investment and repatriation. Notwithstanding these benefits, as noted above, changes in government leadership or changes in policies in these countries that result in the elimination of any of the benefits realized by us or the imposition of new taxes applicable to such operations could have a material adverse effect on our business, results of operations and financial condition.


Our international business activities and processes expose us to numerous and often conflicting laws and regulations, policies, standards or other requirements and sometimes even conflicting regulatory requirements, and to risks that could
harm our business, financial position, profit, and cash flows.

    We are a global company and currently market our products and services in Australia, Brazil, Canada, India, Indonesia, New Zealand, the Philippines, Singapore, United Arab Emirates, the U.K. and the U.S., amongst other countries. Our business in foreign countries is subject to numerous risks inherent in international business operations. Among others, these risks include:

Data protection and privacy regulations regarding access by government authorities to customer, partner, or employee data;
Data residency requirements (the requirement to store certain data only in and, in some cases, also to access such data only from within a certain jurisdiction);
Conflict and overlap among tax regimes;
Possible tax constraints impeding business operations in certain countries;
Expenses associated with the localization of our products and compliance with local regulatory requirements;
Discriminatory or conflicting fiscal policies;
Operational difficulties in countries with a high corruption perception index;
Works councils, labor unions, and immigration laws in different countries;
Difficulties enforcing intellectual property and contractual rights in certain jurisdictions;
Country-specific software certification requirements;
Compliance with various industry standards; and
Market volatilities or workforce restrictions due to changing laws and regulations resulting from political decisions (e.g. Brexit, government elections)


    As we expand into new countries and markets, these risks could intensify. The application of the respective local laws and regulations to our business is sometimes unclear, subject to change over time, and often conflicting among jurisdictions. Compliance with these varying laws and regulations could involve significant costs or require changes in products or business practices. Non-compliance could result in the imposition of penalties or cessation of orders due to alleged non-compliant activity. We do not believe we have engaged in any activities sanctionable under these laws and regulations, but governmental authorities could use considerable discretion in applying these statutes and any imposition of sanctions against us could be material. One or more of these factors could have an adverse effect on our operations globally or in one or more countries or regions, which could have an adverse effect on our business, financial position, profit, and cash flows.

We conduct money transfer transactions in some regions that are politically and economically volatile, which could increase our cost of operating in those regions.

We conduct money transfer transactions in some regions that are politically volatile and economically unstable, which could increase our cost of operating in those regions. For example, it is possible that our money transfer services or other products could be used in contravention of applicable law or regulations. Such circumstances could result in increased compliance costs, regulatory inquiries, suspension or revocation of required licenses or registrations, seizure or forfeiture of assets and the imposition of civil and/or criminal fees and penalties, inability to settle due to currency restrictions or volatility, or other restrictions on our business operations. In addition to monetary fines or penalties that we could incur, we could be subject to reputational harm that could have a material adverse effect on our business, financial condition and results of operations.

23

Table of Contents
A significant change or disruption in international migration patterns could adversely affect our business, financial condition and results of operations.

Our money transfer business relies in part on international migration patterns, as individuals move from their native countries to countries with greater economic opportunities or a more stable political environment and significant changes in international migration patterns could adversely affect our business, financial condition and results of operations. A significant portion of money transfer transactions are initiated by immigrants or refugees sending money back to their native countries. Changes in immigration laws that discourage international migration and political or other events (such as war, trade wars, terrorism or health emergencies) that make migration of work abroad more difficult could adversely affect our money transfer remittance volume or growth rate.

Additionally, sustained weakness in global economic conditions caused by COVID-19 could reduce economic opportunities for migrant workers and result in reduced or disrupted international migration patterns. Reduced or disrupted international migration patterns could reduce money transfer transaction volumes and therefore have an adverse effect on our business, financial condition and results of operations.

Changes in the method pursuant to which LIBOR rates are determined and potential phasing out of LIBOR after 2021 may
affect our financial results.

    On July 27, 2017, the U.K. Financial Conduct Authority (the “FCA”), which regulates the London Interbank Offered Rate (“LIBOR”) has announced that the FCA intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021 (the “FCA Announcement”). The FCA Announcement indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021. Following the implementation of any reforms to LIBOR or the methods pursuant to which LIBOR rates are determined, or other benchmark rates that may be enacted in the U.K. or elsewhere, the manner of administration of such benchmarks may change, with the result that such benchmarks may perform differently than in the past, such benchmarks could be eliminated entirely, or there could be other consequences which cannot be predicted. Under the Company's Credit Facility, loans bear interest at a rate based on either (i) a fluctuating base rate, which, under certain circumstances may be set based on LIBOR and (ii) an Adjusted LIBOR rate (subject to certain interest rate floors). If LIBOR is phased out, we may be required to renegotiate with our lenders to establish a new interest rate (the “LIBOR Successor Rate”). We can give no assurance that we and the requisite lenders under our Credit Facility will be able to agree on a LIBOR Successor Rate. If we and our lenders cannot agree on a LIBOR Successor Rate, our ability to draw upon the Company's Credit Facility may be materially impacted.

Our earnings may be adversely affected if we change our intent not to repatriate foreign earnings or if such earnings become subject to U.S. tax on a current basis.

We have earnings outside of the U.S. Other than amounts for which we have already accrued U.S. taxes, we consider foreign earnings to be indefinitely reinvested outside of the U.S. While we have no plans to do so, events may occur that could effectively force us to change our intent not to repatriate such earnings. If such earnings are repatriated in the future or are no longer deemed to be indefinitely reinvested, we may have to accrue taxes associated with such earnings at a substantially higher rate than our projected effective income tax rate, and we may be subject to additional tax liabilities in certain foreign jurisdictions in which we operate. These increased taxes could have a material adverse effect on our business, results of operations and financial condition.
New legislation that would change U.S. or foreign taxation of business activities, including the imposition of tax based on gross revenue, could harm our business and financial results
    Reforming the taxation of international businesses has been a priority for some U.S. politicians, and a wide variety of changes have been proposed or enacted. Due to the large and expanding scale of our international business activities, any changes in the taxation of such activities may increase our tax expense, the amount of taxes we pay, or both, and could harm our business and financial results. For example, the Tax Cuts and Jobs Act (the “Tax Act”), was enacted in December 2017, significantly reformed the U.S. Internal Revenue Code of 1986, as amended (the “Code”). The Tax Act lowered U.S. federal corporate income tax rates, changed the utilization of future net operating loss carryforwards, allowed for the expensing of certain capital expenditures, and put into effect sweeping changes to U.S. taxation of international business activities.

    In addition, many jurisdictions and intergovernmental organizations have been discussing proposals that may change various aspects of the existing framework under which our tax obligations are determined in many of the countries in which we do business. Some jurisdictions have enacted, and others have proposed, taxes based on gross receipts applicable to digital
24

Table of Contents
services regardless of profitability. The Organization for Economic Co-operation and Development (the “OECD”) has been working on a proposal that may change how taxable presence for digital services is defined and result in the imposition of taxes based on net income in countries where we have no physical presence. We continue to examine the impact these and other tax reforms may have on our business. The impact of these and other tax reforms is uncertain and one or more of these or similar measures may adversely affect our business.
    
    Our tax expense and liabilities are also affected by other factors, such as changes in our business operations, acquisitions, investments, entry into new businesses and geographies, intercompany transactions, the relative amount of our foreign earnings, losses incurred in jurisdictions for which we are not able to realize related tax benefits, the applicability of special tax regimes, and changes in foreign currency exchange rates. Significant judgment is required in evaluating and estimating our tax expense and liabilities. In the ordinary course of our business there are many transactions and calculations for which the ultimate tax determination is uncertain. The U.S. Treasury Department, the IRS, and other standard-setting bodies will continue to interpret or issue guidance on the application and administration of the Tax Act. As future guidance is issued, we may make adjustments to amounts that we have previously recorded that may materially impact our financial statements in the period in which the adjustments are made.


We may have exposure to greater than anticipated tax liabilities.

Our future income taxes could be adversely affected by lower than anticipated earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated earnings in jurisdictions where we have higher statutory tax rates, by changes in the valuation of our deferred tax assets and liabilities, or due to changes in tax laws, regulations, and income tax accounting principles in the domestic and foreign jurisdictions in which we operate. We are subject to regular review and audit by both domestic and foreign tax authorities. Any adverse outcome of such a review or audit could have a negative effect on our operating results and financial condition. In addition, the determination of our worldwide provision for income taxes requires significant judgment, and there are some transactions for which the ultimate tax treatment is uncertain. Although we believe our estimates are reasonable and appropriate, the ultimate tax outcome may differ from the amounts recorded in our financial statements and may materially affect our financial results in the period or periods for which such determination is made. The tax rates in the foreign jurisdictions in which the Company operates could increase and have a significant impact on the Company's financial results.

Changes in tax laws or tax rulings could materially affect our financial position, results of operations, and cash flows.
    The income and non-income tax regimes we are subject to or operate under are unsettled and may be subject to significant change. Changes in tax laws or tax rulings, or changes in interpretations of existing laws, could materially affect our financial position, results of operations, and cash flows. For example, changes to U.S. tax laws enacted in December 2017 had a significant impact on our tax obligations and effective tax rate for the fourth quarter of 2017 and in 2018. In addition, many countries in Europe, as well as a number of other countries and organizations, have recently proposed or recommended changes to existing tax laws or have enacted new laws that could significantly increase our tax obligations in many countries where we do business or require us to change the manner in which we operate our business. The OECD has been working on a Base Erosion and Profit Shifting Project, issued in 2015, and is expected to continue to issue guidelines and proposals that may change various aspects of the existing framework under which our tax obligations are determined in many of the countries in which we do business. The European Commission has conducted investigations in multiple countries, focusing on whether local country tax rulings or tax legislation provides preferential tax treatment that violates E.U. state aid rules and concluded that certain countries, including Ireland, have provided illegal state aid in certain cases. These investigations may result in changes to the tax treatment of our foreign operations. Due to the large and expanding scale of our international business activities and expiring tax holiday benefits, many of these types of changes to the taxation of our activities could increase our worldwide effective tax rate and harm our financial position, results of operations, and cash flows.

Our financial position and operating results may be adversely affected by the changing U.S. Dollar rates and fluctuations in other currency exchange rates.

We will be exposed to currency exchange risk with respect to the U.S. dollar in relation to the foreign currencies in the countries where we conduct operations because a significant portion of our operating expenses are incurred in foreign countries. This exposure may increase as we expand in foreign countries.

The rapid spread of contagious illnesses can have an adverse effect on our business and results of operations.
    
25

Table of Contents
    The rapid spread of a contagious illness such as a novel coronavirus, or fear of such an event, can have a material adverse effect on the demand for worldwide travel and therefore have an adverse effect on our business and results of operations. Similarly, travel restrictions or operational issues resulting from the rapid spread of contagious illnesses in a part of the world in which we have significant operations may have an adverse effect on our business and results of operations.


Risks Related To Corporate Governance
Principal shareholders may be able to exert control over our future direction and operations.

If our principal shareholders and the holdings of entities controlled by them vote in the same manner, this could delay, prevent or facilitate a change in control of Ebix or other significant changes to Ebix or its capital structure. Refer to the disclosure regarding “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” in our annual proxy statement for more information.

Provisions in our articles of incorporation, bylaws, and Delaware law may make it difficult for a third party to acquire us, even in situations that may be viewed as desirable by our shareholders.

Our certificate of incorporation and bylaws, and the provisions of Delaware law may delay, prevent or otherwise increase the difficulty of our acquisition by means of a tender offer, a proxy contest, open market purchases, removal of incumbent directors and otherwise. These provisions, which are summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids, and to encourage persons seeking to acquire control of us to first negotiate with us. We are subject to the “business combination” provisions of Section 203 of the Delaware General Corporation Law. In general, those provisions prohibit a publicly held Delaware corporation from engaging in various “business combination” transactions with any interested stockholder for a period of three years after the date of the transaction in which the person became an interested stockholder, unless:

The transaction is approved by the board of directors prior to the date the interested stockholder obtained interested stockholder status;
Upon consummation of the transaction that resulted in the stockholder's becoming an interested stockholder, the stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or
On or subsequent to the date the business combination is approved by the board of directors, it is authorized at an annual or special meeting of stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.

These provisions could prohibit or delay mergers or other takeover or change of control attempts with respect to us and, accordingly, may discourage attempts to acquire us.

The Company has an Amended SAR Agreement with Mr. Robin Raina which could have the effect of discouraging or making more difficult an acquisition or change of control of the Company even in situations that may be viewed as desirable by our shareholders.

    On April 10, 2018, the Company entered into a Stock Appreciation Right Award Agreement, which was amended on May 7, 2019 (the “Amended SAR Agreement”) with Robin Raina, the Company’s Chairman, President and Chief Executive Officer. The Amended SAR Agreement replaced the Acquisition Bonus Agreement (the “ABA”) between the Company and Mr. Raina, dated July 15, 2009. At the time that Mr. Raina and the Company entered into the ABA, the Board had concluded that Mr. Raina’s retention was critical to the future success and growth of the Company and, consequently, the Board’s intention in entering into the ABA was to ensure that Mr. Raina would be appropriately rewarded for his contributions to the Company prior to an Acquisition Event (as defined below), as well as to further motivate Mr. Raina to maximize the value received by all stockholders if the Company were to be acquired. The Amended SAR Agreement also recognizes Mr. Raina’s critical role in the future success and growth of the Company.

Upon the effective date of the original SAR Agreement, Mr. Raina received 5,953,975 stock appreciation rights with respect to the Company’s common shares (the “SARs”). Upon an Acquisition Event (as defined in the Amended SAR Agreement), each of the SARs entitles Mr. Raina to receive a cash payment from the Company equal to the excess, if any, of the net proceeds per share received in connection with an Acquisition Event over the base price of $7.95. Mr. Raina will only be entitled to receive a payment with respect to the SARs if he is employed by the Company at the time of an Acquisition Event or was terminated by the Company without cause within the 180-day period immediately preceding an Acquisition Event. The
26

Table of Contents
Amended SAR agreement further provides that if an Acquisition Event occurs more than 180 days after, but not later than the tenth anniversary of, the date that Mr. Raina’s employment is involuntarily terminated by the Company without Cause (as defined in the Amended SAR Agreement), 1,000,000 SARs will be deemed accrued and will be eligible to vest on the closing date of the Acquisition Event, which number will be increased by 750,000 SARs beginning on the first anniversary of the effective date of the Amended SAR Agreement and each anniversary thereafter (subject in each case to Mr. Raina’s continued employment on each anniversary date), until 100% of the SARs (including any Shortfall Grants) have accrued and are eligible to vest on the closing date of an Acquisition Event that occurs more than 180 days after, but not later than the tenth anniversary of, the date that Mr. Raina’s employment is involuntarily terminated by the Company without Cause; provided, however, that, (i) no additional SARs will accrue following the date that Mr. Raina’s employment is involuntarily terminated by the Company without Cause, (ii) any accrued SARs will be forfeited if an Acquisition Event does not occur prior to the tenth anniversary of the date that Mr. Raina’s employment is involuntarily terminated by the Company without Cause, and (iii) all of the SARs will be forfeited if Mr. Raina’s employment terminates for any other reason prior to the closing date of an Acquisition Event.

    Annually, while Mr. Raina is employed by the Company and prior to an Acquisition Event, the Board shall determine whether a “shortfall” (as defined in the SAR Agreement) existed as of the end of the immediately preceding fiscal year. In the event the Board determines that a shortfall existed, Mr. Raina will be granted additional SARs (or, in the Board’s sole discretion, restricted shares or restricted stock units (each a “Share Grant”)) in an amount sufficient to eliminate such shortfall (each a “Shortfall Grant”). A “shortfall” will exist if the number of Mr. Raina’s shares is less than 20% of the total of (a) the number of SARs, plus (b) the number of outstanding shares reported by the Company in its audited financial statements as of the end of the immediately preceding fiscal year, minus (c) the number of shares paid, awarded or otherwise received by Mr. Raina from the Company as compensation after April 10, 2018, including any shares received as a result of Mr. Raina exercising stock options granted after April 10, 2018 or the grant or vesting of restricted stock or settlement of RSUs granted to Mr. Raina after April 10, 2018, but excluding any shares received as a result of the grant, vesting or settlement of any Share Grants.

    In the event that an Acquisition Event had occurred on December 31, 2020, and assuming that the stockholders of the Company received Net Proceeds of $37.97 per share (the closing price of the Company’s common stock on December 31, 2020) in connection with the Acquisition Event, Mr. Raina would have received a $178.7 million payment with respect to the SARs upon the occurrence of the Acquisition Event, determined by multiplying the number of SARS by the excess of the Net Proceeds per share over the base price of $7.95 per share.

Risks Related To Accounting and Financial Statements

We could potentially be required to recognize an impairment of goodwill or other indefinite-lived intangible assets.

Goodwill represents the excess of the amounts paid by us to acquire businesses over the fair value of their net assets at the date of acquisition. The Company’s indefinite-lived assets are associated with the contractual customer relationships existing with those property and casualty insurance carriers in Australia using our property and casualty data exchange. At December 31, 2020, we had $949.0 million of goodwill and $21.6 million of indefinite-lived intangible assets carried on the Company's consolidated balance sheet. See Note 1 to the Consolidated Financial Statements for a discussion of our goodwill and indefinite-lived intangible assets. We evaluate goodwill and indefinite-lived intangible assets at least annually for any potential impairment. If it is determined that goodwill or indefinite-lived intangible assets have been impaired, we must write down the goodwill and indefinite-lived intangible assets by the amount of the impairment, with a corresponding charge to net income. These write downs could have a material adverse effect on our results of operations and financial condition.

If we fail to maintain an effective system of internal controls, we may not be able to accurately determine our financial results or prevent fraud. As a result, our stockholders could lose confidence in our financial results, which could harm our business and the market value of our common shares.

Effective internal controls over financial reporting are necessary for us to provide reliable and accurate financial reports and effectively prevent fraud. We may in the future discover areas of our internal controls that need improvement. Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX”) requires us to evaluate and report on the effectiveness of our internal controls over financial reporting and have our independent auditors issue their own opinion regarding the effectiveness of our internal control over financial reporting and related disclosures. While we continually undertake efforts to maintain an effective system of internal controls and compliance with SOX, we cannot always be certain that we will be successful in maintaining adequate control over our financial reporting and related financial processes. Furthermore, as we grow our business, our internal control structure may become more complex, and could possibly require significantly more resources to ensure our internal controls remain effective. If we or our independent auditors discover a material weakness or significant deficiency in our controls over financial reporting, the disclosure of that fact, even if immediately remedied, could significantly reduce the
27

Table of Contents
market value of our common stock. In addition, the existence of any material weakness or significant deficiency may require management to devote significant time and incur significant expense to remediate any such weaknesses, and management may not be able to remediate the same in a timely manner.

The nature of our business requires the application of complex revenue and expense recognition rules that require management to make estimates and assumptions. Additionally, the current legislative and regulatory environment affecting U.S. Generally Accepted Accounting Principles (“GAAP”) is uncertain and significant changes in current principles could affect our financial statements going forward.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets, liabilities, equity, revenues and expenses that are not readily apparent from other sources.

While we believe that our financial statements have been prepared in accordance with GAAP, we cannot predict with certainty the impact of future changes to accounting principles or our accounting policies on our financial statements going forward. In addition, were we to change our critical accounting estimates, including the timing of recognition of license revenue and other revenue sources, our reported revenues and results of operations could be significantly impacted. Additionally, the accounting rules and regulations that we must comply with are complex. The Financial Accounting Standards Board (the “FASB”) and the SEC, or other accounting organizations or governmental entities frequently issue new pronouncements or new interpretations of existing accounting standards. Recent actions and public comments from the FASB and the SEC have focused on the integrity of financial reporting. In addition, many companies' accounting policies are being subject to heightened scrutiny by regulators and the public. Changes in accounting standards, how the accounting standards are interpreted, or the adoption of new accounting standards, particularly concerning revenue recognition, can have a significant effect on our reported results, and could even retroactively affect previously reported transactions and financial statements, and may require that we make significant changes to our systems and operational policy, processes and controls.

    Further, the accounting rules and regulations are continually changing in ways that could materially impact our financial statements. Changes resulting from these new standards may result in materially different financial results and may require that we change how we process, analyze and report financial information and that we change financial reporting controls. Such changes in accounting standards may have an adverse effect on our business, financial position, and income, which may negatively impact our financial results.

We may be exposed to risks relating to the resignation of our prior registered public accounting firm.

    As previously disclosed by the Company in its Current Report on Form 8-K filed with filed with the SEC on February 19, 2021 (the “February 19 8-K”), on February 15, 2021, the Company received notice from its registered public accounting firm, RSM, that RSM resigned effective immediately. As further described in the February 19, 2021 8-K, RSM informed the Company that it was “resigning as a result of being unable, despite repeated inquiries, to obtain sufficient appropriate audit evidence that would allow it to evaluate the business purpose of significant unusual transactions that occurred in the fourth quarter of 2020, including whether such transactions have been properly accounted for and disclosed in the financial statements subject to the Audit.”

    As further described in the February 19, 2021 8-K, from the time that RSM was initially engaged through its resignation, other than as provided above and described in the February 19, 2021 8-K, there were no (i) disagreements (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K) between the Company and RSM on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of RSM, would have caused RSM to make reference to the subject matter thereof in its reports for such fiscal years and interim period, or (ii), reportable events as that term is described in Item 304(a)(1)(v) of Regulation S-K. Nevertheless, we may discover future deficiencies in our internal controls over financial reporting, including those identified through testing conducted by us or subsequent testing by our independent registered public accounting firm. If we are unable to meet the demands that have been placed upon us as a public company, including the requirements of the Sarbanes-Oxley Act, we may be unable to accurately report our financial results in future periods, or report them within the timeframes required by law or stock exchange regulations. Failure to comply with the Sarbanes-Oxley Act, when and as applicable, could also potentially subject us to sanctions or investigations by the SEC or other regulatory authorities. Any failure to maintain or implement required new or improved controls, or any difficulties we encounter in their implementation, could result in additional material weaknesses or significant deficiencies, cause us to fail to meet our reporting obligations or result in material
28

Table of Contents
misstatements in our financial statements. If we cannot provide reliable financial reports or prevent fraud, our business and results of operations could be harmed and investors could lose confidence in our reported financial information.

Risks Related to Litigation and Regulation

The costs and effects of litigation, investigations or similar matters involving us or our subsidiaries, or adverse facts and developments related thereto, could materially affect our business, operating results and financial condition. Our insurance may not cover these costs.

We may be involved from time to time in a variety of litigation, investigations, inquiries or similar matters arising out of our business, including those described in “Part I, Item 3 - Legal Proceedings” and “Part II - Item 8. Financial Statements and Supplementary Data - Note 5 - Commitments and Contingencies” of this Report. We cannot predict the outcome of these or any other legal matters. In the future, we may need to record litigation reserves with respect to these matters. Further, regardless of how these matters proceed, it could divert our management's attention and other resources away from our business. Our insurance may not cover all claims that may be asserted against us and indemnification rights to which we are entitled may not be honored, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation. Should the ultimate judgments or settlements in any litigation or investigation significantly exceed our insurance coverage, they could have a material adverse effect on our business, financial condition and results of operations. In addition, premiums for insurance covering directors' and officers' liability are rising. We may not be able to obtain appropriate types or levels of insurance in the future, nor may we be able to obtain adequate replacement policies with acceptable terms or at historic rates, if at all.

Government investigations may require significant management time and attention, result in significant legal expenses or damages and cause the Company's business, financial condition, results of operations and cash flows to suffer. The Company could face additional governmental investigations, could incur substantial costs to defend any such investigations and be required to pay damages, fines and penalties, or incur additional expenses or be subject to injunctions as a result of the outcome of such investigations. The unfavorable resolution of one or more matters could adversely impact the Company.

The Company has been subject to government investigations in the past and may be subject to new government investigations in the future. The amount of time needed to resolve any such investigations is uncertain, and the Company cannot predict the outcome of any such investigations. Subject to certain limitations, the Company is obligated to indemnify current and former directors, officers and employees in connection with any such governmental investigations, inquiries, or actions. Such matters could require the Company to expend significant management time and incur significant legal and other expenses, result in civil and criminal actions seeking, among other things, injunctions against the Company and the payment of significant fines and penalties by the Company and adversely affect our ability to attract and retain customers and employees, which could have a material effect on the Company's financial condition, business, results of operations and cash flow. Additionally, marketplace rumors regarding any such investigations could affect the trading price of our common stock, regardless of whether these rumors are accurate.
If governmental authorities were to commence legal action related to any such investigations, then the Company could be required to pay significant penalties and could become subject to injunctions, a cease and desist order and other equitable remedies. The Company can provide no assurances as to the outcome of any such governmental investigation.
Federal Trade Commission laws and regulations that govern the insurance industry could expose us or the agents, brokers and carriers with whom we conduct business in our online marketplace to legal penalties.

We perform functions for licensed insurance agents, brokers and carriers and need to comply with complex regulations that vary among states and nations. These regulations can be difficult to comply with, and open to interpretation. If we fail to properly interpret or comply with these regulations, we, the insurance agents, brokers or carriers doing business with us, our officers, or agents with whom we contract could be subject to various sanctions, including censure, fines, cease-and-desist orders, loss of license or other penalties. This risk, as well as other laws and regulations affecting our business and changes in the regulatory climate or the enforcement or interpretation of existing law, could expose us to additional costs, including indemnification of participating insurance agents, brokers or carriers, and could require changes to our business or otherwise harm our business. Furthermore, because the application of online commerce to the consumer insurance market is relatively new, the impact of current or future regulations on our business is difficult to anticipate. To the extent that there are changes in regulations regarding the manner in which insurance is sold, our business could be adversely affected.

Potential liabilities under the Foreign Corrupt Practices Act ("FCPA") could have a material adverse effect on our business.
29

Table of Contents

We are subject to the FCPA, which prohibits people or companies subject to U.S. jurisdiction and their intermediaries from engaging in bribery or other prohibited payments to foreign officials for the purposes of obtaining or retaining business or gaining an unfair business advantage. It also requires proper record keeping and characterization of such payments in reports filed with the SEC. Our international operations subject us to possible FCPA violations, likely more so than most companies. To the extent that any of our employees, supplies, distributors, consultants, subcontractors, or others engage in conduct that subjects us to exposure under the FCPA, or other anti-corruption legislation, we could suffer financial penalties, debarment from government contracts and other consequences that may have a material adverse effect on our business, financial condition or results of operations.

We are not in compliance with the requirements of Nasdaq for continued listing, and if Nasdaq does not concur that we have adequately remedied our non-compliance with Nasdaq Listing Rule 5250(c)(1), our common stock may be delisted from trading on Nasdaq, which could have a material adverse effect on us and our shareholders.

    On March 1, 2021, subsequent to the resignation of RSM from its position on February 15, 2021, we filed a Notification of Late Filing with the SEC pursuant to Rule 12b-25 of the Securities Exchange Act of 1934, as amended (“Rule 12b-25”), indicating that we were unable, without unreasonable effort and expense, to finalize our 2020 Financial Statements by March 1, 2021, the filing due date to file the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”) . We indicated at the time that we intended to file the 2020 Form 10-K as soon as practicable, and would make every effort to file the 2020 Form 10-K within the fifteen-day extension period afforded by Rule 12b-25.

    On March 2, 2021, we received a notification letter from The Nasdaq Stock Market LLC (“Nasdaq”) stating that, because the Company had not yet filed the 2020 Form 10-K, the Company was no longer in compliance with Nasdaq Listing Rule 5250(c)(1), which requires listed companies to timely file all required periodic financial reports with the SEC. Nasdaq’s notification letter states that we have 45 calendar days, or until April 16, 2021, to submit to Nasdaq a plan to regain compliance with the Nasdaq Listing Rules. If Nasdaq accepts the Company’s plan, then Nasdaq may grant the Company up to 180 days from the prescribed due date for filing the 2020 Form 10-K to regain compliance. If Nasdaq does not accept the Company’s plan, then the Company will have the opportunity to appeal that decision to a Nasdaq hearings panel.

    The Company has provided its plan to Nasdaq, and as described in more detail above, the Company has retained KGS as its independent registered public accounting firm to audit the Financial Statements. However, there can be no assurance that Nasdaq will concur that we have remedied our non-compliance with Listing Rule 5250(c)(1), in which case our common stock could remain subject to delisting by Nasdaq. If our common stock is delisted, there can be no assurance whether or when it would again be listed for trading on Nasdaq or any other securities exchange. Further, the market price of our shares could decline and become more volatile, and our shareholders might find that their investment in our shares has limited liquidity. Moreover, institutions whose charters forbid holding securities in unlisted companies might sell our shares, which could have a further adverse effect on the price of our stock.

Risks Related To Our Common Stock

The price of our common stock may be extremely volatile.

In a future period, our results of operations may be below the expectations of public market investors, which could negatively affect the market price of our common stock. Furthermore, the stock market in general has experienced heightened price and volume fluctuations recently. We believe that, in the future, the market price of our common stock could fluctuate widely due to variations in our performance and operating results or because of any of the following factors:

announcements of new services, products, or technological innovations, or strategic relationships by us or our competitors;
announcements of business acquisitions or strategic relationships by us or our competitors;
trends or conditions in the insurance, financial services, software, business process outsourcing and internet/e-commerce markets;
changes in market valuations of our competitors; and
general political, economic, regulatory and market conditions.

In addition, the market prices of securities of technology companies, including our own, have been volatile and have experienced fluctuations that have often been unrelated or disproportionate to a specific company's operating performance. As a result, investors may not be able to sell shares of our common stock at or above the price at which an investor paid. In the past, following periods of volatility in the market price of a company's securities, securities class action litigation has often been
30

Table of Contents
instituted against that company. Any securities litigation would involve substantial costs and our management's attention could be diverted from our business.

Our ability and intent to pay cash dividends in the future may be limited.

We currently pay a $0.075 quarterly dividend on our common shares, and while the Board of Directors intends to pay quarterly dividends, the Board will make the determination of the amount of future cash dividends, if any, to be declared and paid based on, among other things, our financial condition, funds from operations, the level of our capital expenditures and future business prospects.


Quarterly and annual operating results may fluctuate, which could cause our stock price to be volatile.

Our quarterly and annual operating results may fluctuate significantly in the future due to a variety of factors related to our revenues or operating expenses in any particular period. Results of operations during any particular period are not necessarily an indication of our results for any other period. Factors that may adversely affect our periodic results may include the loss of a significant insurance agent, carrier or broker relationship or the merger of any of our participating insurance carriers with one another. Our operating expenses are based in part on our expectations of our future revenues and are partially fixed in the short term. We may be unable to adjust spending quickly enough to offset any unexpected revenue shortfall.








1B. UNRESOLVED STAFF COMMENTS
    None.


Item 2. PROPERTIES

    The Company’s corporate headquarters, including substantially all of our corporate administration functions, is located in Johns Creek, Georgia where we own a commercial office building. In addition the Company and its subsidiaries lease office space, primarily for sales and operations support, in Salt Lake City, Utah,  Pittsburgh, Pennsylvania, Pasadena, California, Birmingham, Alabama,  and Phoenix, Arizona. The Company leases office space in New Zealand, Australia, Singapore, Dubai, Brazil, Canada, Indonesia, Philippines, and London for support, operations and sales offices. The Company also leases approximately 140 facilities across India, while owning six facilities in India. Management believes its facilities are adequate for its current needs and that necessary suitable additional or substitute space will be available as needed at reasonable rates.
    Information on the geographic dispersion of the Company’s revenues and long-lived assets is furnished in Note 14 to the consolidated financial statements, included in Part II Item 8 of this Form 10-K.


Item 3. LEGAL PROCEEDINGS

On February 22, 2021, Christine Marie Teifke, a purported purchaser of Ebix, Inc. securities, filed a putative class action in the United States District Court for the Southern District of New York on behalf of herself and others who purchased or acquired Ebix securities between November 9, 2020 and February 19, 2021. The complaint asserts claims against Ebix, Inc., Robin Raina, and Steven M. Hamil, for purported violations of Section 10(b) of the Securities Exchange Act of 1934, alleging that Ebix, Inc. made false and misleading statements and failed to disclose material adverse facts about an audit of the company's gift card business in India and its internal controls over the gift and prepaid card revenue transaction cycle. The complaint also asserts a claim against Robin Raina and Steven M. Hamil for purported violations of Section 20(a) of the Exchange Act arising out of the same facts. The complaint seeks, among other relief, damages and attorneys' fees and costs.
    
31

Table of Contents
On July 16, 2019, Yatra Online, Inc. ("Yatra"), Ebix, Inc. ("Ebix"), and EbixCash Travels, Inc. ("Merger Sub") entered into a Merger Agreement. On May 14, 2020, Yatra entered into an agreement with Ebix and Merger Sub extending the outside date of the Merger Agreement (the "Extension Agreement"). On June 5, 2020, Yatra terminated the Merger Agreement and filed a complaint in the Delaware Court of Chancery against Ebix and Merger Sub (the "Complaint"). On September 25, 2020, Yatra amended the Complaint and added as a defendant each financial institution (each, a “Defendant Lender”) party to the Credit Facility, which, prior to the filing of the original Complaint, had been previously amended on May 7, 2020 (the “Credit Facility”). The Complaint, as amended, alleges that Ebix and Merger Sub breached certain representations, warranties, and covenants contained in the Merger Agreement and the Extension Agreement and that Ebix negotiated in bad faith. The amended Complaint also alleges fraudulent actions by Ebix and the Defendant Lenders arising from certain terms of the Credit Facility and tortious interference with the closing of the Merger Agreement by Ebix and the Defendant Lenders. The Complaint seeks, among other relief, damages, pre-judgment and post-judgment interest, and attorneys' fees and costs. Ebix and Merger Sub deny any liability and intend to defend the action vigorously.

On May 12, 2017, Ebix Software India Pvt. Ltd. (“Ebixcash”) entered into several agreements with the most prominent shareholders of Itz Cash Card Limited (“Itz”), the most relevant among these a stock purchase agreement (the “SPA”), to purchase a majority ownership stake in Itz. Further, as part of the overall purchase of Itz, a share purchase agreement between Ebixcash and individual ESOP holders of Itz was entered into on July 7, 2017 (the “ESOP SPA”) (with the SPA, the ESOP SPA and the other purchase documents, collectively, the “Transaction Documents”). Part of the consideration for Ebixcash’s purchase of Itz consisted of two individual potential earn-out payments, the first for the period for the year ended March 31, 2019 (the “First Earn-Out”) and the second for the following year, ending on March 31, 2020 (the “Second Earn-Out”). Neither the First Earn-Out nor the Second Earn-Out were achieved pursuant to the terms of the SPA. After correspondence between the parties between September 2019 and May 2020, the former shareholders of Itz (“Sellers”) sent Ebixcash notices of arbitration (“NOAs”) under which they were availing themselves of the arbitration dispute provisions set forth in the Transaction Documents. Apart from the amounts claimed owed under the earn-out provisions, the Sellers also alleged in the NOAs other violations of the terms of the Transaction Documents, including, certain non-competition and restricted matter approval violations. The matter is under Arbitration in accordance with the rules of the Singapore International Arbitration Centre. The Company believes that each of the Sellers claims is without merit and continues to defend its position vigorously. The Company believes that Ebixcash has several viable counterclaims related to improper termination of the Transaction Documents and violation of non-compete provisions.

As the Company has previously disclosed, in May 2013, twelve putative class action complaints were filed in the Delaware Court of Chancery against the Company and its board of directors challenging a proposed merger between the Company and an affiliate of Goldman Sachs & Co. On June 10, 2013, the Court entered an Order of Consolidation and Appointment of Lead Plaintiffs and a Leadership Structure consolidating the twelve actions and appointing lead plaintiffs (“Plaintiffs”) and lead counsel in the litigation, captioned In re Ebix, Inc. Stockholder Litigation, Consol. C.A. No. 8526-VCS (the “Litigation”). In connection with the Litigation, on January 23, 2019, the parties entered into a Stipulation and Agreement of Settlement (the “Settlement Agreement”) pursuant to which the parties agreed, subject to approval by the Delaware Court of Chancery, to settle and resolve the Litigation pursuant to the terms set forth in the Settlement Agreement (the “Litigation Settlement”). On April 5, 2019, the Delaware Court of Chancery determined that the Litigation Settlement was fair, reasonable, adequate and in the best interest of the plaintiffs, the class and the Company and awarded to plaintiffs’ counsel attorneys’ fees and expenses in the sum of $19.65 million, payable by the Company within 20 days, and entered an Order and Final Judgment (the “Order”) approving the Litigation Settlement. The Order provides for full settlement, satisfaction, compromise and release of all claims that were asserted or could have been asserted in the Litigation, whether on behalf of the class or the Company. The Order is publicly available for inspection at the Office of the Register in Chancery, and on the Court's online electronic filing system, File & ServeXpress. The Settlement contains no admission of wrongdoing or liability, and may not be deemed to be a presumption as to the validity of any claims, causes of action or other issues. The Settlement was fully paid on May 2, 2019.

The Company is involved in various other claims and legal actions arising in the ordinary course of business, which in the opinion of management, the ultimate likely disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.




Item 4. MINE SAFETY DISCLOSURES
    Not applicable.
32

Table of Contents
PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
    At December 31, 2020, the principal market for the Company’s common stock was the Nasdaq Global Capital Market. The Company’s common stock trades under the symbol “EBIX.”
As previously disclosed, on March 2, 2021, the Company received a notification letter from Nasdaq stating that, because the Company had not yet filed its Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”), the Company was no longer in compliance with Nasdaq Listing Rule 5250(c)(1), which requires listed companies to timely file all required periodic financial reports with the SEC. Nasdaq’s notification letter states that the Company has 45 calendar days, or until April 16, 2021, to submit to Nasdaq a plan to regain compliance with the Nasdaq Listing Rules, and the Company has provided such a plan to Nasdaq within this timeline.

    If Nasdaq accepts the Company’s plan, then Nasdaq may grant the Company up to 180 days from the prescribed due date for filing the 2020 Form 10-K to regain compliance. If Nasdaq does not accept the Company’s plan, then the Company will have the opportunity to appeal that decision to a Nasdaq hearings panel. At this time, this matter has not affected the listing of the Company’s common stock on the Nasdaq Global Capital Market.

Holders
     As of April 23, 2021, there were 30,942,871 shares of the Company’s common stock outstanding. As of April 23, 2021, there were 136 registered holders of record of the Company’s common stock.
Dividends

     While the Board of Directors intends to continue to pay quarterly dividends, the Board will make the determination of the amount of future cash dividends, if any, to be declared and paid based on, among other things, the Company's financial condition, funds from operations, the level of its capital expenditures and its future business prospects.
Sales or Issuances of Unregistered Securities
    None
Recent Repurchases of Equity Securities
    There were no share repurchases made by the Company during the fiscal year ended December 31, 2020. During the fiscal year ended December 31, 2019, the Company repurchased 95,000 shares of common stock for a total aggregate purchase price of $4.15 million. The Company has approximately $80.1 million remaining under its current Board of Directors-approved share repurchase program.

33

Table of Contents
PERFORMANCE GRAPH
    The line graph below compares the yearly percentage change in cumulative total stockholder return on our Common Stock for the last five fiscal years with the Nasdaq Stock Market (U.S.) stock index and the Nasdaq Computer Index. The following graph assumes the investment of $100 on December 31, 2015, and the reinvestment of any dividends (rounded to the nearest dollar).
Comparison of Five Year Cumulative Total Return
12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020
EBIX, INC. $ 100  $ 176  $ 247  $ 140  $ 108  $ 120 
NASDAQ STOCK MARKET (U.S.) $ 100  $ 108  $ 138  $ 133  $ 179  $ 257 
NASDAQ COMPUTER $ 100  $ 112  $ 156  $ 150  $ 226  $ 338 
EBIX-20201231_G1.JPG
34

Table of Contents
Item 6. SELECTED FINANCIAL DATA
    The following data for fiscal years 2020, 2019, 2018, 2017, and 2016 should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and with our consolidated financial statements and the related notes and other financial information included herein.

Consolidated Financial Highlights

Year Ended December 31,
2020 2019 2018 2017 2016
(In thousands, except per share amounts)
Results of Operations:          
Revenue $ 625,609  $ 580,615  $ 497,826  $ 363,971  $ 298,294 
Operating income 125,802  155,673  152,979  113,221  100,281 
Net income from continuing operations $ 92,377  $ 96,720  $ 93,139  $ 100,618  $ 93,847 
Net income per share:        
Basic $ 3.03  $ 3.17  $ 2.97  $ 3.19  $ 2.88 
Diluted $ 3.02  $ 3.16  $ 2.95  $ 3.17  $ 2.86 
Shares used in computing per share data:        
Basic 30,510  30,511  31,393  31,552  32,603 
Diluted 30,571  30,594  31,534  31,719  32,863 
Cash dividend per common share $ 0.30  $ 0.30  $ 0.30  $ 0.30  $ 0.30 
Financial Position:        
Total assets $ 1,569,853  $ 1,591,619  $ 1,610,947  $ 1,113,013  $ 803,755 
Short-term debt* 25,260  23,650  19,053  14,500  12,500 
Long-term debt* 672,269  693,498  700,709  385,779  260,279 
Redeemable common stock —  —  —  —  — 
Stockholders’ equity $ 612,979  $ 599,445  $ 544,437  $ 533,759  $ 438,636 
*Excluding amounts related to deferred financing costs
35

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS ("MD&A") OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    As used herein, the terms “Ebix,” “the Company,” “we,” “our” and “us” refer to Ebix, Inc., a Delaware corporation, and its consolidated subsidiaries as a combined entity.
    The information contained in this section has been derived from our historical financial statements and should be read together with our historical financial statements and related notes included elsewhere in this document. The discussion below contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve risks and uncertainties including, but not limited to: demand and acceptance of services offered by us, our ability to achieve and maintain acceptable cost levels, pricing levels and actions by competitors, regulatory matters, general economic conditions, and changing business strategies. Forward-looking statements are subject to a number of factors that could cause actual results to differ materially from our expressed or implied expectations, including, but not limited to our performance in future periods, our ability to generate working capital from operations, the adequacy of our insurance coverage, and the results of litigation or investigations. Our forward-looking statements can be identified by the use of terminology such as “anticipates,” “expects,” “intends,” “believes,” “will” or the negative thereof or variations thereon or comparable terminology. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
OVERVIEW

    Ebix endeavors to provide on-demand software and e-commerce services to the insurance, financial, healthcare and e-learning industries. In the Insurance sector, the Company’s main focus is to develop and deploy globally a wide variety of insurance and reinsurance exchanges on an on-demand basis, while also providing SaaS enterprise solutions in the area of CRM, front-end & back-end systems, outsourced administrative and risk compliance. The P&C exchanges operate primarily in Australia, New Zealand and the U.K. With a "Phygital” strategy that combines over 320,000 physical distribution outlets in India and many (“ASEAN”) countries, to an Omni-channel online digital platform, the Company’s EbixCash Financial exchange portfolio encompasses leadership in the areas of domestic and international money remittance, Forex, travel, pre-paid & gift cards, utility payments, software solutions for lending and wealth management etc., in India and other markets. The Company’s Forex Exchange has the leading market share within India’s airport foreign exchange business and encompasses 20 international airports, such as Delhi, Mumbai, Hyderabad, Chennai and Kolkata International airports, all of which combined conducting over $4.8 billion in gross transaction value annually (pre-COVID-19). EbixCash’s inward remittance business in India conducts gross annual remittance of approximately $5 billion annually (pre-COVID-19) and is the clear market leader. EbixCash, through its travel portfolio of Via and Mercury, is one of Southeast Asia’s leading travel exchanges, with over 200,000 agents, 25 branches and over 9,800 corporate clients, combined processing an estimated $2.5 billion in gross merchandise value per annum (pre-COVID-19). Through its various SaaS-based software platforms, Ebix employs thousands of domain-specific technology professionals to provide products, support and consultancy to thousands of customers on six continents.

    Ebix provides application software products for the insurance industry, including carrier systems, agency systems and exchanges, as well as custom software development. Approximately 88% of the Company’s revenues are either recurring or repeating (transaction-based) in nature. Rather than license our products in perpetuity, we typically either license them for multiple years with ongoing support revenues or license them on a limited term basis using a subscription hosting or Application Service Provider ("ASP") model. Combined subscription-based and transaction-based revenues of $552 million comprised 88% of the Company's total revenues in 2020, as compared to 84% of total revenues in 2019. In 2020, subscription-based revenues decreased by approximately $14 million to $164 million, and as a percentage of the Company's total revenues was 26% in 2020 versus 31% in 2019. The Company has modified the classification of certain revenues in 2020, which impacts the presentation of 2019 revenues and percentages above versus the 2019 10-K presentation.

The Company’s technology vision is to converge processes in a manner such that data can seamlessly flow between entities after an initial data entry has been made. Our customers include many of the top insurance and financial sector companies in the world.

The insurance and financial markets continue to focus on initiatives to reduce paper-based processes and facilitate improvements in efficiency, both on the back end of transactions as well as at the consumer-involved front end of transaction processes. This drive for efficiency involves all entities and directly impacts the manner in which insurance and financial products are distributed. Management believes that both the insurance and financial services industries will continue to
36

Table of Contents
experience significant change and increased efficiencies through online exchanges as reduced paper-based processes are becoming increasingly the norm across the world insurance and financial markets.



Trends and Uncertainties Related to the COVID-19 Pandemic

In December 2019, COVID-19 was reported and has spread globally, including to every state in the U.S. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, 2020 the U.S. government declared a national emergency with respect to COVID-19.

In response to the COVID-19 pandemic, many state, local, and foreign governments implemented travel restrictions, quarantines, shelter-in-place orders, and similar government orders and restrictions, in an attempt to control the spread of the disease. Such restrictions or orders, or the perception that such restrictions or orders could be implemented, resulted in business closures, work stoppages, slowdowns and delays, work-from-home policies, and the cancellation or postponement of events.

Beginning in March 2020, in an effort to protect our employees and comply with applicable government orders, we restricted non-essential employee travel and transitioned our employees to a remote work environment. We have not experienced a material impact from shifting our employees to a remote work environment, which we primarily attribute to the professionalism of our workforce and our extensive use of technology throughout our business. However, COVID-19 could negatively impact the productivity of our workforce if the pandemic requires prolonged remote working conditions.

During the fiscal year ended December 31, 2020, particularly beginning in March, we experienced a decrease in demand for certain of our solutions and services, particularly those related to the Company's travel, foreign exchange, remittance, e-learning and consulting business areas, after certain government restrictions were implemented. This decreased demand continued throughout 2020 in varying degrees for each business area, and even persists through the date of this filing for all of the above mentioned business areas, but most notably in the travel and foreign exchange businesses. We expect that demand variability for our products and services will continue as a result of the COVID-19 pandemic, and cannot predict with any certainty when demand for these solutions/services will return to pre-COVID-19 levels.

We continue to monitor developments related to COVID-19 and remain flexible in our response to the challenges presented by the pandemic. Along with the measures mentioned above to protect the health and safety of our employees, we have also taken steps to strengthen our financial position to mitigate the adverse impact that COVID-19 has had or may have on our business and operations, including amending our Credit Facility, reducing salaries for certain employees, furloughing employees in the most negatively impacted business areas, eliminating certain employee positions, and eliminating, reducing, or deferring non-essential expenditures. Additionally, we have taken steps to preserve cash balances, including a temporary cessation to our share repurchase program.

Our reported results for the year ended December 31, 2020 may not be reflective of current market conditions, or of our results for any future periods, which may be negatively impacted by the COVID-19 pandemic to a greater extent than the reported period. The impact of the COVID-19 pandemic may also exacerbate other risks discussed in this Annual Report. Refer to Item 1A. “Risk Factors” in this Annual Report on Form 10-K for a complete description of the material risks that the Company currently faces.

Key Performance Indicators    
Management focuses on a variety of key indicators to monitor the Company's operating and financial performance. These performance indicators include measurements of revenue growth, operating income, operating margin, income from continuing operations, diluted earnings per share, and cash provided by operating activities. We monitor these indicators, in conjunction with our corporate governance practices, to ensure efficient management of our business and maintenance of effective controls.

    The MD&A discusses year-to-year comparisons between 2020 and 2019. Discussions of year-to-year comparisons between 2019 and 2018 are not included in this Form 10-K, but can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on March 2, 2020.
    The key performance indicators for the twelve months ended December 31, 2020, 2019, and 2018 were as follows:
37

Key Performance Indicators
Twelve Months Ended December 31,
(In thousands except per share data) 2020 2019 2018
Revenue $ 625,609  $ 580,615  $ 497,826 
Revenue growth % 17  % 37  %
Operating income $ 125,802  $ 155,673  $ 152,979 
Net income attributable to Ebix, Inc. $ 92,377  $ 96,720  $ 93,139 
Diluted earnings per share $ 3.02  $ 3.16  $ 2.95 
Cash provided by operating activities $ 100,356  $ 60,793  $ 83,455 

RESULTS OF OPERATIONS
Year Ended December 31,
2020 2019 2018
  (In thousands)
Operating revenue: $ 625,609  $ 580,615  $ 497,826 
Operating expenses:
Costs of services provided 343,262  205,165  168,415 
Product development 35,267  45,302  39,078 
Sales and marketing 13,835  19,578  17,587 
General and administrative, net 87,537  140,429  108,475 
Amortization and depreciation 13,738  14,468  11,292 
Impairment of intangible asset 6,168     
Total operating expenses 499,807  424,942  344,847 
Operating income 125,802  155,673  152,979 
Interest expense, net (31,411) (41,703) (26,665)
Other non-operating income 153  337  60 
Non-operating expense - securities litigation —  (21,140) — 
Foreign exchange loss, net (387) (2,376) (792)
Income before taxes 94,157  90,791  125,582 
Income tax expense (5,330) (220) (32,501)
Net income including noncontrolling interest $ 88,827  $ 90,571  $ 93,081 
Net income attributable to noncontrolling interest (3,550) $ (6,149) $ (58)
Net income attributable to Ebix, Inc. $ 92,377  $ 96,720  $ 93,139 
TWELVE MONTHS ENDED DECEMBER 31, 2020 AND 2019
Operating Revenue

    The Company derives its revenues primarily from subscription and transaction fees pertaining to products or services delivered over our exchanges or from our ASP, fees for business process outsourcing services, and fees for software development projects, including fees for consulting, implementation, training, and project management provided to customers with installed systems, e-governance solutions to governmental agencies in the health and education sectors, as well as foreign exchange, remittance (both inward and outward) and travel services from our financial exchanges.
    Ebix’s revenue streams come from three product/service channels. Presented in the table below is the breakout of our revenues for each of those product/service channels for the years ended December 31, 2020 and 2019.
38

For the Year Ended
December 31,
(In thousands) 2020 2019
EbixCash Exchanges 388,293  319,953 
Insurance Exchanges 178,111  190,067 
Risk Compliance Solutions 59,205  70,595 
Totals $ 625,609  $ 580,615 


    In the table above for the year ending December 31, 2020 and 2019 there are $13.1 million and $17.5 million, respectively, of Insurance Exchange revenues derived in India that are being reported within the EbixCash Exchange channel above.

    During the twelve months ended December 31, 2020, our total revenue increased $45.0 million, or 8%, to $625.6 million compared to $580.6 million in 2019. On March 11, 2020, COVID-19 was declared a global pandemic by the World Health Organization. Across the U.S. and the world, governments and municipalities instituted measures to control the spread of COVID-19, including quarantines, shelter-in-place orders, school closings, travel restrictions and the closure of non-essential businesses. Countries across the world are re-opening economies, but are doing so in phases that differ in each country and, in many cases, within individual countries. While our travel, foreign exchange, remittance and e-learning businesses continue to be materially negatively impacted by COVID-19, the increase in 2020 total revenue year-over-year was due primarily to strong demand for the Company's payment solutions offerings in India (primarily prepaid gift cards), which increased by more than $200 million year-over-year to approximately $256 million, or 590% year-over-year growth. The increased demand for prepaid gift cards in India was primarily due to: (i) changes in regulations by the Reserve Bank of India related to debit cards, which has shifted demand in the market towards prepaid gift cards; (ii) COVID-19, which has facilitated increased online and electronic commerce due to restrictive lockdowns in 2020; and (iii) the Company's increased marketing efforts around the prepaid gift card business. The Company’s travel, foreign exchange, remittance and e-learning businesses had a year-over-year decline in revenues in 2020 in excess of $150 million, an approximately 65% decline year-over-year, which offset the growth in the payments solutions business.

The impact from fluctuations of the exchange rates for the foreign currencies in the countries in which we conduct operations also adversely affected reported revenue. During each of the years 2020 and 2019 the change in foreign currency exchange rates decreased reported consolidated operating revenue by $(21.9) million and $(9.3) million, respectively. Thus, on a constant currency basis total revenue for the fiscal year 2020 increased approximately 12% year-over-year.

The specific components of our revenue based on our three main business lines and the changes experienced during the past year are discussed immediately below.
    Overall Exchange revenues increased $56.4 million, or 11%, as explained below:
Insurance Exchange division revenues decreased by $12.0 million, or 6%, principally due to challenges faced in our health content services channel, and the negative effect of foreign exchange losses associated with the strengthening U.S. dollar
EbixCash Exchange division revenues increased $68.3 million, or 21%, due to a mix of organic growth and business acquisitions in the travel, foreign exchange, and software solutions sectors, offset by foreign exchange losses associated with the strengthening of the US Dollar.
Risk Compliance Solutions division revenues decreased by $11.4 million, or 16%, primarily due to a decline in our U.S. professional consulting services associated with some major realignments in the sector.

International revenue accounted for 73% and 69% of the Company’s total revenue for the fiscal years ended December 31, 2020 and 2019, respectively.

Costs of Services Provided

39

    Costs of services provided, which includes costs associated with product sales, customer support, consulting, implementation, and training services increased $138.1 million, or 67%, from $205.2 million in 2019 to $343.3 million in 2020 and the Company's gross margin decreased to 45.1% in 2020 from 64.7% in 2019. The increase in costs of services provided and the decrease in gross margin from fiscal year 2019 to 2020 is directly related to the increase in over $200 million in revenue within the Company’s payment solutions business (primarily gift card revenue) in fiscal years 2020 versus 2019. Payment solutions gross margins are significantly lower than other solutions and services the Company provides its customers. In fiscal years 2020 and 2019, the payment solutions gross margins for the Company were approximately 1% and 9.5%, respectively. Excluding the payment solutions business, gross margins for the Company in fiscal years 2020 and 2019 were approximately 76% and 68%, respectively. The increase in gross margins, excluding the payment solutions business, in fiscal year 2020 versus 2019 was driven by the revenue mix differences for the Company, with the Company’s highest margin solutions/services (e.g. insurance exchange software and services) experiencing less relative negative impact from COVID-19 during 2020 versus other solutions/services (e.g. travel, foreign exchange and remittance businesses).

Product Development Expenses

    The Company’s product development efforts are focused on the development of new technologies for insurance carriers, brokers and agents, and the development of new data exchanges for use in domestic and international insurance markets, as well as the Forex and travel sectors. Product development expenses decreased $10.0 million, or 22%, from $45.3 million in 2019 to $35.3 million in 2020. The decrease is due to reduced personnel costs and is directly related to actions taken by management to reduce overall corporate expenditures in fiscal year 2020 versus 2019 in response to COVID-19.
Sales and Marketing Expenses

    Sales and marketing expenses decreased $5.7 million, or 29%, from $19.6 million in 2019 to $13.8 million in 2020. This decrease is primarily due to reduced advertising and marketing costs in response to COVID-19.
General and Administrative Expenses

    General and administrative ("G&A") expenses decreased $52.9 million, or 38%, from $140.4 million in 2019 to $87.5 million in 2020. This decrease was driven mostly by management’s strategic response to COVID-19 to reduce overall corporate costs, as well as material rent reductions and abatements as a result of COVID-19. Specifically, personnel-related costs decreased approximately $28 million in fiscal year 2020 as compared to 2019, and rent expense in fiscal year 2020 was approximately $23 million less than in fiscal year 2019. Other items impacting the year-to-year comparison of G&A expenses include a reduction in bad debt expense of approximately $12 million in fiscal year 2020 as compared to 2019 due to the $12.1 million accounts receivable reserve that was recognized in the third quarter of 2019 as a precautionary measure in regards to receivables that are due from a public sector entity in India and that were billed during the 2016 through 2019 operating periods. Additionally, in 2019 the Company reduced the acquisition earn out accrual for the ItzCash acquisition by $15.4 million, which served to decrease overall G&A expenses in 2019. The one-time accounts receivable reserve of $12.1 million (increased G&A expense) and the $15.4 million earn out accrual reduction (reduced G&A expense) largely offset the impacts to overall G&A expense in fiscal year 2019.
Amortization and Depreciation Expenses

    Amortization and depreciation expenses decreased $730 thousand, or 5%, to $13.7 million in 2020 from $14.5 million in 2019 primarily due to lower amortization in 2020 versus 2019 related to definite lived intangibles resulting from prior acquisition activity, primarily in India.

Interest Income

    Interest income decreased $462 thousand, or 73%, from $629 thousand in 2019 to $167 thousand in 2020 primarily due to decreases in the comparative balances in interest bearing accounts and overall lower interest rates in 2020 compared to 2019.
40

Interest Expense

    Interest expense decreased $10.8 million, or 25% from $42.3 million in 2019 to $31.6 million in 2020, primarily due to decrease LIBOR interest rates in 2020 versus 2019. Additionally, The Company’s working capital facilities in India had average balances that were approximately $30 million lower in 2020 versus 2019. These working capital facilities generally carry interest rates of between 6.75% and 9.45%. The decrease in working capital facilities was associated with both COVID-19's impact on operations and renegotiated customer agreements that improved the Company’s payment terms in 2020 relative to 2019.
Foreign Exchange Loss

Net foreign exchange loss of $387 thousand in 2020 which consisted of net losses realized and unrealized upon the settlement of receivables or payables and re-measurement of cash balances denominated in currencies other than the functional currency of the respective operating division recording the instrument. In fiscal year 2019, a net foreign currency exchange loss of $2.4 million was recorded.
Income Taxes
The Company recognized income tax expense of $5.3 million in 2020 compared to $0.2 million of income tax expense in 2019, representing an increase of $5.1 million. Our effective tax rate increased to 5.7% in 2020, compared with 0.2% in 2019. The increase in the effective tax rate in 2020 is due to a decrease in the availability of tax credits in 2020 as compared to 2019, as well as a lower tax holiday benefit available in 2020 compared to 2019 and a lower benefit from state tax deductions.
The pre-tax income from and the applicable statutory tax rates in each jurisdiction in which the Company had operations for the year ending December 31, 2020 are as follows:

(In thousands) Pre-tax income Statutory tax rate
United States (27,528) 21.0  %
Canada (29) 26.5  %
Brazil 3,708  34.0  %
Australia 2,332  30.0  %
Singapore 2,654  17.0  %
New Zealand 899  28.0  %
India 47,925  34.6  %
Mauritius (3,358) 15.0  %
United Kingdom 5,056  19.0  %
Sweden 1,977  22.0  %
Thailand (19) 20.0  %
Dubai 60,540  ----%
Total 94,157 


LIQUIDITY AND CAPITAL RESOURCES
    Our principal sources of liquidity are the cash flows provided by our operating activities, and cash and cash equivalents on hand.
    We intend to continue to utilize cash flows generated by our ongoing operating activities, in combination with the possible issuance of additional debt or equity, to fund capital expenditures and organic growth initiatives, to make strategic business acquisitions, to retire outstanding indebtedness, and to repurchase shares of our common stock if and as market and operating conditions warrant.
41

    We believe that anticipated cash flows provided by our operating activities, together with current cash balances and access to credit and the capital markets, if required, will be sufficient to meet our projected cash requirements for the next twelve months, although any projections of future cash needs, cash flows, and the general market conditions for credit and equity securities is subject to substantial uncertainty. In the event additional liquidity needs arise, we may raise funds from a combination of sources, including the potential issuance of debt or equity securities. However, there are no assurances that such financing will be available in amounts or on terms acceptable to us, if at all. In addition, the covenants in our Credit Facility could adversely affect our ability to obtain such financing and our ability to make strategic acquisitions, fund investments, repurchase shares of our common stock or engage in other business activities that could be in our interest.
    We regularly evaluate our liquidity requirements, including the need for additional debt or equity offerings, when considering potential business acquisitions, or the development of new products or services. During fiscal year 2021, the Company intends to utilize its cash and other financing resources to fund organic growth initiatives, strategic business acquisitions, and new product development initiatives and service offerings.
Our cash and cash equivalents were $105.0 million and $73.2 million at December 31, 2020 and 2019, respectively. The Company holds material cash and cash equivalent balances overseas in foreign jurisdictions. The free flow of cash from certain countries where we hold such balances may be subject to repatriation tax effects and other restrictions. Furthermore, the repatriation of earnings from some of our foreign subsidiaries would result in the application of withholding taxes at source and taxation at the U.S. parent level upon receipt of the repatriation amounts. The approximate cash, cash equivalents, restricted cash, and short-term investments balances held in our domestic U.S. operations and each of our foreign subsidiaries as of April 19, 2021 is presented in the table below (figures denominated in thousands):


Cash,
Restricted
Cash and ST
investments
India $ 66,879 
United States 15,164 
Philippines 7,352 
Australia 7,245 
Singapore 3,980 
Canada 2,079 
United Arab Emirates 1,373 
New Zealand 1,224 
Latin America 1,206 
Indonesia 1,077 
Europe 505 
Mauritius 10 
Total $ 108,094 
    
    Our current ratio increased from 1.55 at December 31, 2019 to 1.89 at December 31, 2020, and our working capital position increased to $170.5 million at December 31, 2020 as compared to $129.0 million at the end of 2019. The increase in our short-term liquidity position is primarily due to the following factors: (a) an approximately $91 million reduction in cash used for acquisitions in 2020 as compared to 2019; (b) a decrease in trade accounts receivable and accounts receivable from service providers at December 31, 2020 versus December 31, 2019 of approximately $24 million; and (c) partially offset by an approximately $44 million decrease in current liabilities during 2020, an increase in short-term investments of approximately $21 million at December 31, 2020 compared to December 31, 2019, and a decrease in the Company's working capital facilities at December 31, 2020 as compared to December 31, 2019 of approximately $12 million. We believe that our ability to generate sustainable robust cash flow from operations will enable the Company to continue to meet its debt obligations and to fund its current liabilities from current assets, including available cash balances.


Business Combinations

42

    The Company seeks to execute accretive business acquisitions in combination with organic growth initiatives as part of its comprehensive business growth and expansion strategy. The Company looks to acquire businesses that are complementary to Ebix's existing products and services.

During the twelve months ending December 31, 2020, the Company completed two business acquisition as follows:
Effective May 4, 2020, Ebix acquired from bankruptcy India-based Trimax, which provides IT and integration services to state-owned transport corporations, operates data centers, and is an IT infrastructure solution provider, for approximately $9.9 million of upfront consideration. Additionally, Ebix issued preferred shares in Trimax to the selling shareholders that can be sold five years from the closing of the acquisition based on an independent valuation performed by a Big 4 valuation firm. The maximum value of the preferred shares upon sale is approximately $9.9 million. The valuation and purchase price allocation remains preliminary and will be finalized as soon as practicable but in no event longer than one year from the effective date of this transaction.

In October 1, 2020 the Company acquired a 70% interest in AssureEdge Global Services (“AssureEdge”) for a total purchase price of approximately $5.0 million, including net working capital acquired. AssureEdge is a pan-India based BPO company, with a variety of BPO offerings via six contact centers across the country. It serves a number of industries and clients that have cross-selling value for EbixCash services. The valuation and purchase price allocation remains preliminary and will be finalized as soon as practicable, but in no event longer than one year from the effective date of this transaction.

During the twelve months ended December 31, 2019, the Company completed three business acquisitions, as follows:

Effective August 23, 2019, Ebix acquired Canada based Wallstreet Canada foreign exchange and outward remittance markets for approximately $2.1 million of upfront consideration plus net working capital.

Effective January 1, 2019, Ebix acquired the assets of India based Essel Forex, for approximately $8.7 million, plus possible future contingent earn-out payments of up to $721 thousand based on earned revenues. Ebix funded the entire transaction in cash, using its internal cash reserves. Essel Forex is a large provider of foreign exchange services in India with a wide spectrum of related products including sales of all major currencies, travelers’ checks, demand drafts, remittances, money transfers and prepaid cards primarily for corporate clients. The earn-out period expired on December 31, 2019 and the acquired business did not meet the requisite revenue target, so no earnout payment was due or paid.

Effective January 1, 2019, Ebix acquired an 80% controlling stake in India based Zillious for $10.1 million plus possible future contingent earn-out payments of up to $2.2 million based on agreed milestones in the acquisition agreement. Zillious is an on-demand SaaS travel technology solution in the corporate travel segment in India. Zillious is an on-demand SaaS travel technology solution in the corporate travel segment in India. The Company determined that the fair value of the contingent earn-out consideration was zero as of September 30, 2020 and at December 31, 2020.

A significant component of the purchase price consideration for many of the Company's business acquisitions is a potential subsequent cash earn-out payment based on reaching certain specified future revenue targets. The terms for the contingent earn-out payments in most of the Company's business acquisitions typically address the GAAP recognizable revenues achieved by the acquired entity over a one-, two-, and/or three-year period subsequent to the effective date of their acquisition by Ebix. These terms typically establish a minimum threshold revenue target to achieve over the agreed upon period post acquisition to earn the specified cash earn-out payment. The Company applies these terms in its calculation and determination of the fair value of contingent earn-out liabilities for purchased businesses as part of the related valuation and purchase price allocation exercise for the corresponding acquired assets and liabilities. The Company recognizes these potential obligations as contingent liabilities and are reported as such on its Condensed Consolidated Balance Sheets. As discussed in more detail in Note 1 of the Notes to the Condensed Consolidated Financial Statements, these contingent consideration liabilities are recorded at fair value on the acquisition date and are re-measured quarterly based on the then assessed fair value and adjusted if necessary. As of December 31, 2020, the total of these contingent liabilities was $0.0 million. As of December 31, 2019, the total of these contingent liabilities was $10.1 million, of which $1.5 million was reported in long-term liabilities, and $8.6 million was included in current liabilities in the Company's Condensed Consolidated Balance Sheet.
Operating Activities

For the twelve months ended December 31, 2020, the Company generated $100.4 million of net cash flow from operating activities compared to $60.8 million for the year ended December 31, 2019, representing an increase of $39.6 million, or 65%. The major sources of cash provided by our operating activities during 2020 included net income of $92.4 million, adjusted for $3.6 million of net loss attributable to non-controlling interest, $13.7 million of depreciation and amortization, $6.1 million of amortization of right-of-use assets, $6.2 million related to a non-cash intangible impairment loss, $4.8 million of non-cash share-based compensation, $3.4 million of amortization expense for capitalized software development costs, $(19.9) million of working capital requirements, $(6.5) million of cash used to pay the Miles acquisition earn out, and $(3.1) million of non-cash gains recognized when reducing certain earn-out contingent liabilities. The increase in our operating cash flow in
43

2020 as compared to 2019 is primarily due to increased cash flow from reductions in accounts receivable from trade and service providers as COVID-19 reduced revenues and resulted in comparatively more accounts receivable conversion to cash in 2020 versus 2019. Additionally, in 2019 the acquisition earn-out accrual was reduced by $16.5 million (primarily related to the ItzCash acquisition earn out accrual) as compared to a reduction of the same accrual in 2020 of $3.1 million (primarily related to the Miles and Zillious acquisitions), both of which served to reduce operating cash flow given the non-cash nature of the gains from earn-out adjustments.

    For the twelve months ended December 31, 2019, the Company generated $60.8 million of net cash flow from operating activities compared to $87.3 million for the year ended December 31, 2018, representing a decrease of $26.5 million, or 30%. The major sources of cash provided by our operating activities during 2019 included net income of $96.7 million, less $6.1 million of net income attributable to a non-controlling interest, and net of $(16.5) million of non-cash gains recognized when reducing certain earn-out contingent liabilities, $(15.5) million of deferred tax benefits, $14.5 million of depreciation and amortization, $7.1 million of amortization of right-of-use assets, $3.4 million of non-cash share-based compensation, $2.7 million of amortization expense for capitalized software development costs, and $(26.5) million of working capital requirements. The primary cause for the decrease in our operating cash flow was the cash required to fund our substantially increased gross merchandise value ("GMV") transactions for our travel and foreign exchange business and the $19.7 million paid to settle the derivative litigation matter discussed in Item 3 "Legal Proceedings".
Investing Activities

    Net cash used for investing activities during the twelve months ended December 31, 2020 totaled $44.8 million, primarily related to a $21.0 million decrease in investment in marketable securities (specifically bank certificates of deposits), $14.3 million used for the acquisitions during the year (net of cash acquired), $5.3 million of capital expenditures to support our operations, and $4.2 million used and capitalized in connection with the development of software to be sold/marketed or used internally.
    
    Net cash used for investing activities during the twelve months ended December 31, 2019, totaled $96.7 million and consisted of $105.5 million used for acquisitions during the year (net of cash acquired), $5.3 million to reacquire Paul Merchant's 10% equity interest in Ebix’s combined international remittance business in India, $4.9 million of capital expenditures mainly in India to support our growing operations, and $8.0 million used and capitalized in connection with the development of software to be sold and marketed, or used internally. Partially offsetting these outflows was $27.0 million from the net maturities of marketable securities (specifically bank certificates of deposit).
Financing Activities
    
    Net cash used by financing activities during the twelve months ended December 31, 2020, was $42.0 million, and primarily consisted of a $10.9 million decrease in the year-end balances in our working capital facilities in India, $20.7 million used to make scheduled payments against the Company’s outstanding Credit Facility term loan, and $9.2 million used to pay quarterly dividends to the holders of our common stock.

    Net cash provided by financing activities during the twelve months ended December 31, 2019 was $905 thousand, and primarily consisted of $13.0 million used to reacquire 295 thousand shares of the Company's common stock, $9.2 million used to pay quarterly dividends to the holders of our common stock, and $15.1 million used to make scheduled payments against the Credit Facility term loan. Partially offsetting this cash outflow was $13.5 million provided via borrowings under the Company's revolving credit facility, repayment of a $6.5 million short term loan that had been made to a third party, and $19.1 million net funds provided by the EbixCash working capital facilities in India.
Credit Facility

The Company maintains a senior secured syndicated credit facility, dated August 5, 2014, among Ebix, Inc., as borrower, its subsidiaries party thereto from time to time as guarantors, Regions Bank (as administrative agent and collateral agent) and the lenders party thereto from time to time (as amended from time to time, the “Credit Facility”) that provides a $450 million revolving line of credit as well as a term loan, which at December 31, 2020 had a balance of $255.5 million. The Credit Facility matures in February 2023.

On May 7, 2020, Ebix entered into Amendment No. 10 to the Credit Facility. Amendment No. 10 provides for, among other things, increased flexibility under financial maintenance covenants, which the Company sought in part due to the unforeseen negative effects of the COVID-19 pandemic.

44

On March 30, 2020, the Company and certain of its subsidiaries entered into a waiver related to the Credit Facility (the "Waiver"). The Waiver provided that so long as the Company’s leverage ratio is below 5.0 to 1.0 for the Company’s fiscal quarter ending March 31, 2020 pursuant to the terms of its compliance certificate required by the Credit Facility, the existing leverage ratio requirement of 3.50 to 1.0 was waived.

    On September 27, 2019, the Company and certain of its subsidiaries entered into Amendment No. 9 to the Credit Facility, which amended the definition of “Consolidated EBITDA" and “Indebtedness”, and modified the maximum consolidated debt leverage ratios allowed.

At December 31, 2020, the outstanding balance on the revolving line of credit under the Credit Facility was $439.4 million and the facility carried an interest rate of 3.50%. The outstanding balance is included in the long-term liabilities section of the Condensed Consolidated Balance Sheets. During 2020, The company drew $1.4 million on its revolving line of credit. During 2020, the average and maximum outstanding balances on the revolving line of credit were $438.9 million and $439.4 million, respectively, and the weighted average interest rate was 4.04%.

At December 31, 2020, the outstanding balance on the term loan was $255.5 million, of which $22.6 million is due within the next twelve months. $20.7 million of scheduled amortization payments were made on the term loan during 2020. This term loan also carried an interest rate of 3.50% at December 31, 2020. The current and long-term portions of the term loan are included in the respective current and long-term liabilities sections of the Condensed Consolidated Balance Sheets, the amounts of which were $22.6 million and $232.9 million, respectively, at December 31, 2020. During 2020, the weighted average interest rate on the term loan was 4.04%

Contractual Obligations and Commercial Commitments
    The following table summarizes our known contractual debt and lease obligations as of December 31, 2020. The table excludes commitments that are contingent based on events or factors uncertain at this time.
  Payment Due by Period
Total Less Than
1 Year
1 - 3 Years 3 - 5 Years More than
5 years
  (In thousands)
Revolving line of credit $ 439,402  $ —  $ 439,402  $ —  $ — 
Short and long-term debt 258,127  25,260  232,867  —  — 
Operating leases 14,248  4,669  6,455  1,605  1,519 
Capital leases 526  190  259  77  — 
Non-Cancellable operating leases 56,279  20,251  36,028  —  — 
Total $ 768,582  $ 50,370  $ 715,011  $ 1,682  $ 1,519 

Off Balance Sheet Transactions
    We do not engage in off-balance sheet financing activities.
Inflation
We do not believe that the rate of inflation has had a material effect on our operating results. However, inflation could adversely affect our future operating results.

45

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    The Company is subject to certain market risks, including foreign currency exchange rates and interest rates. The Company’s exposure to foreign currency exchange rates risk is related to our foreign-based operations where transactions are denominated in foreign currencies and are subject to market risk with respect to fluctuations in the relative value of those currencies. A significant portion of the Company’s operations are based in the U.S., and the functional currencies in our Singapore and Dubai product development centers is the U.S. dollar. However, the Company has operations in Australia, India, New Zealand, Great Britain, Canada, Brazil, Philippines, and Indonesia where we conduct transactions in the local currencies of each of these locations. There can be no assurance that fluctuations in the value of those foreign currencies will not have a material adverse effect on the Company’s business, operating results, revenues or financial condition. During the years of 2020 and 2019 the net change in the cumulative foreign currency translation account, which is a component of stockholders’ equity, was unrealized losses of $23.1 million and $15.0 million, respectively. The Company considered the historical trends in currency exchange rates and determined that it was reasonably possible that adverse changes in our respective foreign currency exchange rates of 20% could possibly be experienced in the near term future. Such an adverse change in currency exchange rates would have resulted in a reduction to pre-tax income of approximately $11.7 million and $14.8 million for the years ended December 31, 2020 and 2019, respectively.
    The Company’s exposure to interest rate risk relates to its interest expense on outstanding debt obligations and to its interest income on existing cash balances. As of December 31, 2020, the Company had $697.5 million of outstanding debt obligations, excluding amounts related to deferred financing costs, which consisted of a $255.5 million term loan, a $439.4 million balance on our revolving line of credit under the Credit Facility, a $1.8 million note due to IHC by the EbixHealth JV, and $894 thousand of remaining debt pertaining to the Weizmann acquisition. As of December 31, 2020, the Company’s term loan and outstanding balance on the revolving line of credit under the Credit Facility accrued interest at a rate per annum equal to 3.50%, calculated as LIBOR plus 3.00% with a 0.50% LIBOR floor rate. The Company is exposed to market risk in relation to this secured revolving line of credit and secured term loan in regards to the potential increase to interest expense arising from adverse changes in the LIBOR interest rates. This interest rate risk is estimated as the potential decrease in earnings resulting from a hypothetical 30% increase in the LIBOR rate. Such an adverse change in the LIBOR rate would have resulted in a reduction to pre-tax income of approximately $1.8 million and $5.7 million for the years ending December 31, 2020 and 2019, respectively. The Company’s average cash balances and short term investments during 2020 were $119.8 million and its existing cash balances and short term investments as of December 31, 2020 was $105.0 million and $25.0 million, respectively. The Company is exposed to market risk in relation to these cash balances in regards to the potential loss of interest income arising from adverse changes in interest rates. This interest rate risk is estimated as the potential decrease in earnings resulting from a hypothetical 20% decrease in interest rates earned on deposited funds. Such an adverse change in these interest rates would have resulted in a reduction to pre-tax income of approximately $261 thousand and $359 thousand for the years ended December 31, 2020 and 2019, respectively.



46

Table of Contents
RECENT ACCOUNTING PRONOUNCEMENTS

See Part II, Item 8, "Note 1 Description of Business and Summary of Significant Accounting Policies" for detailed description of Recent Accounting Pronouncements.
    
APPLICATION OF CRITICAL ACCOUNTING POLICIES
    The preparation of financial statements in conformity with GAAP, as promulgated in the U.S., requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities in our consolidated financial statements and accompanying notes. We believe the most complex and sensitive judgments, because of their significance to the consolidated financial statements, result primarily from the need to make estimates and assumptions about the effects of matters that are inherently uncertain. The following accounting policies involve the use of “critical accounting estimates” because they are particularly dependent on estimates and assumptions made by management about matters that are uncertain at the time the accounting estimates are made. In addition, while we have used our best estimates based on facts and circumstances available to us at the time, different estimates reasonably could have been used in the current period, or changes in the accounting estimates that we used are reasonably likely to occur from period to period, which may have a material impact on our financial condition and results of operations. For additional information about these policies, see Note 1 "Description of Business and Summary of Significant Accounting Policies" of the notes to the consolidated financial statements in this Form 10-K. Although we believe that our estimates, assumptions and judgments are reasonable, they are limited based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.

COVID-19 has created and may continue to create significant uncertainty in global financial markets, which may reduce demand for our services, impact the productivity of our workforce, reduce our access to capital, and harm our business and results of operations. As of the date of our Condensed Consolidated Financial Statements, we are not aware of any specific event or circumstance that would require us to update our estimates or judgments, or to revise the carrying value of our assets or liabilities. However, these estimates may change as new events occur and additional information is obtained, which may result in changes being recognized in our consolidated financial statements in future periods. While we considered the effects of COVID-19 in our estimates and assumptions, due to the current level of uncertainty over the economic and operational impacts of COVID-19 on our business, there may be other judgments and assumptions that were not currently considered. Such judgments and assumptions could result in a meaningful impact to our financial statements in future periods. Actual results could differ from those estimates and any such differences may have a material impact on our financial statements.
    Revenue Recognition and Contract Liabilities—The Company derives its revenues primarily from software subscription and transaction fees, software license fees, financial transaction fees, risk compliance solution services fees, and professional service fees, including associated fees for consulting, implementation, training, and project management provided to customers with installed systems and applications. Sales and value-added taxes are not included in revenues, but rather are recorded as a liability until the taxes assessed are remitted to the respective taxing authorities.
    The Company determines revenue recognition by applying the following steps:
identification of the contract, or contracts, with a customer;
identification of the performance obligations in the contract;
determination of the transaction price;
allocation of the transaction price to the performance obligations in the contract; and
recognition of revenue when, or as, we satisfy a performance obligation.
    The Company analyzes its different services individually to determine the appropriate basis for revenue recognition, as further described below. Additionally, certain services exist in multiple channels. As Ebix derives revenues from three product/service channels—EbixCash Exchanges, Insurance Exchanges, and Risk Compliance Solutions—for policy disclosure purposes, contracts are discussed in conjunction with the channel to which they are most significant.
    The Company assesses the terms of customer contracts including termination rights, penalties (implied or explicit), and renewal rights.
47

Table of Contents

EbixCash Exchanges ("EbixCash")

EbixCash revenues are primarily derived from consideration paid by customers for prepaid gift cards, financial transaction (foreign exchange, remittance, other payment solutions) and travel transaction services. The significant majority of EbixCash revenue is for a single performance obligation and is recognized at a point in time. These revenues vary by transaction based upon channel, send and receive locations, the principal amount sent, whether the money transfer involves different send and receive currencies, and speed of service, as applicable.

EbixCash also offers several other services, including payment services and ticketing and travel services, for which revenue is impacted by varying factors. EbixCash acts as the principal in most transactions and reports revenue on a gross basis, as EbixCash controls the service at all times prior to transfer to the customer, is primarily responsible for fulfilling the customer contracts, has the risk of loss, and has the ability to establish transaction prices.

The main services from which EbixCash derives revenue are as follow:

Gift Cards

EbixCash issues general purpose gift cards to corporate customers and consumers that can be later redeemed at various merchants. The gift cards are co-branded between EbixCash and its card-issuing banking partner(s) and are affiliated with major payment associations such as VISA, Mastercard, and Rupay. The gift cards are branded EbixCash cards, but are affiliated with major payment associations such as VISA, Mastercard, and Rupay. The gift cards are sold to a diversified set of corporate customers from various industries. The gift cards are used by corporate customers to disburse incentives to the end users, which are primarily their employees, agents and business associates. The gift cards sold by EbixCash are not reloadable, cannot be used at ATMs or for any other cash-out or funds transfer transactions, and are subject to maximum limits per card (currently INR10,000 or approximately $140). Gift cards issued by EbixCash are valid for a period of 15 months from the date of issuance for virtual cards and three years for physical cards. EbixCash has entered into arrangements with banks and financial institutions to settle payments to merchants based on utilization of the gift cards.

The Company has end-to-end responsibilities related to the gift cards sold, from the activation and ongoing utilization of the gift cards to customer service responsibilities to risk of loss due to fraud on the gift cards sold. EbixCash acts a principal in the sale of gift cards and, thus, gift card revenue is recognized on a gross basis (full purchase value at the time of sale) with the corresponding cost of the gift cards recorded as cost of services provided. Unredeemed gift cards at December 31, 2020 are not significant to the financial results of the Company and are recorded as deferred revenues in the financial results.

EbixCash Travel Exchanges

EbixCash Travel revenues are primarily derived from commissions and transaction fees received from various travel providers and international exchanges involved in the sale of travel to the consumer. EbixCash Travel revenue is for a single performance obligation and is recognized at a point in time. Travel revenues include reservation commissions, segment fees from global travel exchange providers, and transaction net revenues (i.e., the amount charged to travelers less the amount owed to travel service providers) in connection with our reservation services; ancillary fees, including travel insurance-related revenues and certain reservation booking fees; and credit card processing rebates and customer processing fees. EbixCash Travel services include the sale of hotel rooms, airline tickets, bus tickets and train tickets. EbixCash’s Travel revenue is also derived from ticket sales, wherein the commissions payable to EbixCash Travel, along with any transaction fees paid by travel providers and travel exchanges, is recognized as revenue after completion of the service. The transaction price on such services is agreed upon at the time of the purchase.

EbixCash Travel revenue for the corporate meetings, incentives, conferences, and exhibitions ("MICE") packages is recognized at full purchase value at the completion of the obligation with the corresponding costs recorded as cost of services provided. For MICE revenues, EbixCash Travel acts as the principal in transactions and, accordingly, reports revenue on a gross basis. EbixCash Travel controls the service at all times prior to transfer to the customer, is responsible for fulfilling the customer contracts, has the risk of loss, and has the ability to establish transaction prices.

48

Table of Contents
EbixCash Money Transfer

For the EbixCash money transfer business, EbixCash has one performance obligation whereupon the customer engages EbixCash to perform one integrated service. This typically occurs instantaneously when the beneficiary entitled to receive the money transferred by the sender visits the EbixCash outlet and collects the money. Accordingly, EbixCash recognizes revenue upon completion of the following: (i) the customer’s acknowledgment of EbixCash’s terms and conditions and the receipt of payment information, (ii) the money transfer has been processed, (iii) the customer has received a unique transaction identification number, and (iv) funds are available to be picked up by the beneficiary. The transaction price is comprised of a transaction fee and the difference between the exchange rate set by EbixCash to the customer and the rate available in the wholesale foreign exchange market, as applicable, both of which are readily determinable at the time the transaction is initiated

Foreign Exchange and Outward Remittance Services

For EbixCash’s foreign exchange and payment services, customers agree to terms and conditions for all transactions, either at the time of initiating a transaction or signing a contract with EbixCash to provide payment services on the customer’s behalf. In the majority of EbixCash’s foreign exchange and payment services, EbixCash makes payments to the recipient to satisfy its performance obligation to the customer and, therefore, EbixCash recognizes revenue on foreign exchange and payment when this performance obligation has been fulfilled.

Consumer Payment Services

EbixCash offers several different bill payment services that vary by considerations such as: (i) who pays the fee to EbixCash (consumer or biller); (ii) whether the service is offered to all consumers; (iii) whether the service is restricted to existing biller relationships of EbixCash; and (iv) whether the service utilizes a physical agent network offered for consumers’ convenience, among other factors. The determination of which party is EbixCash’s customer for revenue recognition purposes is based on these considerations for each of EbixCash’s bill payment services. For all transactions, EbixCash’s customers agree to EbixCash’s terms and conditions, either at the time of initiating a transaction (where the consumer is determined to be the customer for revenue recognition purposes) or upon signing a contract with EbixCash to provide services on the biller’s behalf (where the biller is determined to be the customer for revenue recognition purposes). As with consumer money transfers, customers engage EbixCash to perform one integrated service, collect money from the consumer and process the bill payment transaction, thereby providing the billers real-time or near real-time information regarding their customers’ payments and, thus, simplifying the billers’ collection efforts. EbixCash’s revenues from bill payment services are generated from contracts to process transactions at any time during the duration of the contract. The transaction price on bill payment services is contractual and determinable. Certain biller agreements may include per-transaction or fixed periodic rebates, which EbixCash records as a reduction to revenue.

EbixCash Technology Services

EbixCash also offers on-demand technology to various providers in the area of lending, wealth and asset management, and travel across the world.

Insurance Exchanges
    
    Insurance Exchanges revenues are primarily derived from consideration paid by customers related to our SaaS platforms, related services and the licensing of software. A typical contract for our SaaS platform will also include services for setup, customization, transaction processing, maintenance, and/or hosting. Determining whether products and services are considered distinct performance obligations that should be accounted for separately may require significant judgement. Set-up and customization services, related to our SaaS platforms, are not considered to be distinct from the usage fees associated with the SaaS platform and, accordingly, are accounted for as a single performance obligation. These services along with the usage or transaction fees are recognized over the contract duration which considers the significance of the upfront fees in the context of the contract and which may, therefore, exceed the initial contracted term.
    Contracts generally do not contain a right of return or refund provisions. Our contracts often do contain overage fees, contingent fees, or service level penalties which are accounted for as variable consideration. Revenue accounted for as variable
49

Table of Contents
consideration is immaterial and is recognized using the “right to invoice” practical expedient when the invoiced amount equals the value provided to the customer.
Software-as-a-Service

    The Company allocates the transaction price to each distinct performance obligation using the relative stand-alone selling price. Determining the stand-alone selling price may require significant judgement. The stand-alone selling price is the price at which the Company has sold or would sell a promised good or service separately to a customer. The Company determines the stand-alone selling price based on observable price of products or services sold separately in comparable circumstances when such observable prices are available. When standalone selling price is not directly observable, the Company estimates the stand-alone selling price using the market assessment approach by considering historical pricing and other market factors.

Software Licenses
    Software license revenues attributable to a software license that is a separate performance obligation are recognized at the point in time that the customer obtains control of the license.
Subscription Services

    Subscription services revenues are associated with performance obligations that are satisfied over specific time periods and primarily consist of post-contract support services. Revenue is generally recognized ratably over the contract term. Our subscription contracts are generally for an initial three-year period with subsequent one-year automatic renewals.

Transaction Fees
    
    Transaction revenue is comprised of fees applied to the volume of transactions that are processed through our SaaS platforms. These are typically based on a per-transaction rate and are invoiced for the same period in which the transactions were processed and as the performance obligation is satisfied. The amount invoiced generally equals the value provided to the customer, and revenue is typically recognized when invoiced using the as-invoiced practical expedient.

Professional Services

    Professional service revenue primarily consists of fees for setup, customization, training, or consulting. Professional service fees are generally on a time and materials basis or a fixed fee. Revenues for time and materials are recognized as such services are rendered while fixed fee revenues are recognized based on the input method driven by the expected hours to complete the project measured against the actual hours completed to date. Professional services, particularly related to SaaS platforms, may have significant dependencies on the related licensed software and may not be considered a distinct performance obligation.

Risk Compliance Services ("RCS")

    RCS revenues consist of two revenue streams - Certificates of Insurance ("COI") and consulting services. COI revenues are derived from consideration paid by customers for the creation and tracking of certificates of insurance. These are transactional-based revenues. Consulting services revenues are driven by distinct consulting service engagements rendered to customers for which revenues are recognized using the output method on a time and material basis as the services are performed.

COI Creation and Tracking

    The Company provides services to issue and track certificates of insurance in the U.S. and Australian markets. Revenue is derived from transaction fees for each certificate issued or tracked. The Company recognizes revenue at the issuance of each certificate or over the period the certificate is being tracked.

Consulting Services

    The Company provides consulting services to clients around the world for project management and development. Consulting services fees are generally on a time and materials basis or a fixed fee. Revenues for time and materials are
50

Table of Contents
recognized using an output method as the services are rendered while fixed fee revenues are recognized based on the input method driven by the expected hours to complete the project measured against the actual hours completed to date.

Allowance for Doubtful Accounts Receivable
    Management specifically analyzes the aging of accounts receivable and historical bad debts, write-offs, customer concentrations, customer credit-worthiness, current economic trends, and changes in our customer payment patterns when evaluating the adequacy of the allowance for doubtful accounts receivable.
Valuation of Goodwill
     Goodwill represents the cost in excess of the fair value of the identifiable net assets from the businesses that we acquire. In accordance with the relevant FASB accounting guidance, goodwill is tested for impairment at the reporting unit level on an annual basis or on an interim basis if an event occurred or circumstances change that would indicate that fair value of a reporting unit decreased below its carrying value. Potential impairment indicators include a significant change in the business climate, legal factors, operating performance indicators, competition, customer retention and the sale or disposition of a significant portion of the business. The Company first assesses certain qualitative factors to determine whether the existence of events or circumstances would indicate that it is more likely than not that the fair value of our reporting unit was less than its carrying amount.
     
    The aforementioned quantitative testing process involves comparing the reporting unit carrying values to their respective fair values. We determine fair value of our reporting unit by applying the discounted cash flow method using the present value of future estimated net cash flows, as well as applying the market capitalization method. If the fair value of a reporting unit exceeds its carrying value, then no further testing is required. However, if a reporting unit’s fair value were to be less than its carrying value, we would then determine the amount of the impairment charge, if any, which would be the amount that the carrying value of the reporting unit’s goodwill exceeded its implied value. We perform our annual goodwill impairment evaluation and testing as of October 1st of each year or when events or circumstances dictate more frequently.

    The Company has considered the guidance within ASC 350 “Goodwill and Other Intangible Assets” and ASC 280 “Segment Reporting” in concluding that Ebix effectively operates as one reporting unit. There have been no goodwill impairments at the reporting unit level during the periods presented herein.

    Projections of cash flows are based on our views of revenue growth rates, operating costs, anticipated future economic conditions, the appropriate discount rates relative to risk, and estimates of residual values and terminal values. We believe that our estimates are consistent with assumptions that marketplace participants would use in their estimates of fair value. The use of different estimates or assumptions for our projected discounted cash flows (e.g., revenue growth rates, future economic conditions, discount rates, and estimates of terminal values) when determining the fair value of our reporting unit could result in different values and may result in a goodwill impairment charge.

Income Taxes
    We account for income taxes in accordance with FASB accounting guidance on the accounting and disclosure of income taxes, which involves estimating the Company’s current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our Consolidated Balance Sheets. We then assess the likelihood that our net deferred tax assets will be recovered from future taxable income in the years in which those temporary differences are expected to be recovered or settled, and, to the extent we believe that recovery is not likely, we establish a valuation allowance.

    On December 22, 2017, the TCJA was enacted, substantially changing the U.S. tax system and affecting the Company in a number of ways. Notably, the TCJA: establishes a flat corporate income tax rate of 21.0% on U.S. earnings; imposes a one-time tax on unremitted cumulative non-U.S. earnings of foreign subsidiaries (“Transition Tax”);imposes a new minimum tax on certain non-U.S. earnings, irrespective of the territorial system of taxation, and generally allows for the repatriation of future earnings of foreign subsidiaries without incurring additional U.S. taxes by transitioning to a territorial system of taxation; subjects certain payments made by a U.S. company to a related foreign company to certain minimum taxes (Base Erosion Anti-Abuse Tax); eliminates certain prior tax incentives for manufacturing in the United States and creates an incentive for U.S. companies to sell, lease or license goods and services abroad by allowing for a reduction in taxes owed on earnings related to such sales; allows the cost of investments in certain depreciable assets acquired and placed in service after September 27, 2017 to be immediately expensed; and reduces deductions with respect to certain compensation paid to specified executive officers.
51

Table of Contents

In March 2018, the FASB Issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC SAB No. 118. ASU 2018-05 was issued to incorporate into Topic 740 recent SEC guidance related to the income tax accounting implications of the TCJA. Due to the complexities involved in accounting for the enactment of the TCJA, the SEC Staff had issued SAB No. 118 which allowed the Company to record provisional amounts in earnings for the year ended December 31, 2017. ASU 2018-05 became effective immediately and permitted companies to use provisional amounts for certain income tax effects of the TCJA during a one-year measurement period. The Transition Tax is based on the Company’s total post-1986 earnings and profits that were previously deferred from U.S. income taxes. The Company completed its tax accounting for the TCJA during Q4 2018 and recorded an adjustment of $24.53 million related to the transition tax after taking into consideration carried forward NOLs and other tax attributes available for set-off.

    The Company does not recognize a deferred U.S. tax liability and associated income tax expense for the undistributed earnings of its foreign subsidiaries, which are considered indefinitely invested because those foreign earnings will remain permanently reinvested in those subsidiaries to fund ongoing operations and growth.
    The Company follows the provisions of FASB accounting guidance on accounting for uncertain income tax positions. This guidance clarified the accounting for uncertainty in income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. The guidance utilizes a two-step approach for evaluating tax positions. Recognition (“Step 1”) occurs when an enterprise concludes that a tax position, based solely on its technical merits is more likely than not to be sustained upon examination. Measurement (“Step 2”) is only addressed if Step 1 has been satisfied. Under Step 2, the tax benefit is measured at the largest amount of benefit, determined on a cumulative probability basis that is more likely than not to be realized upon final settlement. As used in this context, the term “more likely than not” is interpreted to mean that the likelihood of occurrence is greater than 50%.
Foreign Currency Translation
    The functional currency for the Company's main foreign subsidiaries in Dubai and Singapore is the U.S. dollar, because the intellectual property research and development activities provided by its Singapore and Dubai subsidiaries support of Ebix's operating divisions across the world, which are primarily transacted in U.S. dollars.
    The functional currency of the Company's other foreign subsidiaries is the local currency of the country in which the subsidiary operates. The assets and liabilities of these foreign subsidiaries are translated into U.S. dollars at the rates of exchange at the balance sheet dates. Income and expense accounts are translated at the average exchange rates in effect during the period. Gains and losses resulting from translation adjustments are included as a component of accumulated other comprehensive income in the accompanying consolidated balance sheets. Foreign exchange transaction gains and losses that are derived from transactions denominated in a currency other than the subsidiary's functional currency are included in the determination of net income.
52

Table of Contents
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


53

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Ebix, Inc.

Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Ebix, Inc. and its subsidiaries (the Company) as of December 31, 2020, the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for the year then ended, and the related notes to the consolidated financial statements and schedule (collectively, the ‘financial statements’). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated April 2, 2021 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

For KG Somani & Co.


Anuj Somani
Partner

We have served as the Company's auditor since 2021.

New Delhi, India
April 27, 2021



54

Report of Independent Registered Public Accounting Firm


To the Stockholders and the Board of Directors of Ebix, Inc.

Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Ebix, Inc. and its subsidiaries (the Company) as of December 31, 2019, the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for the year then ended, and the related notes to the consolidated financial statements and schedule (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019, and the results of its operations and its cash flows for the year ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ RSM US LLP

We served as the Company's auditor from 2018 to 2021.

Atlanta, Georgia
March 2, 2020


55

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of Ebix, Inc.


Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Ebix, Inc. and subsidiaries (the “Company”) as of December 31, 2018, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for the year ended as of December 31, 2018, and related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the company as of December 31, 2018, and the results of its operations and its cash flows for the year ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 1, 2019 expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis of Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

T R Chadha & Co LLP

We have served as the Company’s auditor since 2018.

New Delhi, India
March 1, 2019
56

Ebix, Inc. and Subsidiaries
Consolidated Statements of Income


Year Ended December 31,
  2020 2019 2018
(In thousands, except per share amounts)
Operating revenue: $ 625,609  $ 580,615  $ 497,826 
Operating expenses:
Costs of services provided 343,262  205,165  168,415 
Product development 35,267  45,302  39,078 
Sales and marketing 13,835  19,578  17,587 
General and administrative, net 87,537  140,429  108,475 
Amortization and depreciation 13,738  14,468  11,292 
Impairment of intangible asset 6,168  —  — 
Total operating expenses 499,807  424,942  344,847 
Operating income 125,802  155,673  152,979 
Interest income 167  629  436 
Interest expense (31,578) (42,332) (27,101)
Non-operating income 153  337  60 
Non-operating expense - litigation settlement (see Note 5) —  (21,140) — 
Foreign currency exchange loss (387) (2,376) (792)
Income before income taxes 94,157  90,791  125,582 
Income tax provision (5,330) (220) (32,501)
Net income including noncontrolling interest $ 88,827  $ 90,571  $ 93,081 
Net loss attributable to noncontrolling interest (see Note 17) (3,550) (6,149) (58)
Net income attributable to Ebix, Inc. $ 92,377  $ 96,720  $ 93,139 
Basic earnings per common share $ 3.03  $ 3.17  $ 2.97 
Diluted earnings per common share $ 3.02  $ 3.16  $ 2.95 
Basic weighted average shares outstanding 30,510  30,511  31,393 
Diluted weighted average shares outstanding 30,571  30,594  31,534 

See accompanying notes to the consolidated financial statements.

57

Table of Contents
Ebix, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income




Year Ended December 31,
2020 2019 2018
(In thousands)
Net income including noncontrolling interest $ 88,827  $ 90,571  $ 93,081 
Other comprehensive loss:
                Foreign currency translation adjustments (23,105) (15,021) (39,354)
                                Total other comprehensive loss (23,105) (15,021) (39,354)
Comprehensive income $ 65,722  $ 75,550  $ 53,727 
Comprehensive loss attributable to noncontrolling interest (see Note 17) (3,550) (6,149) (58)
Comprehensive income attributable to Ebix, Inc. $ 69,272  $ 81,699  $ 53,785 

See accompanying notes to the consolidated financial statements.


58

Table of Contents

Ebix, Inc. and Subsidiaries
Consolidated Balance Sheets
December 31,
2020 2019
(In thousands, except share and per share amounts)
ASSETS
Current assets:    
Cash and cash equivalents $ 105,035  $ 73,228 
Receivables from service providers 4,711  25,607 
Short-term investments 25,019  4,443 
Restricted cash 8,519  35,051 
Fiduciary funds - restricted 4,106  4,966 
Trade accounts receivable, less allowances of $22,691 and $21,696, respectively
142,847  153,565 
Other current assets 71,661  67,074 
Total current assets 361,898  363,934 
Property and equipment, net 52,521  48,421 
Right-of-use assets 12,372  19,544 
Goodwill 949,037  952,404 
Intangibles, net 50,880  46,955 
Indefinite-lived intangibles 21,647  42,055 
Capitalized software development costs, net 19,389  19,183 
Deferred tax assets, net 63,402  69,227 
Other assets 38,707  29,896 
Total assets $ 1,569,853  $ 1,591,619 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 64,764  $ 84,735 
Payables to service agents 5,281  12,196 
Accrued payroll and related benefits 11,792  8,755 
Working capital facilities 16,643  28,352 
Fiduciary funds - restricted 4,106  4,966 
Short-term debt 894  1,167 
Contingent liability for earn-out acquisition consideration
—  8,621 
Current portion of long-term debt, net of deferred financing costs of $920 and $575, respectively
23,621  22,091 
Contract liabilities 32,898  28,712 
Lease liability 3,905  5,955 
Other current liabilities 27,486  29,335 
Total current liabilities 191,390  234,885 
Revolving line of credit 439,402  438,037 
Long-term debt, less current portion, net of deferred financing costs of $1,062 and $1,534, respectively
232,140  254,467 
Contingent liability for earn-out acquisition consideration —  1,474 
Contract liabilities 8,033  8,541 
Lease liability 8,540  13,196 
59

Deferred tax liability, net 1,235  1,235 
Other liabilities 29,009  40,339 
Total liabilities 909,749  992,174 
Commitments and Contingencies, Note 5
Stockholders’ equity:
Preferred stock, $0.10 par value, 500,000 shares authorized, no shares issued and outstanding at December 31, 2020 and 2019
—  — 
Series Y Convertible preferred stock, $0.10 par value, 350,000 shares authorized, no shares issued and outstanding at December 31, 2020 and no shares authorized, issued and outstanding at December 31, 2019
—  — 
Common stock, $0.10 par value, 220,000,000 shares authorized, 30,515,334 issued and outstanding at December 31, 2020 and 30,492,044 issued and outstanding at December 31, 2019
3,052  3,049 
Additional paid-in capital 11,126  6,960 
Retained earnings 700,304  618,503 
Accumulated other comprehensive loss (101,503) (78,398)
Total Ebix, Inc. stockholders’ equity 612,979  550,114 
Noncontrolling interest (see Note 17) 47,125  49,331 
Total stockholders' equity 660,104  599,445 
Total liabilities and stockholders’ equity $ 1,569,853  $ 1,591,619 
See accompanying notes to the consolidated financial statements.


60

Table of Contents


Ebix, Inc. and Subsidiaries
Consolidated Statements Stockholders’ Equity
  Common Stock      
Issued
Shares
Amount Additional Paid-in
Capital
Retained
Earnings
Accumulated Other Comprehensive
Loss
Noncontrol-ling interest Total
(In thousands, except per share amounts)
Balance, January 1, 2018 31,476,428  $ 3,148  $ 1,410  $ 510,975  $ (24,023) $ 42,249  533,759 
Cumulative effect of accounting change
(adoption of Topic 606), net of tax effect
—  —  —  (8,714) —  —  (8,714)
Cumulative effect of accounting change
(adoption of ASC 340-40), net of tax effect
—  —  —  (1,446) —  —  (1,446)
Net income attributable to Ebix, Inc. —  —  —  93,139  —  —  93,139 
Net loss attributable to noncontrolling interest —  —  —  —  —  (58) (58)
Cumulative translation adjustment —  —  —  —  (39,354) —  (39,354)
Exercise of stock options 27,999  436  —  —  —  439 
Repurchase and retirement of common stock (996,773) (100) —  (49,520) —  —  (49,620)
Deferred compensation and amortization related to options and restricted stock —  —  2,811  —  —  —  2,811 
Vesting of restricted stock 68,946  (6) —  —  —  — 
Forfeiture of certain shares to satisfy exercise costs and the recipients income tax obligations related to stock options exercised and restricted stock vested (8,875) —  (467) —  —  —  (467)
Noncontrolling interest —  —  (787) —  —  24,051  23,264 
Common stock dividends paid, $0.30 per share
—  —  —  (9,316) —  —  (9,316)
Balance, December 31, 2018 30,567,725  $ 3,057  $ 3,397  $ 535,118  $ (63,377) $ 66,242  $ 544,437 
Net income attributable to Ebix, Inc. —  —  —  96,720  —  0 96,720 
Net loss attributable to noncontrolling interest —  —  —  —  —  (6,149) (6,149)
Cumulative translation adjustment —  —  —  —  (15,021) —  (15,021)
Repurchase and retirement of common stock (95,000) (10) —  (4,142) —  0 (4,152)
61

Deferred compensation and amortization related to options and restricted stock —  —  3,397  —  —  0 3,397 
Vesting of restricted stock 24,107  (2) —  —  —  — 
Forfeiture of certain shares to satisfy exercise costs and the recipients income tax obligations related to stock options exercised and restricted stock vested (4,788) —  (230) —  —  —  (230)
Noncontrolling interest —  —  398  —  —  (10,762) (10,364)
Common stock dividends paid, $0.30 per share
—  —  —  (9,193) —  (9,193)
Balance, December 31, 2019 30,492,044  $ 3,049  $ 6,960  $ 618,503  $ (78,398) $ 49,331  $ 599,445 
Net income attributable to Ebix, Inc. —  —  —  92,377  —  —  92,377 
Net loss attributable to noncontrolling interest —  —  —  —  —  (3,550) (3,550)
Cumulative translation adjustment —  —  —  —  (23,105) —  (23,105)
Exercise of stock options 30,000  633  —  —  —  636 
Deferred compensation and amortization related to options and restricted stock —  —  4,792  —  —  —  4,792 
Vesting of restricted stock 68,504  (7) —  —  —  — 
Forfeiture of certain shares to satisfy exercise costs and the recipients income tax obligations related to stock options exercised and restricted stock vested (75,214) (7) (1,253) (1,329) —  —  (2,589)
Noncontrolling interest —  —  —  —  —  1,343  1,343 
Common stock dividends paid, $0.30 per share

—  —  —  (9,245) —  (9,245)
Balance, December 31, 2020 30,515,334  $ 3,052  $ 11,126  $ 700,304  $ (101,503) $ 47,125  $ 660,104 
See accompanying notes to the consolidated financial statements.


62

Table of Contents


Ebix, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Year Ended December 31,
  2020 2019 2018
(In thousands)
Cash flows from operating activities:    
Net income attributable to Ebix, Inc. $ 92,377  $ 96,720  $ 93,139 
Net (loss) income attributable to noncontrolling interest (3,550) (6,149) (58)
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization 13,738  14,468  11,292 
Provision for doubtful accounts 1,749  12,325  3,571 
Provision for deferred taxes, net of acquisitions and effects of currency translation 5,114  (15,525) (13,043)
Unrealized foreign exchange losses —  1,104  606 
Amortization of right-of-use assets 6,100  7,144  — 
Amortization of capitalized software development costs 3,367  2,696  2,233 
Share-based compensation 4,792  3,397  2,811 
Reduction of acquisition earn-out contingent liability (3,105) (16,543) (1,391)
Cash paid for acquisition earn-out (6,453) —  (3,831)
Intangible asset impairment 6,168  —  — 
Changes in current assets and liabilities, net of acquisitions:
Accounts receivable 3,258  (22,977) 15,839 
Receivables from service providers 20,896  10,950  (36,557)
Payables to service agents (6,915) (13,455) 25,651 
Other assets (10,487) (8,351) (8,486)
Accounts payable and accrued expenses (14,569) (19,624) (11,787)
Accrued payroll and related benefits 2,100  (661) (788)
Lease liabilities (5,700) (6,878) (360)
Reserve for potential uncertain income tax return positions —  (95) 149 
Other liabilities (12,204) 30,396  13,205 
Contract liabilities 3,680  (8,149) (8,740)
Net cash provided by operating activities 100,356  60,793  83,455 
Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired (14,276) (105,466) (232,557)
Cash (paid to) received from Paul Merchants for 10% stake in MTSS combined business and other investment
—  (5,348) 4,996 
Maturities (purchases) of marketable securities (20,964) 27,015  (4,087)
Capitalized software development costs (4,229) (7,989) (8,079)
Capital expenditures (5,337) (4,908) (8,032)
Net cash used in investing activities (44,806) (96,696) (247,759)
Cash flows from financing activities:
Proceeds from / (payment) to revolving line of credit, net 1,364  13,500  150,008 
Proceeds from term loan —  —  175,500 
Principal payments on term loan obligation (20,711) (15,063) (10,016)
63

Payments on short-term notes, net —  6,450  (8,341)
Working capital facilities (10,927) 19,079  (8,094)
Repurchase of common stock —  (12,952) (40,820)
Payments of long term debt (271) (686) (80)
Payments for capital lease obligations (210) —  (6)
Proceeds from exercise of common stock options 636  —  439 
Forfeiture of certain shares to satisfy exercise costs and the recipients income tax obligations related to stock options exercised and restricted stock vested (2,589) (230) (467)
Dividends paid (9,245) (9,193) (9,316)
Net cash (used) provided by financing activities (41,953) 905  248,807 
Effect of foreign exchange rates on cash and cash equivalents (4,753) (3,314) (5,689)
Net change in cash and cash equivalents, and restricted cash 8,844  (38,312) 78,814 
Cash and cash equivalents, and restricted cash at the beginning of the year 111,369  149,681  70,867 
Cash and cash equivalents, and restricted cash at the end of the year $ 120,213  $ 111,369  $ 149,681 
Supplemental disclosures of cash flow information:
Interest paid $ 29,498  $ 41,143  $ 25,690 
Income taxes paid $ 21,321  $ 24,041  $ 10,149 
See accompanying notes to the consolidated financial statements.



64

Table of Contents
Ebix, Inc. and Subsidiaries

Supplemental schedule of noncash financing activities:
As of December 31, 2020, there were 75,214 shares, totaling $2.6 million, used to satisfy exercise costs and the recipients' income tax obligations related to stock options exercised and restricted stock vesting.
    As of December 31, 2018, there was $77.6 million of the upfront cash consideration and contingent consideration included in Other current liabilities in the Company's Consolidated Balance Sheet.
    As of December 31, 2018, there were 200,000 shares totaling $8.8 million of share repurchases that were not settled until January 2019.
    During 2018, there were 8,875 shares, totaling $467 thousand, used to satisfy exercise costs and the recipients' income tax obligations related to stock options exercised and restricted stock vesting.
    
    
See accompanying notes to consolidated financial statements.


65

Table of Contents
Ebix, Inc. and Subsidiaries
Notes to Consolidated Financial Statements


Note 1. Description of Business and Summary of Significant Accounting Policies
    Description of Business— Ebix, Inc. and its subsidiaries, (“Ebix” or the “Company”, "we", "us", and "our") is a leading international supplier of on-demand infrastructure exchanges to the insurance, financial, travel, payment remittances and healthcare industries. In the insurance industry, the Company’s main focus is to develop and deploy a wide variety of insurance and reinsurance exchanges on an on-demand basis using SaaS enterprise solutions in the area of customer relationship management ("CRM"), front-end and back-end systems, and outsourced administrative and risk compliance. The Company's products feature fully customizable and scalable software solutions designed to streamline the way insurance and financial industry professionals manage distribution, marketing, sales, customer service, and accounting activities. With a "Phygital” strategy that combines physical distribution outlets in India and many Association of Southeast Asian Nations (ASEAN) countries to a Omni-channel online digital platform, the Company’s EbixCash Financial exchange portfolio of software and services encompasses domestic and international money remittance, foreign exchange ("Forex"), travel, pre-paid gift cards, utility payments, lending, and wealth management in India and other Southeast Asian markets. The Company has its headquarters in Johns Creek, Georgia and also conducts operating activities in Australia, Canada, India, New Zealand, Singapore, the U.K., Brazil, Philippines, Indonesia, Thailand and United Arab Emirates. International revenue accounted for 73.4%, 68.6%, and 60.4% of the Company’s total revenue in 2020, 2019, and 2018, respectively.    

EbixCash Exchanges ("EbixCash")

EbixCash revenues are primarily derived from consideration paid by customers for financial transaction services, including services like transferring or exchanging money. The significant majority of EbixCash revenue is for a single performance obligation and is recognized at a point in time. These revenues vary by transaction based upon channel, send and receive locations, the principal amount sent, whether the money transfer involves different send and receive currencies, and speed of service, as applicable.

    EbixCash also offers several other services, including payment services and ticketing and travel services for which revenue is impacted by varying factors. EbixCash acts as the principal in most transactions and reports revenue on a gross basis, as EbixCash controls the service at all times prior to transfer to the customer, is primarily responsible for fulfilling the customer contracts, has the risk of loss, and has the ability to establish transaction prices.

    The main services from which EbixCash derives revenue are as follow:

Gift Cards

    EbixCash sells general purpose prepaid gift cards to corporate customers and consumers that can be later redeemed at various merchants. The gift cards are co-branded between EbixCash and its card-issuing banking partner(s) and are affiliated with major payment associations such as VISA, Mastercard, and Rupay. The gift cards are sold to a diversified set of corporate customers from various industries. The gift cards are used by corporate customers to disburse incentives to the end users, which are primarily their employees, agents and business associates. The gift cards sold by EbixCash are not reloadable, cannot be used at ATMs or for any other cash-out or funds transfer transactions, and are subject to maximum limits per card (currently INR10,000 or approximately $140). Gift cards issued by EbixCash are valid for a period of 15 months from the date of issuance for virtual cards and three years for physical cards. EbixCash has entered into arrangements with banks and financial institutions to settle payments to merchants based on utilization of the gift cards.

The Company has end-to-end responsibilities related to the gift cards sold, from the activation and ongoing utilization of the gift cards to customer service responsibilities to risk of loss due to fraud on the gift cards sold. EbixCash acts a principal in the sale of gift cards and, thus, gift card revenue is recognized on a gross basis (full purchase value at the time of sale) with the corresponding cost of the gift cards recorded as cost of services provided. Unredeemed gift cards at December 31, 2020 are not significant to the financial results of the Company and are recorded as deferred revenues in the financial results.

EbixCash Travel Exchanges

66

    EbixCash Travel revenues are primarily derived from commissions and transaction fees received from various travel providers and international exchanges involved in the sale of travel to the consumer. EbixCash Travel revenue is for a single performance obligation and is recognized at a point in time. Travel revenues include reservation commissions, segment fees from global travel exchange providers, and transaction net revenues (i.e., the amount charged to travelers less the amount owed to travel service providers) in connection with our reservation services; ancillary fees, including travel insurance-related revenues and certain reservation booking fees; and credit card processing rebates and customer processing fees. EbixCash Travel services include the sale of hotel rooms, airline tickets, bus tickets and train tickets. EbixCash’s Travel revenue is also derived from ticket sales, wherein the commissions payable to EbixCash Travel, along with any transaction fees paid by travel providers and travel exchanges, is recognized as revenue after completion of the service. The transaction price on such services is agreed upon at the time of the purchase.

    EbixCash Travel revenue for the corporate MICE (Meetings, Incentives, Conferences, and Exhibitions) packages is recognized at full purchase value at the completion of the obligation with the corresponding costs recorded under cost of services provided. For MICE revenues, EbixCash Travel acts as the principal in transactions and, accordingly, reports revenue on a gross basis. EbixCash Travel controls the service at all times prior to transfer to the customer, is responsible for fulfilling the customer contracts, has the risk of loss, and has the ability to establish transaction prices.

EbixCash Money Transfer

    For the EbixCash money transfer business, EbixCash has one performance obligation whereupon the customer engages EbixCash to perform one integrated service. This typically occurs instantaneously when the beneficiary entitled to receive the money transferred by the sender visits the EbixCash outlet and collects the money. Accordingly, EbixCash recognizes revenue upon completion of the following: 1) the customer’s acknowledgment of EbixCash’s terms and conditions and the receipt of payment information, 2) the money transfer has been processed, 3) the customer has received a unique transaction identification number, and 4) funds are available to be picked up by the beneficiary. The transaction price is comprised of a transaction fee and the difference between the exchange rate set by EbixCash to the customer and the rate available in the wholesale foreign exchange market, as applicable, both of which are readily determinable at the time the transaction is initiated

Foreign Exchange and Outward Remittance Services

    For EbixCash’s foreign exchange and payment services, customers agree to terms and conditions for all transactions, either at the time of initiating a transaction or signing a contract with EbixCash to provide payment services on the customer’s behalf. In the majority of EbixCash’s foreign exchange and payment services, EbixCash makes payments to the recipient to satisfy its performance obligation to the customer and, therefore, EbixCash recognizes revenue on foreign exchange and payment when this performance obligation has been fulfilled.

Consumer Payment Services

    EbixCash offers several different bill payment services that vary by considerations such, as: 1) who pays the fee to EbixCash (consumer or biller); 2) whether the service is offered to all potential consumers; 3) whether the service is restricted to existing biller relationships of EbixCash; and 4) whether the service utilizes a physical agent network offered for consumers’ convenience, among other factors. The determination of which party is EbixCash’s customer for revenue recognition purposes is based on these considerations for each of EbixCash’s bill payment services. For all transactions, EbixCash’s customers agree to EbixCash’s terms and conditions, either at the time of initiating a transaction (where the consumer is determined to be the customer for revenue recognition purposes) or upon signing a contract with EbixCash to provide services on the biller’s behalf (where the biller is determined to be the customer for revenue recognition purposes). As with consumer money transfers, customers engage EbixCash to perform one integrated service, collect money from the consumer and process the bill payment transaction, thereby providing the billers real-time or near real-time information regarding their customers’ payments and, thus, simplifying the billers’ collection efforts. EbixCash’s revenues from bill payment services are generated from contracts to process transactions at any time during the duration of the contract. The transaction price on bill payment services is contractual and determinable. Certain biller agreements may include per-transaction or fixed periodic rebates, which EbixCash records as a reduction to revenue.



EbixCash Technology Services
    
67

    EbixCash also offers on-demand technology to various providers in the area of lending, wealth and asset management, and travel across the world.

Insurance Exchanges
    
    Insurance Exchanges revenues are primarily derived from consideration paid by customers related to our SaaS platforms, related services and the licensing of software. A typical contract for our SaaS platform will also include services for setup, customization, transaction processing, maintenance, and/or hosting. Determining whether products and services are considered distinct performance obligations that should be accounted for separately may require significant judgement. Set-up and customization services related to our SaaS platforms are not considered to be distinct from the usage fees associated with the SaaS platform and, accordingly, are accounted for as a single performance obligation. These services, along with the usage or transaction fees, are recognized over the contract duration, which considers the significance of the upfront fees in the context of the contract and which may, therefore, exceed the initial contracted term. A customer's transaction volume tends to remain fairly consistent during the contract period without significant fluctuations. The invoiced amount is a reasonable approximation of the revenue that would be allocated to the related period under the variable consideration guidelines in ASC 606-10-32-40. To the extent that a SaaS contract includes subscription services or professional services, apart from the upfront customization, these are considered separate performance obligations. The Company also has separate software licensing (on premise/ perpetual), unrelated to the SaaS platforms, which is recognized at a point in time when the license is transferred to the customer.
    Contracts generally do not contain a right of return or refund provisions. Our contracts often do contain overage fees, contingent fees, or service level penalties which are accounted for as variable consideration. Revenue accounted for as variable consideration is immaterial and is recognized using the “right to invoice” practical expedient when the invoiced amount equals the value provided to the customer.
Software-as-a-Service

    The Company allocates the transaction price to each distinct performance obligation using the relative stand-alone selling price. Determining the stand-alone selling price may require significant judgement. The stand-alone selling price is the price at which an entity has sold or would sell a promised good or service separately to a customer. The Company determines the stand-alone selling price based on observable price of products or services sold separately in comparable circumstances, when such observable prices are available. When standalone selling price is not directly observable, the Company estimates the stand-alone selling price using the market assessment approach by considering historical pricing and other market factors.

Software Licenses
    Software license revenues attributable to a software license that is a separate performance obligation are recognized at the point in time that the customer obtains control of the license.
Subscription Services

    Subscription services revenues are associated with performance obligations that are satisfied over specific time periods and primarily consist of post-contract support services. Revenue is generally recognized ratably over the contract term. Our subscription contracts are generally for an initial three-year period with subsequent one-year automatic renewals.

Transaction Fees
    
    Transaction revenue is comprised of fees applied to the volume of transactions that are processed through our SaaS platforms. These are typically based on a per-transaction rate and are invoiced for the same period in which the transactions were processed and as the performance obligation is satisfied. The amount invoiced generally equals the value provided to the customer, and revenue is typically recognized when invoiced using the as-invoiced practical expedient.

Professional Services

    Professional service revenue primarily consists of fees for setup, customization, training, or consulting services. Professional service fees are generally on a time and materials basis or a fixed fee basis. Revenues for time and materials are recognized as such services are rendered, while fixed fee revenues are recognized based on the input method that is driven by the expected hours to complete the project measured against the actual hours completed to date. Professional services,
68

particularly related to SaaS platforms, may have significant dependencies on the related licensed software and may not be considered a distinct performance obligation.

Risk Compliance Services ("RCS")

    RCS revenues consist of two revenue streams - Certificates of Insurance ("COI") and Consulting Services. COI revenues are derived from consideration paid by customers for the creation and tracking of certificates of insurance. These are transactional-based revenues. Consulting Services revenues are driven by distinct consulting service engagements rendered to customers for which revenues are recognized using the output method on a time and material basis as the services are performed.

COI Creation and Tracking

    The Company provides services to issue and track certificates of insurance in the U.S. and Australian markets. Revenue is derived from transaction fees for each certificate issued or tracked. The Company recognizes revenue at the issuance of each certificate or over the period the certificate is being tracked.

Consulting Services

    The Company provides consulting services to clients around the world for project management and development. Consulting services fees are generally on a time and materials basis or a fixed fee basis. Revenues for time and materials are recognized using an output method as the services are rendered, while fixed fee revenues are recognized based on the input method driven by the expected hours to complete the project measured against the actual hours completed to date.

Summary of Significant Accounting Policies
    Basis of Presentation— The consolidated financial statements include the accounts of Ebix and its wholly and majority-owned subsidiaries. Non-controlling interests in net income or losses, and net equity are reported in amounts that reflect the non-controlling party(s) percentage ownership in the respect subsidiaries. The effect of intercompany balances and transactions has been eliminated.

    Use of Estimates—The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and reported amounts of revenue and expenses during those reporting periods. Management has made material estimates primarily with respect to revenue recognition and contract liabilities, accounts receivable, acquired intangible assets, annual impairment reviews of goodwill and indefinite-lived intangible assets, investments, contingent earnout liabilities in connection with business acquisitions, and the provision for income taxes. Actual results may be different from those estimates.

    Reclassification—Certain prior year amounts have been reclassified to be consistent with current year presentation within our financial statement.

    Segment Reporting—Since the Company, from the perspective of its chief operating decision maker, allocates resources and evaluates business performance as a single entity on a worldwide basis, the Company reports as a single segment. The applicable enterprise-wide disclosures are included in Note 14.
    Cash and Cash Equivalents—The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. Such investments are stated at cost, which approximates fair value. The Company does maintain cash balances in banking institutions in excess of federally insured amounts and therefore is exposed to the related potential credit risk associated with such cash deposits.
The Company deposited $30.0 million with a third party bank in a trust account with commingled funds of its outside legal counsel in contemplation of a potential acquisition on December 31, 2020. The funds are included under the heading 'Cash and Cash Equivalent' in the consolidated balance sheet due to the nature of the said account, as the account had neither a restriction on the Company's ability to access the funds at its discretion nor did the account have restrictions associated with the potential acquisition that would limit the Company's control over and access to the cash. The contemplated acquisition did not occur as of December 31, 2020 or through the filing of this Form 10-K, and on February 2, 2021 the Company had the cash returned to its primary U.S. operating bank account.
69

Short-term Investments—The Company’s primary short-term investments consist of certificates of deposits with established commercial banking institutions in India that have readily determinable fair values. Ebix accounts for such investments that are reasonably expected to be realized in cash, sold or consumed during the year as short-term investments that are available-for-sale. The carrying amount of investments in marketable securities approximates their fair value. The carrying value of our short-term investments was $25 million and $4.4 million at December 31, 2020 and 2019, respectively.
    Restricted Cash— The carrying value of our restricted cash was $8.5 million and $35.1 million at December 31, 2020 and 2019, respectively. The Company holds fixed deposits pledged with banks for issuance of bank guarantees and letters of credit related to its India operations for our working capital facilities.

    The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows:

For the Year Ended December 31,
2020 2019 2018
(In thousands)
Cash and cash equivalents $ 105,035  $ 73,228  137,858 
Restricted cash 8,519  35,051  8,317 
Restricted cash included in other long-term assets 6,659  3,090  3,506 
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 120,213  $ 111,369  $ 149,681 
    Fiduciary Funds - Restricted—Due to the EbixHealth JV being a third party administrator (“TPA”), the Company collects premiums from insureds and, after deducting its fees, remits these premiums to insurance companies. Unremitted insurance premiums and/or claim funds established for the benefit of various carriers are held in a fiduciary capacity until disbursed by the Company. The use of premiums collected from insureds but not yet remitted to insurance companies is restricted by law in certain states. The total assets held on behalf of others, $4.1 million, are recorded as an asset and offsetting fiduciary funds - restricted liability.
    Fair Value Measurements—The Company follows the relevant GAAP guidance regarding the determination and measurement of the fair value of assets/liabilities in which fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction valuation hierarchy which requires an entity to maximize the use of observable inputs when measuring fair value. The guidance describes the following three levels of inputs that may be used in the methodology to measure fair value:

Level 1 — Unadjusted quoted prices available in active markets for identical investments to the reporting entity at the measurement date.
Level 2 — Other than quoted prices included in Level 1 inputs, which are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 — Unobservable inputs, which are used to the extent that observable inputs are not available, and used in situations where there is little or no market activity for the asset or liability and wherein the reporting entity makes estimates and assumptions related to the pricing of the asset or liability including assumptions regarding risk.
    
    A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
As of December 31, 2020 and 2019, the Company has the following financial instruments for which it had to consider fair values and had to make fair value assessments:

Short-term investments (commercial bank certificates of deposits and mutual funds), for which the fair values are measured as a Level 1 instrument.
Contingent accrued earn-out business acquisition consideration liabilities for which fair values are measured as Level 3 instruments. These contingent consideration liabilities were recorded at fair value on the acquisition date and are remeasured quarterly based on the then assessed fair value and adjusted if necessary.
70

The increases or decreases in the fair value of contingent consideration can result from changes in anticipated revenue levels and changes in assumed discount periods and rates. As the fair value measure is based on significant inputs that are not observable in the market, they are categorized as Level 3.

Other financial instruments not measured at fair value on the Company's consolidated balance sheets at December 31, 2020 and 2019 but which require disclosure of their fair values include: cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, accrued payroll and related benefits, finance lease obligations, and the revolving line of credit and term loan debt . The Company believes that the estimated fair value of such instruments at December 31, 2020 and 2019 reasonably approximates their carrying value as reported on the consolidated balance sheets.
    
    Additional information regarding the Company's assets and liabilities that are measured at fair value on a recurring basis is presented in the following tables:

Fair Values at Reporting Date Using*
Descriptions Balance at December 31, 2020 Quoted Prices in Active Markets for Identical Assets or Liabilities
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
(In thousands)
Assets
Commercial bank certificates of deposits ($7.4 million is recorded in the long term asset section of the consolidated balance sheets in "Other Assets")
$ 32,072  $ —  $ 32,072  $ — 
Mutual funds 381  381  —  — 
Total assets measured at fair value $ 32,453  $ 381  $ 32,072  $ — 
Liabilities
Contingent earn-out acquisition consideration —  —  —  — 
Total liabilities measured at fair value $ —  $ —  $ —  $ — 
* During the year ended December 31, 2020 there were no transfers between fair value Levels 1, 2 or 3.
71

Fair Values at Reporting Date Using*
Descriptions Balance at December 31, 2019 Quoted Prices in Active Markets for Identical Assets or Liabilities
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
(In thousands)
Assets
Commercial bank certificates of deposits ($50 thousand is recorded in the long term asset section of the consolidated balance sheets in "Other Assets")
$ 4,493  —  4,493  — 
Mutual Funds 1,058  1,058  —  — 
Total assets measured at fair value $ 5,551  $ 1,058  $ 4,493  $ — 
Liabilities
Contingent earn-out acquisition consideration (a) 10,095  —  —  10,095 
Total liabilities measured at fair value $ 10,095  $ —  $ —  $ 10,095 
(a) The income valuation approach is applied and the valuation inputs include the contingent payment arrangement terms, projected cash flows, rate of return, and probability assessments.
* During the year ended December 31, 2019, there were no transfers between fair value Levels 1, 2 or 3.

    For the Company's assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the following table provides a reconciliation of the beginning and ending balances for each category therein, and gains or losses recognized during the year:
72

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Contingent Liability for Accrued Earn-out Acquisition Consideration Balance at December 31, 2020 Balance at December 31, 2019
(In thousands)
Beginning balance $ 10,095  24,976 
Total remeasurement adjustments:
       (Gains) or losses included in earnings ** (3,105) (16,543)
       Reductions recorded against goodwill —  — 
       Foreign currency translation adjustments *** (537) (260)
Acquisitions and settlements
       Business acquisitions —  1,922 
       Settlements (6,453) — 
Ending balance $ —  $ 10,095 
The amount of total (gains) or losses for the year included in earnings or changes to net assets, attributable to changes in unrealized (gains) or losses relating to assets or liabilities still held at year-end. $ (3,105) $ (16,543)
** recorded as a component of general and administrative expenses
*** recorded as a component of other comprehensive income within stockholders' equity


Quantitative Information about Level 3 Fair Value Measurements
    The significant unobservable inputs used in the fair value measurement of the Company's contingent consideration liabilities designated as Level 3 are as follows:








73

              
(In thousands)   Fair Value at  December 31, 2020                Valuation Technique   Significant Unobservable
Input
Contingent acquisition consideration:   $— Discounted cash flow Expected future annual revenue streams and probability of achievement
              
(In thousands)   Fair Value at  December 31, 2019  
Valuation Technique
  Significant
Unobservable
Input
Contingent acquisition consideration:
(Wdev, Miles, Zillious and Essel acquisitions)
  $10,095 Discounted cash flow Expected future annual revenue streams and probability of achievement
Sensitivity to Changes in Significant Unobservable Inputs
    As presented in the table above, the significant unobservable inputs used in the fair value measurement of contingent consideration related to business acquisitions are forecasts of expected future annual revenues as developed by the Company's management and the probability of achievement of those revenue forecasts. The discount rate used in these calculations is 12.6%. Significant increases (decreases) in these unobservable inputs in isolation would likely result in a significantly (lower) higher fair value measurement.
    Revenue Recognition and Contract Liabilities—The Company derives its revenues primarily from software subscription and transaction fees, software license fees, financial transaction fees, risk compliance solution services fees, and professional service fees including associated fees for consulting, implementation, training, and project management provided to customers with installed systems and applications. Sales and value-added taxes are not included in revenues, but rather are recorded as a liability until the taxes assessed are remitted to the respective taxing authorities.
    The Company determines revenue recognition by applying the following steps:
identification of the contract, or contracts, with a customer;
identification of the performance obligations in the contract;
determination of the transaction price;
allocation of the transaction price to the performance obligations in the contract; and
recognition of revenue when, or as, we satisfy a performance obligation.
    The Company analyzes its different services individually to determine the appropriate basis for revenue recognition, as further described below. Additionally, certain services exist in multiple channels. As Ebix derives revenues from three product/service channels, EbixCash Exchanges, Insurance Exchanges, and Risk Compliance Solutions, for policy disclosure purposes, contracts are discussed in conjunction with the channel to which they are most significant.
    The Company assesses the terms of customer contracts, including termination rights, penalties (implied or explicit), and renewal rights.

Contract Liabilities

    Contract liabilities includes payments or billings that have been received or made prior to performance. In certain cases, cash collections pertain to maintenance and support fees, initial setup or registration fees under hosting agreements, software license fees received in advance of delivery and acceptance, and software development fees paid in advance of completion and delivery. Approximately $7.2 million and $6.4 million of contract liabilities were included in billed accounts receivable at December 31, 2020 and 2019, respectively.

Disaggregation of Revenue
74

    The following tables present revenue disaggregated by primary geographical regions and product channels for the years ended December 31, 2020 , 2019 and 2018:
Year Ended December 31,
2020 2019 2018
(In thousands)
India* $ 378,660  $ 300,678  $ 196,372 
United States $ 166,320  182,530  196,984 
Australia $ 33,846  33,268  35,770 
Latin America $ 14,801  19,755  19,866 
Europe $ 13,145  14,695  15,387 
Canada $ 4,383  4,805  5,611 
Singapore* $ 3,969  6,549  7,674 
Indonesia* $ 3,206  9,706  7,482 
Philippines* $ 2,140  5,991  6,483 
United Arab Emirates* $ 3,335  683  1,042 
New Zealand $ 1,804  1,955  2,015 
Mauritius* $ —  —  3,140 
$ 625,609  $ 580,615  $ 497,826 
*Primarily India led businesses for which total revenue was $388.3 million, $320.0 million and $217.5 million for the years ended December 31, 2020, 2019, and 2018, respectively.
    The Company’s revenues are derived from three product/service groups. Presented in the table below is the breakout of our revenue streams for each of those product/service groups for the years ended December 31, 2020, 2019, and 2018.
For the Year Ended
December 31,
(In thousands) 2020 2019 2018
EbixCash Exchanges $ 388,293  $ 319,953  $ 217,457 
Insurance Exchanges 178,111  190,067  192,604 
Risk Compliance Solutions 59,205  70,595  87,765 
Totals $ 625,609  $ 580,615  $ 497,826 

Costs to Obtain and Fulfill a Contract
    The Company’s capitalized costs are primarily derived from the fulfillment of SaaS related setup and customizations from which the customer receives benefit through continued access to and use of the SaaS product platforms. In accordance with the guidance in ASC 340-40-25-5, we capitalize the costs directly related to the setup and development of these customizations, which satisfy the Company’s performance obligation with respect to access to the Company’s underlying product platforms. The capitalized costs primarily consist of the salaries of the developers directly involved in fulfilling the project and are solely based on the time spent on that project. The Company amortizes the capitalized costs ratably over the expected useful life of the related customizations, matching our treatment for the related revenue, and the capitalized costs are recoverable from profit margin included in the contract. As of December 31, 2020, the Company had $646 thousand of contract costs in “Other current assets” and $985 thousand in “Other assets” on the Company's Condensed Consolidated Balance Sheets.
75

(In thousands) December 31, 2020 December 31, 2019
Balance, beginning of period $ 1,897  $ 2,238 
Costs recognized from beginning balance (743) (708)
Additions, net of costs recognized 476  367 
Balance, end of period $ 1,630  $ 1,897 

Contract Liabilities
    The Company records contract liabilities when it receives payments or invoices in advance of the performance of services. A significant portion of this balance relates to contracts where the customer has paid in advance for the use of our SaaS platforms over a specified period of time. This portion is recognized as the related performance obligation is fulfilled (generally less than one year). Part of our performance obligation for these contracts consists of the requirement to provide our customers with continued access to, and use of, our SaaS platforms and associated customizations. Without continued access to the SaaS platform, the customizations have no separate benefit to the customer. Our customers simultaneously receive and consume the benefits as we provide access over time. The remaining portion of the contract liabilities balance consists primarily of customer-specific customizations that are not distinct from related performance obligations that transfer over time. This portion is recognized over the expected useful life of the customizations.
(In thousands) December 31, 2020 December 31, 2019
Balance, beginning of period $ 37,253  $ 44,660 
Revenue recognized from beginning balance (32,783) (31,507)
Additions from business acquisitions —  769 
Additions, net of revenue recognized and currency translation 36,460  23,331 
Balance, end of period $ 40,930  $ 37,253 

Revenue Allocated to Remaining Performance Obligations
    The following table presents our estimated revenue allocated to remaining performance obligations for contracted revenue that has not yet been recognized, representing our “contractually committed” revenue as of December 31, 2020 that we will transfer from contract liabilities and recognize in future periods:
Estimated Revenue (In thousands):  
For the year ending December 31, 2021 $ 3,996 
For the year ending December 31, 2022 2,791 
For the year ending December 31, 2023 2,188 
For the year ending December 31, 2024 1,123 
For the year ending December 31, 2025 208 
  $ 10,306 
    Our contractually committed revenue, for purposes of the tabular presentation above, is generally limited to service customer contracts with significant programming, setup, and implementation activities related to our SaaS offerings. Our contractually committed revenue amounts generally exclude, based on the following practical expedients that we elected to apply, remaining performance obligations for: (i) contracts with an original expected duration of one year or less; and (ii) contracts for which we recognize revenue at the amount for which we have the right to invoice for services performed.
    Accounts Receivable and the Allowance for Doubtful Accounts Receivable—Reported accounts receivable as of December 31, 2020 include $97.6 million of trade receivables stated at invoice billed amounts and $45.2 million of unbilled receivables (net of a $22.7 million estimated allowance for doubtful accounts receivable). Reported accounts receivable at December 31, 2019 include $118.3 million of trade receivables stated at invoice billed amounts and $35.3 million of unbilled
76

receivables (net of a $21.7 million estimated allowance for doubtful accounts receivable). The Company records a contract asset when revenue recognized on a contract exceeds the billings. The contract asset is transferred to receivables when the entitlement to payment becomes unconditional. These contract assets are primarily related to project-based revenue where we recognize revenue using the input method calculated using expected hours to complete the project measured against the actual hours completed to date. Management specifically analyzes accounts receivable and historical bad debts, write-offs, customer concentrations, customer credit-worthiness, current economic trends and changes in our customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. Bad debt expense was $1.7 million, $12.3 million, and $3.6 million for the years ended December 31, 2020, 2019, and 2018, respectively.
    
    Costs of Services Provided—Costs of services provided consist of data processing costs, customer support costs, including personnel costs to maintain our proprietary databases, costs to provide customer call center support, hardware and software expense associated with transaction processing systems and exchanges, telecommunication and computer network expense, and occupancy costs associated with facilities where these functions are performed. Cost of services provided also include the direct expenses associated with our services businesses, including the cost of prepaid gift cards, the cost of travel services provided and the cost of foreign exchange and remittance transactions. Depreciation expense is not included in costs of services provided.
    Capitalized Software Development Costs—In accordance with ASC 350-40 “Internal-Use Software” and ASC 350-985 “Software” the Company expenses costs as they are incurred until technological feasibility has been established, at and after which time those costs are capitalized until the product is available for general release to customers. Costs incurred to enhance our software products, after general market release of the services using the products, is expensed in the period they are incurred. The periodic expense for the amortization of previously capitalized software development costs is included in costs of services provided.

    Goodwill and Indefinite-Lived Intangible Assets—Goodwill represents the cost in excess of the fair value of the identifiable net assets from the businesses that we acquire. In accordance with ASC 350, “Goodwill and Other Intangible Assets" and ASU No. 2011-08, “Testing Goodwill for Impairment”, goodwill is tested for impairment at the reporting unit level on an annual basis or on an interim basis if an event occurred or circumstances change that would indicate that fair value of our reporting unit decreased below its carrying value. Potential impairment indicators include a significant change in the business climate, legal factors, operating performance indicators, competition, customer retention and the sale or disposition of a significant portion of the business. The Company applies the accounting guidance concerning goodwill impairment evaluation, whereby the Company first assesses certain qualitative factors to determine whether the existence of events or circumstances would indicate that it is more likely than not that the fair value of a reporting unit was less than its carrying amount. If after assessing the totality of events and circumstances, we were to determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we would perform quantitative impairment testing.

We perform our annual goodwill impairment evaluation and testing as of October 1st of each year or, when events or circumstances dictate, more frequently. No goodwill impairments have occurred nor recognized in 2019 or 2020.

The Company has considered the guidance within ASC 350 “Goodwill and Other Intangible Assets” and ASC 280 “Segment Reporting” in concluding that Ebix effectively operates as one operating and reportable segment and one reporting unit.

    
Changes in the carrying amount of goodwill for the years ended December 31, 2020 and 2019 are as follows:
77

December 31, 2020 December 31, 2019
  (In thousands)
Beginning Balance $ 952,404  $ 946,685 
Additions for current year acquisitions 11,241  17,931 
Adjustments for final purchase accounting 725  741 
Foreign currency translation adjustments (15,333) (12,953)
Ending Balance $ 949,037  $ 952,404 
The Company’s indefinite-lived assets are primarily associated with the estimated fair value of the contractual customer relationships existing with the property and casualty insurance carriers in Australia using the Company's property and casualty ("P&C") data exchange. Indefinite-lived intangible assets are not amortized, but rather are tested for impairment annually and tested on an interim basis if a triggering event has occurred.

    We perform our annual impairment testing of indefinite-lived intangible assets as of October 1st of each year. The annual impairment testing of indefinite-lived intangible assets is perform by comparing the asset's fair value to its carrying value. An impairment charge is recognized if the asset's estimated fair value is less than its carrying value.

    To estimate the fair value, we utilize cash flow projections. Projections of cash flows are based on our views of revenue growth rates, operating costs, anticipated future economic conditions, the appropriate discount rates relative to risk, and estimates of residual values and terminal values. We believe that our estimates are consistent with assumptions that marketplace participants would use in their estimates of fair value. The use of different estimates or assumptions for our projected discounted cash flows (e.g., revenue growth rates, future economic conditions, discount rates, and estimates of terminal values) when determining the fair value of our reporting unit could result in different values and may result in a goodwill impairment charge.

For the year ended December 31, 2020, as a result of the analysis performed the Company concluded that the IHC customer relationship indefinite-lived intangible asset associated with the Company's EbixHealth JV has been impaired, the Company recorded a $6.2 million impairment charge within the asset impairment line on the consolidated statement of operations. In addition, the Company has concluded that they IHC customer relationship intangible is no longer considered indefinite-lived. The Company will amortize this intangible over the remaining estimated life of ten years. During the years ended December 2019, and 2018, we had no impairments to the recorded balances of our indefinite-lived intangible assets.

    Finite-lived Intangible Assets—Finite-lived intangible assets represent the estimated acquisition date fair value of customer relationships, developed technology, trademarks, non-compete agreements and other intangibles described below obtained in connection with the businesses we acquire. We amortize these intangible assets on a straight-line basis over their estimated useful lives, as follows:
  Life
Category (years)
Customer relationships
7-20
Developed technology
3-12
Airport contract 9
Store networks 5
Dealer networks
15-20
Brand 15
Trademarks
3-15
Non-compete agreements 5
Database 10
78


Intangible assets as of December 31, 2020 and December 31, 2019, are as follows:
December 31,
2020 2019
  (In thousands)
Finite-lived intangible assets:    
Customer relationships $ 96,616  $ 83,012 
Developed technology 19,867  19,979 
Dealer networks 6,653  6,726 
Airport Contract 4,523  4,635 
Store Networks 2,440  2,500 
Trademarks 2,700  2,689 
Brand 896  918 
Non-compete agreements 759  764 
Backlog 140  140 
Database 212  212 
Total intangibles 134,806  121,575 
Accumulated amortization (83,926) (74,620)
Finite-lived intangibles, net $ 50,880  $ 46,955 
Indefinite-lived intangibles:    
Customer/territorial relationships $ 21,647  $ 42,055 


As a part of the 2009 acquisition of E-Z Data Ebix recognized a $14.2 million indefinite-lived intangible asset associated with acquired corporate customer relationships. During the third quarter 2020, the Company identified a potential indicator of impairment and performed a quantitative analysis to test for impairment. The Company determined the fair value of the intangible assets exceeded its carrying value, however the Company determined that the intangible asset no longer had an indefinite life. The Company has reclassified the $14.2 million to finite-lived and will amortize the value of this intangible over an estimated remaining useful life of 15 years. In the third quarter of 2020 and each quarter subsequent, Ebix will recognize approximately $237 thousand of amortization related to the E-Z Data corporate customer relationships acquired.    
Income Taxes— The Company follows the asset and liability method of accounting for income taxes pursuant to the pertinent guidance issued by the FASB. Deferred income taxes are recorded to reflect the estimated future tax effects of differences between the financial statement and tax basis of assets, liabilities, operating losses, and tax credit carry forwards using the tax rates expected to be in effect when the temporary differences reverse. Valuation allowances, if any, are recorded to reduce deferred tax assets to the amount management considers more likely than not to be realized. Such valuation allowances are recorded for the portion of the deferred tax assets that are not expected to be realized based on the levels of historical taxable income and projections for future taxable income over the periods in which the temporary differences will be deductible.
    The Company applies the relevant FASB accounting guidance on accounting for uncertainty in income taxes positions. This guidance clarifies the accounting for uncertainty in income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. In this regard we recognize the tax benefit from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
    Foreign Currency Translation—The functional currency is the U.S. dollar for the Company's foreign subsidiaries in Dubai and Singapore, and its product development and information technology enabled services activities for the insurance industry provided by its India subsidiary. For Dubai and Singapore, because both the intellectual property research and development activities provided by its Dubai and Singapore subsidiaries, and the product development and information
79

technology enabled services activities for the insurance industry provided by its India subsidiary are in support of the Company's operating divisions across the world, which are primarily transacted in U.S. dollars.

    The functional currency of the Company's other foreign subsidiaries is the local currency of the country in which the subsidiary operates. The assets and liabilities of these foreign subsidiaries are translated into U.S. dollars at the rates of exchange at the balance sheet dates. Income and expense accounts are translated at the average exchange rates in effect during the period. Gains and losses resulting from translation adjustments are included as a component of accumulated other comprehensive income in the accompanying consolidated balance sheets, and are included in the consolidated statements of comprehensive income. Foreign exchange transaction gains and losses that are derived from transactions denominated in a currency other than the subsidiary's functional currency are included in the determination of net income.
    Advertising—With the exception of certain direct-response costs in connection with our business services of providing medical continuing education to physicians, dentists and healthcare professionals, advertising costs are expensed as incurred. Advertising costs amounted to $4.8 million, $9.7 million, and 7.5 million in 2020, 2019, and 2018, respectively, and are included in sales and marketing expenses in the accompanying Consolidated Statements of Income.

    Effective January 1, 2018 Subtopic 340-40 replaced that guidance to require the costs of direct-response advertising to be expensed as they are incurred or the first time the advertising takes place. The Company was required to recognize a cumulative effective change to opening retained earnings in the year of adoption of the standard. The Company recorded a one-time $1.9 million adjustment to retained earnings on January 1, 2018 and is expensing all future costs from this date forward. Under the new guidance Subtopic 340-40, the Company's expense decreased by $522 thousand during 2018 from what would have been recorded under legacy US GAAP 340-20.
    Sales Commissions —Certain sales commission paid with respect to subscription-based revenues are deferred and subsequently amortized into operating expenses ratably over the term of the related customer subscription contracts. As of December 31, 2020, 2019, and 2018 $650 thousand, $652 thousand, and $661 thousand, respectively, of sales commissions were deferred and included in other current assets on the accompanying Consolidated Balance Sheets. During the years ended December 31, 2020 and 2019, the Company amortized $763 thousand and $1.0 million, respectively, of previously deferred sales commissions and included this expense in operating expenses on the accompanying Consolidated Statements of Income.
    Property and Equipment—Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the assets' estimated useful lives. Leasehold improvements are amortized over the shorter of the expected life of the improvements or the remaining lease term. Repairs and maintenance are charged to expense as incurred and major improvements that extend the life of the asset are capitalized and depreciated over the expected remaining life of the related asset. Gains and losses resulting from sales or retirements are recorded as incurred, at which time related costs and accumulated depreciation are removed from the Company’s accounts. Fixed assets acquired in acquisitions are recorded at fair value. The estimated useful lives applied by the Company for property and equipment are as follows:
  Life
Asset Category (years)
Buildings 39
Building Improvements 15
Computer equipment 5
Furniture, fixtures and other 7
Software 3
Land Improvements 20
Land Unlimited life
Leasehold improvements Shorter of asset life or life of the lease
Recent Accounting Pronouncements—The following is a brief discussion of recently released accounting pronouncements that are pertinent to the Company's business:
    In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): "Simplifying the Accounting for Income Taxes". ASU 2019-12 is expected to reduce the cost and complexity related to the accounting for income taxes by eliminating the need for an entity to analyze whether the following apply to a given reporting period:
80

• Exception to the incremental approach for intra period tax allocation;
• Exceptions to accounting for basis differences when there are ownership changes in foreign investments; and
• Exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses.
    For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company not yet assessed the impact that the adoption of this guidance will have on its statement of financial position or its statement of income.

In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions to the current guidance on contract modifications and hedging relationships to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate ("SOFR"). The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The adoption of this guidance has had no impact on the consolidated financial statements as the Company has not yet modified any of the existing contracts in response to the reference rate reform. The impact of this ASU will ultimately depend on the terms of any future contract modification related to a change in reference rate, including potential future modifications to the Company's Credit Facility.
    

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): "Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement". ASU 2018-13 is intended to improve the effectiveness of ASC 820’s disclosure requirements. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year.

    In February 2018, the FASB issued 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income". The ASU provides that the stranded tax effects from the Tax Act in accumulated other comprehensive loss may be reclassified to retained earnings. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.
    In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): "Simplifying the Test for Goodwill Impairment". To simplify the subsequent measurement of goodwill, the FASB eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities). Instead, under the amendments in this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. A public business entity filer should adopt the amendments in this ASU for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019.
    In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): "Clarifying the Definition of a Business" which amended the existing FASB ASC. The standard provides additional guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting, including acquisitions, disposals, goodwill, and consolidation. ASU 2017-01 is effective for fiscal 2019 with early adoption permitted. The Company adopted this guidance in 2019 and it had an effect classification certain of its recent acquisitions.
    In October 2016, the FASB issued ASU 2016-16, Taxes (Topic 740): "Intra-Entity Transfers of Assets Other Than Inventory". Current GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. This prohibition on recognition is an exception to the principle of comprehensive recognition of current and deferred income taxes in GAAP. The amendments specified by ASU 2016-16 require an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments eliminate the exception for an intra-entity transfer of an asset other than inventory. Two common examples of assets included in the scope of the amendments are intellectual property, and property, plant and equipment. The amendments do not include new disclosure requirements; however, existing disclosure requirements might be applicable when accounting for the current and deferred income taxes for an intra-entity transfer of an asset other than inventory. The amendments align the recognition of income tax consequences for intra-entity transfers of assets other than inventory with International Financial Reporting Standards. IAS 12, Income Taxes, requires recognition of current and deferred income taxes resulting from an intra-entity transfer of any asset (including inventory) when the transfer occurs. The amendments are effective for public business
81

entities for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities in the first interim period if an entity issues interim financial statements. The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company adopted this new standard and it did not have a material effect on its consolidated statement of financial position or statement of income.
    In June 2016, the FASB issued ASU 2016-13. Financial Instruments - Credit Losses (Topic 326). The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. For public business entities that are U.S. Securities and Exchange Commission (SEC) filers, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted this new standard and it did not have a material effect on its consolidated statement of financial position or statement of income.
        In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This new accounting guidance is intended to improve financial reporting about leasing transactions. The ASU affects all companies and other organizations that lease assets such as real estate, airplanes, and manufacturing equipment. The ASU will require organizations that lease assets referred to as “Lessees” to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. An organization is to provide disclosures designed to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements concerning additional information about the amounts recorded in the financial statements. Under the new guidance, a lessee is required to recognize assets and liabilities for leases with lease terms of more than twelve months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP which requires only capital leases to be recognized on the balance sheet, the new ASU requires both types of leases (i.e., operating and capital) to be recognized on the balance sheet. The capital lease is accounted for in substantially the same manner as capital leases are accounted for under existing GAAP. For operating leases, there now is the recognition of a lease liability and a lease asset for all such leases greater than one year in term. Public companies are required to adopt the new leasing standard for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We adopted Topic 842 effective January 1, 2019 using a modified retrospective method and will not restate comparative periods. As permitted under the transition guidance, we carried forward the assessment of whether our contracts contain or are leases, classification of our leases and remaining lease terms. See Note 19.

Note 2. Earnings per Share

    The basic and diluted earnings per share (“EPS”), and the basic and diluted weighted average shares outstanding for all periods as presented in the accompanying Consolidated Statements of Income are shown below:
For the year ended
December 31,
  (In thousands, except per share amounts)
Earnings per share: 2020 2019 2018
Basic earnings per common share $ 3.03  $ 3.17  $ 2.97 
Diluted earnings per common share $ 3.02  $ 3.16  $ 2.95 
Basic weighted average shares outstanding 30,510  30,511  31,393 
Diluted weighted average shares outstanding 30,571  30,594  31,534 
    Basic EPS is equal to net income attributable to Ebix, Inc. divided by the weighted average number of shares of common stock outstanding for the period. Diluted EPS takes into consideration common stock equivalents which for the Company consist of stock options and restricted stock. With respect to stock options, diluted EPS is calculated as if the Company had additional common stock outstanding from the beginning of the year or the date of grant or issuance, net of assumed repurchased shares using the treasury stock method. With respect to restricted stock, diluted EPS is calculated as if the Company had additional common stock outstanding from the beginning of the year or the date of grant or issuance. Diluted
82

EPS is equal to net income attributable to Ebix, Inc divided by the combined sum of the weighted average number of shares outstanding and common stock equivalents. At December 31, 2020, 2019, and 2018 there were 181,875, 181,875, and 42,000 respectively of potentially issuable shares with respect to stock options which could dilute EPS in the future but which were excluded from the diluted EPS calculation because presently their effect is anti-dilutive. Diluted shares outstanding are determined as follows for each year ended December 31, 2020, 2019, and 2018:
For the year ended
December 31,
(In thousands)
  2020 2019 2018
Basic weighted average shares outstanding 30,510  30,511  31,393 
Incremental shares for common stock equivalents 61  83  141 
Diluted shares outstanding 30,571  30,594  31,534 


Note 3. Business Acquisitions
    The Company’s business acquisitions are accounted for under the purchase method of accounting in accordance with ASC 805 ("Business Combinations"). Accordingly, the consideration paid by the Company for the businesses it purchases is allocated to the tangible and intangible assets and liabilities acquired based upon their estimated fair values as of the date of the acquisition. The excess of the purchase price over the estimated fair values of assets acquired and liabilities assumed is recorded as goodwill. Recognized goodwill pertains in part to the value of the expected synergies to be derived from combining the operations of the businesses we acquire including the value of the acquired workforce. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record significant adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recognized in our consolidated statements of income.

    The Company's practice is to immediately integrate all functions including infrastructure, sales and marketing, administration, product development after a business acquisition is consummated, so as to ensure that synergistic efficiencies are maximized, redundancies eliminated, and to leverage cross-selling opportunities. Furthermore, the Company centralizes certain key functions such as information technology, marketing, sales, human resources, finance, and other general administrative functions after an acquisition, in order to realize cost efficiencies. By executing this integration strategy, it becomes neither practical nor feasible to accurately and separately track and disclose the earnings from the business combinations we have executed after they have been acquired.

    A significant component of the purchase price consideration for many of the Company's business acquisitions is a potential future cash earnout based on reaching certain specified future revenue targets. The terms for the contingent earn-out payments in most of the Company's business acquisitions typically address revenues achieved by the acquired entity over a one, two, and/or three year period subsequent to the effective date of their acquisition by Ebix. These terms typically establish a minimum threshold revenue target with achievement of revenues recognized over that target being awarded in the form of a specified cash earn-out payment. The Company applies these terms in its calculation and determination of the fair value of contingent earn-out liabilities for purchased businesses as part of the related valuation and purchase price allocation exercise for the corresponding acquired assets and liabilities. The Company recognizes these potential obligations as contingent liabilities as reported on its Consolidated Balance Sheets. As discussed in more detail in Note 1, these contingent consideration liabilities are recorded at fair value on the acquisition date and are remeasured quarterly based on the then assessed fair value and adjusted if necessary. During each of the years ending December 31, 2020, 2019 and 2018, these aggregate contingent accrued earn-out business acquisition consideration liabilities, were reduced by $3.1 million, $16.5 million, and $1.4 million, respectively, due to remeasurements as based on the then assessed fair value and changes in the amount and timing of anticipated future revenue levels. These reductions to the contingent accrued earn-out liabilities resulted in corresponding reduction to general and administrative expenses as reported on the Consolidated Statements of Income. As of December 31, 2020, there were no outstanding contingent earn-out liability in the Company's Consolidated Balance Sheet. As of December 31, 2019, the total of these contingent liabilities was $10.1 million, of which $1.5 million was reported in long-term liabilities and $8.6 million was included in current liabilities in the Company's Consolidated Balance Sheet.


83

2020 Acquisitions

Trimax- Effective May 4, 2020, Ebix acquired from bankruptcy India-based Trimax, which provides IT and integration services to state-owned transport corporations, operates data centers, and is an IT infrastructure solution provider, for approximately $9.9 million of upfront consideration. Additionally, Ebix issued preferred shares in Trimax to the selling shareholders that can be sold five years from the closing of the acquisition based on an independent valuation performed by a Big 4 valuation firm. The maximum potential value of the preferred shares is approximately $9.9 million. The valuation and purchase price allocation remains preliminary and will be finalized as soon as practicable but in no event longer than one year from the effective date of this transaction.
AssureEdge- Effective October 1, 2020 the Company acquired a 70% interest in AssureEdge Global Services (“AssureEdge”) for a total purchase price of approximately $5.0 million, including net working capital acquired. AssureEdge is a pan-India based business process outsourcing ("BPO") company, with a variety of BPO offerings via six contact centers across the country. It serves a number of industries and clients that have cross-selling value for EbixCash services. The valuation and purchase price allocation remains preliminary and will be finalized as soon as practicable but in no event longer than one year from the effective date of this transaction.

2019 Acquisitions
Wallstreet Canada- Effective August 23, 2019, Ebix acquired Canada based Wallstreet Canada, a foreign exchange and outward remittance service provider for approximately $2.1 million inclusive of net acquired working capital.
Essel Forex- Effective January 1, 2019, Ebix acquired the assets of India based Essel Forex, for approximately $8.7 million, plus possible future contingent earn-out payments of up to $721 thousand based on earned revenues. Ebix funded the entire transaction in cash using its internal cash reserves. Essel Forex is a provider of foreign exchange services in India, with a wide spectrum of related products including sales of all major currencies, travelers’ checks, demand drafts, remittances, money transfers and prepaid cards primarily for corporate clients.
    Zillious- Effective January 1, 2019, Ebix acquired an 80% controlling stake in India based Zillious for $10.1 million plus possible future contingent earn-out payments of up to $2.2 million based on agreed milestones in the acquisition agreement. Zillious is an on-demand SaaS travel technology solution in the corporate travel segment in India.
    The following table summarizes the recognized intangible assets, goodwill and earn-out provisions, as a result of the cumulative valuation and purchase price allocations on effective date of acquisition, for the 2020 and 2019 acquisitions:

Company acquired Date acquired Goodwill Intangibles Assets Contingent Earn-Out Provision
(In thousands)
Essel Forex Jan-19 8,372  1,163  407 
Zillious Jan-19 9,489  1,875  1,515 
Wallstreet Canada Aug-19 71  —  — 
Total for 2019 acquisitions $ 17,932  $ 3,038  $ 1,922 
Trimax* May-20 8,243  —  — 
AssureEdge* Oct-20 3,678  —  — 
Total for 2020 acquisitions $ 11,921  $ —  $ — 
*The valuation and purchase price allocation remains preliminary and will be finalized as soon as practicable but in no event longer than one year from the effective date of this transaction.

84

    The following table summarizes the fair value of the consideration transferred, net assets acquired and liabilities assumed, as of the acquisition date, for acquisitions closed during 2020 and 2019:
 
(In thousands) 2020 2019
Fair value of total consideration transferred
Cash $ 13,774  $ 105,391 
Consideration payable 1,827  — 
Contingent earn-out consideration arrangement (net) —  1,922 
Total consideration transferred 15,601  107,313 
Fair value of equity components recorded (not part of consideration)
Recognition of noncontrolling interest of joint ventures 1,350  (10,258)
Total equity components recorded 1,350  (10,258)
Total consideration transferred and equity components recorded $ 16,951  $ 97,055 
Fair value of assets acquired and liabilities assumed
Cash, net of adjustment $ 1,358  $ (75)
Other current assets 2,812  5,175 
Property, plant, and equipment 4,021  231 
Other long term assets 103  3,023 
Intangible assets, definite lived —  6,296 
Capitalized software development costs —  — 
Deferred tax liability —  12 
Current and other liabilities, net of consideration transferred (3,264) 63,721 
Net assets acquired, excludes goodwill 5,030  78,383 
Goodwill 11,921  18,672 
Total net assets acquired $ 16,951  $ 97,055 
    The following table summarizes the separately identified intangible assets acquired as a result of the acquisitions that occurred during 2020 and 2019:
  December 31,
  2020 2019
Weighted
Average
Weighted
Average
Intangible asset category Fair Value Useful Life Fair Value Useful Life
  (In thousands) (In years) (In thousands) (In years)
Customer relationships $ —  0.0 $ 3,042  7.5
Developed technology —  0.0 851  7.0
Agent network —  0.0 582  10.2
Airport contracts —  0.0 —  0.0
Store networks —  0.0 —  0.0
Brand —  0.0 78  5.0
Branch network —  0.0 1,743  10.0
Purchase accounting adjustments for prior year acquisitions —  0.0 —  0.0
Total acquired intangible assets $   0.0 $ 6,296  8.0
85


    Estimated aggregate future amortization expense for the intangible assets recorded as part of the business acquisitions described above and all other prior acquisitions is as follows:
Future Amortization Expenses (In thousands):  
For the year ended December 31, 2021 $ 9,359 
For the year ended December 31, 2022 8,967 
For the year ended December 31, 2023 6,942 
For the year ended December 31, 2024 5,155 
For the year ended December 31, 2025 3,835 
Thereafter 16,622 
   
  $ 50,880 
    The Company recorded $9.5 million, $10.2 million, and $7.5 million of amortization expense related to acquired intangible assets for the years ended December 31, 2020, 2019, and 2018, respectively.

Note 4. Credit Facility

The Company maintains a senior secured syndicated credit facility, dated August 5, 2014, among Ebix, Inc., as borrower, its subsidiaries party thereto from time to time as guarantors, Regions Bank (As administrative agent and collateral agent) and the lenders party thereto from time to time (as amended from time to time, the "Credit Facility") that provides a $450 million revolving line of credit (the "Revolver") as well as a term loan (the "Term Loan"), which at December 31, 2020 had a balance of $255.5 million. The Credit Facility matures in February 2023.

On May 7, 2020, Ebix entered into Amendment No. 10 to the Credit Facility. Amendment No. 10 provides for, among other things, increased flexibility under financial maintenance covenants, which the Company sought in part due to the unforeseen negative effects of the COVID-19 pandemic.

On March 30, 2020, the Company and certain of its subsidiaries entered into a waiver related to the Credit Facility (the "Waiver"). The Waiver provided that so long as the Company’s leverage ratio is below 5.0 to 1.0 for the Company’s fiscal quarter ending March 31, 2020 pursuant to the terms of its compliance certificate required by the Credit Facility, the existing leverage ratio requirement of 3.50 to 1.0 was waived.    

On September 27, 2019, the Company and certain of its subsidiaries entered into Amendment No. 9 to the Credit Facility, which amended the definitions of “Consolidated EBITDA" and “Indebtedness” and modified the maximum consolidated debt leverage ratios allowed.

    
At December 31, 2020, the outstanding balance on the Revolver was $439.4 million and the facility carried an interest rate of 3.5%. During 2020, the Company drew $1.4 million on its Revolver. This balance on the Revolver is included in the long-term liabilities section of the Condensed Consolidated Balance Sheets. During 2020, the average and maximum outstanding balances on the Revolver were $438.9 million and $439.4 million, respectively, and the weighted average interest rate on the Revolver was 4.04%. At December 31, 2019, the outstanding balance on the Revolver was $438.0 million and the facility carried an interest rate of 4.25%. This balance on the Revolver was included in the long-term liabilities section of the Condensed Consolidated Balance Sheets. During 2019, the average and maximum outstanding balances on the Revolver were $437.2 million and $438.0 million, respectively.

At December 31, 2020, the outstanding balance on the Term Loan was $255.5 million, of which $22.6 million is due within the next twelve months. $20.7 million of scheduled amortization payments were made on the Term Loan during 2020. The Term Loan also carried an interest rate of 3.5% at December 31, 2020, and the weighted average interest rate on the Term Loan during 2020 was 4.04%. The current and long-term portions of the Term Loan are included in the respective current and long-term debt sections of the Condensed Consolidated Balance Sheets, the amounts of which were $22.6 million and $232.9 million. At December 31, 2019, the outstanding balance on the Term Loan was $276.2 million, of which $20.7 million was due within twelve months. This term loan also carried an interest rate of 4.25%.

At December 31, 2020, the Company's Condensed Consolidated Balance Sheets include $4.9 million of remaining deferred financing costs in connection with the Credit Facility, which are being amortized as a component of interest expense through the maturity of the Credit Facility in February 2023. $2.9 million of such deferred financing costs pertain to the Revolver and $2.0 million pertains to the Term Loan, of which $919 thousand is netted against the current portion of the Term Loan and $1 million is netted against the long-term portion of the Term Loan as reported on the Condensed Consolidated
86

Balance Sheets. At December 31, 2019, the Company's Condensed Consolidated Balance Sheets included $5.2 million of remaining deferred financing costs in connection with the Credit Facility, with $3.1 million pertaining to the Revolver and $2.1 million pertaining to the Term Loan, of which $575 thousand was netted against the current portion of the Term Loan and $1.5 million was netted against the long-term portions of the Term Loan as reported on the Condensed Consolidated Balance Sheets.
    


Note 5. Commitments and Contingencies

    Contingencies— On February 22, 2021, Christine Marie Teifke, a purported purchaser of Ebix, Inc. securities, filed a putative class action in the United States District Court for the Southern District of New York on behalf of herself and others who purchased or acquired Ebix securities between November 9, 2020 and February 19, 2021. The complaint asserts claims against Ebix, Inc., Robin Raina, and Steven M. Hamil, for purported violations of Section 10(b) of the Securities Exchange Act of 1934, alleging that Ebix, Inc. made false and misleading statements and failed to disclose material adverse facts about an audit of the company's gift card business in India and its internal controls over the gift and prepaid card revenue transaction cycle. The complaint alleges that Ebix's stock price fell as a result of the revelation that Ebix's independent auditor, RSM US LLP, had resigned, citing concerns with the company's internal controls and disagreements over other accounting issues. The complaint also asserts a claim against Robin Raina and Steven M. Hamil for purported violations of Section 20(a) of the Exchange Act arising out of the same facts. The complaint seeks, among other relief, damages and attorneys' fees and costs.

On July 16, 2019, Yatra Online, Inc. ("Yatra"), Ebix, Inc. ("Ebix"), and EbixCash Travels, Inc. ("Merger Sub") entered into a Merger Agreement. On May 14, 2020, Yatra entered into an agreement with Ebix and Merger Sub extending the outside date of the Merger Agreement (the "Extension Agreement"). On June 5, 2020, Yatra terminated the Merger Agreement and filed a complaint in the Delaware Court of Chancery against Ebix and Merger Sub (the "Complaint"). On September 25, 2020, Yatra amended the Complaint and added as a defendant each financial institution (each, a “Defendant Lender”) party our Credit Facility, which prior to the filing of the original Complaint, had been previously amended on May 7, 2020. The Complaint, as amended, alleges that Ebix and Merger Sub breached certain representations, warranties, and covenants contained in the Merger Agreement and the Extension Agreement and that Ebix negotiated in bad faith. The amended Complaint also alleges fraudulent actions by Ebix and the Defendant Lenders arising from certain terms of the Credit Facility and tortious interference with the closing of the Merger Agreement by Ebix and the Defendant Lenders. The Complaint seeks, among other relief, damages, pre-judgment and post-judgment interest, and attorneys' fees and costs. Ebix and Merger Sub deny any liability and intend to defend the action vigorously.

On May 12, 2017, Ebix Software India Pvt. Ltd. (“Ebixcash”) entered into several agreements with the most prominent shareholders of Itz Cash Card Limited (“Itz”), the most relevant among these a stock purchase agreement (the “SPA”), to purchase a majority ownership stake in Itz. Further, as part of the overall purchase of Itz, a share purchase agreement between Ebixcash and individual ESOP holders of Itz was entered into on July 7, 2017 (the “ESOP SPA”) (with the SPA, the ESOP SPA and the other purchase documents, collectively, the “Transaction Documents”). Part of the consideration for Ebixcash’s purchase of Itz consisted of two individual potential earn-out payments, the first for the period for the year ended March 31, 2019 (the “First Earn-Out”) and the second for the following year, ending on March 31, 2020 (the “Second Earn-Out”). Neither the First Earn-Out nor the Second Earn-Out were achieved pursuant to the terms of the SPA. After correspondence between the parties between September 2019 and May 2020, the former shareholders of Itz (“Sellers”) sent Ebixcash notices of arbitration (“NOAs”) under which they were availing themselves of the arbitration dispute provisions set forth in the Transaction Documents. Apart from the amounts claimed owed under the earn-out provisions, the Sellers also alleged in the NOAs other violations of the terms of the Transaction Documents, including, certain non-competition and restricted matter approval violations. The matter is under Arbitration in accordance with the rules of the Singapore International Arbitration Centre. The Company believes that each of the Sellers claims is without merit and continues to defend its position vigorously. The Company believes that Ebixcash has several viable counterclaims related to improper termination of the Transaction Documents and violation non-compete provisions.
As the Company previously disclosed, in May 2013, twelve putative class action complaints were filed in the Delaware Court of Chancery against the Company and its board of directors challenging a proposed merger between the
87

Company and an affiliate of Goldman Sachs & Co. On June 10, 2013, the Court entered an Order of Consolidation and Appointment of Lead Plaintiffs and a Leadership Structure consolidating the twelve actions and appointing lead plaintiffs (“Plaintiffs”) and lead counsel in the litigation, captioned In re Ebix, Inc. Stockholder Litigation, Consol. C.A. No. 8526-VCS (the “Litigation”). In connection with the Litigation, on January 23, 2019, the parties entered into a Stipulation and Agreement of Settlement (the “Settlement Agreement”) pursuant to which the parties agreed, subject to approval by the Delaware Court of Chancery, to settle and resolve the Litigation pursuant to the terms set forth in the Settlement Agreement (the “Litigation Settlement”). On April 5, 2019, the Delaware Court of Chancery determined that the Litigation Settlement was fair, reasonable, adequate and in the best interest of the plaintiffs, the class and the Company and awarded to plaintiffs’ counsel attorneys’ fees and expenses in the sum of $19.65 million, which was paid on May 2, 2019, and entered an Order and Final Judgment (the “Order”) approving the Litigation Settlement. The Order provided for full settlement, satisfaction, compromise and release of all claims that were asserted or could have been asserted in the Litigation, whether on behalf of the class or the Company. The Settlement contains no admission of wrongdoing or liability, and may not be deemed to be a presumption as to the validity of any claims, causes of action or other issues.

The Company is involved in various other claims and legal actions arising in the ordinary course of business, which in the opinion of management, the ultimate likely disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.
    Lease Commitments— See Note 19.

    Business Acquisition Earn-out Contingencies—A significant component of the purchase price consideration for many of the Company's business acquisitions is a potential future cash earn out based on reaching certain specified future revenue targets. The terms for the contingent earn-out payments in most of the Company's business acquisitions typically address the GAAP recognizable revenues achieved by the acquired entity over a one, two, and/or three year period subsequent to the effective date of their acquisition by Ebix. These terms typically establish a minimum threshold revenue target with achievement of revenues recognized over that target being awarded in the form of a specified cash earn-out payment. The Company applies these terms in its calculation and determination of the fair value of contingent earn-out liabilities for purchased businesses as part of the related valuation and purchase price allocation exercise for the corresponding acquired assets and liabilities. As of December 31, 2020, here were no outstanding contingent liability in the Company's Consolidated Balance Sheet. As of December 31, 2019, the total of these contingent liabilities was $10.1 million of which $1.5 million was reported in long-term liabilities, and $8.6 million was included in current liabilities in the Company's Consolidated Balance Sheet.
    Self-Insurance—For some of the Company’s U.S. employees the Company has a self-insured plan for its health insurance program and has a stop loss policy that limits the individual liability to $120 thousand per person and the aggregate liability to 125% of the expected claims based upon the number of participants and historical claims. As of December 31, 2020 and 2019, the amount accrued on the Company’s consolidated balance sheet for the self-insured component of the Company’s employee health insurance was $345 thousand and $362 thousand, respectively. The maximum potential estimated cumulative liability for the annual contract period, which ends in September 2021, is $4.1 million. During the years ended December 31, 2020 and 2019, the Company recognized $1.8 million, and $2.6 million of expense, respectively, associated with claims from its self-insured health insurance program.
    
    Gratuity Leave—In accordance with Indian law, we pay gratuity to our eligible employees in India. Under our gratuity plan, an employee is entitled to receive a gratuity payment on the termination of his or her employment if the employee has rendered continuous service to our company for not less than five years, or if the termination of employment is due to death or disability. The amount of gratuity payable to an eligible employee is based on number of years of employment and is limited to a maximum of $28 thousand per employee. As of December 31, 2020 and 2019, the amount accrued on the Company’s consolidated balance sheet for gratuity leave was $4.3 million and $3.2 million, respectively.


Note 6. Share-Based Compensation
    Stock Options—The Company accounts for compensation expense associated with stock options issued to employees, Directors, and non-employees based on their fair value, which is calculated using an option pricing model, and is recognized over the service period, which is usually the vesting period. At December 31, 2020, the Company had two equity based compensation plans. No stock options were granted to employees or non-employees during 2020, 2019, and 2018; however, options were granted to Directors in 2020, 2019, and 2018. Stock compensation expense of $517 thousand, $537 thousand and
88

$449 thousand was recognized during the years ending December 31, 2020, 2019, and 2018, respectively, on outstanding and unvested options.
    The fair value of options granted during 2020 is estimated on the date of grant using a Black-Scholes option pricing model. The following table includes the weighted- average assumptions used in estimating the fair values and the resulting weighted-average fair value of stock options granted in the periods presented:
Year Ended December 31,
2020 2019 2018
Weighted average fair values of stock options granted $ 15.58  $ 12.68  $ 11.80 
Expected volatility 64.7  % 36.0  % 35.7  %
Expected dividends .84  % .65  % .70  %
Weighted average risk-free interest rate .24  % 1.72  % 2.47  %
Expected life of stock options (in years) 3.5 3.5 3.5

    A summary of stock option activity for the years ended December 31, 2020, 2019, and 2018 is as follows:
Shares Weighted
Average
Exercise Price
Weighted
Average
Remaining
Contractual
Term (Years)
Aggregate Intrinsic
Value
        (In thousands)
Outstanding at January 1, 2018 147,999  $ 37.68  2.94 $ 6,152 
Granted 42,000  $ 42.56     
Exercised (27,999) $ 15.65     
Canceled —  $ —     
Outstanding at December 31, 2018 162,000  $ 42.75  3.05 $ — 
Granted 66,000  $ 46.75 
Exercised —  $ — 
Canceled (10,125) $ 46.66 
Outstanding at December 31, 2019 217,875  $ 43.78  2.60 $ — 
Granted 36,000  $ 35.70 
Exercised (30,000) $ 21.19 
Canceled (6,000) $ 28.59 
Outstanding at December 31, 2020 217,875  $ 45.97  2.57 $ — 
Exercisable at December 31, 2020 115,125  $ 49.17  1.63 $ — 
    The aggregate intrinsic value for stock options outstanding and exercisable is defined as the difference between the market value of the Company’s stock as of the end of the period and the exercise price of the stock options. The total intrinsic value of stock options exercised during 2020, 2019, and 2018 was $341 thousand, zero and $900 thousand, respectively.
    Cash received or the value of stocks canceled from option exercises under all share-based payment arrangements for the years ended December 31, 2020, 2019, and 2018, was $127 thousand, zero and $439 thousand, respectively.
    A summary of non-vested options and changes for the years ended December 31, 2020, 2019 and 2018 is as follows:

89

Non-Vested Number of Shares Weighted
Average
Exercise Price
     
Non-vested balance at January 1, 2018 76,500  $ 47.99 
Granted 42,000  $ 42.56 
Vested (36,750) $ 43.52 
Canceled —  $ — 
Non-vested balance at December 31, 2018 81,750  $ 47.21 
Granted 66,000  $ 46.75 
Vested (28,875) $ 48.46 
Canceled (10,125) $ 46.66 
Non-vested balance at December 31, 2019 108,750  $ 46.65 
Granted 36,000  $ 35.70 
Vested (42,000) $ 47.66 
Canceled —  $ — 
Non-vested balance at December 31, 2020 102,750  $ 42.40 

    The following table summarizes information about stock options outstanding by price range as of December 31, 2020:
Options Outstanding Options Exercisable
Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life (Years) Weighted-Average Exercise Price Number of Shares Weighted-Average Exercise Price
$35.70 36,000  0.82 $ 5.90  —  $ — 
$41.60 36,000  0.45 $ 6.87  11,250  $ 4.07 
$42.56 36,000  0.50 $ 7.03  18,000  $ 6.65 
$49.22 40,875  0.06 $ 9.23  40,875  $ 17.48 
$52.92 30,000  0.47 $ 7.29  11,250  $ 5.17 
$53.90 39,000  0.27 $ 9.65  33,750  $ 15.80 
217,875  2.57 $ 45.97  115,125  $ 49.17 

    Restricted Stock—Pursuant to the Company’s restricted stock agreements, the restricted stock granted generally vests as follows: one third after one year, and the remaining in eight equal quarterly installments. The restricted stock also vests with respect to any unvested shares upon the applicable employee’s death, disability or retirement, the Company’s termination of the employee other than for cause, or for a change in control of the Company. A summary of the status of the Company’s non-vested restricted stock grant shares is presented in the following table:
90

Shares Weighted-Average Grant Date
Fair Value
Non-vested at January 1, 2018 107,095  $ 45.74 
Granted 5,623  $ 76.47 
Vested (68,788) $ 40.67 
Forfeited (3,514) $ 46.24 
Non-vested at December 31, 2018 40,416  $ 58.60 
Granted 91,658  $ 50.54 
Vested (24,120) $ 57.14 
Forfeited —  $ — 
Non-vested at December 31, 2019 107,954  $ 52.08 
Granted 388,089  $ 24.37 
Vested (68,504) $ 52.49 
Forfeited —  $ — 
Non-vested at December 31, 2020 427,539  $ 26.86 
    In the aggregate the total compensation expense recognized in connection with the restricted grants was $4.3 million, $2.9 million, and $2.4 million during each of the years ending December 31, 2020, 2019, and 2018, respectively.
    As of December 31, 2020, there was $9.1 million of total unrecognized compensation cost related to non-vested share based compensation arrangements granted under the 2006 and 2010 Incentive Compensation Program. That cost is expected to be recognized over a weighted-average period of 2.75 years. The total fair value of shares vested during the years ended December 31, 2020, 2019, and 2018 was $3.6 million, $1.4 million, and $2.8 million, respectively.
    As of December 31, 2020, the Company has 8.6 million shares of common stock reserved for possible future stock option and restricted stock grants.


Note 7. Income Taxes
    The income tax expense (benefit) consists of the following:

Year Ended December 31,
2020 2019 2018
  (In thousands)
Current:
US federal $ (249) $ 1,378  $ 22,353 
US state (406) 909  847 
Non US 10,681  12,861  15,212 
  10,026  15,148  38,412 
Deferred:
US federal (1,220) (3,781) 5,617 
US state (657) (3,107) (1,031)
Non US (2,819) (8,040) (10,497)
(4,696) (14,928) (5,911)
Total $ 5,330  $ 220  $ 32,501 

Income (loss) before income taxes includes the following components:
91

Year Ended December 31,
2020 2019 2018
  (In thousands)
US $ (27,528) $ (47,574) $ (36,202)
Non US 121,685  138,365  161,784 
Total $ 94,157  $ 90,791  $ 125,582 
    A reconciliation of the statutory federal income tax rate to the effective income tax rate consists of the following:

Year Ended December 31,
2020 2019 2018
Statutory US federal income tax rate 21.0  % 21.0  % 21.0  %
US state income taxes, net of federal benefit (0.9) % (2.3) % (0.3) %
Non-US tax rate differential (12.2) % (13.6) % (15.2) %
GILTI Related 12.5  % 18.6  % 15.1  %
SubPart F —  % —  % 0.7  %
Tax holidays (4.0) % (6.0) % (3.4) %
Tax Credits (10.0) % (15.0) % (10.6) %
Passive income exemption (0.4) % (1.2) % (0.9) %
Acquisition contingent earnout liability adjustments (0.7) % (4.0) % (0.2) %
Nondeductible items 2.0  % 1.0  % (0.1) %
Effect of valuation allowance (1.2) % 1.2  % (0.1) %
Prior year Transition Tax and related true-ups 0.5  % 0.7  % 19.5  %
Uncertain tax positions (1.0) % (0.1) % 0.1  %
Other —  % (0.1) % 0.3  %
Effective income tax rate 5.7  % 0.2  % 25.9  %
    The Company's effective tax rate increased to 5.7% in 2020, compared with 0.2% in 2019. The increase in effective tax rate in 2020 is due to a decrease in the availability of tax credits as well as lower tax holiday benefit available in 2020 compared to 2019 and lower benefits from the state taxes deduction.
    Deferred tax assets and liabilities are comprised of the following:

92

December 31, 2020 December 31, 2019
Deferred Deferred
Assets Liabilities Assets Liabilities
(In thousands)
Depreciation and amortization $ —  $ 3,450  $ —  $ 3,562 
Share-based compensation 451  —  959  — 
Accruals and prepaids 6,586  —  6,806  — 
Bad debts 2,727  —  2,594  — 
Acquired intangible assets —  13,071  —  13,335 
Net operating loss carryforwards 33,247  —  27,607  — 
Tax credit carryforwards (primarily Minimum Alternative Tax ("MAT") in India) 48,669  —  50,210  — 
  91,680  16,521  88,176  16,897 
Valuation allowance (2,160) —  (3,288) — 
Total deferred taxes $ 89,520  $ 16,521  $ 84,888  $ 16,897 
    
    We have US Federal, state and foreign operating losses and credit carryforwards as follows:

Year Ended December 31,
2020 2019
  (In thousands)
US Federal loss carryforwards $ 55,029  $ 48,623 
US state loss carryforwards 79,907  65,412 
Foreign loss carryforwards 73,922  58,660 
US Federal credit carryforwards 1,818  3,359 
Foreign credit carryforwards 46,851  46,851 
    The US federal and state operating loss carryforwards expire at varying dates through 2025. The federal credits begin to expire in 2026. We also have non-U.S. tax credits (primarily MAT paid in India) carried forward of approximately $46.9 million as of December 31, 2020, which is available for set-off against the future tax liability of certain Indian operations on a staggered basis over a period up-to fifteen years.

    On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in the United States. The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property, and the creation of certain refundable employee retention credits. The Company evaluated the provisions of the CARES Act and does not anticipate the associated impacts, if any, will have a material effect on the Company’s provision for income taxes for the year ended December 31, 2020.

The Company has not recognized a deferred U.S. tax liability and associated income tax expense for the undistributed earnings of its foreign subsidiaries which we consider indefinitely invested because those foreign earnings will remain permanently reinvested in those subsidiaries to fund ongoing operations and growth. Upon distribution of those earnings in the form of dividends or otherwise, we may be subject to income taxes and withholding taxes payable in various jurisdictions, which could potentially be partially offset by foreign tax credits. At December 31, 2020 the cumulative amount of the Company’s undistributed foreign earnings was approximately $767.4 million, inclusive of income previously taxed in the United States.

    The following table summarizes the activity related to provision made by the Company in the books for uncertain tax positions:
93

Year Ended December 31,
2020 2019 2018
(In thousands)
Beginning Balance $ 9,199  $ 9,294  $ 9,144 
Additions for tax positions related to current year —  —  150 
Additions for tax positions of prior years 966  195  — 
Reductions for tax position of prior years (1,874) (290) — 
Ending Balance $ 8,291  $ 9,199  $ 9,294 
The Company recognizes estimated interest accrued and penalties related to uncertain tax positions as part of the income tax expense provided for such positions. The Company accrued as of December 31, 2020 and 2019 approximately $3.0 million and $1.0 million, respectively, of estimated interest and penalties. These amounts are included in the December 31, 2020 and 2019 balances in the preceding table of $8.3 million and $9.2 million, respectively, which is included in other long term liabilities in the accompanying Consolidated Balance Sheet.
    We file income tax returns in the US federal, many US state and local jurisdictions, and certain foreign jurisdictions. We have substantially resolved all US federal income tax matters for tax years prior to 2015. Our state and foreign tax matters may remain open from 2008 forward.


Note 8. Stock Repurchases

    Effective February 6, 2017, the Company's Board of Directors unanimously approved and authorized a share repurchase plan of $150.0 million. The Board directed that the repurchases be funded with available cash balances and cash generated by the Company's operating activities. The aggregate amount of repurchases of the Company's equity shares is limited by restrictive covenants contained in our Credit Facility.

    The Company's share repurchase plan’s terms have been structured to comply with the SEC’s Rule 10b-18, and are subject to market conditions and applicable legal requirements. The program does not obligate the Company to acquire any specific number of shares and may be suspended or terminated at any time. All purchases are made in the open market. Treasury stock is recorded at its acquired cost. During 2020, there were no stock repurchases under the plan. During 2019, the Company repurchased and retired 95,000 shares of its common stock under these plans for total consideration of $4.2 million.

    As of December 31, 2020, the Company had $80.1 million remaining in its current Board of Directors-approved share repurchase program.


Note 9. Accounts Payable and Accrued Expenses

    Accounts payable and accrued expenses at December 31, 2020, and December 31, 2019, consisted of the following:
2020 2019
  (In thousands)
Trade accounts payable $ 56,636  $ 74,967 
Accrued professional fees 1,268  2,247 
Income taxes payable* 3,429  4,094 
Sales taxes payable 3,431  3,385 
Other accrued liabilities —  42 
Total $ 64,764  $ 84,735 

* Long term portion of income taxes payable pertaining to the 2017 Tax Cuts and Jobs Act one-time transition tax totaling $15.0 million is included in other liabilities in the Company's Consolidated Balance Sheets.


Note 10. Other Current Assets
94


    Other current assets at December 31, 2020 and December 31, 2019 consisted of the following:
2020 2019
  (In thousands)
Prepaid expenses $ 57,017  $ 51,021 
Other third party receivables 3,530  4,785 
Sales taxes receivable from customers 4,588  6,499 
Credit card merchant account balance receivable 848  796 
Short term portion of capitalized costs to obtain and fulfill contracts 646  734 
Accrued interest receivable 355  176 
Other 4,677  3,063 
Total $ 71,661  $ 67,074 


Note 11. Other Current Liabilities
    Other current liabilities at December 31, 2020 and December 31, 2019 consisted of the following:
2020 2019
  (In thousands)
Acquisition obligations (contingent consideration) $ 2,443  $ 6,762 
Customer advances (deposits) 25,043  22,573 
Total $ 27,486  $ 29,335 


Note 12. Property and Equipment

    Property and equipment at December 31, 2020 and 2019 consisted of the following:
2020 2019
  (In thousands)
Computer equipment $ 26,357  $ 15,899 
Buildings 26,564  26,475 
Land 10,386  10,479 
Land improvements 7,195  7,195 
Leasehold improvements 763  910 
Furniture, fixtures and other 7,271  7,307 
  78,536  68,265 
Less accumulated depreciation and amortization (26,015) (19,844)
  $ 52,521  $ 48,421 

    Depreciation expense was $4.2 million, $4.3 million and $3.7 million, for the years ended December 31, 2020, 2019, and 2018, respectively.


Note 13. Cash Option Profit Sharing Plan and Trust

    The Company maintains a 401(k) Cash Option Profit Sharing Plan, for our U.S. based employees, which allows participants to contribute a percentage of their compensation to the Profit Sharing Plan and Trust up to the Federal maximum. The Company matches 100% of an employee’s 1% contributed and 50% on the 2% contributed by an employee. Accordingly, the Company’s contributions to the Plan were $508 thousand, $557 thousand and $536 thousand for the years ending December 31, 2020, 2019, and 2018, respectively.
95

    We maintain employee benefit plans in the form of certain statutory and incentive plans covering substantially all of our India based employees. In accordance with Indian law, all of our employees in India are entitled to receive benefits under the Employees' Provident Fund Scheme, 1952, as amended, a retirement benefit scheme under which an amount equal to 12% of the basic salary of an employee is contributed both by the employer and the employee in a government fund. For the years ending December 31, 2020, 2019, and 2018 the aggregate amount set aside or accrued by us to provide for pension or retirement benefits for all of our employees, which amount consists of the Provident Fund was $2.6 million, $4.2 million, and $4.0 million, respectively.


Note 14. Geographic Information

    The Company operates with one operating and one reportable segment whose results are regularly reviewed by the Company's CEO, its chief operating decision maker, as to operating performance and the allocation of resources. External customer revenues in the tables below were attributed to a particular country based on whether the customer had a direct contract with the Company which was executed in that particular country for the sale of the Company's products/services with an Ebix subsidiary located in that country.
    The following enterprise wide information relates to the Company's geographic locations:
Year ended December 31,
2020 2019 2018
External Revenues Long-lived assets External Revenues Long-lived assets External Revenues Long-lived assets
(In thousands)
India* $ 378,660  $ 698,936  $ 300,678  $ 700,986  $ 196,372  $ 672,699 
United States $ 166,320  $ 381,782  182,530  395,225  196,984  390,551 
Australia $ 33,846  $ 3,581  33,268  3,541  35,770  1,485 
Latin America $ 14,801  $ 13,723  19,755  17,176  19,866  16,348 
Europe $ 13,145  $ 22,900  14,695  24,508  15,387  23,880 
Canada $ 4,383  $ 6,930  4,805  7,012  5,611  5,846 
Singapore* $ 3,969  $ 19,336  6,549  18,282  7,674  17,805 
Indonesia* $ 3,206  $ 139  9,706  117  7,482  98 
Philippines* $ 2,140  $ 661  5,991  729  6,483  448 
United Arab Emirates* $ 3,335  $ 54,789  683  54,887  1,042  54,249 
New Zealand $ 1,804  $ 513  1,955  578  2,015  158 
Mauritius* $ —  $ 4,665  —  4,643  3,140  — 
$ 625,609  $ 1,207,955  $ 580,615  $ 1,227,684  $ 497,826  $ 1,183,567 
*Primarily India led businesses for which total revenue was $388.3 million, $320.0 million and $217.5 million for the years ended December 31, 2020, 2019, and 2018, respectively.



Note 15. Related Party Transactions

    We consider Regions Bank ("Regions") to be a related party because Regions provides financing to the Company via our Credit Facility (refer to Note 4 to these Consolidated Financial Statements), for which Regions is the lead bank, and because Regions is also a customer to whom the Company sells products and services. Revenues recognized from Regions were $190 thousand, $193 thousand, and $221 thousand for the years ended December 31, 2020, 2019, and 2018, respectively. Accounts receivable due from Regions were $24 thousand and $13 thousand at December 31, 2020 and 2019, respectively.

    We also consider BMO Bank ("BMO") to be a related party because BMO is a participating bank in our Credit Facility (refer to Note 4 of these Consolidated Financial Statements), and because BMO is also a customer to whom the Company sells products and services. Revenues recognized from BMO were $361 thousand and $351 thousand for the year ended December
96

31, 2020 and 2019, respectively, and the accounts receivable due from BMO were $43 thousand and $29 thousand at December 31, 2020 and 2019 respectively.

    As discussed in Note 17 "Investment in Joint Ventures", Vayam Technologies Ltd ("Vayam") is also a customer of the Ebix Vayam Limited JV, and during the twelve months ending December 31, 2020 and 2019, the Ebix Vayam Limited JV recognized $667 thousand and $1.4 million of revenue from Vayam, respectively. As of December 31, 2020, Vayam had $13.6 million of accounts receivable with the Ebix Vayam Limited JV.

    Also, as discussed in Note 17 "Investment in Joint Ventures", an in regards to the EbixHealth JV it was concluded that the customer relationship with IHC, our joint venture partner, to be by its nature, a related party.


97


Note 16. Quarterly Financial Information (unaudited)
    The following is the unaudited quarterly financial information for 2020, 2019, and 2018:
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
  (In thousands, except share data)
Year ended December 31, 2020        
Total revenues $ 137,876  $ 111,312  $ 154,305  $ 222,116 
Gross Profit 80,419  62,219  68,329  71,380 
Operating income 34,313  31,850  31,899  27,740 
Net income from continuing operations $ 24,723  $ 23,475  $ 24,682  $ 19,497 
Net income per common share:
Basic $ 0.81  $ 0.77  $ 0.81  $ 0.64 
Diluted $ 0.81  $ 0.76  $ 0.80  $ 0.64 
Year ended December 31, 2019        
Total revenues $ 142,924  $ 144,275  $ 147,233  $ 146,183 
Gross Profit 96,995  93,321  92,062  93,072 
Operating income 54,131  41,282  26,007  34,253 
Net income from continuing operations 25,710  28,851  20,509  21,650 
Net income per common share:
Basic $ 0.84  $ 0.95  $ 0.67  $ 0.71 
Diluted $ 0.84  $ 0.94  $ 0.67  $ 0.71 
Year ended December 31, 2018        
Total revenues $ 108,230  $ 124,626  $ 128,643  $ 136,327 
Gross Profit 68,639  81,067  85,680  94,025 
Operating income 33,896  38,315  39,238  41,530 
Net income from continuing operations 26,208  29,180  29,242  8,509 
Net income per common share:        
Basic $ 0.83  $ 0.93  $ 0.93  $ 0.27 
Diluted $ 0.83  $ 0.92  $ 0.92  $ 0.27 

    In some instances the sum of the quarterly basic and diluted net income per share amounts may not agree to the full year basic and diluted net income per share amounts reported on the Consolidated Statements of Income because of rounding.

98


Note 17. Investment in Joint Ventures

    Effective February 7, 2016, Ebix and Vayam Technologies Ltd ("Vayam") formed a joint venture named Ebix Vayam Limited JV. This joint venture was established to carry out IT projects in the government sector of the country of India and particularly in regards to the implementation of e-governance projects in the areas of education and healthcare. Ebix has a 51% equity interest in the joint venture, and Vayam has a 49% equity interest in the joint venture. Ebix is fully consolidating the operations of the Ebix Vayam Limited JV into the Company's financial statements and separately reporting the Vayam minority, non-controlling, interest in the joint venture's net income and equity. Vayam is also a customer of the Ebix Vayam Limited JV, and during the twelve months ending December 31, 2020 and 2019, the Ebix Vayam Limited JV recognized $667 thousand and $1.4 million of revenue from Vayam, respectively. As of December 31, 2020, the Ebix Vayam Limited JV had $13.6 million of accounts receivable with Vayam, net of the estimated allowance for doubtful accounts receivable in the amount of $11.7 million. As of December 31, 2019, the Ebix Vayam Limited JV had $22.8 million of accounts receivable with Vayam, net of the estimated allowance for doubtful accounts receivable in the amount of $12.1 million, this provision for doubtful account against receivables due from a public sector entity, BSNL, in India.

    Effective September 1, 2015, Ebix and IHC formed a joint venture named EbixHealth JV. This joint venture was established to promote and market a best practices administration data exchange for health and pet insurance lines of business nationally. Ebix has a 51% equity interest in the joint venture and IHC has a 49% equity interest the joint venture. IHC is also a customer of the EbixHealth JV, and during the twelve months ending December 31, 2020 and 2019, the EbixHealth JV recognized $1.9 million and $2.8 million of revenue from IHC, respectively. As of December 31, 2020, IHC had $63 thousand of accounts receivable with the EbixHealth JV. Furthermore, as a related party, IHC also has been and continues to be a customer of Ebix, and during the twelve months ending December 31, 2020 and 2019, the Company recognized $10 thousand and $78 thousand, respectively, of revenue from IHC. As of December 31, 2020 Ebix had $2 thousand of outstanding accounts receivable from IHC. The EbixHealth JV has a $1.8 million note due to IHC. Additionally, based on the final purchase price allocation valuation report for the EbixHealth JV it was concluded that the customer relationship with IHC, our joint venture partner, to be by its nature, an indefinite-lived customer relationship. For the year ended December 31, 2020, as a result of the annual impairment analysis performed, the Company concluded that the IHC customer relationship indefinite-lived intangible asset associated with the Company's EbixHealth JV has been impaired, the Company recorded a $6.2 million impairment charge. In addition, the Company has concluded that they IHC customer relationship intangible is no longer considered indefinite-lived and will be amortized over the estimated remaining life of 10 years.


Note 18. Capitalized Software Development Costs

    In accordance with ASC 350-40 “Internal-Use Software” and/or ASC 350-985 “Software” the Company has capitalized certain software and product related development costs associated with the Company’s continuing medical education service offerings, development of Property and Casualty (P&C) underwriting insurance data exchange platform servicing the London markets; development of EbixCash’s SaaS based Asset Management and Collection platforms having global application; development of EbixCash’s new single-sign on agent and customer portal, including mobile application, and content development work related to E-Learning division of EbixCash. During the year ended December 31, 2020 and 2019, the Company capitalized $4.2 million and $8.0 million, respectively, of such development costs. As of December 31, 2020 and 2019, a total of $19.4 million and $19.2 million, respectively, of remaining unamortized development costs are reported on the Company’s consolidated balance sheet. During the year ended December 31, 2020 and 2019, the Company recognized $3.4 million and $2.7 million, respectively, of amortization expense with regards to these capitalized software development costs, which is included in costs of services provided in the Company’s consolidated income statement. The capitalized continuing medical education product costs are being amortized using a three-year to five-year straight-line methodology and certain continuing medical education products costs are immediately expensed. The capitalized software development costs for the property and casualty underwriting insurance data exchange platform are being amortized over a period of five years. The capitalized software development costs related to EbixCash products mentioned above shall be amortized over a period of five years once the platforms / products are rolled out in the market.



Note 19: Leases

    In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This accounting guidance is intended to improve financial reporting about leasing transactions. The ASU requires organizations that lease assets referred to as “Lessees” to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. An organization
99

is to provide disclosures designed to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements concerning additional information about the amounts recorded in the financial statements. Under the new guidance, a lessee is required to recognize assets and liabilities for leases with lease terms of more than twelve months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike former GAAP, which requires only financing leases to be recognized on the balance sheet, the new ASU requires both types of leases (i.e., operating and financing) to be recognized on the balance sheet. The financing lease will be accounted for in substantially the same manner as capital leases were accounted for under the previous guidance. For operating leases, there is now the recognition of a lease liability and a lease asset for all such leases greater than one year in term.

    The Company adopted Topic 842 effective January 1, 2019, using a modified retrospective method and did not restate comparative periods. The Company elected to adopt the package of practical expedients; accordingly, the Company retained the lease classification and initial direct costs for any leases that existed prior to adoption and we did not revisit whether any existing or expired contracts contain leases. The Company has operating and finance leases for office space, retail, data centers and certain office equipment with expiration dates ranging through 2029, with various renewal options. Only renewal options that were reasonably assured to be exercised are included in the lease liability. As of December 31, 2020, the maturity of lease liabilities under Topic 842 are as follows:
Year Operating Leases Financing Leases Total
 (In thousands)
2021 $ 4,667  $ 190  $ 4,857 
2022 3,462  160  3,622 
2023 2,993  99  3,092 
2024 1,605  77  1,682 
2025 1,001  —  1,001 
Thereafter 519  —  519 
Total 14,247  526  14,773 
Less: present value discount* (1,802) (49) (1,851)
              Present value of lease liabilities 12,445  477  12,922 
Less: current portion of lease liabilities (3,905) (164) (4,069)
     Total long-term lease liabilities $ 8,540  $ 313  $ 8,853 
* The discount rate used was the relevant incremental borrowing rate in each of the jurisdictions
wherein the leased properties are located

    The company's net assets recorded under operating and finance leases were $12.9 million as of December 31, 2020. The lease cost recognized in our Condensed Consolidated Statement of Income in the category of General and Administrative, is summarized as follows:

December 31
(In thousands) 2020 2019
Operating Lease Cost $ 7,051  $ 8,613 
Finance Lease Cost:
                   Amortization of Lease Assets 161 121
                   Interest on Lease liabilities 39 36
Finance Lease Cost 200 157
Sublease Income (476) (654)
Total Net Lease Cost $ 6,775  $ 8,116 
100



    
    Other information about lease amounts recognized in our Condensed Consolidated Statement of Income is summarized as follows:
December 31, 2020
Weighted Average Lease Term - Operating Leases 3.63 years
Weighted Average Lease Term - Finance Leases 3.18 years
Weighted Average Discount Rate - Operating Leases 8.09  %
Weighted Average Discount Rate - Finance Leases 7.13  %

    Commitments for minimum rentals under non-cancellable leases, under the legacy guidance in ASC 840 as of December 31, 2020 were as follows:

Year Operating Leases Financing Leases
 (In thousands)
2021 $ 4,667  $ 190 
2022 3,462  160 
2023 2,993  99 
2024 1,605  77 
2025 1,001  — 
Thereafter 519  — 
Total $ 14,247  $ 526 
Less: sublease income (476)
Net lease payments $ 13,771 
Less: amount representing interest   (39)
Present value of obligations under financing leases   $ 487 
Less: current portion   (164)
Long-term obligations   $ 323 


    As of December 31, 2020, our lease liability of $12.9 million does not include certain arrangements, which are primarily airport leases that do not meet the definition of a lease under Topic 842. Such arrangements represent further commitments of approximately $56.3 million as follows:
Year Commitments
 (In thousands)
2021 $ 20,251 
2022 18,271 
2023 17,756 
Thereafter — 
Total $ 56,278 
    
Finance leases range from three to five years and are primarily for office equipment. Rental expense for office and airport facilities and certain equipment subject to operating leases for the period ended December 31, 2020 and 2019 was $4.5 million and $37.8 million, respectively. The year over year decline in this rent expense is a result of COVID-19, in which airport leases were subject to force majeure provisions and the cessation of the Company's airport operations during 2020. Monthly rent payments were temporarily waived until the Company restarted its airport operations.

101


Note 20: Working Capital Facilities

    The Company maintains working capital debt facilities with banks in India for working capital funding requirements to support our foreign exchange, travel and remittance businesses. We are required to extend short term credits to franchisee networks (B2B) and corporate customers. Additionally, we are required to maintain minimum levels of foreign currency inventory across branches and airport operations.  Typically, these facilities carry interest rates 6.75% to 9.45% and are rupee denominated working capital lines and are collateralized against the receivables of these businesses and existing foreign currency inventory on hand.

    As of December 31, 2020 and 2019, the total of these working capital facilities was $16.6 million and $28.4 million, respectively, and is included in current liabilities in the Company's Condensed Consolidated Balance Sheet.


Note 21. Concentrations of Credit Risk


Credit Risk

    The Company is potentially subject to concentrations of credit risk in its accounts receivable. Credit risk is the risk of an unexpected loss if a customer fails to meet its contractual obligations. Although the Company is directly affected by the financial condition of its customers and the loss of or a substantial reduction in orders or the ability to pay from the customer could have a material effect on the consolidated financial statements, management does not believe significant credit risks exist at December 31, 2020. The Company had one customer whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable.
 
Major Customer

               As previously disclosed in Note 18, effective February 7, 2016, Ebix and Vayam Technologies Ltd ("Vayam") formed a joint venture named Ebix Vayam Limited JV. This joint venture was established to carry out IT projects in the government sector of the country of India and particularly in regards to the implementation of e-governance projects in the areas of education and healthcare. Ebix has a 51% equity interest in the joint venture, and Vayam has a 49% equity interest in the joint venture. Vayam is also a customer of the Ebix Vayam Limited JV, and during the twelve months ending December 31, 2020 and 2019, the Ebix Vayam Limited JV recognized $667 thousand and $1.4 million of revenue from Vayam, respectively, and as of December 31, 2020, Vayam had $13.6 million of accounts receivable with the Ebix Vayam Limited JV, net of the estimated allowance for doubtful accounts receivable in the amount of $11.7 million. As of December 31, 2019, the Ebix Vayam Limited JV had $22.8 million of accounts receivable with Vayam, net of the estimated allowance for doubtful accounts receivable in the amount of $12.1 million, this provision for doubtful account against receivables due from a public sector entity, BSNL, in India.


Note 22. Subsequent Events

RSM Resignation

    As previously disclosed, by letter dated February 15, 2021, RSM US LLP (“RSM”) notified the Audit Committee of the Board of Directors of the Company of its resignation as the Company’s independent registered public accounting firm. See Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure for more details on the RSM resignation. Subsequent to the RSM resignation, the following subsequent events also occurred:

•    On February 22, 2021, Christine Marie Teifke filed a class action lawsuit against Ebix, Inc., Robin Raina and Steven Hamil claiming violations of the Federal Securities Laws as a result of the announcement that RSM had resigned. See Item 3 Legal Proceedings for more details on the class action lawsuit.
•    The Company was unable to file this Form 10-K with the SEC by its March 1, 2021 due date and filed a Form 12b-25 notifying the SEC of its late filing.
•    As a result of the filing of the Form 12b-25, Nasdaq notified the Company on March 2, 2021 that it is no longer in compliance with Nasdaq Listing Rule 5250(c)(1). See Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities for a description of the Nasdaq noncompliance. Nasdaq's notification letter provided the Company 45 calendar days, or until April 16, 2021, to submit to Nasdaq a plan to regain compliance with the Nasdaq Listing Rules. On April 16, 2021,
102

the Company submitted a plan to Nasdaq to regain compliance with the Nasdaq Listing Rules. The Company believes that the filing of this Annual Report on Form 10-K will substantially bring the Company back into compliance with Nasdaq Listing Rules.
•    The Company engaged KGS, effective March 5, 2021, as its new independent accountants for the year ending December 31, 2020 and diligently worked with KGS to complete this Form 10-K filing, 2021. See Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure for more details on the engagement of KGS.
•    On March 31, 2021, the Company entered into Amendment No. 11 Credit Agreement and Waiver (“Amendment No. 11”) relating to the Credit Facility, dated as of August 5, 2014, among Ebix, Inc., as borrower, its subsidiaries party thereto from time to time as guarantors, Regions Bank as administrative agent and collateral agent, and the lenders party thereto from time to time (as amended from time to time, the “Credit Agreement”). The Amendment No. 11 is described in more detail below.
•    On April 9, 2021, the Company entered into Amendment No. 12 to Credit Agreement and Waiver (“Amendment No. 12”) as described in more detail below.

Amendments and Waivers to the Credit Facility

Amendment No. 11. On March 31, 2021, the Company entered into Amendment No. 11 to its Credit Facility. Amendment No. 11 provided for, among other things, a limited waiver through April 10, 2021, of any potential event of default arising under the Credit Facility from failure to timely deliver the Company's audited consolidated financial statements and related compliance certificate for the year ended December 31, 2020. Amendment No. 11 also modified certain covenants contained in the Credit Facility, including with respect to certain permitted restricted payments and investments. The Company paid customary consent fees in connection with the closing of Amendment No. 11.

Amendment No. 12. On April 9, 2021, the Company entered into Amendment No. 12 to its Credit Facility. Amendment No. 12 provides for, among other things, a waiver of any potential event of default arising under the Credit Facility from the failure to timely deliver the Company's audited consolidated financial statements and related compliance certificate for the year ended December 31, 2020; provided that (i) such financial statements and related compliance certificate are delivered in accordance with the requirements set forth in the Credit Facility by May 15, 2021, and (ii) there is no good faith determination by the requisite lenders under the Credit Facility of a "Material Circumstance" (as defined and further described in Amendment No. 12), which determination (if any) may only be made within a specified period described in Amendment No. 12 and is subject to certain cure rights of the Company.

Amendment No. 12 modifies the applicable margin that applies from and after the date thereof under the Credit Facility. Through and including March 31, 2022, the applicable margin is (i) 5.00% per annum for adjusted LIBOR rate loans and letter of credit fees, (ii) 4.00% per annum for base rate loans, and (iii) 0.50% for unused revolving commitment fees. Commencing April 1, 2022, the applicable margin for outstanding loans and letters of credit under the Credit Facility will increase by a per annum rate of 1.00%. Amendment No. 12 also provides for a fee on each of December 31, 2021, and June 30, 2022, equal to 0.20% of the aggregate principal amount of outstanding term loans and used and unused revolving commitments as of each such date. The Company paid customary consent fees in connection with the closing of Amendment No. 12.

Amendment No. 12 modifies certain mandatory prepayment provisions in the Credit Facility to provide that (i) the annual excess cash flow mandatory prepayment shall commence with the year ending December 31, 2021 (instead of the year ended December 31, 2020), and such prepayment, if any, shall be calculated without a deduction for the $20 million prepayment of term loans made by the Company on April 9, 2021, and (ii) the Company shall be required to apply any available U.S. cash in excess of $25 million as of the end of each quarter (commencing June 30, 2021) to prepay outstanding loans under the revolving line of credit and cash collateralize outstanding letters of credit thereunder (in each case, without any reduction to the revolving commitments under the Credit Facility).

Amendment No. 12 also modifies, among other things, certain covenants contained in the Credit Facility, including with respect to (i) certain permitted restricted payments and investments, and (ii) certain reporting requirements.



Dividends
    
    The Company declared its quarterly cash dividend to the holders of its common stock, whereby a dividend in the amount of $0.075 per common share will be paid on March 15, 2021 to shareholders of record on March 2, 2021.
103

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

As previously disclosed, by letter dated February 15, 2021, RSM notified the Audit Committee of the Board of Directors ( the "Board") of the Company of its resignation as the Company’s independent registered public accounting firm.

RSM was engaged by the Audit Committee on December 21, 2018 to serve as the Company’s independent auditor for the fiscal year ending December 31, 2019 and was engaged again on June 12, 2020 to serve as the Company’s independent auditor for the fiscal year ending December 31, 2020. RSM’s previously issued reports on the Company’s consolidated financial statements and the Company’s internal controls over financial reporting for the fiscal year ended December 31, 2019 did not contain an adverse opinion or a disclaimer of opinion; nor were they qualified or modified as to uncertainty, audit scope, or accounting principles. As of February 15, 2021, RSM had not completed its audit procedures or issued any reports on the Company’s consolidated financial statements and internal controls over financial reporting for the fiscal year ended December 31, 2020.

From December 21, 2018 when RSM was initially engaged, through RSM’s resignation, other than as provided below, there were no (i) “disagreements” (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K) between the Company and RSM on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of RSM, would have caused RSM to make reference to the subject matter thereof in its reports for such fiscal years and interim period, or (ii), “reportable events” as that term is described in Item 304(a)(1)(v) of Regulation S-K.

RSM informed the Company that there was a disagreement under Item 304(a)(1)(iv) of Regulation S-K with respect to the classification of $30 million. In connection with a pending acquisition, in December 2020 the Company transferred $30 million to a commingled trust account of its outside legal counsel that was not under the direct control of the Company, and classified the funds as a cash or cash equivalent on its balance sheet. RSM discussed with the Company RSM’s view that these funds could not be classified as a cash or cash equivalent but could be classified as other current assets. There was no dispute that the $30 million was owned by the Company and would be classified as part of current assets included in the financial statements.

The Company considered this issue to be an initial difference of opinion based on incomplete facts or preliminary information rather than a “disagreement” pursuant to Item 304(a)(1)(iv).

On February 15, 2021, RSM told the Chairman of the Company’s Audit Committee during a telephone call that RSM was resigning as the Company’s independent registered public accounting firm, effective immediately. RSM then advised the Chairman on the call that it was resigning as a result of being unable, despite repeated inquiries, to obtain sufficient appropriate audit evidence that would allow it to evaluate the business purpose of significant unusual transactions that occurred in the fourth quarter of 2020, including whether such transactions have been properly accounted for and disclosed in the financial statements subject to the Audit. RSM informed the Chairman that the unusual transactions concerned the Company’s gift card business in India. RSM asserts that on that call it further advised the Chairman that if this requested information was further investigated it might materially impact the fairness or reliability of the financial statements subject to the audit or affect RSMs willingness to be associated with the Company’s financial statements, but that since RSM had resigned, no further investigation would occur. The Chairman discussed with RSM the reasons for its resignation.

Promptly following the call between RSM and the Chairman of the Audit Committee, RSM sent the resignation letter dated February 15, 2021. RSM stated in its resignation letter that it was “resigning as a result of being unable, despite repeated inquiries, to obtain sufficient appropriate audit evidence that would allow it to evaluate the business purpose of significant unusual transactions that occurred in the fourth quarter of 2020, including whether such transactions have been properly accounted for and disclosed in the financial statements subject to the Audit.” RSM informed the Company that the unusual transactions concerned the Company’s gift card business in India. RSM also stated in its letter that it believed that the Company’s “internal control over financial reporting was not effective as of December 31, 2020 due to the identification of a material weakness. Specifically, management did not design or implement the necessary procedures and controls over the gift or prepaid card revenue transaction cycle sufficient to prevent or detect a material misstatement.” RSM further stated in the letter that, “because we have not completed the Audit, we cannot conclude on other control deficiencies that may rise to the level of a material weakness.”

Effective March 5, 2021, the Company engaged KG Somani & Co. (“KGS”), as our independent accountants for the year ending December 31, 2020. The Audit Committee made the decision to engage KGS. The Company has not consulted
104

Table of Contents
with the KGS during our two most recent fiscal years or during any subsequent interim period prior to its appointment as our new independent accountants regarding either:

(i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on our financial statements, and neither a written report was provided to us nor oral advice was provided that KGS concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or

(ii) any matter that was either the subject of disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a reportable event (within the meaning of Item 304(a)(1)(v) of Regulation S-K).As a result of the resignation of RSM on February 15, 2021, the Company was unable to timely file its Annual Report on Form 10-K. The Company has engaged KGS and is now filing its Form 10-K and expects to file it quarterly report on Form 10-Q for the quarter ended March 31, 2021 on time.

As referenced in the Company's February 20, 2021 press release following RSM's resignation, the Board engaged counsel, Skadden, Arps, Slate, Meagher & Flom LLP to, along with accounting experts from the consulting firm, AlixPartners LLP, assist the Company with respect to matters raised by the former auditor's resignation. Having reviewed the work performed by AlixPartners and considered their observations, the Board is satisfied that no steps are necessary with respect to any gift card business issues raised by the former auditor in its resignation.

    The audit committee of the Company decided to retain KPMG for valuation work and Ernst & Young for tax advice, tax provisioning and SOX internal control evaluation work for the year 2020.


105

Table of Contents

Item 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures: We maintain a system of disclosure controls and procedures designed to provide reasonable assurance that the information required to be disclosed by the Company in reports that we file and submit under the Exchange Act is recorded, processed, summarized and reported accurately within the time periods specified in the SEC's rules and forms. Disclosure controls also are designed to reasonably assure that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Disclosure controls include components of internal control over financial reporting, which consists of control processes designated to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with United States generally accepted accounting principles.
We monitor and evaluate on an ongoing basis our disclosure controls and procedures in order to improve their overall effectiveness. In the course of these evaluations, we modify and refine our internal processes and controls as conditions warrant.
Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) promulgated under the Exchange Act) as of December 31, 2020. Based on that evaluation, management has concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accurately recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and to ensure that information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with United States generally accepted accounting principles.

    The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our board of directors, audit committee, management and other personnel, 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:

(1)    Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of assets;
(2)    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 are being made only in accordance with authorizations of our management and directors; and
(3)    Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

     Because of its inherent limitations, internal control over financial reporting cannot provide absolute assurance. It is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override of controls. Because of such limitations, there is a risk that material misstatements due to error or fraud may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process and, therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

    In making its assessment of the effectiveness of the Company controls over financial reporting, management used the criteria set forth by the 2013 Committee of Sponsoring Organizations of the Treadway Commission, or 2013 COSO Internal
106

Table of Contents
Control-Integrated Framework. Based on our assessment and those criteria, management believes that we maintained effective internal control over financial reporting as of December 31, 2020.

    K G Somani & Co, the independent registered public accounting firm that audited our Consolidated Financial Statements included in this Annual Report on Form 10-K, audited the effectiveness of our internal control over financial reporting as of December 31, 2020. K G Somani & Co has issued their report which is included in this Annual Report on Form 10-K.




Changes in Internal Control over Financial Reporting


    There were no changes in our internal control over financial reporting identified in management's evaluation during the year ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


107

Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Ebix, Inc.

Opinion on the Internal Control Over Financial Reporting
We have audited Ebix, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2020, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows of the Company for the year then ended, and the related notes to the consolidated financial statements and our report dated April 24, 2021 expressed an unqualified opinion.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company's internal control over financial reporting is a process designed 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. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) 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 company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



/s/ K G Somani & Co


New Delhi, India
April 27, 2021

108

Table of Contents
Item 9B. OTHER INFORMATION
None.

PART III


Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors

    ROBIN RAINA, 54, has been a director at Ebix since 2000 and Chairman of the Board at Ebix since May 2002. Mr. Raina joined Ebix in October 1997 as our Vice President-Professional Services and was promoted to Senior Vice President-Sales and Marketing in February 1998. Mr. Raina was promoted to Executive Vice President, Chief Operating Officer in December 1998. Mr. Raina was appointed President effective August 2, 1999, Chief Executive Officer effective September 23, 1999 and Chairman in May 2002. Mr. Raina holds an industrial engineering degree from Thapar University in Punjab, India

Areas of Relevant Experience. Mr. Raina’s strategic direction for the Company and implementation of such direction has proven instrumental for the Company’s turnaround and growth.

HANS U. BENZ, 75, After receiving a master's degree at the “Swiss Harvard Business School” University of St. Gallen (HSG) in 1970, Hans Benz had a System- and Business-Engineer career for 40 years in many different positions. Mr. Benz joined Ebix as a director in 2005. From 2001 to 2005 Mr. Benz was President of the holding of the BISON GROUP, a Swiss corporation that develops and implements process-oriented business solution software in Europe. Prior to this position and from 1995 to 2001 he was President of a Swiss banking software development company belonging to the UBS Group. Previously Mr. Benz was with the private bank of Coutts & Co., Zürich as Senior Vice President and was also head of their global IT organization as a part of their larger worldwide NatWest IT organization.
 
Areas of Relevant Experience. Mr. Benz’s former business experience extends from wholesale and retail industry to the Swiss private insurance industry as founding partner in a national data center. He has extensive experience in the software ERP and finance sectors, international marketing, strategic planning, IT planning, executive compensation, and defining strategic vision.
.
PAVAN BHALLA, 58, has been a director of Ebix since June 2004. He was a Partner with FCM LLC, a consulting firm that serves the largest private equity firms in the world, from March 2019 to January 2021. Prior to that, from May 2017 to March 2019, he was President of Alight Solutions, a global provider of HR outsourced solutions.  From September 2011 to April 2017, he was with Aon Corporation and held a number of positions including the CEO of their HR Outsourcing business. Prior to this role, he was the Executive Vice President, Chief Financial Officer and Treasurer of Harris Interactive Inc., a position he held since October 2010. Prior to that, Mr. Bhalla served as Vice President for Hewitt Associates, and had been in this role since August 2006. Before the roles at Hewitt Associates and Harris Interactive, Mr. Bhalla served as the Senior Vice President-Finance of MCI Inc., a global telecommunications company, and supervised the financial management of MCI’s domestic business units. Prior to joining MCI in August 2003, Mr. Bhalla spent more than seven years with BellSouth Corporation, a telecommunications company, serving in a variety of executive positions, including Chief Financial Officer of BellSouth Long Distance from 1999 to 2002 and Corporate Controller of BellSouth Cellular Corp. from 1997 to 1999. Mr. Bhalla holds a master’s degree in business administration from the University of Chicago’s Booth School of Business. He is also a registered Certified Public Accountant from Illinois.

Areas of Relevant Experience. Mr. Bhalla has extensive hands-on relevant experience in corporate finance and international business transactions. His extensive accounting and financial background qualifies him as an audit committee financial expert under applicable SEC and the Nasdaq Stock Market Marketplace Rules (the “Nasdaq Marketplace Rules”).

NEIL D. ECKERT, 58, has been a director of Ebix since 2005. Neil Eckert serves as the Executive Chairman of IncubEx, a company that specialises in the development of environmental commodity markets. He was also co-founder and Chief Executive Office of Climate Exchange PLC until the sale of the company to Intercontinental Exchange in July 2010 for approximately $600 million. Climate Exchange owned Chicago Climate exchange and European Climate exchange which hosted over 90% of Global Carbon Emissions Trading Scheme volumes. Mr. Eckert was also previously founding Chairman of Trading Emissions PLC, an Aim listed company that invested in Emissions reduction permits. Mr. Eckert founded Brit
109

Table of Contents
Insurance in 1995 and served as CEO until 2005. He was founder and Chairman of Aggregated Micropower PLC, an Aim listed renewable developer until its sale in January 2020.
Areas of Relevant Experience. Mr. Eckert has an extensive background with experience of operating as the CEO of two different public companies and has executive experience in strategic planning, hands-on understanding of insurance industry, sales and marketing, corporate finance, executive compensation and international matters.

    GEORGE W. HEBARD III, 48, has been a director of Ebix since March 2015. Mr. Hebard is the Managing Partner of Ziba Capital, a New York investment firm. He previously served as a Managing Director of Barington Capital Group, a New York investment firm, from January 2014 to June 2019. Mr. Hebard was previously Interim Principal Executive Officer and Interim Chief Operating Officer of Enzon Pharmaceuticals, Inc., a position he held as an employee from May 2012 to December 2013 and as a consultant from January 2014 to March 2016. From September 2011 to April 2012, Mr. Hebard was a Managing Director at Icahn Capital LP, the entity through which Carl C. Icahn manages investment funds. From January 2005 to September 2011, Mr. Hebard served as a Managing Director at Blue Harbour Group, an investment firm in Greenwich, Connecticut. Prior to Blue Harbour Group, Mr. Hebard served as a Managing Director at Ranger Partners from April 2002 to December 2003, and prior to Ranger Partners, Mr. Hebard was an Associate at Icahn Associates Corp. from August 1998 to April 2002. Mr. Hebard was also a director of Turning Point Brands, Inc. (NYSE: TPB) from May 2014 to September 2018 and a director of Enzon Pharmaceuticals, Inc. (NASDAQ: ENZN) from February 2012 to November 2013. He has an MBA from INSEAD and an A.B. in Economics from Princeton University.

Areas of Relevant Experience.  Mr. Hebard brings to the Board over twenty years of experience working in finance and investment management, including a strong record as a financially sophisticated investor with a broad understanding of the operational, financial and strategic issues facing public and private companies.

ROLF HERTER, 57, has been a director of Ebix since 2005. Mr. Herter is the managing partner of Streichenberg, Attorneys at Law in Zurich, Switzerland. Streichenberg is a mid-sized commercial law firm, and Mr. Herter has been managing partner since 2004. Mr. Herter’s practice consists, among others, of representation for information technology companies, both private and publicly held. He has served on the board of directors of several companies and is currently serving as a member of the board of directors of YSMA AG, Immo Swiss Investments AG in liq., Bantex AG in liq., Eurotas Trust AG in liq., Invitech AG in liq., Ostschweizerische Treuhandgesellschaft AG. He also serves as a supervisor of investments for several Swiss and German companies.

Areas of Relevant Experience. Mr. Herter has extensive experience in the legal sector with expertise in managing multiple companies in terms of investments, capital structure, organization restructuring and governance, and with an expertise in European affairs.

HANS UELI KELLER, 68, has been a director of Ebix since 2004. Mr. Keller has spent over 20 years with Zurich-based Credit Suisse, a global financial services company, serving as Executive Board Member from 1997 to 2000, head of retail banking from 1993 to 1995, and head of marketing from 1985 to 1992. He serves as chairman of the board of Helvetica Property Investors AG, Zurich, a real estate fund and asset management company.

Areas of Relevant Experience. Mr. Keller has extensive executive experience in sales and marketing, corporate finance, strategic planning, executive compensation, and international distribution.


Executive Officers

We have five executive officers:  Robin Raina, Steven M. Hamil, Graham Prior, Leon d’Apice and James Senge, Sr. Information as to Mr. Raina is provided above.

STEVEN M. HAMIL, 52, joined the Company in April 2020 to serve as the Company's Corporate Executive Vice President and the Company's Global Chief Financial Officer. Prior to joining the Company and since 2013, Mr. Hamil served at Regions Financial Corporation as a Senior Vice President and Managing Director in the technology, media and communications and defense and governments services banking group. Prior to this position he served as Senior Vice President and Senior Client Manager at BBVA USA and its predecessor company, Compass Bancshares Inc., from 2010 to 2013. From 2000 to 2009, Mr. Hamil held multiple positions at Wachovia Capital Markets, LLC, the latest being a Director within the Loan Syndications/Leverage Finance group. Earlier in his career, Mr. Hamil was the Senior Vice President of Finance and Chief Accounting Officer at Movie Gallery, Inc., and held positions at Bank of America Corporation and Ernst & Young Global Limited. Mr. Hamil is a certified public accountant (inactive - State of Alabama) and holds both a B.S. in Business
110

Table of Contents
Administration (Accounting) from the University of Alabama (summa cum laude) and a Masters of Business Administration from Duke University's Fuqua School of Business.
    

GRAHAM PRIOR, 64, was made an executive officer of the Company in 2012. He serves as Corporate Executive Vice President International Business & Intellectual Property. Mr. Prior has been employed by Ebix since 1996 when the Company acquired Complete Broking Systems Ltd for which Mr. Prior was a part owner. Mr. Prior has been working within the insurance technology industry since 1990 and is currently responsible for the Company’s international operations in Singapore, New Zealand, Australia, Europe, Africa and Asia. Mr. Prior is also responsible for the Company’s worldwide product development initiatives.

LEON d’APICE, 64, was made an executive officer of the Company in 2012 He serves as the Company’s Corporate Executive Vice President and Managing Director – Ebix Australia Group. Mr. d’Apice, has been employed with Ebix since 1996 when the Company acquired Complete Broking Systems Ltd for which Mr. d’Apice was also a part owner. Mr. d’Apice has been in the information technology field since 1977 and is currently responsible for all of the operations of Ebix’s Australia business units.

JAMES SENGE, SR., 60, was made an executive officer of the Company in 2012. He serves as the Company’s Senior Vice President EbixHealth. Mr. Senge has been employed with Ebix since 2008 when the Company acquired Acclamation Systems, Inc. ("Acclamation"). Mr. Senge had been employed by Acclamation since 1979. During his over 32 years with Acclamation/Ebix Mr. Senge has been involved with all facets of the EbixHealth division, including being responsible for the strategic direction and day to day operations of the divisions. Mr. Senge’s focus is on expanding the Company’s reach into the on-demand, end to end technology solutions for the health insurance and healthcare markets. Mr. Senge works from Ebix’s Pittsburgh, Pennsylvania office.
Corporate Governance
The following table lists our three board committees, the directors who served on them as of the end of 2020 and the number of committee meetings held in 2020.
Name Audit Compensation Corporate Governance and Nominating
Mr. Bhalla C M
Mr. Benz       M           M
Mr. Eckert
           M
C
Mr. Herter          M
Mr. Keller       M C
Mr. Raina
Mr. Hebard
2020 Meetings 4 5 2

    On February 20, 2015, the Board appointed Hans Ueli Keller as Lead Independent Director. As Lead Independent Director, Mr. Keller's responsibilities include, but are not limited to: (i) coordinating the activities of the independent directors; (ii) setting the agenda for board meetings in conjunction with the CEO and corporate secretary; (iii) chairing executive sessions of the independent directors; and (iv) performing such other duties as are assigned from time to time by the board.

On June 11, 2019, Neil Eckert was asked by the Board and accepted a position serving on the Compensation Committee.

    It is the Company's policy that directors should attend each meeting of the Board of Directors and each meeting of the committees on which they serve. During 2020, the Company's full Board of Directors met four times, all of the meetings being conducted over telephonic conference calls due to the COVID-19 pandemic. Each member of the Board of Directors attended all of the regular meetings of the Board and the Board committees on which the director served and for which they were eligible to participate. In addition to participation at Board and committee meetings, our directors discharge their responsibilities
111

Table of Contents
throughout the year through personal meetings and other communications, including considerable telephone contact with the Chairman and Chief Executive Officer and sometimes with others pertinent members of management regarding matters of interest and concern to the Company.

    Effective January 9, 2015, the Company amended its bylaws in a way that changed the procedures by which security holders may recommend nominees to the Company’s Board of Directors. Section 3.10 of the Amended and Restated Bylaws creates certain advance notice requirements for stockholder nominations of directors at both annual and special meetings. To be timely, a director nomination by a stockholder for an annual meeting must be submitted not less than 90 nor more than 120 days before the anniversary date of the immediately preceding annual meeting. In the case of a nomination at a special meeting, notice of such nomination must be given within 10 days that notice of such meeting was provided or made public.

    In addition, Section 3.10 of the Amended and Restated Bylaws requires disclosures relating to the nominees and their relationships with stockholders proposing their nomination. Among other things, Section 3.10 of the Amended and Restated Bylaws requires a proposed nominee to: (1) represent and promise that the nominee is not, nor will become, party to any understanding with another person (a) to vote or act as a Director in a certain manner or (b) concerning compensation, reimbursement or indemnification without disclosure to the Company; and (2) represent that, if elected to the Board, such nominee would comply with Regulation FD and Company governance, trading, ethics, stock ownership and other policies.

    Section 3.10 of the Amended and Restated Bylaws also requires disclosures similar to a stockholder proposing business for an annual meeting. In addition, a proposing stockholder, including its affiliates, must disclose all agreements or other understandings with a director nominee it has proposed, as well as any other material interest involved in such nomination.

Code of Conduct and Ethics

The Board has adopted the Code of Conduct and Ethics (the “Code of Ethics”), which applies to the senior financial officers (the “Senior Financial Officers”) of the Company and its subsidiaries, including its principal executive officer, principal financial officer and principal accounting officer. Our Board also has adopted a Code of Conduct, articulating standards of business and professional ethics, which is applicable to all of our directors, officers and employees. The Company is committed to the highest standards of professional and ethical conduct, and the Code of Ethics and Code of Conduct provide guidance as to upholding these standards.

The Code of Ethics consists of basic standards of business practice, as well as professional and personal conduct, including prohibitions against any conduct or transactions that might constitute a conflict of interest between the Senior Financial Officers and the Company. Any action that might constitute a conflict of interest is reviewed by Company management, and potential conflicts of executive officers or members of the Board are reviewed by the Board.

This Code of Ethics is posted on the Company’s website at www.ebix.com, where it may be found by navigating to “Ebix Inc. Code of Ethics” under Corporate Governance within the Investor section of the website. Any amendment to or waiver of the Code of Ethics must be approved by the Audit Committee and will be promptly disclosed by the Company. The Company intends to satisfy the disclosure requirement under Form 8-K regarding an amendment to, or waiver from, a provision of the Code of Ethics by posting such information on the Company’s website, at the address and location specified above. These codes are reviewed annually and amended as necessary or appropriate in response to changing regulatory requirements and evolving best practices.
Audit Committee and Audit Committee Financial Expert

    The Company has a standing Audit Committee. The Audit Committee’s principal responsibility is to assist the Board in its general oversight of the Company’s financial reporting, internal controls, ethics compliance and audit functions. This committee is directly responsible for the appointment, compensation and oversight of the work of the Company’s independent public accounting firm, reviews the annual financial results and the annual audit of the Company’s financial statements and approves the inclusion of the audited financial statements in the Company’s Annual Report on Form 10-K.

The Audit Committee assists the Board in monitoring:  (a) the integrity of our financial statements, (b) the effectiveness of our internal control over financial reporting, (c) the effectiveness of our disclosure controls, (d) the qualifications and independence of our independent registered public accounting firm, (e) the performance of our independent registered public accounting firm, and (f) our compliance with legal and regulatory requirements. The Audit Committee is also responsible for oversight of the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company’s risk assessment and risk management policies. The Audit Committee’s
112

Table of Contents
charter provides that the Audit Committee review and approve related party transactions and conflicts of interest questions between Board members or senior management, on the one hand, and the Company, on the other hand (as defined and required by applicable securities laws, rules and regulations and the rules of the Nasdaq). The Audit Committee is also responsible for reviewing and monitoring compliance with the Company’s Code of Ethics for Senior Financial Officers. In addition, the Audit Committee has established procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, financial reporting, internal accounting controls or auditing matters and the confidential and anonymous submission by Company employees of concerns regarding accounting and auditing matters.

    The Audit Committee exercises oversight responsibility regarding the quality and integrity of our auditing and financial reporting practices. In discharging this responsibility, the Audit Committee, among other things, holds the authority to approve or remove the independent registered public accounting firm and to pre-approve the audit and any non-audit service to be provided by the auditors and reviews the results and scope of the annual audit performed by the auditors. The Audit Committee has three members, who currently are Messrs. Bhalla (Chairman), Benz and Keller. After reviewing the qualifications of the current members of the Audit Committee, and any relationships they may have with the Company that might affect their independence from the Company, our Board has determined that: (1) all current members of the Audit Committee are “independent” as that concept is defined in Section 10A of the Securities Exchange Act of 1934, (2) all current members of the Audit Committee are “independent” as that concept is defined in the Nasdaq listing standards, (3) all current members of the Audit Committee are financially literate, and (4) Mr. Bhalla qualifies as an “audit committee financial expert” as defined under SEC rules promulgated under the Sarbanes-Oxley Act of 2002. The Audit Committee met five times during 2019. The Audit Committee exercises its authority pursuant to a written charter that was adopted in October 2004.
Delinquent Section 16(a) Reports

    Section 16(a) of the Securities Exchange Act of 1934 requires the Company's officers and directors and persons who beneficially own more than ten percent of a registered class of our equity securities to file with the Securities and Exchange Commission reports of securities ownership on Form 3 and changes in such ownership on Forms 4 and 5. Officers, directors and more than ten percent beneficial owners also are required by rules promulgated by the Securities and Exchange Commission to furnish the Company with copies of all such Section 16(a) reports that they file. Based solely upon a review of the copies of Forms 3, 4, and 5 furnished to the Company or representations by certain executive officers and directors that no such reports were required for them, the Company believes that during 2020 all of the Company's directors, officers and more than ten-percent beneficial owners filed all such reports on a timely basis except that, while Mr. Hamil believed his Form 3 and Form 4 were filed in April 2020, due to a clerical error such filings were not received by the SEC and when this was discovered in April 2021 the filings were made promptly.


Item 11. EXECUTIVE COMPENSATION
Compensation Disclosure and Analysis
Objectives and Goals

The objectives of the Compensation Committee have been to adopt a compensation approach that is simple, internally equitable, and externally competitive, and that attracts, motivates, and retains qualified people capable of contributing to the growth, success and profitability of the Company, thereby contributing to long-term stockholder value.

Simplicity. The Compensation Committee believes that a compensation package with three major elements of compensation is the simplest approach, consistent with the Company’s goals. The Company generally does not utilize special personal perquisites such as private jets, payment of country club dues, Company-furnished motor vehicles, permanent lodging, or defrayment of the cost of personal entertainment.

Internal Equity. Internal equity has generally been evaluated based on an assessment of the relative contributions of the members of the management team. In 2020, the Compensation Committee did not undertake any formal audit or similar analysis of compensation equity with respect to either the CEO relative to the other members of the management team or with respect to the management team relative to the Company’s employees generally. However, the Compensation Committee believes that the relative difference between CEO compensation and the compensation of the Company’s other executives is consistent with such differences found in the Company’s insurance services peer group and the market for executive-level personnel for public companies of similar size.

External Competitiveness. The Compensation Committee believes it is important to management retention and morale that compensation be competitive with our competitors. In setting annual compensation, the Compensation Committee
113

Table of Contents
generally reviews market data and compares total annual compensation opportunities for our executive officers with compensation opportunities for similar positions at comparable companies. Based on this review, the Compensation Committee approves compensation levels and opportunities for our CEO and our other executive officers that the Compensation Committee believes are competitive with the marketplace and provide appropriate retention and incentive value.

Major Compensation Components

The principal components of compensation for our executive officers are: (i) base salary, (ii) short-term incentives, generally in the form of cash bonus programs, and (iii) long-term incentives, generally in the form of equity-based awards such as stock awards. We believe the Company’s goals are best met by utilizing an approach to compensation with these three distinct elements.

Base Salary:

     Base salaries for our executive officers are established based on the scope of their responsibilities, prior relevant background, professional experience, and technical training. Also in this regard, the Compensation Committee takes into account competitive market compensation paid by the companies represented in the compensation data it reviews for similar positions, and the overall market demand for such executives. Although the Company considered the same factors in establishing the base salaries of each of its executive officers, due to the different levels of roles played by each executive, the base salaries are justifiably substantially different.

    On April 10, 2019, the Company’s Board of Directors, upon recommendation from the Compensation Committee, announced that Mr. Raina's salary for 2019 and going forward is to be paid in shares of common stock of the Company. As a result, on January 2, 2020 the Company granted Mr. Raina 107,655 shares of restricted common stock, which represents his annual salary of $3,600,000 divided by $33.44, the closing price of the Company’s common stock on January 2, 2020. One third of these shares will vest on January 1, 2021 with the remaining stock vesting in quarterly installments over the next eight quarters.

Incentive Bonus Plan

    The stockholders approved a Bonus Plan for Mr. Raina at the 2016 Annual Meeting. The Bonus Plan provides for the payment of annual cash incentive awards to the Company’s Chief Executive Officer based upon the achievement by the Company of specified performance goals. The Bonus Plan was intended to preserve the Company’s federal income tax deduction for annual incentive payments to the CEO by meeting the requirements for “qualified performance-based compensation” under Section 162(m) of the Internal Revenue Code of 1986 as amended (the “Code”) (or any successor provision). However, Section 162(m) of the Code was amended in December 2017 as discussed below. Participation in the Bonus Plan is limited to the CEO of the Company. The Company does not anticipate that compensation paid to any of its other executive officers will be subject to the compensation deduction limits of Section 162(m). The Bonus Plan provides that Mr. Raina is eligible to receive cash incentives in connection with a particular fiscal year during the term of the Bonus Plan if the Company meets or exceeds certain performance goals (“Performance Goals”) set each year by the Compensation Committee. Not later than ninety (90) days after the commencement of any fiscal year during the term of the Bonus Plan (or such other date as may be permitted or required by Section 162(m)), and at a time when the outcome is uncertain, the Compensation Committee will set in writing Performance Goals based on one or more of the following business criteria:

Revenue
Sales
Profit (net profit, gross profit, operating profit or other corporate profit measures)
Earnings (EBIT, EBITDA, earnings per share, or other corporate earnings measures)
Net income (before or after taxes, operating income or other income measures)
Cash (cash flow, cash generation or other cash measures)
Stock price or performance
Total stockholder return (stock price appreciation plus reinvested dividends divided by beginning share price)
Return measures (return on assets, capital, equity, investments or sales, and cash flow return on assets, capital, equity, or sales)
Market share
Improvements in capital structure
Expenses (expense management, expense ratio, expense efficiency ratios or other expense measures)
114

Table of Contents
Business expansion or consolidation (acquisitions and divestitures)
Strategic plan development and implementation

    At the time the Compensation Committee sets the Performance Goals for a particular fiscal year, it will also set in writing the CEO’s incentive bonus opportunity, expressed as a dollar amount or a percentage of the CEO’s base salary, which will be earned if the established Performance Goals are achieved.

    Performance Goals may be specified in absolute terms, on an adjusted basis, in percentages, or in terms of growth from period to period or growth rates over time, as well as measured relative to the performance of a group of comparator companies, or a published or special index, or a stock market index. Performance Goals need not be based upon an increase or positive result under a business criterion and could include, for example, the maintenance of the status quo or the limitation of economic losses (measured, in each case, by reference to a specific business criterion). Performance measures may but need not be determinable in conformance with generally accepted accounting principles.

    Payment of annual incentives under the Bonus Plan will be made promptly following the Compensation Committee’s written certification that the Performance Goals and any other material conditions were satisfied. The Compensation Committee has the right to exercise negative discretion to pay out an annual incentive to the CEO under the Bonus Plan that is less than the amount that would have been payable based solely upon application of the applicable Performance Goals. The Compensation Committee may, in its discretion, pay annual incentives to the other named executive officers.

Long-Term Incentives:

    While salary and short-term incentives are primarily designed to compensate current and past performance, the primary goal of the long-term incentives, such as stock options and restricted stock awards, is to link executive officer compensation with the long-term interests of the stockholders.

    On July 20, 2020, the Compensation Committee, in consultation with the entire Board, granted 200,000 shares of restricted stock to Mr. Raina under the 2010 Plan as incentive compensation to recognize Mr. Raina's leadership in guiding the Company, especially related to the actions taken in the face of COVID-19. The shares vest over a three-year period. The first one-third of these awards vest on July 20, 2021 and the remaining two-thirds vest in quarterly installments over the next eight quarters.

Use of Compensation Consultants and Benchmarking

    In June 2019, after much analysis of potential consulting firms, the Compensation Committee recommended, and the Board of Directors subsequently approved retaining Ernst & Young LLP (EY) as a compensation consultant to assist with executive compensation matters. The EY study, completed in 2020, carried out a benchmarking study and assessed the overall trends in remuneration of positions comparable to that of a CEO and Independent Directors of the Company. The study looked at the key trends in terms of compensation components and structure, while covering organizations comparable in terms of sector, size and global spread of operations. The Compensation Committee accordingly finalized the compensation levels and opportunities that the Compensation Committee believed are competitive with the marketplace and provide appropriate retention and incentive value.

Other Compensation Components

Company executives are eligible to participate in the Company’s health care, insurance and other welfare and employee benefit programs, which are the same for all eligible employees, including Ebix’s executive officers.




Use of Employment and Severance Agreements

In the past, the Compensation Committee has determined that competitive considerations merit the use of employment contracts or severance agreements for certain members of senior management. Presently, however, no member of senior management is employed under an employment contract.
115

Table of Contents

Recapture and Forfeiture Policies

Historically the Company has not had formal policies with respect to the adjustment or recapture of performance based awards where the financial measures on which such awards are based or to be based are adjusted for changes in reported results such as, but not limited to, instances where the Company’s financial statements are restated. The Compensation Committee does not believe that repayment should be required where the Plan participant has acted in good faith and the errors are not attributable to the participant’s gross negligence or willful misconduct. In such later situations, the Compensation Committee believes the Company has or will have available negotiated or legal remedies. However, the Compensation Committee may elect to take into account factors, such as the timing and amount of any financial restatement or adjustment, the amounts of benefits received, and the clarity of accounting requirements leading to any restatement in fixing of future compensation.

Deductibility of Compensation and Related Tax Considerations

As one of the factors in its review of compensation matters, the Compensation Committee considers the anticipated tax treatment to the Company and to the executives of various payments and benefits.

Section 162(m). For 2017 and earlier, Section 162(m) imposed a $1.0 million limit on the amount that a publicly traded company may deduct for compensation paid to its chief executive officer and its next three most highly compensated executives, excluding the chief financial officer. This limitation did not apply to pay that qualifies as “performance-based compensation.” In order to qualify as performance-based, compensation must, among other things, be based solely on the attainment of pre-established, objective goals under a stockholder approved plan with no discretion permitted in determining award payouts. However, the Tax Cuts and Jobs Act adopted in December 2017 made significant changes to Section 162(m) of the Code that impacted public companies, including our company. Starting with the 2018 fiscal year, only performance-based compensation that is paid pursuant to a binding contract in effect on November 2, 2017 is exempt from the $1,000,000 deduction limit. Accordingly, any compensation that we paid pursuant to new compensation arrangements entered into after November 2, 2017, even if performance-based, will count towards the $1,000,000 deduction limit. In addition, the $1,000,000 deduction limit applies to a broader group of executives, including the chief financial officer and any individual who serves as our chief executive officer or chief financial officer at any time after January 1, 2018, plus any executive who is among our three most highly compensated executive officers for any fiscal year beginning with 2018. While the Bonus Plan described above was intended to preserve the Company’s federal income tax deduction for annual incentive payments to the CEO by meeting the requirements for “qualified performance-based compensation” under Section 162(m), as a result of these changes made to Section 162(m) the Bonus Plan, to the extent changed after November 2, 2017 will no longer be excluded from the $1.0 million limitation. In order to maintain flexibility in compensating executive officers in a manner designed to promote varying corporate goals, some of the compensation that we provide to our executive officers may not be deductible.

Section 280G. Code Section 280G generally denies a deduction for a significant portion of certain compensatory payments made to corporate officers, certain stockholders and certain highly-compensated employees if the payments are contingent on a change of control of the employer and the aggregate amounts of the payments to the relevant individual exceed a specified relationship to that individual’s average compensation from the employer over the preceding five years. In addition, Code Section 4999 imposes on that individual a 20% excise tax on the same portion of the payments received for which the employer is denied a deduction under Section 280G. In determining whether to approve an obligation to make payments for which Section 280G would deny the Company a deduction or whether to approve an obligation to indemnify (or “gross-up”) an executive against the effects of the Section 4999 excise tax, the Compensation Committee has adopted an approach similar to that described above with respect to payments which may be subject to the deduction limitations of Section 162(m).

Compensation Committee Conclusion

    Attracting and retaining talented and motivated management and employees is essential to create long-term stockholder value. Offering a competitive, performance-based compensation program with a large equity component helps to achieve this objective by aligning the interests of the Company’s CEO and other executive officers with those of stockholders. The Compensation Committee believes that Ebix’s 2020 compensation program met these objectives. Likewise, based on our review, the Compensation Committee finds the total compensation (and, in the case of the severance and change-in-control scenarios, the potential payouts) to the Company’s CEO and other named executive officers in the aggregate to be reasonable and not excessive.

Amended SAR Agreement

116

Table of Contents
    On April 10, 2018, the Company entered into a Stock Appreciation Right Award Agreement with Robin Raina, the Company’s Chairman, President and Chief Executive Officer, which was amended effective May 7, 2019.
Upon the effective date of the original SAR Agreement, Mr. Raina received 5,953,975 stock appreciation rights with respect to the Company’s common shares (the “SARs”). Upon an Acquisition Event, as defined in the Amended SAR Agreements, each of the SARs entitled Mr. Raina to receive a cash payment from the Company equal to the excess, if any, of the net proceeds per share received in connection with the Acquisition Event over the base price of $7.95 per share. Although the SARs were not granted under the Company’s 2010 Stock Incentive Plan (the “Plan”), the Amended SAR Agreement incorporated certain provisions of the Plan, including the provisions requiring equitable adjustment of the number of SARs and the base price in connection with certain corporate events (including stock splits). Under the terms of the Amended SAR Agreement, Mr. Raina will be entitled to receive full payment with respect to the SARs if either he (i) were employed by the Company on the closing date of an Acquisition Event or (ii) had been involuntarily terminated by the Company without cause (as defined in the Amended SAR Agreement) within the 180-day period immediately preceding an Acquisition Event. All of the SARs would have been forfeited if Mr. Raina’s employment had been terminated for any other reason prior to the closing date of an Acquisition Event. The Amended SAR agreement further provides that if an Acquisition Event occurs more than 180 days after, but not later than the tenth anniversary of, the date that Mr. Raina’s employment is involuntarily terminated by the Company without Cause (as defined in the Amended SAR Agreement), 1,000,000 SARs will be deemed accrued and will be eligible to vest on the closing date of the Acquisition Event, which number will be increased by 750,000 SARs beginning on the first anniversary of the effective date of the Amended SAR Agreement and each anniversary thereafter (subject in each case to Mr. Raina’s continued employment on each anniversary date), until 100% of the SARs (including any Shortfall Grants) have accrued and are eligible to vest on the closing date of an Acquisition Event that occurs more than 180 days after, but not later than the tenth anniversary of, the date that Mr. Raina’s employment is involuntarily terminated by the Company without Cause; provided, however, that, (i) no additional SARs will accrue following the date that Mr. Raina’s employment is involuntarily terminated by the Company without Cause, (ii) any accrued SARs will be forfeited if an Acquisition Event does not occur prior to the tenth anniversary of the date that Mr. Raina’s employment is involuntarily terminated by the Company without Cause, and (iii) all of the SARs will be forfeited if Mr. Raina’s employment terminates for any other reason prior to the closing date of an Acquisition Event

In addition, while Mr. Raina is employed by the Company and prior to an Acquisition Event, the Amended SAR Agreement provides that the Company’s Board would determine annually whether a “shortfall” (as described below) exists as of the end of the immediately preceding fiscal year. In the event the Board determined that a shortfall existed, Mr. Raina will be granted additional SARs (or, in the Board’s sole discretion, additional restricted shares or restricted stock units (each a “Share Grant”)) in an amount sufficient to eliminate such shortfall (each a “Shortfall Grant”). Under the terms of the Amended SAR Agreement, a shortfall exists if the number of Mr. Raina’s Shares is less than 20% of the total of (a) the number of SARs, plus (b) the number of outstanding shares reported by the Company in its audited financial statements as of the end of the immediately preceding fiscal year, minus (c) the number of shares paid, awarded or otherwise received by Mr. Raina from the Company as compensation after April 10, 2018, including any shares received as a result of Mr. Raina exercising stock options granted after April 10, 2018 or the grant or vesting of restricted stock or settlement of RSUs granted to Mr. Raina after April 10, 2018, but excluding any shares received as a result of the grant, vesting or settlement of any Share Grants. Under the terms of the Amended SAR Agreement, if the Board elects to make a Shortfall Grant in respect of such shortfall, such SARs would have been subject to the same terms and conditions as the SARs initially granted under the Amended SAR Agreement. If the Board elects to make a Share Grant in respect of such shortfall, such restricted shares or restricted stock units will have such terms and conditions as determined by the Board, but generally will follow the terms of the restricted shares or restricted stock units granted to other executives of the Company at or about the time of such Share Grant, but no Share Grant would have vested more rapidly than one-third of such Share Grant prior to the first anniversary of the grant date, with the remainder vesting in eight equal quarterly installments following the first anniversary of the grant date.

In connection with the Amended SAR Agreement, Mr. Raina will commit to continue to serve and not resign as the Company’s Chief Executive Officer until at least May 2, 2021.


Stockholder Advisory Vote

    At the last Annual Meeting of Stockholders, approximately 54% of the votes cast by the Ebix stockholders present in person or by proxy and entitled to vote at the Annual Meeting and on the proposal were cast in support of the compensation of the Company’s named executive officers, as discussed and disclosed in the proxy statement. The Board and the Compensation Committee appreciate and value the views of our stockholders.

117

Table of Contents
    Future advisory votes on executive compensation will continue to serve as an additional tool to guide the Board and the Compensation Committee in evaluating the alignment of the Company’s executive compensation program with the interests of the Company and its stockholders.
    

Risk Considerations

    Our Compensation Committee has reviewed risks arising from our compensation policies and practices for both our executives and non-executive employees and has determined that they are not reasonably likely to have a material adverse effect on the Company.

Compensation Committee Interlocks and Insider Participation

    The Company's Compensation Committee currently consists of Mr. Keller, Mr. Benz and Mr. Eckert. None of the members of the Compensation Committee have ever been officers or employees of the Company. No interlocking relationship exists between the members of the Company's Board of Directors or Compensation Committee and the Board of Directors or Compensation Committee of any other company.
.
 Compensation Committee Report

    The Compensation Committee has reviewed and discussed with the Company’s Chief Executive Officer and Chief Financial Officer the above Compensation Disclosure and Analysis. Based on such review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Form 10-K.

This report has been submitted by the Compensation Committee:
Hans U. Benz, Neil Eckert and Hans Ueli Keller

The foregoing report shall not be deemed incorporated by reference by any general statement incorporating by reference this annual report into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under such Acts.

Executive Compensation and Director Compensation Tables
The following table provides information relating to compensation earned by or paid to our named executive officers in all capacities.











118

Table of Contents



Summary Compensation Table

Name and Principal Position  Year Salary ($) Bonus ($) Stock Awards ($) (1) Option Awards ($) Non-Equity Incentive Plan Compensation ($) All Other Compensation ($) Total
Robin Raina, President, 2020 $ 7,960,000 $ 7,960,000 
Chief Executive Officer 2019 $ 2,000,000 (2) 4,200,000 1,584 6,000 (3) $ 6,207,584 
and Chairman of the Board 2018 $ 2,400,000 2,000,000 (2) 9,751 (3) $ 4,409,751 
Steven M. Hamil, Corporate Executive Vice President and Global Chief Financial Officer 2020 $ 231,250 500,000 (4) $ 731,250 
Robert F. Kerris, 2020 $ 162,519 (5) $ 162,519 
Chief Financial Officer and Secretary 2019 $ 185,000 50,000 (5) $ 235,000 
Graham Prior, 2020 $ 161,964 (6) $ 161,964 
Corporate Senior 2019 $ 159,863 (6) $ 159,863 
Vice President 2018 $ 161,694 (6) $ 161,694 
Leon d'Apice, 2020 $ 207,197 17,715 (7) $ 224,912 
Managing Director- 2019 $ 208,706 25,650 (7) $ 234,356 
Ebix Australia Group 2018 $ 224,400 20,785 (7) $ 245,185 
James Senge, Sr., 2020 $ 225,000 3,375 (8) $ 228,375 
Senior Vice President 2019 $ 225,000 2,337 (8) $ 227,337 
EbixHealth 2018 $ 225,000 3,075 (8) $ 228,075 
119

Table of Contents
Footnotes
(1) These amounts reflect the aggregate grant date fair value computed in accordance with accounting guidance related to stock compensation, based on the stock price on the date of grant.
(2) 2018 bonus of $2,000,000 was earned in 2018 and paid in 2019.
(3) This amount represent the $6,000 allowance for miscellaneous business and travel expense for 2019. In 2018, the amount includes a Company matching contribution to a 401(k)/Retirement Plan of $3,751 and the annual $6,000 allowance for miscellaneous business and travel expenses.
(4) Mr. Hamil's base salary is $325,000. Mr. Hamil has started for Ebix April 13, 2020, so his salary shown is partial year. Grant totals is based on new grant value on date of grant.
(5) Mr. Kerris was named Chief Financial Officer effective September 21, 2019. On April 13, 2020, Mr. Kerris moved to a non officer position.
(6) Mr. Prior was compensated in Singapore Dollars. For 2020, all sums were derived by using the exchange rate as of December 31, 2020 of 0.742955. For 2019, all sums were derived by using the exchange rate as of December 31, 2019 of 0.7333. For 2018, all sums were derived by using the exchange rate as of December 31, 2018 of 0.7417. His compensation includes a Company matching contribution to a 401(k)/Retirement Plan.
(7) Mr. d’Apice was compensated in Australian Dollars. For 2020, all sums were derived by using the exchange rate as of December 31, 2020 of 0.690656. For 2019, all sums were derived by using the exchange rate as of December 31, 2019 of 0.6957. For 2018, all sums were derived by using the exchange rate of .7480. His compensation includes a Company matching contribution to a 401(k)/Retirement Plan.
(8) Mr. Senge's base salary is $225,000, his compensation includes a Company matching contribution to a 401(k)/Retirement Plan.

Grants of Plan-Based Awards for 2020

Name Grant Date Estimated Future Payouts Under Non-Equity Incentive Plan Awards All Other Stock Awards: Number
of Shares of Stock or Units (#)
All Other Option Awards: Number of Securities Underlying Options (#) Exercise or Base Price of Option Awards ($/Sh) Grant
Date Fair Value of Stock and Option Awards ($)
Threshold ($) Target ($) Maximum ($)
Robin Raina 1/2/20 —  —  —  107,655  —  —  $ 3,600,000 
Robin Raina 7/20/20 200,000  4,360,000 
Steven M. Hamil —  —  —  30,432  —  —  $ 500,000 
Graham Prior —  —  —  —  —  —  $ — 
Leon d' Apice —  —  —  —  —  —  $ — 
James Senge, Sr —  —  —  —  —  —  $ — 



















120

Table of Contents























Outstanding Equity Awards at 2020 Fiscal Year-End

Option Awards Stock Awards
Number of
Securities
Underlying
Unexercised
Options
(#)
Number of
Securities
Underlying
Unexercised
Options
(#)
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
Option
Exercise
Price
Option
Expiration
Number of
Shares or
Units of
Stock
That
Have
Not
Vested
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested
Name Exercisable Un-exercisable (#) ($) Date (#) ($) (#) ($)
Robin Raina —  —  —  —  —  345,847  (1) $ 13,131,811  —  $ — 
Steven M. Hamil —  —  —  —  —  30,432  $ 1,155,503  —  $ — 
Graham Prior —  —  —  —  —  —  $ —  —  $ — 
Leon d'Apice —  —  —  —  —  —  $ —  —  $ — 
James Senge, Sr. —  —  —  —  —  —  $ —  —  $ — 


(1) Robin Raina has been awarded restricted stock grants by the Compensation Committee: (i) a grant of 13,541 shares of Company common stock on January 7, 2019 of which 5,643 shares were unvested as of December 31, 2020; (ii) a grant of 54,870 shares of Company common stock on April 10, 2019 of which 22,863 shares were unvested as of December 31, 2020; (iii) a grant of 23,247 shares of Company common stock on April 10, 2019 of which 9,686 shares were unvested as of December 31, 2020; (iv) a grant of 107,655 shares of Company common stock on January 2, 2020 of which 107,655 shares were unvested as of December 31, 2020; and (v) a grant of 200,000 shares of Company common stock of which 200,000 shares were unvested as of December 31, 2020.
(2) Steven Hamil has been awarded restricted stock grants by the Compensation Committee, a grant of 30,432 shares of Company common stock on April 13, 2020 of which 30,432 shares were unvested as of December 31, 2020.
121

Table of Contents


Option Exercises and Stock Vested
Option Awards Stock Awards
Number of
Shares
Acquired
Value
Realized
on
Number of
Shares
Acquired
Value
Realized
on
Name on Exercise Exercise on Vesting Vesting
(a) (#) ($) (1) (#) ($) (2)
Robin Raina —  $ —  13,593  $ 639,708 
Steven M. Hamil —  $ —  —  $ — 
Graham Prior —  $ —  —  $ — 
Leon d'Apice —  $ —  —  $ — 
James Senge —  $ —  —  $ — 

(1) Reflects the excess of the fair market value of the shares at the time of exercise over the exercise price of the options.
(2) Reflects the fair market value of the shares on the vesting date.
Pension Benefits and Nonqualified Deferred Compensation
    The Company does not sponsor or maintain any tax-qualified defined benefit plans, supplemental executive retirement plans or nonqualified deferred compensation plans.
Potential Payments for Mr. Raina Upon a Change of Control

    Below is the description of severance payments that Mr. Raina would have received under the Amended SAR Agreement had certain events occurred in 2020.  As mentioned previously, no member of senior management other than Mr. Raina has an employment or severance agreement. Except as described below for Mr. Raina, upon a termination or change of control, each of the executive officers will receive only the unpaid portion of their salary and benefits through the date of termination. No severance payments, acceleration of equity vesting, or other special payments will be due to such executive officers, regardless of the circumstances of the termination.

    Pursuant to the Amended SAR Agreement, Mr. Raina received 5,953,975 stock appreciation rights with respect to the Company’s common shares (the “SARs”). Upon an Acquisition Event, each of the SARs entitles Mr. Raina to receive a cash payment from the Company equal to the excess, if any, of the net proceeds per share received in connection with an Acquisition Event over the base price of $7.95. Mr. Raina will only be entitled to receive a payment with respect to the SARs if he is employed by the Company at the time of an Acquisition Event or was terminated by the Company without cause within the 180-day period immediately preceding an Acquisition Event.

    Annually, while Mr. Raina is employed by the Company and prior to an Acquisition Event, the Board shall determine whether a “shortfall” (as defined in the April SAR Agreement) existed as of the end of the immediately preceding fiscal year. In the event the Board determines that a shortfall existed, Mr. Raina will be granted additional SARs (or, in the Board’s sole discretion, restricted shares or restricted stock units (each a “Share Grant”)) in an amount sufficient to eliminate such shortfall (each a “Shortfall Grant”). A “shortfall” will exist if the number of Mr. Raina’s shares is less than 20% of the total of (a) the number of SARs, plus (b) the number of outstanding shares reported by the Company in its audited financial statements as of the end of the immediately preceding fiscal year, minus (c) the number of shares paid, awarded or otherwise received by Mr. Raina from the Company as compensation after April 10, 2018, including any shares received as a result of Mr. Raina exercising stock options granted after April 10, 2018 or the grant or vesting of restricted stock or settlement of RSUs granted to Mr. Raina after April 10, 2018, but excluding any shares received as a result of the grant, vesting or settlement of any Share Grants.

    No Shortfall Grant was made for 2020. As a result, in the event that an Acquisition Event had occurred on December 31, 2020, and assuming that the Company received Net Proceeds of $37.97 per share (the closing price of the Company’s common stock on December 31, 2020), Mr. Raina would have received a $178.7 million payment upon the Acquisition Event.
122


Pay Ratio Disclosure

    On August 5, 2015, the SEC adopted new rules implementing the pay ratio disclosure requirement of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). These rules require reporting companies to disclose the ratio of the annual compensation of the company's median employee to the annual compensation of its principal executive officer.

The 2020 annual total compensation of our CEO Mr. Raina was $7,960,000, which includes the total value of restricted stock grants issued in 2020. The 2020 annual total compensation of our median compensated employee for all global locations was $4,398, and the ratio of those amounts is 1810 to 1. The 2020 annual total compensation of our median compensated U.S. employee was $84,886 and the ratio of those amounts is 94 to 1. For purposes of identifying the median compensated employee, we took into account salary, bonus, and fair market value of the restricted stock grants on the grant date during the year for all our employees as of December 31, 2020. We annualized this compensation for employees who did not work the entire year, except for employees designated as seasonal or temporary.

There is a lot of flexibility in how the median employees are identified. Companies are using different approaches that are appropriate for their employee population and compensation programs and are using estimates and assumptions. As a result, the ratio that other companies have calculated may not be comparable to the ratio that we have presented not only because of different businesses or different compensation programs, but because of using different methodologies and assumptions.

Director Compensation

    On December 17, 2020, the Board granted the six non-employee directors options to purchase 6,000 shares of common stock of which one-fourth will vest on December 17, 2021, and the remaining options will vest ratably each quarter in the years 2022, 2023 and 2024. In addition each non-employee director received an annual cash retainer of $25,000 during 2020. Mr. Keller received an additional cash retainer of $16,000 for serving as the Compensation Committee Chairman and $8,000 for serving on the Audit Committee. Mr. Benz received an additional cash retainer of $8,000 for serving on the Audit Committee and $8,000 for serving on the Compensation Committee. Mr. Bhalla received an additional cash retainer of $24,000 for serving as the Audit Committee Chairman and $8,000 for serving on the Audit Committee.

2020 Director Compensation
Name Fees Earned or Paid in Cash Option Awards ($) Total ($)
Pavan Bhalla $ 57,000  $ 93,501  $ 150,501 
Hans Ueli Keller $ 49,000  $ 93,501  $ 142,501 
Hans U. Benz $ 41,000  $ 93,501  $ 134,501 
Neil D. Eckert $ 25,000  $ 93,501  $ 118,501 
Rolf Herter $ 25,000  $ 93,501  $ 118,501 
George Hebard, III $ 25,000  $ 93,501  $ 118,501 
    




123

The following table lists below the aggregate number of outstanding options held by each director as of December 31, 2020:
Aggregate Stock Option
Awards at Year End
Pavan Bhalla 36,000 
Hans Ueli Keller 36,000 
Hans U. Benz 36,000 
Neil D. Eckert 36,000 
Rolf Herter 36,000 
George Hebard, III 30,000 

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Securities Authorized for Issuance Under Equity Compensation Plans
    As of December 31, 2020, we maintained the 2010 Ebix Equity Incentive Plan and the 2020 Ebix Equity as approved by our stockholders. The table below provides information as of December 31, 2020 related to these plans.
Number of Securities
to be Issued Upon
Exercise of
Outstanding Options
Weighted-Average
Exercise Price of
Outstanding Options
Number
of Securities
Remaining Available
for Future Issuance
Under Equity
Plan Category Warrants and Rights Warrants and Rights Compensation Plans
Equity Compensation Plans Approved by Security Holders:
-2010 Stock Incentive Plan 181,875  $ 48.01  3,684,898 
-2020 Stock Incentive Plan 36,000  35.70  4,964,000 
Equity Compensation Plans Not Approved by Security Holders 5,953,975  (1) N/A
Total 6,171,850  $ 45.97  8,648,898 
(1) These are the SARs granted to Mr. Raina under the Amended SAR Agreement

124

Table of Contents
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Current Beneficial Ownership
Name of Beneficial Owner Number of Shares (1) Percent of
Class (2)
Robin Raina(3)
4,149,204  13.4%
Neil D. Eckert(4)
117,862  *
Rolf Herter(5)
101,271  *
Leon d’Apice(6)
89,978  *
Hans Ueli Keller(7)
44,396  *
Hans U. Benz(8)
30,877  *
Pavan Bhalla(9)
99,341  *
James S. Senge, Sr.(10)
12,221  *
Graham Prior(11)
16,784  *
George Hebard(12)
70,250  *
Steven M. Hamil(13)
30,432  *
Directors and executive officers as a group (11 persons)(14)
4,762,616  14.6%
Other Beneficial Holders
Blackrock Inc. (15)
3,707,413  12.0%
The Vanguard Group (16)
2,692,150  8.7%
Steven D. Lebowitz(17)
1,551,567  5.0%
*Less than 1%.
(1) For purposes of this table, a person is deemed to be the beneficial owner of a security if he or she: (a) has or shares voting power or dispositive power with respect to such security, or (b) has the right to acquire such ownership within 60 days. “Voting power” is the power to vote or direct the voting of shares, and “dispositive power” is the power to dispose or direct the disposition of shares, irrespective of any economic interest in such shares.
(2) In calculating the percentage ownership or percent of equity vote for a given individual or group, the number of common shares outstanding includes unissued shares subject to options, warrants, rights or conversion privileges exercisable within 60 days held by such individual or group, but are not deemed outstanding by any other person or group. Percentage is based on 30,942,871 shares of our common stock outstanding as of March 29, 2021.
(3) Mr. Raina’s ownership includes: (a)3,932,140 shares of restricted stock and (b) 217,064 shares held as trustee for the Robin Raina Foundation, a 501(c) charity organization, which were donated by Robin Raina from vested restricted stock grants previously issued to Mr. Raina by the Company and to which Mr. Raina disclaims any beneficial ownership. The Federal Tax ID Number for the foundation is 51-0497387. The address of Mr. Raina is 1 Ebix Way, Johns Creek, Georgia 30097.
(4) Mr. Eckert’s ownership includes options to purchase 19,875 shares of our common stock which are exercisable as of March 29, 2021, or that will become exercisable within 60 days after that date. The address of Mr. Eckert is 62 Bishopsgate Lime Street, London EC2N 4AW, UK.
(5) Mr. Herter’s ownership includes options to purchase 19,875 shares of our common stock which are exercisable as of March 29, 2021, or that will become exercisable within 60 days after that date. The address of Mr. Herter is Carl Spitteler Str. 31 8053 Zürich, Switzerland.
(6) The address of Mr. d’Apice is 197 Foreshore Dr. Corlette NSW 2315, Australia.
(7) Mr. Keller’s ownership includes options to purchase 19,875 shares of our common stock which are exercisable as of March 29, 2021, or that will become exercisable within 60 days after that date. The address of Mr. Keller is Oberkreuzbuche 2 6315 Oberägeri, Switzerland.
(8) Mr. Benz’s ownership includes options to purchase 19,875 shares of our common stock which are exercisable as of March 29, 2021, or that will become exercisable within 60 days after that date. The address of Mr. Benz is
Seehofstrasse 13 6314 Zug, Switzerland.

125

Table of Contents
(9) Mr. Bhalla’s ownership includes options to purchase 19,875 shares of our common stock which are exercisable as of March 29, 2021, or that will become exercisable within 60 days after that date. The address of
Mr. Bhalla is 4415 Bancroft Valley, Johns Creek, Georgia 30022.
(10) The address of Mr. Senge is 1629 Seegar Road, Pittsburgh, Pennsylvania 15241.
(11) The address of Mr. Prior is 7 Purchas Road Takapuna, Auckland 0622, New Zealand.
(12) Mr. Hebard’s ownership includes options to purchase 17,250 shares of our common stock which are exercisable as of March 29, 2021, or that will become exercisable within 60 days after that date. The address of Mr. Hebard is 56 East 87th St, Apt 5DC, New York, New York 10128.
(13) Includes 30,432 shares of restricted stock. The address of Mr. Hamil is 1 Ebix Way, Johns Creek, Georgia
30097.
(14) Includes options to purchase 116,625 shares of our common stock which are exercisable as of March 29, 2021, or that will become exercisable within 60 days after that date.
(14) Includes options to purchase shares of our common stock which are exercisable as of March 29, 2020, or that will become exercisable within 60 days after that date.
(15) Ownership consists of shares of our common stock beneficially owned by Blackrock, Inc. and its wholly-owned subsidiaries (“Blackrock”) as disclosed on its Schedule 13G/A filed with the SEC on January 27, 2021. The address of Blackrock is 55 East 52nd Street, New York, New York 10055.
(16) Ownership consists of shares of our common stock beneficially owned by The Vanguard Group, Inc. and its wholly-owned subsidiaries (collectively, “Vanguard”), as disclosed on Vanguard’s joint schedule 13G/A filed with the SEC on February 10, 2021. The address of Vanguard is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.
(17) Ownership consists of shares of our common stock beneficially owned by Steven D. Lebowitz, the Lebowitz Family Stock, LLC, Deborah P. Lebowitz, The Steven & Deborah Lebowitz Foundation, the Lebowitz Family Trust – 1986, Lauren Lebowitz Salem, Robert Lebowitz, Kathryn Lebowitz Silverberg, the A&A Lebowitz Trust, Leonard S. Pearlstein, The Leonard and Susan Pearlstein Community Property Trust, dated September 1, 1983, and Debra Paul, as disclosed on a joint Schedule 13G filed with the SEC on March 29, 2021. The address of Steven D. Lebowitz is 1333 Second Street, Suite 650, Santa Monica, CA 90401.


Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
    
Related Party Transactions

    Under the Audit Committee's charter, and consistent with NASDAQ rules, any material potential or actual conflict of interest or transaction between the Company and any "related person" of the Company must be reviewed and approved by the Audit Committee. SEC rules define a "related person" of the Company as any director (or nominee), executive officer, 5%-or-greater shareholder or immediate family member of any of these persons.

    Rahul Raina is the Company’s Corporate Vice President Sales Ebix RCS & A.D.A.M. International Business Development and the brother of Robin Raina, our Chairman of the Board, President, and Chief Executive Officer. During each of 2020 and 2019 he was paid a salary of $150,000, respectively, and received zero cash bonus. He received no share-based compensation awards in either 2020 or 2019.

    During the year ended December 31, 2020 and 2019, Ebix did not donate to the Robin Raina Foundation, a non-profit 501(c) charity in support of the cause of building and providing homes for the severely underprivileged in India.

Director Independence

Our business is managed by the Company’s employees under the direction and oversight of the Board. Except for Mr. Raina, none of our current directors are an employee of the Company. We keep directors informed of our business through discussions with management, materials we provide to them, visits to our offices and facilities and their participation in Board and Board committee meetings.

Under our Corporate Governance Guidelines, we require that a majority of the Board consist of independent, non-management directors, who also meet the criteria for independence required by the Nasdaq Marketplace Rules. Under such
126

Table of Contents
rules, a director is independent if he or she does not have a material relationship with the Company. Our Board annually evaluates each member’s independent status.

The Board has determined that, as of January 1 2020, the following seven of the Company’s directors are independent under the Nasdaq Marketplace Rules: Messrs. Benz, Bhalla, Eckert, Hebard, Herter, and Keller. Mr. Raina, as a management director, participates in the Board’s activities and provides valuable insight and advice.

Non-management directors have access to individual members of management or to other employees of the Company on a confidential basis. Directors also have access to Company records and files and directors may contact other directors without informing Company management of the purpose or even the fact of such contact.



Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

    Independent Registered Public Accounting Firm

    As previously disclosed, RSM resigned as the Company's independent auditor on February 15, 2021 without completing the 2020 audit. On March 5, 2021 the Audit Committee appointed KGS to audit the Company's financial statements for the fiscal year 2020. RSM served as the Company's registered public accountants for the year ended December 31, 2019.

    The following tables presents fees billed for professional services rendered for the audit of our annual financial statements for 2020 and 2019

Services Rendered by KG & Somani Co. 2020 2019
Audit Fees (4) $ 430,000  $ — 
Audit Related Fees (2) $ —  $ — 
Tax Compliance Service Fees $ —  $ — 
All Other Fees (3) $ —  $ — 

Services Rendered by RSM US LLP 2020 2019
Audit Fees (1) $ 931,655  $ 2,170,400 
Audit Related Fees (2) $ —  $ — 
Tax Compliance Service Fees $ —  $ — 
All Other Fees (3) $ —  $ — 


(1) Integrated audit of the consolidated financial statements including quarterly reviews according to the engagement letter and administrative fees.
.
(2) Includes fees associated with the review of valuation reports associated with business acquisition and audits of the Company's 401(K) plans, and related out of pocket expenses incurred by the auditors.
(3) Includes fees related to the audit of the financial statements and the Company's purchase accounting for certain acquired businesses.
(4) Integrated audit of the consolidated financial statements for the year ended December 31, 2020. Amount represents total fees per the engagement letter. Company also to pay KGS out of pocket expenses (undetermined amount at time of filing).
    The Audit Committee considered and pre-approved all of the above-referenced fees and services. Pursuant to a policy adopted by our Board of Directors, the Audit Committee requires advance approval of all audit services and permitted non-
127

Table of Contents
audit services to be provided by the independent registered public accounting firm as required by the Securities Exchange Act of 1934.


PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
    (a) 1. Financial Statements
    The following consolidated financial statements and supplementary data of the Company and its subsidiaries, required by Part II, Item 8 are filed herewith:
Report of Independent Registered Public Accounting Firm.
Consolidated Balance Sheets as of December 31, 2020 and December 31, 2019 .
Consolidated Statements of Income for the years ended December 31, 2020, December 31, 2019, and December 31, 2018.
Consolidated Statements of Comprehensive Income for the years ended December 31, 2020, December 31, 2019, and December 31, 2018.
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2020, December 31, 2019, and December 31, 2018.
Consolidated Statements of Cash Flows for the years ended December 31, 2020, December 31, 2019, and December 31, 2018.
Notes to Consolidated Financial Statements
2. Financial Statement Schedules
The following consolidated financial statement schedule is filed herewith:
Schedule II—Valuation and Qualifying Accounts for the years ended December 31, 2020, December 31, 2019, and December 31, 2018.
Schedules other than those listed above have been omitted because they are not applicable or the required information is included in the financial statements or notes thereto.
3. Exhibits—The exhibits filed herewith or incorporated by reference are listed on the Exhibit Index attached hereto.


128

Table of Contents
EXHIBIT INDEX
Exhibits
2.1
3.1
3.2
3.3
3.4
3.5
4.1*
10.1**
10.2**
10.3**
10.5**
10.8**
129

Table of Contents


10.17**

10.18**

21.1*
23.1*
130

Table of Contents
23.2*
23.3*
31.1*
31.2*
32.1*
32.2*
101* XBRL (Extensible Business Reporting Language) - The following materials from Ebix, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2019, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income (Loss) (iv) the Consolidated Statements of Stockholders' Equity and Comprehensive Income (Loss), (v) the Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements which were tagged as blocks of text.

*    Filed herewith
**     Indicates management contract or compensatory plan or arrangement.

131

Table of Contents
SIGNATURES
    Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized.
       
  EBIX, INC.
(Registrant)
 
  By:   /s/ ROBIN RAINA  
    Robin Raina 
   
Chairman of the Board, President and
Chief Executive Officer 
Principal Executive Officer
Date: April 27, 2021
    Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
         
Signature   Title   Date
/s/ ROBIN RAINA
 
  Chairman of the Board, President, and
Chief Executive Officer
(principal executive officer)
  April 27, 2021
(Robin Raina)      
/s/ STEVEN M. HAMIL
 
  Chief Financial Officer
(principal financial and accounting officer)
  April 27, 2021
(Steven M. Hamil)      
/s/ HANS U. BENZ
 
  Director    April 27, 2021
(Hans U. Benz)      
/s/ PAVAN BHALLA
 
  Director    April 27, 2021
(Pavan Bhalla)      
/s/ NEIL D. ECKERT
 
  Director    April 27, 2021
(Neil D. Eckert)      
/s/ ROLF HERTER   Director    April 27, 2021
(Rolf Herter)      
/s/ HANS UELI KELLER
 
  Director    April 27, 2021
(Hans Ueli Keller)
/s/ GEORGE W. HEBARD III
 
  Director    April 27, 2021
(George W. Hebard III)

132

Table of Contents
Schedule II
Ebix, Inc.

Schedule II—Valuation and Qualifying Accounts
Years ended December 31, 2020, December 31, 2019 and December 31, 2018
Allowance for doubtful accounts receivable (in thousands):
Year ended December 31,
2020 2019 2018
Beginning balance $ 21,696  $ 6,969  $ 4,143 
Provision for doubtful accounts 1,749  12,325  3,571 
Write-off of accounts receivable against allowance (754) (2,290) (745)
Other (opening balance adjustments on acquisitions) —  4,692  — 
Ending balance $ 22,691  $ 21,696  $ 6,969 

Valuation allowance for deferred tax assets (in thousands):
Year ended December 31,
2020 2019 2018
Beginning balance $ (3,288) $ (2,031) $ (35)
Decrease (increase) 1,128  (1,257) (1,996)
Ending balance $ (2,160) $ (3,288) $ (2,031)

133

DESCRIPTION OF EBIX CAPITAL STOCK

Shares Authorized and Outstanding

Ebix is authorized to issue 220,500,000 shares of capital stock, divided into two classes consisting of: (i) 220,000,000 shares of common stock, par value $0.10 per share, and (ii) 500,000 shares of preferred stock, par value $0.10 per share.  Ebix has designated 350,000 shares of Ebix’s preferred stock as a series designated “Series Y Convertible Preferred Stock”. As of  April 23, 2021, there were 30,942,871 shares of Ebix common stock issued and outstanding, and no shares of Ebix’s preferred stock were issued and outstanding.

Common Stock

Voting Rights

Except as otherwise provided by law or as set forth in the Ebix amended and restated certificate of incorporation (“Ebix certificate of incorporation”) or as otherwise provided by any outstanding series of preferred stock, the holders of Ebix common stock have general voting power on all matters as a single class. On each matter to be voted on by the holders of Ebix common stock, each outstanding share of Ebix common stock is entitled to one vote per share. Holders of Ebix common stock are not entitled to cumulative voting of their shares in elections of directors.

Liquidation Rights

In the event of a voluntary or involuntary liquidation, dissolution or winding up of Ebix, the prior rights of Ebix’s creditors and the liquidation preference of any preferred stock then outstanding, with the exception of the Ebix Preferred Stock, must first be satisfied. The holders of Ebix common stock will be entitled to share in the remaining assets of Ebix on a pro rata basis.

Dividends

Shares of Ebix common stock are entitled to participate equally in dividends when and as dividends may be declared by the Ebix Board out of funds legally available for the payment of dividends.

Preferred Stock

Preferred stock may be issued from time to time in one or more series, each of which is to have the voting powers, designation, preferences, and relative, participating, optional, or other special rights and qualifications, limitations, or restrictions thereof as are stated and expressed in the Ebix certificate of incorporation, or in a resolution or resolutions providing for the issue of that series adopted by the Ebix Board.

The Ebix Board has the authority to create one or more series of preferred stock and, with respect to each series, to fix or alter as permitted by law, among other things:

the number of shares and the distinctive designation of the series;

the voting power, if any;

dividend rights;

redemption rights;

liquidation preferences;

conversion rights; and

any other relative rights, preferences and limitations.





Transfer Agent and Registrar

The transfer agent and registrar for Ebix common stock is Computershare.

Preemptive Rights

No holder of shares of any class or series of capital stock of Ebix will have any preemptive right to subscribe for, purchase or otherwise acquire shares of any class or series of capital stock of Ebix.

Certain Matters of Corporate Governance

The Delaware General Corporation Law (the “DGCL”), the Ebix certificate of incorporation, and the Ebix bylaws contain provisions that could discourage or make more difficult a change in control of Ebix, including an acquisition of Ebix by means of a tender offer, an acquisition of Ebix by means of a proxy contest and removal of Ebix’s incumbent officers and directors, without the support of the Ebix Board. A summary of these provisions follows.

Section 203 of the DGCL

Ebix is governed by the provisions of Section 203 of the DGCL. In general, Section 203 prohibits a public Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless:

the transaction was approved by the board of directors prior to the time that the stockholder became an interested stockholder;

upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding shares owned by directors who are also officers of the corporation and shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

at or subsequent to the time the stockholder became an interested stockholder, the business combination was approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of a majority of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.

In general, Section 203 defines a “business combination” to include mergers, asset sales and other transactions resulting in financial benefit to a stockholder and an “interested stockholder” as a person who, together with affiliates and associates, owns, or within three years did own, 15% or more of the corporation’s outstanding voting stock.

Stockholder Meetings

Under the Ebix bylaws, the Ebix Board or a committee of the Ebix Board duly designated by the Ebix Board to call a meeting and holders of not less than ten percent of common stock able to cast votes at a special meeting may call special meetings of stockholders, and any business conducted at any special meeting will be limited to the purpose or purposes specified in the order calling for the special meeting.

Stockholder Action by Written Consent

The Ebix certificate of incorporation allows stockholder action to be taken not only at an annual or a special meeting of stockholders but also permits stockholders to act by written consent.

Advance Notice Requirements for Stockholder Proposals

The Ebix bylaws generally permit stockholders to bring business (other than nominations of persons for election as directors) before a meeting of the stockholders if the stockholder intending to bring such business gives timely notice thereof in proper written form to Ebix’s corporate secretary.




To be timely, a stockholder’s notice to Ebix’s corporate secretary must be delivered to or be mailed and received at Ebix’s principal office not fewer than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting of stockholders. If the annual meeting is called for a date that is not within 25 days before or after the anniversary date, then notice, in order to be timely, must be received no later than the close of business on the 10th day following the day on which the notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever occurs first.

To be in proper written form, a stockholder’s notice to Ebix’s corporate secretary must set forth certain information. As to each matter the stockholder proposes to bring before the annual meeting, the stockholder’s notice must include:

a brief description of the business desired to be brought before the annual meeting and the proposed text of any proposal regarding the business (including the text of any resolutions proposed for consideration and, if the business includes a proposal to amend the Ebix bylaws, the text of the proposed amendment); and

the reasons for conducting the business at the annual meeting.

Further, as to the stockholder giving notice and the beneficial owner, if any, on whose behalf the proposal is being made, the stockholder’s notice must include:

the name and address of the person;

(A) the class or series and number of all shares of Ebix stock which are owned beneficially or of record by such person and any affiliates or associates of such person, (B) the name of each nominee holder of shares of all Ebix stock owned beneficially but not of record by such person or any affiliates or associates of such person, and the number of such shares of Ebix stock held by each such nominee holder, (C) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, or any affiliates or associates of such person, with respect to Ebix stock and (D) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of Ebix stock) has been made by or on behalf of such person, or any affiliates or associates of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk or benefit of stock price changes for, such person, or any affiliates or associates of such person, or to increase or decrease the voting power or pecuniary or economic interest of such person, or any affiliates or associates of such person, with respect to Ebix stock;

a description of all agreements, arrangements, or understandings (whether written or oral) between or among such person, or any affiliates or associates of such person, and any other person or persons (including their names) in connection with or relating to (A) Ebix or (B) the proposal, including any material interest in, or anticipated benefit from the proposal to such person, or any affiliates or associates of such person;

a representation that the stockholder giving notice intends to appear in person or by proxy at the annual meeting to bring such business before the meeting; and

any other information relating to such person or proposal that would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies by such person with respect to the proposed business to be brought by such person before the annual meeting pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder.

Advance Notice Requirements for Director Nominations

The Ebix bylaws generally permit stockholders to nominate persons for election as directors if the stockholder intending to make such nomination gives timely notice thereof in writing in proper form.

To be timely, a stockholder’s notice must be received by Ebix’s corporate secretary no less than 90 days nor more than 120 days prior to the first anniversary of the immediately preceding year’s annual meeting of stockholders. If the annual



meeting is called for a date that is not within 25 days before or after such anniversary date, then notice, in order to be timely, must be received no later than the 10th day following the day on which notice of the date of the annual meeting was mailed or the date of such meeting is publicly announced, whichever occurs first. In the case of a special meeting of stockholders called for the purpose of electing directors, a stockholder’s notice must be received no later than the 10th day following the day on which the date of such special meeting is publicly announced.

To be in proper form, the notice must set forth certain information. As to each person whom the stockholder proposes to nominate for election as a director, the stockholder’s notice must include:

the name, age, business address and residence address of such person;

the principal occupation or employment of such person;

(A) the class or series and number of all shares of Ebix stock which are owned beneficially or of record by such person and any affiliates or associates of such person, (B) the name of each nominee holder of shares of all Ebix stock owned beneficially but not of record by such person or any affiliates or associates of such person, and the number of such shares of Ebix stock held by each nominee holder, (C) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, or any affiliates or associates of such person, with respect to Ebix stock and (D) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of Ebix stock) has been made by or on behalf of such person, or any affiliates or associates of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk or benefit of stock price changes for, such person, or any affiliates or associates of such person, or to increase or decrease the voting power or pecuniary or economic interest of such person, or any affiliates or associates of such person, with respect to Ebix stock;

such person’s written representation and agreement that such person (A) is not and will not become a party to any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of Ebix, will act or vote on any issue or question, (B) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than Ebix with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director of Ebix that has not been disclosed to Ebix in such representation and agreement and (C) in such person’s individual capacity, would be in compliance, if elected as a director of Ebix, and will comply with, all applicable publicly disclosed confidentiality, corporate governance, conflict of interest, Regulation FD, code of conduct and ethics, and stock ownership and trading policies and Ebix guidelines; and

any other information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder.

Further, as to the stockholder giving the notice, and the beneficial owner, if any, on whose behalf the nomination is being made, the stockholder’s notice must include:

the name and record address of the stockholder giving the notice and the name and principal place of business of such beneficial owner;

(A) the class or series and number of all shares of Ebix stock which are owned beneficially or of record by such person and any affiliates or associates of such person, (B) the name of each nominee holder of shares of Ebix stock owned beneficially but not of record by such person or any affiliates or associates of such person, and the number of shares of Ebix stock held by each such nominee holder; (C) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, or any affiliates or associates of such person, with respect to Ebix stock and (D) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of Ebix



stock) has been made by or on behalf of such person, or any affiliates or associates of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk or benefit of stock price changes for, such person, or any affiliates or associates of such person, or to increase or decrease the voting power or pecuniary or economic interest of such person, or any affiliates or associates of such person, with respect to Ebix stock;

a description of  (A) all agreements, arrangements, or understandings (whether written or oral) between such person, or any affiliates or associates of such person, and any proposed nominee, or any affiliates or associates of such proposed nominee, (B) all agreements, arrangements, or understandings (whether written or oral) between such person, or any affiliates or associates of such person, and any other person or persons (including their names) pursuant to which the nomination(s) are being made by such person, or otherwise relating to Ebix or their ownership of Ebix capital stock, and (C) any material interest of such person, or any affiliates or associates of such person, in such nomination, including any anticipated benefit therefrom to such person, or any affiliates or associates of such person;

a representation that the stockholder giving notice intends to appear in person or by proxy at the annual or special meeting to nominate the persons named in its notice; and

any other information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with the solicitation of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.

Undesignated Preferred Stock

The Ebix certificate of incorporation authorizes the issuance of undesignated or “blank check” preferred stock. The authorization of blank check preferred stock makes it possible for the Ebix Board to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of Ebix. These and other provisions may have the effect of deferring hostile takeovers or delaying changes in control or management of Ebix.

Amendment of Charter or Bylaw Provisions

The amendment of any of the above provisions would require approval by holders of at least a majority of the outstanding Ebix common stock.


EXECUTION VERSION 142283789_8 AMENDMENT NO. 11 TO CREDIT AGREEMENT AND WAIVER This AMENDMENT NO. 11 TO CREDIT AGREEMENT AND WAIVER (this “Amendment”), dated as of March 31, 2021, is entered into by and among EBIX, INC., a Delaware corporation (the “Borrower”), certain subsidiaries of the Borrower party hereto as guarantors (the “Guarantors” and collectively with the Borrower, the “Credit Parties”) under the Credit Agreement (defined below), each Lender under the Credit Agreement that is a party hereto and REGIONS BANK, as administrative agent (in such capacity, the “Administrative Agent”) and collateral agent (in such capacity, the “Collateral Agent”). RECITALS WHEREAS, the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent and certain banks and other financial institutions party thereto as lenders (the “Lenders”) are parties to that certain Credit Agreement, dated as of August 5, 2014 (as amended hereby, as amended by that certain Amendment No. 1 to Credit Agreement and Waiver dated as of February 3, 2015, as further amended by that certain Amendment No. 2 to Credit Agreement dated as of June 17, 2016, as further amended by that certain Amendment No. 3 to Credit Agreement and Waiver dated as of October 19, 2017, as further amended by that certain Amendment No. 4 to Credit Agreement and Waiver dated as of November 3, 2017, as further amended by that certain Amendment No. 5 to Credit Agreement (Incremental Increase) dated as of November 3, 2017, as further amended by that certain Amendment No. 6 to Credit Agreement dated as of February 21, 2018, as further amended by that certain Amendment No. 7 to Credit Agreement dated as of April 9, 2018, as further amended by that certain Amendment No. 8 to Credit Agreement (Including Incremental Increase) dated as of November 27, 2018, as further amended by that certain Amendment No. 9 to Credit Agreement dated as of September 27, 2019, as further amended by that certain Amendment No. 10 to Credit Agreement dated as of May 7, 2020, and as further amended, restated, extended, supplemented or otherwise modified from time to time, the “Credit Agreement”, and the Credit Agreement as in effect immediately prior to giving effect to this Amendment being referred to as the “Existing Credit Agreement”), pursuant to which the Lenders have extended a revolving credit facility and term loan facility to the Borrower; WHEREAS, the Borrower has requested that (a) the Existing Credit Agreement be amended as set forth below and (b) the Potential Events of Default (defined below) be waived as set forth below, in each case in a manner permitted by, and consistent with, Section 11.4 of the Existing Credit Agreement; NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Defined Terms. Unless otherwise defined herein, capitalized terms used herein shall have the meanings, if any, assigned to such terms in the Existing Credit Agreement. 2. Amendments. Subject to the terms and conditions hereof and with effect from and after the Eleventh Amendment Effective Date (as defined below), the Existing Credit Agreement (other than the Appendices, Schedules and Exhibits thereto) is hereby amended to (i) delete the stricken text (indicated textually in the same manner as the following example: stricken text), and (ii) to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text), in each case, as set forth in the amended Credit Agreement attached hereto as Annex I. 3. Waiver. Subject to the terms and conditions hereof and with effect from and after the Eleventh Amendment Effective Date, the Administrative Agent and the Lenders party hereto hereby waive any Event of Default arising from (a) the failure to comply with Section 7.1(b) of the Credit Agreement


 
2 142283789_8 (and any related requirement under Section 7.1(c) of the Credit Agreement) with respect to the Fiscal Year of the Borrower ended December 31, 2020, and (b) any event of the type described in clause (ii) of Section 9.1(b) of the Credit Agreement occurring with respect to any other Indebtedness solely as a result of a failure to deliver audited annual financial statements and/or any related compliance certificate or similar reporting with respect to the Fiscal Year of the Borrower ended December 31, 2020 (to the extent such Indebtedness has not become or been declared due and payable prior to its stated maturity as a result thereof) (clauses (a) and (b) collectively, the “Potential Events of Default”), provided that such waiver of the Potential Events of Default shall cease, and each Potential Event of Default shall (unless such Potential Event of Default would not in fact, absent the waiver provided herein, at any time have become an Event of Default under the Existing Credit Agreement or the Credit Agreement) automatically, immediately and without further action by the Administrative Agent or any Lender, be and become an Event of Default under the Credit Agreement, on April 10, 2021 (unless otherwise amended, waived or adjusted prior to such date by an agreement with respect thereto entered into in compliance with the Credit Agreement). For purposes of the definition of “Applicable Margin” in the Credit Agreement, the Compliance Certificate with respect to the Fiscal Year of the Borrower ended December 31, 2020 shall be deemed to be due by April 10, 2021 (unless otherwise amended, waived or adjusted prior to such date by an agreement with respect thereto entered into in compliance with the Credit Agreement). The waiver and other modifications set forth in this Amendment are limited to the extent specifically set forth in Sections 2 and 3 hereof and shall in no way serve to waive compliance with any other terms, covenants or provisions of the Credit Agreement or any other Credit Document, or any obligations of the Borrower or any other Credit Party, other than as expressly set forth herein. 4. Representations and Warranties. The Borrower and each of the other Credit Parties, by its execution of this Amendment, hereby represents and warrants to the Administrative Agent and the Lenders as follows: (a) the execution, delivery and performance by each Credit Party of this Amendment have been duly authorized by all necessary corporate or other organizational action and do not and will not (i) violate in any material respect the terms of any of the Credit Parties’ Organizational Documents; (ii) except as could not reasonably be expected to have a Material Adverse Effect, conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any other Contractual Obligations of any Credit Party, (iii) result in or require the creation of any Lien upon any of the properties or assets of any Credit Party (other than Liens created under any of the Credit Documents in favor of the Collateral Agent for the benefit of the holders of the Obligations), or (iv) require any approval of stockholders, members or partners or any approval or consent of any Person under any material Contractual Obligation of any Credit Party; (b) this Amendment has been duly executed and delivered by each Credit Party, and constitutes a legal, valid and binding obligation of each Credit Party, enforceable against such Credit Party in accordance with its terms, except as may be limited by Debtor Relief Laws or by equitable principles relating to enforceability; (c) immediately after giving effect to this Amendment, the representations and warranties of each Credit Party contained in Section 6 of the Credit Agreement and in each other Credit Document are true and correct in all material respects on and as of the Eleventh Amendment Effective Date, except to the extent that such representations and warranties specifically relate to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date, and except that for purposes


 
3 142283789_8 of this clause (c), the representations and warranties contained in Sections 6.7(a) and (b) of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to Sections 7.1(b) and (a) of the Credit Agreement, respectively. 5. Effectiveness; Conditions Precedent. The effectiveness of this Amendment and the related amendments to the Credit Agreement herein provided are each subject to the satisfaction of the following conditions precedent (the date of such satisfaction, the “Eleventh Amendment Effective Date”): (a) the Administrative Agent shall have received, in form and substance reasonably acceptable to the Administrative Agent, counterparts of this Amendment, duly executed by each Credit Party, the Administrative Agent and the Required Lenders; (b) each of the representations and warranties set forth in Section 4 above is true and correct in all material respects (or, with respect to any such representation or warranty modified by a materiality or Material Adverse Effect standard, in all respects (taking into account such materiality or Material Adverse Effect standard)); (c) immediately after giving effect to this Amendment, as of the Eleventh Amendment Effective Date, no Default or Event of Default shall have occurred and be continuing; and (d) the Administrative Agent, on behalf of each Lender approving this Amendment by submission of a signature page hereto (without conditions or escrow) at or prior to 3:00 p.m. New York time on March 31, 2021 (each, a “Consenting Lender”), shall have received a fee equal to 0.05% of the aggregate principal amount of the outstanding Term Loans and the Revolving Commitments (whether or not utilized) of all Consenting Lenders, such fee to be for the ratable account of, and paid by the Administrative Agent ratably to, each Consenting Lender; (e) the Administrative Agent shall have confirmation that all other fees payable by any Credit Party under this Amendment, under the Credit Agreement and under any engagement, commitment or fee letter with respect to this Amendment, and all reasonable and documented out-of-pocket fees and expenses required to be paid by any Credit Party on or before the Eleventh Amendment Effective Date in accordance with and subject to the limitations in Section 11.2 of the Credit Agreement, have been paid, including the reasonable and documented out-of-pocket fees and expenses of counsel for the Administrative Agent, in each case, to the extent invoiced prior to the date hereof (without prejudice to final settling of accounts for such fees and expenses); and 6. Reaffirmation. Each Credit Party, (a) acknowledges and consents to all of the terms and conditions of this Amendment, (b) affirms all of its obligations under the Credit Documents as amended and otherwise modified hereby, (c) agrees that this Amendment, and all documents executed in connection herewith, do not operate to reduce or discharge any Credit Party’s obligations under the Credit Documents, and (d) confirms that the Collateral Documents and the Liens granted thereunder remain in full force and effect notwithstanding the entry into this Amendment. 7. Waiver and Release of Claims. For good and valuable consideration, the sufficiency of which is hereby acknowledged, each Credit Party hereby voluntarily and knowingly releases and forever discharges the Administrative Agent (and any sub-agent thereof), the Collateral Agent (and any sub-agent thereof), each Lead Arranger, each Lender (whether or not a party hereto), the Swingline Lender and the Issuing Bank, and the respective Affiliates, directors, employees, advisors, auditors, agents and other


 
4 142283789_8 representatives of any of the foregoing Persons (each, a “Lender Party Released Person”), from all possible claims, demands, actions, causes of action, damages, costs, expenses and liabilities whatsoever, known or unknown, anticipated or unanticipated, suspected or unsuspected, fixed, contingent or conditional, at law or in equity, originating at any time on or before the Eleventh Amendment Effective Date, that in any way relate to or arise from this Amendment, the Credit Agreement, any other Credit Document, any extension of credit or any transactions contemplated hereunder or thereunder, which such Credit Party may have against any Lender Party Released Person and irrespective of whether or not any such claims arise out of contract, tort, violation of law or regulations, or otherwise, including the exercise of any rights and remedies under this Amendment, the Credit Agreement or any other Credit Document, or the negotiation, execution or implementation of this Amendment, the Credit Agreement or any other Credit Document. 8. Miscellaneous. (a) Except as herein expressly amended or otherwise modified, all terms, covenants and provisions of the Credit Agreement and each other Credit Document are and shall remain in full force and effect. All references in any Credit Document to the “Credit Agreement” or “this Agreement” (or similar terms intended to reference the Credit Agreement) shall henceforth refer to the Credit Agreement as amended and otherwise modified by this Amendment. This Amendment shall be deemed incorporated into, and a part of, the Credit Agreement. (b) This Amendment shall be binding upon and inure to the benefit of the parties hereto, each other Lender and each other Credit Party, and their respective successors and assigns. (c) THIS AMENDMENT IS SUBJECT TO THE PROVISIONS OF SECTIONS 11.13 AND 11.14 OF THE CREDIT AGREEMENT RELATING TO GOVERNING LAW, VENUE AND WAIVER OF RIGHT TO TRIAL BY JURY, THE PROVISIONS OF WHICH ARE BY THIS REFERENCE INCORPORATED HEREIN IN FULL. (d) This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Amendment and the other Credit Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Amendment shall become effective upon satisfaction of the conditions set forth in Section 5 hereof. Delivery of an executed counterpart of a signature page of this Amendment by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Amendment. This Amendment may not be amended except in accordance with the provisions of Section 11.4 of the Credit Agreement. (e) If any provision of this Amendment or the other Credit Documents is held to be illegal, invalid or unenforceable, (i) the legality, validity and enforceability of the remaining provisions of this Amendment and the other Credit Documents shall not be affected or impaired thereby and (ii) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. (f) The Borrower agrees to pay, in accordance with and subject to the limitations in Section 11.2 of the Credit Agreement, all reasonable and documented out-of-pocket expenses incurred by


 
5 142283789_8 the Administrative Agent and its Affiliates in connection with the preparation, execution, delivery, administration of this Amendment and the other instruments and documents to be delivered hereunder. (g) This Amendment shall constitute a “Credit Document” under and as defined in the Credit Agreement. [Signature Pages Follow.]


 


 
ADMINISTRATIVE AGENT AND COLLATERAL AGENT: REGIONS BANK,, as Administrative Agent and Collateral Agent ByTif u Name: Tyler Tirpak Title: Associate EBJX Inc. Signature Pages Amendment No. 11 to Credit Agreement and Waiver 142283789_8


 
LENDERS: REGIONS BANK, as a Lender, the Issuing Bank and the Swingline Lender By:tiK\ sidA4\ Name: Tyler Tirpak Title: Assocaite EBJX Inc. Signature Pages Amendment No. 11 to Credit Agreement and Waiver 142283789_8


 
142283789_8 Internal Use BMO HARRIS BANK N.A., as a Lender By: Name: Victor Davida Title: Vice President


 


 


 


 


 


 
142283789_8 Annex I See attached.


 
142964982_4 CREDIT AGREEMENT dated as of August 5, 2014 (as amended through and including, and as attached as Annex I to, that certain Amendment No. 11 to Credit Agreement and Waiver dated as of March 31, 2021) among EBIX, INC., as Borrower, CERTAIN SUBSIDIARIES OF THE BORROWER PARTY HERETO FROM TIME TO TIME, as Guarantors THE LENDERS PARTY HERETO FROM TIME TO TIME, REGIONS BANK, as Administrative Agent and Collateral Agent, PNC BANK, NATIONAL ASSOCIATION and BMO CAPITAL MARKETS CORP., as Syndication Agents, and BBVA COMPASS and FIFTH THIRD BANK, NATIONAL ASSOCIATION, as Documentation Agent REGIONS CAPITAL MARKETS, a division of Regions Bank, PNC CAPITAL MARKETS, LLC and BMO CAPITAL MARKETS CORP., as Joint Lead Arrangers and Joint Bookrunners


 
TABLE OF CONTENTS Page -i- 142964982_4 SECTION 1 DEFINITIONS AND INTERPRETATION ...................................................................... 1 Section 1.1 Definitions ............................................................................................................ 1 Section 1.2 Accounting Terms ............................................................................................... 41 Section 1.3 Pro Forma Calculations ...................................................................................... 41 Section 1.4 Rules of Interpretation ........................................................................................ 43 SECTION 2 LOANS AND LETTERS OF CREDIT ........................................................................... 44 Section 2.1 Revolving Loans and Term Loan A.................................................................... 44 Section 2.2 Swingline Loans ................................................................................................. 48 Section 2.3 Issuances of Letters of Credit and Purchase of Participations Therein ............... 51 Section 2.4 Pro Rata Shares; Availability of Funds ............................................................... 54 Section 2.5 Evidence of Debt; Register; Lenders’ Books and Records; Notes ..................... 55 Section 2.6 Scheduled Principal Payments ............................................................................ 55 Section 2.7 Interest on Loans ................................................................................................. 56 Section 2.8 Conversion/Continuation .................................................................................... 58 Section 2.9 Default Rate of Interest ....................................................................................... 59 Section 2.10 Fees ..................................................................................................................... 59 Section 2.11 Prepayments/Commitment Reductions ............................................................... 60 Section 2.12 Application of Prepayments ................................................................................ 63 Section 2.13 General Provisions Regarding Payments ............................................................ 63 Section 2.14 Sharing of Payments by Lenders ........................................................................ 64 Section 2.15 Cash Collateral .................................................................................................... 65 Section 2.16 Defaulting Lenders ............................................................................................. 66 Section 2.17 Removal or Replacement of Lenders .................................................................. 68 SECTION 3 YIELD PROTECTION .................................................................................................... 69 Section 3.1 Making or Maintaining LIBOR Loans ............................................................... 69 Section 3.2 Increased Costs ................................................................................................... 71 Section 3.3 Taxes ................................................................................................................... 73 Section 3.4 Designation of a Different Lending Office ......................................................... 76 SECTION 4 GUARANTY ................................................................................................................... 76 Section 4.1 The Guaranty ...................................................................................................... 76 Section 4.2 Obligations Unconditional .................................................................................. 77 Section 4.3 Reinstatement ..................................................................................................... 78 Section 4.4 Certain Additional Waivers ................................................................................ 78 Section 4.5 Remedies ............................................................................................................. 78 Section 4.6 Rights of Contribution ........................................................................................ 78 Section 4.7 Guarantee of Payment; Continuing Guarantee ................................................... 78 Section 4.8 Keepwell ............................................................................................................. 78 SECTION 5 CONDITIONS PRECEDENT ......................................................................................... 79 Section 5.1 Conditions Precedent to Initial Credit Extensions .............................................. 79 Section 5.2 Conditions to Each Credit Extension .................................................................. 81 SECTION 6 REPRESENTATIONS AND WARRANTIES ................................................................ 82


 
-ii- 142964982_4 Section 6.1 Organization; Requisite Power and Authority; Qualification ............................. 82 Section 6.2 Information, Equity Interests and Ownership ..................................................... 82 Section 6.3 Due Authorization............................................................................................... 82 Section 6.4 No Conflict ......................................................................................................... 82 Section 6.5 Governmental Consents ...................................................................................... 83 Section 6.6 Binding Obligation ............................................................................................. 83 Section 6.7 Financial Statements ........................................................................................... 83 Section 6.8 No Material Adverse Effect; No Default ............................................................ 84 Section 6.9 Tax Matters ......................................................................................................... 84 Section 6.10 Properties ............................................................................................................ 84 Section 6.11 Environmental Matters ....................................................................................... 84 Section 6.12 No Defaults ......................................................................................................... 85 Section 6.13 No Litigation or other Adverse Proceedings ...................................................... 85 Section 6.14 Governmental Regulation ................................................................................... 85 Section 6.15 Intellectual Property ............................................................................................ 86 Section 6.16 Pension Plans ...................................................................................................... 87 Section 6.17 Solvency ............................................................................................................. 88 Section 6.18 Compliance with Laws ....................................................................................... 88 Section 6.19 Disclosure ........................................................................................................... 88 Section 6.20 Insurance ............................................................................................................. 88 Section 6.21 Pledge Agreement and Security Agreement ....................................................... 88 Section 6.22 Mortgages ........................................................................................................... 89 SECTION 7 AFFIRMATIVE COVENANTS ..................................................................................... 89 Section 7.1 Financial Statements and Other Reports ............................................................. 89 Section 7.2 Existence ............................................................................................................. 91 Section 7.3 Payment of Taxes and Claims ............................................................................ 91 Section 7.4 Maintenance of Properties .................................................................................. 92 Section 7.5 Insurance ............................................................................................................. 92 Section 7.6 Inspections .......................................................................................................... 92 Section 7.7 Lenders Meetings ................................................................................................ 92 Section 7.8 Compliance with Laws and Material Agreements .............................................. 93 Section 7.9 Use of Proceeds .................................................................................................. 93 Section 7.10 Books and Records ............................................................................................. 93 Section 7.11 Additional Subsidiaries; Real Estate Assets ....................................................... 93 Section 7.12 Primary Depositary and Operating Accounts ..................................................... 96 Section 7.13 Further Assurances ............................................................................................. 96 Section 7.14 Intellectual Property ............................................................................................ 96 SECTION 8 NEGATIVE COVENANTS ............................................................................................ 97 Section 8.1 Indebtedness ....................................................................................................... 97 Section 8.2 Liens ................................................................................................................... 98 Section 8.3 Restricted Payments ............................................................................................ 99 Section 8.4 Burdensome Agreements .................................................................................... 99 Section 8.5 Investments ....................................................................................................... 100 Section 8.6 Use of Proceeds ................................................................................................ 101 Section 8.7 Financial Covenants .......................................................................................... 102 Section 8.8 Fundamental Changes ....................................................................................... 102 Section 8.9 Dispositions ...................................................................................................... 103


 
-iii- 142964982_4 Section 8.10 Sales and Lease-Backs ...................................................................................... 104 Section 8.11 Transactions with Affiliates .............................................................................. 104 Section 8.12 Conduct of Business ......................................................................................... 105 Section 8.13 Accounting Policies; Fiscal Year ...................................................................... 105 Section 8.14 Amendments to Organizational Agreements .................................................... 105 Section 8.15 [Reserved.] ........................................................................................................ 105 Section 8.16 Material IP Subsidiaries .................................................................................... 105 SECTION 9 EVENTS OF DEFAULT; REMEDIES; APPLICATION OF FUNDS ........................ 106 Section 9.1 Events of Default .............................................................................................. 106 Section 9.2 Remedies ........................................................................................................... 108 Section 9.3 Application of Funds ........................................................................................ 108 SECTION 10 AGENCY ....................................................................................................................... 109 Section 10.1 Appointment and Authority .............................................................................. 109 Section 10.2 Rights as a Lender ............................................................................................. 110 Section 10.3 Exculpatory Provisions ..................................................................................... 110 Section 10.4 Reliance by Agents ........................................................................................... 111 Section 10.5 Delegation of Duties ......................................................................................... 111 Section 10.6 Resignation or Removal of Agents ................................................................... 111 Section 10.7 Non-Reliance on Agents and Other Lenders .................................................... 112 Section 10.8 No Other Duties, etc ......................................................................................... 112 Section 10.9 Administrative Agent May File Proofs of Claim .............................................. 113 Section 10.10 Collateral Matters ............................................................................................. 113 SECTION 11 MISCELLANEOUS ...................................................................................................... 114 Section 11.1 Notices; Effectiveness; Electronic Communications ........................................ 114 Section 11.2 Expenses; Indemnity; Damage Waiver ............................................................. 116 Section 11.3 Set-Off .............................................................................................................. 118 Section 11.4 Amendments and Waivers ................................................................................ 118 Section 11.5 Successors and Assigns .................................................................................... 120 Section 11.6 Independence of Covenants .............................................................................. 124 Section 11.7 Survival of Representations, Warranties and Agreements ................................ 124 Section 11.8 No Waiver; Remedies Cumulative ................................................................... 124 Section 11.9 Marshalling; Payments Set Aside ..................................................................... 124 Section 11.10 Severability ....................................................................................................... 124 Section 11.11 Obligations Several; Independent Nature of Lenders’ Rights .......................... 124 Section 11.12 Headings ........................................................................................................... 125 Section 11.13 Governing Law; Jurisdiction; Etc ..................................................................... 125 Section 11.14 WAIVER OF JURY TRIAL ............................................................................. 125 Section 11.15 Confidentiality .................................................................................................. 126 Section 11.16 Usury Savings Clause ....................................................................................... 126 Section 11.17 Counterparts; Integration; Effectiveness ........................................................... 127 Section 11.18 No Advisory of Fiduciary Relationship ............................................................ 127 Section 11.19 Electronic Execution of Assignments and Other Documents ........................... 128 Section 11.20 USA PATRIOT Act .......................................................................................... 128 Section 11.21 Conflicts ............................................................................................................ 128 Section 11.22 Acknowledgement and Consent to Bail-In of EEA Financial Institutions ....... 128 Section 11.23 Certain ERISA Matters ..................................................................................... 129


 
-iv- 142964982_4 Appendices Appendix A Lenders, Commitments and Commitment Percentages Appendix B Notice Information Schedules Schedule 6.2 Equity Interests and Ownership Schedule 6.10(b) Real Estate Assets Schedule 6.15 Intellectual Property Schedule 6.20 Insurance Coverage Schedule 8.1 Existing Indebtedness Schedule 8.2 Existing Liens Schedule 8.4 Existing Burdensome Agreements Schedule 8.5 Existing Investments Exhibits Exhibit 1.1 Form of Secured Party Designation Notice Exhibit 2.1 Form of Funding Notice Exhibit 2.3 Form of Issuance Notice Exhibit 2.5-1 Form of Revolving Loan Note Exhibit 2.5-2 Form of Swingline Note Exhibit 2.5-3 Form of Term Loan A Note Exhibit 2.8 Form of Conversion/Continuation Notice Exhibit 3.3 Forms of U.S. Tax Compliance Certificates (Forms 1 – 4) Exhibit 7.1(c) Form of Compliance Certificate Exhibit 7.11 Form of Guarantor Joinder Agreement Exhibit 11.5 Form of Assignment Agreement


 
CREDIT AGREEMENT This CREDIT AGREEMENT, dated as of August 5, 2014 (as amended, restated, supplemented, increased, extended, supplemented or otherwise modified from time to time, this “Agreement”), is entered into by and among EBIX, INC., a Delaware corporation (the “Borrower”), certain Subsidiaries of the Borrower from time to time party hereto, as Guarantors, the Lenders from time to time party hereto, REGIONS BANK, as administrative agent (in such capacity, “Administrative Agent”) and collateral agent (in such capacity, “Collateral Agent”). RECITALS: WHEREAS, the Borrower has requested that the Lenders provide revolving credit and term loan facilities for the purposes set forth herein; and WHEREAS, the Lenders have agreed to make the requested facilities available on the terms and conditions set forth herein; NOW, THEREFORE, in consideration of these premises and the mutual covenants and agreements contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows: DEFINITIONS AND INTERPRETATIONSection 1 Definitions. The following terms used herein, including in the introductorySection 1.1 paragraph, recitals, exhibits and schedules hereto, shall have the following meanings: “Acquisition” by any Person, means the acquisition by such Person, in a single transaction or in a series of related transactions, of (a) Control, whether by the acquisition of more than 50% of the voting Equity Interests of another Person (including the purchase of an option, warrant or convertible or similar type Security to acquire such a Controlling interest at the time it becomes exercisable by the holder thereof) or otherwise, and whether by purchase of such Equity Interest or upon exercise of an option or warrant for, or conversion of securities into, such Equity Interest, or otherwise, or (b) assets of another Person which constitute all or any substantial portion of the assets of such Person, a division of such Person or a line or lines of business conducted by such Person, in each case whether or not involving a merger or consolidation with such other Person and whether for cash, property, services, assumption of Indebtedness, Securities or otherwise, in each case so long as such Person will be or become (including by merger or other combination with an existing Subsidiary), or such assets will be owned by, a Subsidiary of the acquiring Person. “Adjusted LIBOR Rate” means, for any Interest Rate Determination Date with respect to an Interest Period for an Adjusted LIBOR Rate Loan, the rate per annum obtained by dividing (a) (i) the rate per annum (rounded upward to the next whole multiple of one sixteenth of one percent) equal to the LIBOR as published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) for deposits (for delivery on the first day of such period) with a term equivalent to such period in Dollars, determined as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, or (ii) in the event the rate referenced in the preceding clause (i) does not appear on such page or service or if such page or service shall cease to be available, the rate per annum (rounded upward to the next whole multiple of one sixteenth of one percent) equal to the rate determined by the Administrative Agent to be the offered rate on such other page or other service which displays an average settlement rate for deposits (for delivery on the first day of such period) with a term equivalent to such period in Dollars, 130164155_5142964982_4


 
determined as of approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, by (b) an amount equal to (i) one, minus (ii) the Applicable Reserve Requirement. Notwithstanding anything contained herein to the contrary, the Adjusted LIBOR Rate shall not be less than 0.50%. “Adjusted LIBOR Rate Loan” means a Loan bearing interest based on the Adjusted LIBOR Rate. “Administrative Agent” has the meaning assigned thereto in the introductory paragraph hereto, together with its successors and permitted assigns. “Administrative Questionnaire” means an administrative questionnaire provided by the Lenders in a form supplied by the Administrative Agent. “Adverse Proceeding” means any action, suit, proceeding (whether administrative, judicial or otherwise), governmental investigation or arbitration (whether or not purportedly on behalf of any Credit Party or any of their respective Subsidiaries) at law or in equity, or before or by any Governmental Authority, whether pending, or to the knowledge of the Credit Parties, threatened in writing against any Credit Party or any of their respective Subsidiaries or any material property of any Credit Party or any of their respective Subsidiaries. “Affected Lender” has the meaning assigned thereto in Section 3.1(b). “Affected Loans” has the meaning assigned thereto in Section 3.1(b). “Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. “Agent” means each of the Administrative Agent and the Collateral Agent. “Aggregate Commitments” means the Commitments of all the Lenders. “Aggregate Revolving Commitments” means the Revolving Commitments of all the Lenders. The aggregate principal amount of the Aggregate Revolving Commitments in effect on the Sixth Amendment Effective Date is $400,000,000. “Agreement” has the meaning assigned thereto in the introductory paragraph hereto. “Anti-Corruption Laws” means the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq, the UK Bribery Act of 2010 and all other laws, rules, and regulations of any jurisdiction applicable to any Credit Party or any of its Affiliates from time to time concerning or relating to bribery or corruption. “Amendment No. 10 Effective Date” means May 7, 2020. “Amendment No. 11” means that certain Amendment No. 11 to Credit Agreement and Waiver dated as of, and which became effective on, the Amendment No. 11 Effective Date. “Amendment No. 11 Effective Date” means March 31, 2021. “Applicable Laws” means all applicable laws, including all applicable provisions of constitutions, statutes, rules, ordinances, regulations and orders of all Governmental Authorities and all orders, rulings, writs and decrees of all courts, tribunals and arbitrators.   2 130164155_5 142964982_4


 
“Applicable Margin” means (a) from the Amendment No. 10 Effective Date through the delivery of the Compliance Certificate for the fiscal quarter ending September 30, 2020, the percentage per annum based upon Pricing Level 6 in the table set forth below, and (b) thereafter, the percentage per annum determined by reference to the table set forth below using the Consolidated Net Leverage Ratio as set forth in the Compliance Certificate most recently delivered to the Administrative Agent pursuant to Section 7.1(c), with any increase or decrease in the Applicable Margin resulting from a change in the Consolidated Net Leverage Ratio becoming effective on the date two Business Days immediately following the date on which such Compliance Certificate is delivered. Pricing Level Consolidated Net Leverage Ratio Adjusted LIBOR Rate Loans and Letter of Credit Fee Base Rate Loans Commitment Fee 1 Less than 1.50 to 1.00 1.50% 0.50% 0.225% 2 Greater than or equal to 1.50 to 1.00, but less than 2.00 to 1.00 1.75% 0.75% 0.250% 3 Greater than or equal to 2.00 to 1.00, but less than 2.50 to 1.00 2.00% 1.00% 0.300% 4 Greater than or equal to 2.50 to 1.00, but less than 3.00 to 1.00 2.25% 1.25% 0.375% 5 Greater than or equal to 3.00 to 1.00 but less than 3.50 to 1.00 2.50% 1.50% 0.375% 6 Greater than or equal to 3.50 to 1.00 but less than 4.00 to 1.00 3.00% 2.00% 0.500% 7 Greater than or equal to 4.00 to 1.00 4.00% 3.00% 0.500% Notwithstanding the foregoing, (x) if at any time a Compliance Certificate is not delivered when due in accordance herewith, then Pricing Level 7 as set forth in the table above shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and shall remain in effect until the date on which such Compliance Certificate is delivered and (y) the determination of the Applicable Margin for any period shall be subject to the provisions of Section 2.7(e). The Applicable Margin with respect to any additional Term Loan established pursuant to Section 2.1(d)(iii) shall be as provided in the joinder document(s) and/or commitment agreement(s) executed by the Borrower and the applicable Lenders in connection therewith. “Applicable Reserve Requirement” means, at any time, for any LIBOR Loan, the maximum rate, expressed as a decimal, at which reserves (including any basic marginal, special, supplemental, emergency or other reserves) are required to be maintained with respect thereto against “Eurocurrency liabilities” (as such term is defined in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time) under regulations issued from time to time by the Board of Governors of the Federal Reserve System or other applicable banking regulator. Without limiting the effect of the foregoing, the Applicable Reserve Requirement shall reflect any other reserves required to be maintained by such member banks with respect to (a) any category of liabilities which includes deposits by reference to which the applicable Adjusted LIBOR Rate or LIBOR Index Rate or any other interest rate of a Loan is to be determined, or (b) any category of extensions of credit or other assets which include Adjusted LIBOR Rate Loans or Base Rate Loans determined by reference to the LIBOR Index Rate. Adjusted LIBOR Rate Loans and Base Rate Loans determined by reference to the LIBOR Index Rate shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without benefit of credit for pro ration, exception or offsets that may be available from time   3 130164155_5 142964982_4


 
to time to the applicable Lender. The rate of interest on Adjusted LIBOR Rate Loans and Base Rate Loans determined by reference to the LIBOR Index Rate shall be adjusted automatically on and as of the effective date of any change in the Applicable Reserve Requirement. “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender. “Asset Sale” means a sale, lease, sale and leaseback transaction, assignment, conveyance, exclusive license (as licensor), transfer or other disposition to, or any exchange of property with, any Person, in one transaction or a series of transactions, of all or any part of any Credit Party or any of its Subsidiaries’ businesses, assets or properties of any kind, whether real, personal, or mixed and whether tangible or intangible, whether now owned or hereafter acquired, created, leased or licensed, including the Equity Interests of any Subsidiary of the Borrower, other than (a) dispositions of surplus, damaged, obsolete or worn out property or property no longer used or useful in the business of the Borrower and its Subsidiaries, whether now owned or hereafter acquired, in the ordinary course of business, including abandonment of Intellectual Property Rights in the ordinary course of business; (b) dispositions of inventory, Owned Intellectual Property and Licensed Intellectual Property in the ordinary course of business; (c) dispositions of accounts or payment intangibles (each as defined in the UCC) resulting from the compromise or settlement thereof in the ordinary course of business for less than the full amount thereof; (d) dispositions of Cash Equivalents in the ordinary course of business; (e) licenses, sublicenses, leases or subleases granted to any third parties in arm’s-length commercial transactions in the ordinary course of business that do not interfere in any material respect with the business of the Borrower or any of its Subsidiaries; (f) dispositions among Credit Parties and Subsidiaries provided that if the transferor of such businesses, assets or properties is a Credit Party, the transferee thereof must be a Credit Party; (g) Investments permitted hereunder; (h) the EbixCash Offering and (i) the disposition of the Headquarters Real Estate Asset pursuant to a sale and leaseback transaction permitted by Section 8.9(i). “Assignment Agreement” means an assignment agreement entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.5(b)) and accepted by the Administrative Agent, in substantially the form of Exhibit 11.5 or any other form (including electronic documentation generated by MarkitClear or other electronic platform) approved by the Administrative Agent. “Attributable Principal Amount” means (a) in the case of Capital Leases, the amount of Capital Lease obligations determined in accordance with GAAP and (b) in the case of Synthetic Leases, an amount determined by capitalization of the remaining lease payments thereunder as if it were a Capital Lease determined in accordance with GAAP. “Authorized Officer” means, as applied to any Person, any individual holding the position of chairman of the board (if an officer), chief executive officer, president or one of its vice presidents (or the equivalent thereof), chief financial officer or treasurer and, solely for purposes of making the certifications required under Section 5.1(b)(ii), any secretary or assistant secretary. “Auto Borrow Agreement” has the meaning assigned thereto in Section 2.2(b)(vi). “Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution. “Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the   4 130164155_5 142964982_4


 
implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule. “Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute. “Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate in effect on such day plus 0.50% and (c) the LIBOR Index Rate in effect on such day (not to be less than 0.50%) plus 1.00%. Any change in the Base Rate due to a change in the Prime Rate, the Federal Funds Rate or the LIBOR Index Rate shall be effective on the effective day of such change in the Prime Rate, the Federal Funds Rate or the LIBOR Index Rate, respectively. Notwithstanding anything to the contrary herein, the Base Rate shall not be less than 1.50%. “Base Rate Loan” means a Loan bearing interest at a rate determined by reference to the Base Rate. “Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation. “Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230. “Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Internal Revenue Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Internal Revenue Code) the assets of any such “employee benefit plan” or “plan”. “Borrower” has the meaning assigned thereto in the introductory paragraph hereto. “Borrowing” means (a) a borrowing consisting of simultaneous Loans of the same Type of Loan and, in the case of Adjusted LIBOR Rate Loans, having the same Interest Period, or (b) a borrowing of Swingline Loans, as appropriate. “Business Day” means (a) any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or the State of Georgia or is a day on which banking institutions located in such state are authorized or required by law or other governmental action to close, and (b) with respect to all notices, determinations, fundings and payments in connection with the Adjusted LIBOR Rate and Adjusted LIBOR Rate Loans (and in the case of determinations, the Index Rate and Base Rate Loans based on the LIBOR Index Rate), the term “Business Day” means any day which is a Business Day described in clause (a) and which is also a day for trading by and between banks in Dollar deposits in the London interbank market. “Capital Lease” means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person. “Cash Collateralize” means, to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Issuing Bank or the Lenders, as collateral for the Letter of Credit Obligations or obligations of Lenders to fund participations in respect thereof, cash or deposit account balances or, if the Administrative Agent and the Issuing Bank may agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance reasonably satisfactory to the Administrative   5 130164155_5 142964982_4


 
Agent and the Issuing Bank. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support. “Cash Equivalents” means, as at any date of determination, any of the following: marketable securities (i) issued or directly and unconditionally guaranteed as to interest(a) and principal by the United States government, or (ii) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one year after the date of acquisition thereof; marketable direct obligations issued by any state of the United States or any political(b) subdivision of any such state or any public instrumentality thereof, in each case maturing within one year after the date of acquisition thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; commercial paper maturing within one year from the date of acquisition thereof and(c) having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; certificates of deposit, bankers’ acceptances and time deposits maturing within 270 days(d) from the date of acquisition thereof and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States or any state thereof or the District of Columbia that (i) is at least “adequately capitalized” (as defined in the regulations of its primary federal banking regulator), and (ii) has Tier 1 capital (as defined in such regulations) of not less than $100,000,000; fully collateralized repurchase agreements with a term of not more than 30 days for(e) securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (d) above; and shares of any money market mutual fund that (i) has substantially all of its assets invested(f) continuously in the types of investments referred to in clauses (a) and (b) above, (ii) has net assets of not less than $500,000,000, and (iii) has the highest rating obtainable from either S&P or Moody’s. “Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith, (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III and (iii) all requests, rules, guidelines or directives issued by a Governmental Authority in connection with a Lender’s submission or re-submission of a capital plan under 12 C.F.R. § 225.8 or a Governmental Authority’s assessment thereof shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.   6 130164155_5 142964982_4


 
“Change of Control” means an event or series of events by which: any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the(a) Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 35% or more of the Equity Interests of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); during any period of twenty-four consecutive months, a majority of the members of the(b) board of directors or other equivalent governing body of the Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body; or other than pursuant to any transaction not prohibited under this Agreement, the Borrower(c) shall cease to own, directly or indirectly, all of the Equity Interests of its Subsidiaries on a fully diluted basis except, with respect to any Foreign Subsidiary, to the extent necessary to qualify directors where required by applicable law or to satisfy other requirements of applicable law with respect to the ownership of Equity Interests of such Foreign Subsidiary. “Closing Date” means August 5, 2014. “Collateral” means the collateral identified in, and at any time covered by, the Collateral Documents. “Collateral Agent” has the meaning assigned thereto in the introductory paragraph hereto, together with its successors and permitted assigns. “Collateral Documents” means the Security Agreement, the Pledge Agreement, the Mortgages, the Security Joinder Agreements, Pledge Joinder Agreements, the Pledge Agreement Supplements and all other instruments, documents and agreements delivered by any Credit Party pursuant to this Agreement or any of the other Credit Documents in order to grant to the Collateral Agent, for the benefit of the Secured Parties, a Lien on any real, personal or mixed property of such Credit Party as security for the Obligations. “Commitments” means the Revolving Commitments and the Term Loan Commitments. “Commitment Fee” has the meaning assigned thereto in Section 2.10(a). “Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).   7 130164155_5 142964982_4


 
“Compliance Certificate” means a Compliance Certificate substantially in the form of Exhibit 7.1(c). “Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes. “Consolidated Capital Expenditures” means, without duplication, for any period for the Borrower and its Subsidiaries on a consolidated basis, any expenditure during such period for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP, excluding capital expenditures (a) made with the net proceeds of casualty insurance policies or proceeds received as a result of the taking of any assets of the Borrower or its Subsidiaries by any Person pursuant to the power of eminent domain, condemnation or otherwise (or pursuant to a sale of any such assets to a purchaser with such power under threat of such taking), (b) made with the proceeds of any Disposition permitted hereunder to the extent, and only to the extent, the capital expenditures made with such proceeds are made within 180 days following such Disposition, (c) which constitute a Permitted Acquisition hereunder or an Investment permitted pursuant to Section 8.5, (d) for assets or property to the extent, and only to the extent, that the consideration therefor consists of used, surplus or worn out property or assets or assets no longer used or useful in the business of the Borrower and its Subsidiaries and (e) as to which the Borrower or any of its Subsidiaries have been reimbursed by a Person other than the Borrower or a Subsidiary, which such exclusion shall be limited to the extent of such reimbursement. “Consolidated EBITDA” means, for any period, an amount determined for the Borrower and its Subsidiaries on a consolidated basis equal to Consolidated Net Income for such period plus the following (without duplication) to the extent deducted in calculating such Consolidated Net Income: (a) Consolidated Interest Charges for such period, (b) the provision for federal, state, local and foreign income taxes payable by the Borrower and its Subsidiaries for such period (net of tax refunds actually received), (c) all amounts attributable to depreciation and amortization expense for such period, (d) other non-cash charges or expenses for such period (excluding any such non-cash item to the extent it represents an accrual or reserve for potential cash items in any future period or amortization of a prepaid cash item that was paid in a prior period) including non-cash compensation expense in respect of stock option and other equity compensation plans, (e) the amount of run-rate costs savings, operating expense reductions, other operating improvements and synergies relating to any Investment, Acquisition, Disposition or incurrence or repayment of Indebtedness (each a “Relevant Transaction”) determined in good faith by the Borrower to be reasonably anticipated to be realized and for which a plan for realization shall have been established within 12 months following any such Relevant Transaction, net of the amount of actual benefits realized during such period from such actions, provided that amounts added back pursuant to this clause (e), when aggregated with amounts added back pursuant to clause (h) below, shall not exceed 10% of Consolidated EBITDA for such period (calculated prior to giving effect to any addbacks pursuant to any of clauses (e), (f), (h) or (j) of this definition), (f) reasonable and documented out-of-pocket fees and expenses incurred in connection with (i) the negotiation, documentation and syndication of this Agreement, any amendments, restatements,   8 130164155_5 142964982_4


 
supplements or other modifications thereto and the transactions contemplated hereby or thereby and (ii) the consummation of any Permitted Acquisition, in each case to the extent not capitalized, provided that amounts added back pursuant to this clause (f) shall not exceed 5% of Consolidated EBITDA for such period (calculated prior to giving effect to any addbacks pursuant to any of clauses (e), (f), (h) or (j) of this definition), (g) to the extent covered by insurance and actually reimbursed or otherwise paid, the amount of proceeds of liability or casualty events and the amount of proceeds of business interruption events; provided that (i) such insurance proceeds shall be deemed to have been received in the fiscal quarter in which the loss giving rise to the right of the Borrower or the applicable Subsidiary to receive such insurance proceeds actually occurred (the “Loss Quarter”), notwithstanding that such insurance proceeds were not actually received in such Loss Quarter, but were received in a subsequent fiscal quarter, (ii) any such insurance proceeds included in the calculation of Consolidated EBITDA pursuant to this clause (g) shall not be included when calculating Consolidated Net Income for any period of four fiscal quarters and (iii) no such insurance proceeds shall be used to calculate Consolidated EBITDA or any financial covenant for any period of four fiscal quarters that does not include such Loss Quarter, (h) the amount of cash expenses, charges or reserves incurred in implementing costs savings, operating expense reductions, other operating improvements and synergies in connection with Relevant Transactions during such period, provided that amounts added back pursuant to this clause (h), when aggregated with amounts added back pursuant to clause (e) above, shall not exceed 10% of Consolidated EBITDA for such period (calculated prior to giving effect to any addbacks pursuant to any of clauses (e), (f), (h) or (j) of this definition), (i) the amount paid in cash by the Borrower and its Subsidiaries during such period pursuant to that certain Order and Final Judgment entered by the Delaware Court of Chancery on April 5, 2019 approving that certain Stipulation and Agreement of Settlement dated January 23, 2019, among the Borrower, the other defendants and the plaintiffs in the litigation captioned In re Ebix, Inc. Stockholder Litigation, Consol. C.A. No. 8526-VCS, provided that aggregate amount added back pursuant to this clause (i) during the term of this Agreement shall not exceed $19,651,896, and (j) the amount of run-rate costs savings, operating expense reductions, other operating improvements and synergies relating to any restructurings, furloughs, or other employment reductions (“Cost-Savings Measures”) relating to actions taken or implemented during or prior to such period of measurement and determined in good faith by the Borrower to be reasonably anticipated to be realized within 12 months following the initial implementation of any such Cost-Savings Measure, net of the amount of any cash expended during such period in connection with such actions, provided that amounts added back pursuant to this clause (j) shall not exceed 10% of Consolidated EBITDA for such period (calculated prior to giving effect to any addbacks pursuant to any of clauses (e), (f), (h) or (j) of this definition). “Consolidated Fixed Charge Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated EBITDA for the period of the four Fiscal Quarters most recently ended minus Consolidated Capital Expenditures made during such period minus Taxes paid in cash during such period to (b) Consolidated Fixed Charges for the period of the four Fiscal Quarters most recently ended, all calculated for the Borrower and its Subsidiaries on a consolidated basis, subject to Section 1.3. “Consolidated Fixed Charges” means, for any period, without duplication, an amount equal to the sum of (a) the cash portion of Consolidated Interest Charges for such period plus (b) originally scheduled   9 130164155_5 142964982_4


 
principal payments of Indebtedness (including payments on account of Capital Leases) for such period plus (c) the amount of Permitted Restricted Payments in excess of $10,000,000 made in cash during such period, all calculated for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP (to the extent applicable to such calculation). “Consolidated Funded Indebtedness” means, at any date, the aggregate principal amount of all Indebtedness of the Borrower and its Subsidiaries (other than Indebtedness of the type described in clauses (e), (g) or (h) of such definition) at such date, determined on a consolidated basis in accordance with GAAP. “Consolidated Interest Charges” means, with reference to any period, total interest expense (including that attributable to Capital Leases) of the Borrower and its Subsidiaries for such period with respect to all outstanding Indebtedness of the Borrower and its Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under Swap Agreements in respect of interest rates to the extent such net costs are allocable to such period in accordance with GAAP), calculated on a consolidated basis for the Borrower and its Subsidiaries for such period in accordance with GAAP. “Consolidated Net Funded Indebtedness” means, at any date, (a) Consolidated Funded Indebtedness at such date minus (b) 100% of the unencumbered and unrestricted cash in excess of $5,000,000 of the Borrower and its Subsidiaries held in the United States or Canada minus (c) 80% of all other unencumbered and unrestricted cash of the Borrower and its Subsidiaries, provided that the aggregate amount of cash deducted pursuant to this clause (c) on any date of measurement shall not exceed $100,000,000. “Consolidated Net Income” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the net income (or loss) of the Borrower and its Subsidiaries for that period, as determined in accordance with GAAP, but excluding therefrom (to the extent otherwise included therein) (a) any extraordinary gains or losses or (b) any gains or losses attributable to a write-up or write-down of assets (including those resulting from any assets revalued upon the application of purchase accounting (including tangible and intangible assets, goodwill, deferred financing costs and inventory)). “Consolidated Net Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Net Funded Indebtedness as of such date to (b) Consolidated EBITDA for the period of the four Fiscal Quarters most recently ended, all calculated for the Borrower and its Subsidiaries on a consolidated basis, subject to Section 1.3. “Consolidated Working Capital Adjustment” means, for any period on a consolidated basis, the amount (which may be a negative number) by which Consolidated Working Capital as of the beginning of such period exceeds (or is less than) Consolidated Working Capital as of the end of such period. “Consolidated Working Capital” means, at any date, the excess (or deficit) of current assets of the Borrower and its Subsidiaries other than cash or Cash Equivalents on such date over current liabilities of the Borrower and its Subsidiaries on such date (other than (x) the current portion of any long-term indebtedness and (y) Revolving Loans, Swingline Loans and Letters of Credit), all determined on a consolidated basis in accordance with GAAP. “Contractual Obligation” means, as applied to any Person, any provision of any Security issued by that Person or of any indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject.  10 130164155_5 142964982_4


 
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise (which such power shall be presumed to exist with respect to any Person in the event that the auditors of the Borrower agree that such Person shall constitute a subsidiary and be consolidated with the Borrower in its financial statements under GAAP). “Controlling” and “Controlled” have meanings correlative thereto. “Conversion/Continuation Date” means the effective date of a continuation or conversion, as the case may be, as set forth in the applicable Conversion/Continuation Notice. “Conversion/Continuation Notice” means a Conversion/Continuation Notice substantially in the form of Exhibit 2.8. “Convertible Notes Hedges” means any convertible bond hedge transactions, call options or capped call options relating to the Borrower’s common stock (regardless of whether settled in the Borrower’s common stock, cash (in an amount based on share value at approximately the time of settlement, calculated in accordance with the applicable documents) or a combination thereof) purchased by the Borrower concurrently with any issuance of convertible notes permitted by Section 8.1(r) for the purpose of hedging the Borrower’s obligations thereunder (and not for speculative purposes). “Credit Date” means the date of a Credit Extension. “Credit Document” means any of this Agreement, each Note, each Issuer Document, the Collateral Documents, any Guarantor Joinder Agreement, the Fee Letter, any Auto Borrow Agreement, any document executed and delivered by the Borrower and/or any other Credit Party pursuant to which any Aggregate Revolving Commitments are increased pursuant to Section 2.1(d)(ii) or an additional Term Loan is established pursuant to Section 2.1(d)(iii), any documents or certificates executed by any Credit Party in favor of the Issuing Bank relating to Letters of Credit, and, to the extent evidencing or securing the Obligations, all other documents, instruments or agreements executed and delivered by any Credit Party for the benefit of any Agent, the Issuing Bank or any Lender in connection herewith or therewith (but specifically excluding any Secured Swap Agreements and Secured Treasury Management Agreements). “Credit Extension” means the making of a Loan or the issuing of a Letter of Credit. “Credit Parties” means, collectively, the Borrower and each Guarantor. “Debt Transaction” means, with respect to the Borrower or any of its Subsidiaries, any sale, issuance, placement, assumption or guaranty of Consolidated Funded Indebtedness, whether or not evidenced by a promissory note or other written evidence of Indebtedness, except for Indebtedness permitted to be incurred pursuant to Section 8.1. “Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect. “Default” means a condition or event that constitutes an Event of Default or that, after notice or lapse of time or both, would constitute an Event of Default.  11 130164155_5 142964982_4


 
“Default Rate” means an interest rate equal to (a) with respect to Obligations other than Adjusted LIBOR Rate Loans (including Base Rate Loans referencing the LIBOR Index Rate) and the Letter of Credit Fee, the Base Rate plus the Applicable Margin, if any, applicable to such Loans plus 2.00% per annum, (b) with respect to Adjusted LIBOR Rate Loans, the Adjusted LIBOR Rate plus the Applicable Margin, if any, applicable to Adjusted LIBOR Rate Loans plus 2.00% per annum and (c) with respect to the Letter of Credit Fee, the Applicable Margin plus 2.00% per annum. “Defaulting Lender” means, subject to Section 2.16(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied or (ii) pay to the Administrative Agent, the Issuing Bank, the Swingline Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swingline Loans) within two Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent or the Issuing Bank or the Swingline Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-in Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.16(b)) upon delivery of written notice of such determination to the Borrower, the Issuing Bank, the Swingline Lender and each Lender. “Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith. For the avoidance of doubt, any issuance or sale of Equity Interests of any Subsidiary of the Borrower shall constitute a Disposition. “Disqualified Equity Interests” means any Equity Interest that, by its terms (or by the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (a) matures (excluding any maturity as a result of an optional  12 130164155_5 142964982_4


 
redemption by the issuer thereof) or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Revolving Commitments), (b) is redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part, (c) provides for scheduled payments of dividends in cash, or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in any such case described in the preceding clauses (a) through (d), prior to the date that is four years after the latest (determined on the date of issuance of such Equity Interest) of (i) the Revolving Commitment Termination Date, (ii) the Term Loan A Maturity Date or (iii) the maturity date of any additional term loan established pursuant to Section 2.1(d). “Dollars” and the sign “$” mean the lawful money of the United States. “Domestic Subsidiary” means any Subsidiary organized under the laws of the United States, any state thereof or the District of Columbia. “Earn Out Obligations” means, with respect to an Acquisition, all obligations of the Borrower or any Subsidiary to make earn out or other contingency payments (including purchase price adjustments, non-competition and consulting agreements, or other indemnity obligations) pursuant to the documentation relating to such Acquisition. The amount of any Earn Out Obligations at the time of determination shall be the aggregate amount, if any, of such Earn Out Obligations that are required at such time under GAAP to be recognized as liabilities on the consolidated balance sheet of the Borrower. “EbixCash” means a Subsidiary of the Borrower that, at the time of the issuance or offering of Equity interests in such Subsidiary, owns (together with its Subsidiaries (if any)) those certain assets of the Borrower and its Subsidiaries primarily involved with its “phygital” online strategy in countries outside the United States. “EbixCash Offering” means an offering to Persons other than the Borrower or any Subsidiary of the Borrower of the Equity Interests of EbixCash for cash. “EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent. “EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway. “EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution. “Eighth Amendment Effective Date” means November 27, 2018. “Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 11.5(b), subject to any consents and representations, if any as may be required therein.  13 130164155_5 142964982_4


 
“Environmental Claim” means any known investigation, written notice, notice of violation, written claim, action, suit, proceeding, written demand, abatement order or other written order or directive (conditional or otherwise), by any Person arising (a) pursuant to or in connection with any actual or alleged violation of any Environmental Law, (b) in connection with any Hazardous Material or any actual or alleged Hazardous Materials Activity or (c) in connection with any actual or alleged damage, injury, threat or harm to human health, safety, natural resources or the environment. “Environmental Indemnity Agreement” means the Environmental Indemnity Agreement dated as of the Closing Date made by the Credit Parties in favor of the Administrative Agent and Collateral Agent, for the benefit of the Secured Parties. “Environmental Laws” means any and all current or future federal or state (or any subdivision of either of them), statutes, ordinances, orders, rules, regulations, judgments, Governmental Authorizations, or any other written requirements of Governmental Authorities relating to (a) any Hazardous Materials Activity, (b) the generation, use, storage, transportation or disposal of Hazardous Materials or (c) protection of human health and the environment from pollution, in any manner applicable to any Credit Party or any of its Subsidiaries or their respective Facilities. “Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, any other Credit Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which Borrower or any Subsidiary assumed liability with respect to any of the foregoing. “Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended to the date hereof and from time to time hereafter, any successor statute, and the regulations thereunder. “ERISA Affiliate” means, as applied to any Person, (a) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member, (b) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member and (c) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any corporation described in clause (a) above or any trade or business described in clause (b) above is a member. “ERISA Event” means (a) a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which notice  14 130164155_5 142964982_4


 
to the PBGC has been waived by regulation), (b) the failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(c) of the Internal Revenue Code), the failure to make by its due date any minimum required contribution or any required installment under Section 430(j) of the Internal Revenue Code with respect to any Pension Plan or the failure to make by its due date any required contribution to a Multiemployer Plan, (c) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such Pension Plan in a distress termination described in Section 4041(c) of ERISA, (d) the withdrawal from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan, (e) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition reasonably likely to constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan, (f) the imposition of liability pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA, (g) the withdrawal of any Credit Party, any of its Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan, or the receipt by any Credit Party, any of their respective Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it is in “critical” or “endangered” status within the meaning of Section 305 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA, (h) the imposition of fines, penalties, taxes or related charges under Chapter 43 of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Pension Plan, (i) the assertion of a claim (other than routine claims for benefits and funding obligations in the ordinary course) against any Pension Plan other than a Multiemployer Plan or the assets thereof, or against any Person in connection with any Pension Plan such Person sponsors or maintains, (j) receipt from the Internal Revenue Service of a final written determination of the failure of any Pension Plan intended to be qualified under Section 401(a) of the Internal Revenue Code to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any such Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code or (k) the imposition of a lien pursuant to Section 430(k) of the Internal Revenue Code or pursuant to Section 303(k) or 4068 of ERISA. “EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time. “Event of Default” has the meaning assigned thereto in Section 9.1. “Excess Cash Flow” means, for the Borrower and its Subsidiaries on a consolidated basis, in accordance with GAAP for any fiscal year, the excess (if any) of: (a) the sum, without duplication, of (i) Consolidated EBITDA for such fiscal year, and (ii) the Consolidated Working Capital Adjustment (which may be negative) for such fiscal year, minus (b) the sum, without duplication, of (i) Consolidated Interest Charges paid in cash or accrued for such period (excluding the portion of rent expense of the Borrower and its Subsidiaries with respect to such period under Synthetic Leases or Capital Leases or in connection with the deferred purchase price of assets that is treated as interest in accordance with GAAP),  15 130164155_5 142964982_4


 
(ii) the aggregate amount of scheduled or (other than in respect of Loans) voluntary principal payments or repayments of Indebtedness made by the Borrower or any of its Subsidiaries during such fiscal year, but only to the extent that such payments or repayments by their terms cannot be reborrowed or redrawn and are neither made with the proceeds of long-term Indebtedness nor otherwise occur in connection with a refinancing of all or any portion of such Indebtedness, (iii) all taxes actually paid in cash by the Borrower and its Subsidiaries, (iv) Consolidated Capital Expenditures and Permitted Acquisitions actually made in cash by the Borrower and its Subsidiaries in such fiscal year, in each case to the extent made with internally generated funds or extensions of credit under revolving credit facilities, (v) other items added to Consolidated Net Income in determining Consolidated EBITDA pursuant to any of clauses (f), (h) or (i) of the definition thereof, to the extent paid in cash during such fiscal year, (vi) all other non-cash items increasing Consolidated EBITDA for such fiscal year, (vii) Earn Out Obligations arising from Investments (including Permitted Acquisitions) permitted hereunder that are actually paid in cash during such period with internally generated funds or extensions of credit under revolving credit facilities, and (viii) cash expenditures in respect of Swap Agreements during such fiscal year. “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute. “Excluded Disqualified Equity Interests” means (a) the Yatra Disqualified Equity Interests in an aggregate issued amount not to exceed $260,000,000 at any time outstanding and (b) Permitted Disqualified Equity Interests in an aggregate amount not to exceed $75,000,000 at any time outstanding. “Excluded Perfection Action” means (a) the obtaining of control agreements or other control or similar arrangements with respect to deposit accounts, securities accounts or other assets requiring perfection by control (but not, for the avoidance of doubt, control by possession, including of certificated Equity Interests) other than Qualifying Control Agreements (as defined in the Security Agreement) with respect to Material Accounts to the extent requested by the Administrative Agent, (b) any requirement to obtain leasehold mortgages with respect to any leasehold interest (including with respect to improvements owned by any Credit Party on any leased premises), (c) any requirement to obtain landlord waivers, estoppels or collateral access letters other than, upon the request of the Administrative Agent, with respect to any Material Leased Property, (d) the perfection of motor vehicles, rolling stock and other assets subject to certificates of title (to the extent not perfected by the filing of a Form UCC-1 financing statement), (e) the perfection of commercial tort claims other than Material Commercial Tort Claims (to the extent not perfected by the filing of a Form UCC-1 financing statement), (f) the perfection of any intellectual property held in non-U.S. jurisdictions (to the extent not perfected by the filing of a Form UCC-1 financing statement or the filing of notices or security agreements with the United States Patent and Trademark Office or Copyright Office) and (g) the perfection of letter of credit rights other than Material Letter of Credit Rights (to the extent not perfected by the filing of a Form UCC-1 financing statement).  16 130164155_5 142964982_4


 
“Excluded Property” means, with respect to the Borrower and each other Credit Party, including any Person that becomes a Credit Party after the Closing Date as contemplated by Section 7.11, (a) any equipment that is subject to a Capital Lease or operating lease or a Lien securing purchase money obligations of any Credit Party that are, in each case, permitted to be incurred under this Agreement or the other Credit Documents, to the extent that the contract or other agreement in which such Lien is granted (or in the documentation providing for such lease) prohibits or requires the consent of any Person other than any Credit Party as a condition to the creation of any other Lien on such equipment, but only, in each case, to the extent, and for so long as, such consent has not been obtained and the Indebtedness secured by the applicable Lien or the lease has not been repaid in full or the applicable prohibition (or consent requirement) has not otherwise been removed or terminated, (b) any property to the extent that the grant of a Lien therein would violate Applicable Laws, require a consent not obtained of any Governmental Authority, or constitute a breach of or default under, or result in the termination of or require a consent not obtained under, any contract, lease, license or other agreement evidencing or giving rise to such property, or result in the invalidation thereof or provide any party thereto with a right of termination (other than to the extent that any such term would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the applicable UCC or any other Applicable Law or principles of equity), (c) any certificates, licenses and other authorizations issued by any Governmental Authority to the extent that Applicable Laws prohibit the granting of a security interest therein, (d) any “intent-to-use” trademark application prior to the filing of a “Statement of Use” or “Amendment to Allege Use” with respect thereto, to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of such “intent-to-use” trademark application under Applicable Law, (e) letter of credit rights to the extent not perfected by the filing of a customary UCC financing statement or otherwise representing proceeds of other Collateral, other than Material Letter of Credit Rights, (f) any Equity Interests in any Person which is not wholly-owned, directly or indirectly, by the Borrower and one or more of its Subsidiaries if, and to the extent that, the granting of a security interest therein would, under the express terms of the organizational documents of such Person, be prohibited or restricted, but only so long as (i) the applicable Credit Party has not been able to obtain the consent of the other holders of the Equity Interests in such Person and (ii) such prohibition or restriction is not enforceable or is otherwise ineffective under Applicable Law (including the UCC), (g) proceeds and products of any and all of the foregoing excluded property described in clauses (a) through (f) above only to the extent such proceeds and products would constitute property or assets of the type described in clauses (a) through (f) above, and (h) those assets as to which the Administrative Agent and the Borrower reasonably determine that the cost (including the cost of adverse tax consequences) of obtaining, perfecting or maintaining such a Lien exceeds the fair market value thereof or is excessive in relation to the practical benefit to the holders of the Obligations of the security to be afforded thereby; provided that the Lien granted to the Collateral Agent under the Security Agreement, the Pledge Agreement or any other Credit Document shall attach immediately to any asset of any Credit Party at such time as such asset ceases to meet any of the criteria for “Excluded Property” described in any of the foregoing clauses (a) through (h) above. “Excluded Subsidiary” means any Domestic Subsidiary that (a) has no material assets other than Equity Interests or Indebtedness of a Foreign Subsidiary, (b) is owned directly or indirectly by a Foreign Subsidiary, (c) is prohibited by any Applicable Law from providing a Guaranty, or which would require governmental (including regulatory) consent, approval, license or authorization to provide a Guaranty, in each case, unless such consent, approval, license or authorization has been received (but without obligation to seek the same), (d) is not Wholly-Owned and is prohibited from providing a Guaranty by any contractual obligation in existence (i) on the Sixth Amendment Effective Date or (ii) at the time of the acquisition of such Subsidiary after the Sixth Amendment Effective Date (to the extent such prohibition was not entered into in contemplation of such acquisition), or (e) with respect to which, in the reasonable judgment of the Borrower and the Administrative Agent, the cost or other consequences (including any  17 130164155_5 142964982_4


 
adverse tax consequences) of providing a Guaranty and granting Collateral shall be excessive in view of the benefits to be obtained by the Lenders therefrom. “Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Guarantor of, or the grant under a Credit Document by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act (or the application or official interpretation thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act (determined after giving effect to Section 4.8 and any and all Guarantees of such Guarantor’s Swap Obligations by other Credit Parties) at the time the Guaranty of such Guarantor, or grant by such Guarantor of a security interest, becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a Master Agreement governing more than one Swap Agreement, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to Swap Agreements for which such Guarantee or security interest is or becomes excluded in accordance with the first sentence of this definition. “Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.17 or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 3.3, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 3.3(f) and (d) any U.S. federal withholding Taxes imposed under FATCA. “Existing Credit Agreement” means that certain Credit Agreement, dated as of April 26, 2012, by and among the Borrower, the lenders party thereto, and Citibank, N.A., as administrative agent, as amended, restated, supplemented or otherwise modified through the Closing Date. “Facility” means any real property including all buildings, fixtures or other improvements located on such real property now, hereafter or heretofore owned, leased, operated or used by the Borrower or any of its Subsidiaries or any of their respective predecessors. “FATCA” means Sections 1471 through 1474 of the Internal Revenue Code as of the date of this Agreement (or any amended or successor version to the extent substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code and any applicable intergovernmental agreements with respect thereto. “Federal Funds Rate” means for any day, the rate per annum (expressed, as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%) equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided, (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on  18 130164155_5 142964982_4


 
the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to Regions Bank or any other Lender selected by the Administrative Agent on such day on such transactions as determined by the Administrative Agent. “Fee Letter” means that certain letter agreement dated as of January 3, 2018, among the Borrower, Regions Bank and Regions Capital Markets, a division of Regions Bank (which replaced that certain letter agreement dated as of April 13, 2016 among the Borrower, Regions Bank and Regions Capital Markets, a division of Regions Bank as of the Sixth Amendment Effective Date). “Financial Officer Certification” means, with respect to the financial statements for which such certification is required, the certification of either the chief financial officer or the corporate vice president – finance and human resources of the Borrower that such financial statements fairly present, in all material respects, the financial condition of the Borrower and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject to, in the case of interim statements, changes resulting from audit and normal year-end adjustments and the absence of footnotes. “First Tier Foreign Subsidiary” means any Foreign Subsidiary owned directly by any Credit Party. “Fiscal Quarter” means a fiscal quarter of any Fiscal Year, including the last fiscal quarter of each Fiscal Year as appropriate. “Fiscal Year” means the fiscal year of the Borrower and its Subsidiaries ending on December 31 of each calendar year. “Flood Hazard Property” means any Real Estate Asset subject to a Mortgage and located in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards. “Foreign Lender” means any Lender that is not a U.S. Person. “Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary. “Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to the Issuing Bank, such Defaulting Lender’s Revolving Commitment Percentage of the outstanding Letter of Credit Obligations with respect to Letters of Credit issued by the Issuing Bank other than Letter of Credit Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to the Swingline Lender, such Defaulting Lender’s Revolving Commitment Percentage of outstanding Swingline Loans made by such Swingline Lender other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders. “Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities. “Funding Notice” means a notice substantially in the form of Exhibit 2.1.  19 130164155_5 142964982_4


 
“GAAP” means, subject to the limitations on the application thereof set forth in Section 1.2, accounting principles generally accepted in the United States in effect as of the date of determination thereof. “Global Unrestricted Cash” means unencumbered and unrestricted cash of the Borrower and its Subsidiaries held in any jurisdiction. “Governmental Acts” means any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority. “Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank and any group or body charged with setting financial accounting or regulatory capital rules or standards). “Governmental Authorization” means any permit, license, authorization, plan, directive, consent order or consent decree of or from any Governmental Authority. “Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning. “Guarantor Joinder Agreement” means a guarantor joinder agreement substantially in the form of Exhibit 7.11 delivered by a Domestic Subsidiary of the Borrower pursuant to Section 7.11. “Guarantors” means (a) each Person identified as a “Guarantor” on the signature pages hereto, (b) each other Person that joins as a Guarantor pursuant to Section 7.11, (c) with respect to (i) Secured Swap Obligations, (ii) Secured Treasury Management Obligations, and (iii) Swap Obligations of a Specified Credit Party (determined before giving effect to Sections 4.1 and 4.8) under the Guaranty hereunder, the Borrower, and (d) each of their respective successors and permitted assigns. “Guaranty” means the Guarantee made by the Guarantors in favor of the Collateral Agent, for the benefit of the Secured Parties, pursuant to Section 4.  20 130164155_5 142964982_4


 
“Hazardous Materials” means any hazardous substances defined by the Comprehensive Environmental Response Compensation and Liability Act, 42 USCA 9601, et. seq., as amended, including any hazardous waste as defined under 40 C.F.R. Parts 260-270, gasoline or petroleum (including crude oil or any fraction thereof), asbestos or polychlorinated biphenyls. “Hazardous Materials Activity” means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Materials, including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing. “Headquarters Real Estate Asset” means that certain Real Estate Asset owned by the Borrower and serving as its headquarters and located at 1 Ebix Way, Johns Creek, Georgia 30097. “Highest Lawful Rate” means the maximum lawful interest rate, if any, that at any time or from time to time may be contracted for, charged, or received under Applicable Laws relating to any Lender which are currently in effect or, to the extent allowed under such Applicable Laws, which may hereafter be in effect and which allow a higher maximum nonusurious interest rate than Applicable Laws now allow. “Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP (except as provided in clause (b) below): all obligations for borrowed money, whether current or long-term (including the(a) Obligations hereunder), all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments but specifically excluding trade payables incurred in the ordinary course of business; all obligations in respect of the deferred purchase price of property or services (other than(b) trade accounts payable in the ordinary course of business and, in each case, not past due for more than ninety days after the date on which such trade account payable was created), including any Earn Out Obligations or other similar deferred or contingent obligations incurred in connection with any Acquisition recognized as a liability on the balance sheet of the Borrower and its Subsidiaries in accordance with GAAP; all obligations under letters of credit (including standby and commercial), bankers’(c) acceptances and similar instruments (including bank guaranties); the Attributable Principal Amount of Capital Leases and Synthetic Leases;(d) Disqualified Equity Interests (other than the Excluded Disqualified Equity Interests,(e) which shall not constitute Indebtedness for any purpose under this Agreement); all Guarantees in respect of Indebtedness of another Person;(f) net obligations under any Swap Agreement or any Convertible Notes Hedges;(g) all Indebtedness of others secured by (or for which the holder of such Indebtedness has(h) an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed; and  21 130164155_5 142964982_4


 
all Indebtedness of the types referred to in clauses (a) through (h) above of any(i) partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company or comparable construct under the laws of a jurisdiction other than the United States) in which the Borrower or a Subsidiary is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to the Borrower or such Subsidiary. For purposes hereof, the amount of Indebtedness shall be determined (i) based on the outstanding principal amount in the case of borrowed money indebtedness under clause (a) and purchase money indebtedness and the deferred purchase obligations under clause (b), (ii) based on the maximum amount available to be drawn in the case of letter of credit obligations and the other obligations under clause (c), (iii) based on the amount of Indebtedness that is the subject of the Guarantees in the case of Guarantees under clause (f), (iv) based on Swap Termination Value in the case of net obligations under any Swap Agreement under clause (g) and (v) in the case of any Indebtedness of the type described in clause (h) that is nonrecourse to the credit of that Person, to be the lesser of (x) the fair market value of such property and (y) the amount of the Indebtedness secured thereby. “Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Credit Party under any Credit Document and (b) to the extent not otherwise described in clause (a), Other Taxes. “Indemnitee” has the meaning assigned thereto in Section 11.2(b). “Index Rate” means, for any Index Rate Determination Date with respect to any Base Rate Loans determined by reference to the Index Rate, the rate per annum (rounded upward to the next whole multiple of 1/16 of 1%) equal to the LIBOR as published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) for deposits with a term equivalent to one month in Dollars, determined as of approximately 11:00 a.m. (London, England time) two Business Days prior to such Index Rate Determination Date, or (b) in the event the rate referenced in the preceding clause (a) does not appear on such page or service or if such page or service shall cease to be available, the rate per annum (rounded upward to the next whole multiple of 1/16 of 1%) equal to the rate determined by the Administrative Agent to be the offered rate on such other page or other service which displays an average settlement rate for deposits with a term equivalent to one month in Dollars, determined as of approximately 11:00 a.m. (London, England time) two Business Days prior to such Index Rate Determination Date. Notwithstanding anything contained herein to the contrary, the Index Rate shall not be less than 0.50%. “Index Rate Determination Date” means the Closing Date and the first Business Day of each calendar month thereafter; provided that, solely for purposes of the definition of Base Rate, Index Rate Determination Date means the date of determination of the Base Rate. “Intellectual Property Rights” means all actual or prospective rights arising in connection with any intellectual property or other proprietary rights, including all rights arising in connection with copyrights, patents, service marks, trade dress, trade secrets, trademarks, trade names or mask works. “Interest Payment Date” means with respect to (a) any Base Rate Loan and any Swingline Loan, the last Business Day of each calendar quarter, commencing on the first such date to occur after the Closing Date and the final maturity date of such Loan; and (b) any LIBOR Loan, the last day of each Interest Period applicable to such Loan; provided, in the case of each Interest Period of longer than three months “Interest Payment Date” shall also include each date that is three months, or an integral multiple thereof, after the commencement of such Interest Period.  22 130164155_5 142964982_4


 
“Interest Period” means, in connection with an Adjusted LIBOR Rate Loan, an interest period of one, two, three or six months, as selected by the Borrower in the applicable Funding Notice or Conversion/Continuation Notice, (a) initially, commencing on the Credit Date or Conversion/Continuation Date thereof, as the case may be; and (b) thereafter, commencing on the day on which the immediately preceding Interest Period expires; provided, (i) if an Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day unless no further Business Day occurs in such month, in which case such Interest Period shall expire on the immediately preceding Business Day; (ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (iii) of this definition, end on the last Business Day of a calendar month; (iii) no Interest Period with respect to any Term Loan shall extend beyond any principal amortization payment date, except to the extent that the portion of such Loan comprised of Adjusted LIBOR Rate Loans that is expiring prior to the applicable principal amortization payment date plus the portion comprised of Base Rate Loans equals or exceeds the principal amortization payment then due; and (iv) no Interest Period with respect to any portion of the Revolving Loans shall extend beyond the Revolving Commitment Termination Date. “Interest Rate Determination Date” means, with respect to any Interest Period, the date that is two Business Days prior to the first day of such Interest Period. “Internal Revenue Code” means the Internal Revenue Code of 1986. “Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other Person, or (c) an Acquisition. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested (without adjustment for subsequent increases or decreases in the value of such Investment) less any amount realized in respect of such Investment upon the sale, collection or return of capital (not to exceed the original amount invested). For the avoidance of doubt, Investments shall not include payments by a Credit Party to any Subsidiary on account of goods and services provided to such Credit Party by such Subsidiary, in each case to the extent such payment is permitted by Section 8.11. “Involuntary Disposition” means the receipt by the Borrower or any of its Subsidiaries of any cash insurance proceeds or condemnation awards payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any of its Property. “IRS” means the United States Internal Revenue Service. “ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance of such Letter of Credit). “Issuance Notice” means an Issuance Notice substantially in the form of Exhibit 2.3. “Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the Issuing Bank and the Borrower (or any Subsidiary) or in favor of the Issuing Bank and relating to such Letter of Credit.  23 130164155_5 142964982_4


 
“Issuing Bank” means Regions Bank, in its capacity as issuer of Letters of Credit hereunder, together with its permitted successors and permitted assigns in such capacity. “LCA Election” means the Borrower’s election to treat a specified Acquisition permitted hereby as a Limited Condition Acquisition. “Lead Arrangers” means, collectively, Regions Capital Markets, PNC Capital Markets, LLC and BMO Capital Markets Corp., in their respective capacities as joint lead arrangers and joint bookrunners. “Lender” means each financial institution with a Term Loan Commitment or a Revolving Commitment, together with its successors and permitted assigns. The initial Lenders are identified on the signature pages hereto and are set forth on Appendix A. “Letter of Credit” means any standby letter of credit issued hereunder. “Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the Issuing Bank. “Letter of Credit Borrowing” means any Credit Extension resulting from a drawing under any Letter of Credit that has not been reimbursed or refinanced as a Borrowing of Revolving Loans. “Letter of Credit Fee” has the meaning assigned thereto in Section 2.10(b)(i). “Letter of Credit Obligations” means, at any time, the sum of (a) the maximum undrawn amount available to be drawn under Letters of Credit then outstanding, assuming compliance with all requirements for drawings referenced therein, plus (b) the aggregate amount of all drawings under Letters of Credit that have not been reimbursed by the Borrower, including Letter of Credit Borrowings. For all purposes of this Agreement, (i) amounts available to be drawn under Letters of Credit will be calculated as provided in Section 1.4(h), and (ii) if a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn. “Letter of Credit Sublimit” means, as of any date of determination, the lesser of (a) $30,000,000 and (b) the Aggregate Revolving Commitments then in effect. “LIBOR” means the London Interbank Offered Rate. “LIBOR Index Rate” means, for any Index Rate Determination Date, the rate per annum obtained by dividing (a) the Index Rate by (b) an amount equal to (i) one, minus (ii) the Applicable Reserve Requirement. “LIBOR Loan” means a Loan bearing interest at a rate determined by reference to the Adjusted LIBOR Rate or LIBOR Index Rate (including a Base Rate Loan referencing the LIBOR Index Rate), as applicable. “LIBOR Replacement Rate” means as defined in Section 3.1(h). “LIBOR Scheduled Unavailability Date” means as defined in Section 3.1(h). “Licensed Intellectual Property” means any Intellectual Property Rights which the Borrower or any of its Subsidiaries licenses from another Person.  24 130164155_5 142964982_4


 
“Lien” means (a) any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease or license in the nature thereof) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing, and (b) in the case of Securities, any purchase option, call or similar right of a third party with respect to such Securities. “Limited Condition Acquisition” means any Permitted Acquisition or other Acquisition by the Borrower or one or more of its Subsidiaries permitted by this Agreement (other than an intercompany Acquisition) whose consummation is not conditioned on the availability of, or on obtaining, third party financing and with respect to which (i) the outside date for the consummation thereof occurs no more than 180 days after the relevant acquisition agreement is entered into and (ii) the Borrower has delivered an LCA Election to the Administrative Agent. “Loan” means any Revolving Loan, Swingline Loan or Term Loan, and the Base Rate Loans and Adjusted LIBOR Rate Loans comprising such Loans. “Margin Stock” has the meaning assigned thereto in Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time. “Master Agreement” has the meaning assigned thereto in the definition of “Swap Agreement”. “Material Account” means any deposit account or securities account other than (a) any deposit account exclusively used for payroll, Taxes, escrow, employee benefits or other fiduciary purposes, (b) any deposit account that is a zero dollar balance account that is, by its terms, swept at least once every two Business Days, and (c) any deposit account or securities account except to the extent the aggregate amount contained in all deposit accounts and securities accounts (other than deposit accounts described in (a) and (b) above) is more than $3,000,000 at any one time during the prior 12-month period (in which case the Borrower shall identify as Material Accounts those deposit accounts and securities accounts as are necessary so that the $3,000,000 threshold is not then exceeded). “Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect on, the business, assets, liabilities (including contingent liabilities), operations or financial condition of the Borrower and its Subsidiaries taken as a whole; (b) a material adverse effect on the rights and remedies of any Agent or any Lender under any Credit Document, or on the ability of any Credit Party to perform its material obligations under any Credit Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Credit Party of any Credit Document to which it is a party. “Material Commercial Tort Claim” means any commercial tort claim with respect to which a Credit Party is the plaintiff or a beneficiary and that makes a claim for damages, or other claim for judgment, in an amount greater than or equal to $2,000,000. “Material IP Subsidiary” means any Subsidiary that (a) owns or licenses Intellectual Property Rights that, individually or in the aggregate, either (i) have a fair market value in excess of $1,000,000, (ii) are leased, licensed or otherwise provided to the Borrower or any of its other Subsidiaries for annual license, royalty or other payments in excess of $1,000,000 or (iii) are material to the operations and/or businesses of the Borrower and its Subsidiaries, taken as a whole or (b) is designated by the Borrower as a “Material IP Subsidiary” in writing as a result of its determination that such designation is reasonably necessary to the operations and/or businesses of the Borrower and its Subsidiaries, taken as a whole.  25 130164155_5 142964982_4


 
“Material Leased Property” means any single parcel, or adjacent or related parcels, of real property leased (or similarly held, but excluding any Real Estate Asset) by any Credit Party where assets that constitute, or are intended under this Agreement and the other Credit Documents to constitute, Collateral with an aggregate fair market value (as reasonably determined by the Borrower) amount in excess of $5,000,000 are at any time located. “Material Letter of Credit Right” means any “letter of credit right” under the UCC in a face amount greater than or equal to $2,000,000 individually (or collectively in the case of multiple letter of credit rights securing the same asset or claim). “Material Real Estate Asset” means any Real Estate Asset that has a fair market value (as reasonably determined by the Borrower) in excess of $7,500,000. “Moody’s” means Moody’s Investor Services, Inc., together with its successors. “Mortgaged Property Support Documents” means, with respect to any Real Estate Asset constituting, or intended to constitute, Collateral, such third party consents, intercreditor agreements, mortgagee title insurance policies (in amounts and with endorsements reasonably acceptable to the Administrative Agent), surveys, appraisals, environmental reports, flood hazard certifications and, evidence of flood insurance (if such insurance is required by Applicable Law), and such other mortgage-related documents as the Administrative Agent or the Collateral Agent may reasonably request in connection with the Mortgage of such Real Estate Asset and its constituting Collateral. “Mortgages” means the mortgages, deeds of trust or deeds to secure debt that purport to grant to the Collateral Agent, for the benefit of the Secured Parties, a security interest in any Real Estate Asset (including with respect to any improvements and fixtures) of the Borrower or any other Credit Party in real property. “Multiemployer Plan” means any “multiemployer plan” as defined in Section 3(37) of ERISA which is sponsored, maintained or contributed to by, or required to be contributed to by, any Credit Party or any of its ERISA Affiliates or with respect to which any Credit Party or any of its ERISA Affiliates previously sponsored, maintained or contributed to or was required to contributed to, and still has liability, whether contingent or otherwise. “Net Cash Proceeds” means the aggregate proceeds paid in cash or Cash Equivalents received by the Borrower or any of its Subsidiaries in connection with any Asset Sale, Involuntary Disposition, Debt Transaction, issuance of convertible notes pursuant to Section 8.1(r) or the EbixCash Offering, net of (a) direct costs and expenses incurred or estimated costs and expenses for which reserves are maintained, in connection therewith (including legal, accounting and investment banking fees and expenses, sales commissions and underwriting discounts); (b) estimated taxes paid or payable (including sales, use or other transactional taxes and any net marginal increase in income taxes) as a result thereof; (c) the amount required to retire any Indebtedness secured by a Permitted Lien on the related property; and (d) amounts held in escrow to be applied as part of the purchase price for such assets. For purposes hereof, “Net Cash Proceeds” includes any cash or Cash Equivalents received upon the disposition of any non-cash consideration (x) received by the Borrower or any of its Subsidiaries in any Asset Sale, Involuntary Disposition, Debt Transaction, issuance of convertible notes pursuant to Section 8.1(r) or the EbixCash Offering or (y) released from escrow to the Borrower or any of its Subsidiaries. “Non-Consenting Lender” has the meaning assigned thereto in Section 2.17.  26 130164155_5 142964982_4


 
“Non-Defaulting Lender” means, at any time, any Lender that is not a Defaulting Lender at such time. “Non-Guarantor Subsidiary” means, at any time any Subsidiary that is not a Guarantor at such time. “Note” means a Revolving Loan Note, a Swingline Note or a Term Loan Note, as applicable. “Notice” means a Funding Notice, an Issuance Notice or a Conversion/Continuation Notice. “Obligations” means all obligations, indebtedness and other liabilities of every nature of each Credit Party from time to time owed to any Agent (including any former Agent in its capacity as such), the Issuing Bank (including any former Issuing Bank in its capacity as such), the Lenders (including former Lenders in their capacity as such) or any of them, the Qualifying Swap Banks and the Qualifying Treasury Management Banks, in each case, under any Credit Document, Secured Swap Agreement or Secured Treasury Management Agreement, together with all renewals, extensions, modifications or refinancings of any of the foregoing, whether for principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to such Credit Party, would have accrued on any Obligation, whether or not a claim is allowed against such Credit Party for such interest in the related bankruptcy proceeding), reimbursement of amounts drawn under Letters of Credit, payments for early termination of Swap Agreements, fees, expenses, indemnification or otherwise; provided that the “Obligations” of a Guarantor shall exclude any Excluded Swap Obligations with respect to such Guarantor. “OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control. “Off-The-Shelf Software” has the meaning assigned thereto in Section 6.15(c). “Organizational Documents” means (a) with respect to any corporation, its certificate or articles of incorporation or organization, as amended, and its by-laws, as amended, (b) with respect to any limited partnership, its certificate of limited partnership, as amended, and its partnership agreement, as amended, (c) with respect to any general partnership, its partnership agreement, as amended, and (d) with respect to any limited liability company, its articles of organization, certificate of formation or comparable documents, as amended, and its operating agreement, as amended. In the event any term or condition of this Agreement or any other Credit Document requires any Organizational Document to be certified by a secretary of state or similar governmental official, the reference to any such “Organizational Document” shall only be to a document of a type customarily certified by such governmental official. “Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Credit Document, or sold or assigned an interest in any Loan or Credit Document). “Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Credit Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.17).  27 130164155_5 142964982_4


 
“Outstanding Amount” means (a) with respect to Revolving Loans and Swingline Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any Borrowings and prepayments or repayments of Revolving Loans and Swingline Loans, as the case may be, occurring on such date; (b) with respect to any Letter of Credit Obligations on any date, the aggregate outstanding amount of such Letter of Credit Obligations on such date after giving effect to any Credit Extension of a Letter of Credit occurring on such date and any other changes in the amount of the Letter of Credit Obligations as of such date, including as a result of any reimbursements by the Borrower of any drawing under any Letter of Credit; and (c) with respect to any Term Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any prepayments or repayments of such Term Loan on such date. “Owned Intellectual Property” means any Intellectual Property Rights for which the Borrower or any of its Subsidiaries is the registered owner. “Participant” has the meaning assigned thereto in Section 11.5(d). “Participant Register” has the meaning assigned thereto in Section 11.5(d). “PATRIOT Act” has the meaning assigned thereto in Section 6.14(f). “PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto. “Pension Plan” means any “employee pension benefit plan” as defined in Section 3(2) of ERISA other than a Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA and which is sponsored, maintained or contributed to by, or required to be contributed to by, any Credit Party or any of its ERISA Affiliates or with respect to which any Credit Party or any of its ERISA Affiliates previously sponsored, maintained or contributed to, or was required to contribute to, and still has liability, whether contingent or otherwise. “Permitted Acquisition” means any non-hostile Acquisition that satisfies the following conditions: the Borrower shall have notified the Administrative Agent and the Lenders of such(a) proposed Acquisition at least (i) three Business Days prior to the consummation thereof if the total consideration (including Earn Out Obligations) for such Acquisition is greater than $50,000,000 but less than or equal to $100,000,000 and (ii) five Business Days prior to the consummation thereof if the total consideration (including Earn Out Obligations) for such Acquisition is greater than $100,000,000 (it being understood no prior notice shall be required for any proposed Acquisition the total consideration (including Earn Out Obligations) for which is less than or equal to $50,000,000, but the Borrower shall provide notice thereof to the Administrative Agent upon, or promptly after, the consummation thereof); the Person or Properties to be acquired (i) is in a similar or complementary line of(b) business as those of the Borrower and its Subsidiaries on the date of such Acquisition and (ii) becomes, or the Properties to be acquired are acquired by, a Subsidiary of the Borrower (or, solely with respect to Properties, by the Borrower); no Event of Default exists either on the date the agreement governing such Acquisition is(c) executed or on the date of consummation thereof (either before or immediately after such consummation); provided that if such Acquisition is a Limited Condition Acquisition, this condition may be satisfied as of the date of entering into of the definitive agreement for such Limited Condition  28 130164155_5 142964982_4


 
Acquisition so long as no Event of Default under any of Sections 9.1(a), (f) or (g) has occurred and is continuing as of the date of consummation of such Acquisition; the Borrower is in pro forma (as provided in Section 1.3) compliance with each of the(d) financial covenants set forth in Section 8.7, provided that if such Acquisition is a Limited Condition Acquisition, this condition may be satisfied as of the date of entering into of the definitive agreement for such Limited Condition Acquisition; all transactions related to such Acquisition are consummated (i) in accordance with the(e) terms of the purchase or acquisition agreement executed in connection therewith and with all other material agreements, instruments and documents implementing such Acquisition (all of which shall be reasonably satisfactory in form and substance to the Administrative Agent in the case of any Acquisition the total consideration (including Earn Out Obligations) for which is greater than $50,000,000), (ii) in accordance with all material Applicable Laws and regulatory approvals and (iii) in conformity in all material respects with all applicable required governmental, corporate and third-party approval and consents; with respect to each such Acquisition of a Person that is required to become a Guarantor,(f) or whose Equity Interests are required to be pledged, under the Credit Documents, all actions required to be taken under the Credit Documents with respect to any such newly created or acquired Subsidiary (including each Subsidiary thereof) or assets in order to become Guarantors and/or provide Collateral shall have been taken (or arrangements reasonably satisfactory to the Administrative Agent for the taking of such actions within the time frame required by the Credit Documents shall have been made); if:(g) either (A) the Borrower demonstrates a pro forma (as provided in Section 1.3)(i) Consolidated Net Leverage Ratio of greater than or equal to 4.00 to 1.00 as of the date of consummation of such Acquisition (or, if such Acquisition is a Limited Condition Acquisition, if elected by the Borrower, as of the date of entering into of the definitive agreement for such Limited Condition Acquisition) or (B) such Acquisition is consummated prior to the delivery of a Compliance Certificate for the fiscal quarter of the Borrower ending September 30, 2020, then in either such case (1) the aggregate consideration (including Earn Out Obligations) for such Acquisition shall consist only of (x) Qualified Equity Interests, (y) Permitted Disqualified Equity Interests constituting Excluded Disqualified Equity Interests (or the cash proceeds thereof) and (z) if as of the date of consummation of such Acquisition the Global Unrestricted Cash (calculated on a pro forma basis (as provided in Section 1.3) after giving effect to such Acquisition) is in excess of $40,000,000, other consideration not to exceed $15,000,000 during such Fiscal Year (when combined with all other Acquisitions consummated pursuant to this clause (g)(i) or clause (g)(ii) below during such Fiscal Year) and (2) the Consolidated EBITDA (calculated as provided in the definition thereof, but only giving effect to clause (e) thereof to the extent of actions anticipated to be taken within one month of the consummation of such Acquisition and amounts anticipated to be realized within 12 months following such consummation) of the Person to be acquired shall be greater than $0; both (A) the Borrower demonstrates a pro forma (as provided in Section 1.3)(ii) Consolidated Net Leverage Ratio of greater than or equal to 3.25 to 1.00 but less than 4.00 to 1.00 as of the date of consummation of such Acquisition (or, if such Acquisition is a Limited Condition Acquisition, if elected by the Borrower, as of the date of entering into of the definitive  29 130164155_5 142964982_4


 
agreement for such Limited Condition Acquisition ) and (B) such Acquisition is consummated after the delivery of a Compliance Certificate for the fiscal quarter of the Borrower ending September 30, 2020, then in such case the aggregate consideration (including Earn Out Obligations) for such Acquisition shall consist only of (x) Qualified Equity Interests, (y) Permitted Disqualified Equity Interests constituting Excluded Disqualified Equity Interests (or the cash proceeds thereof) and (z) if as of the date of consummation of such Acquisition the Global Unrestricted Cash (calculated on a pro forma basis (as provided in Section 1.3) after giving effect to such Acquisition) is (1) in excess of $40,000,000 but less than or equal to $80,000,000, other consideration not to exceed $15,000,000 during such Fiscal Year (when combined with all other Acquisitions consummated pursuant to clause (g)(i) above or this clause (g)(ii) during such Fiscal Year) or (2) in excess of $80,000,000, other consideration not to exceed $50,000,000 during such Fiscal Year (when combined with all other Acquisitions consummated pursuant to clause (g)(i) above or this clause (g)(ii) during such Fiscal Year); and both (A) the Borrower demonstrates a pro forma (as provided in Section 1.3)(iii) Consolidated Net Leverage Ratio of less than 3.25 to 1.00 as of the date of consummation of such Acquisition (or, if such Acquisition is a Limited Condition Acquisition, if elected by the Borrower, as of the date of entering into of the definitive agreement for such Limited Condition Acquisition) and (B) such Acquisition is consummated after the delivery of a Compliance Certificate for the fiscal quarter of the Borrower ending September 30, 2020, then there shall be no limit on the consideration for such Acquisition pursuant to this clause (g) (without limitation of any other clause of this definition), and any Acquisition consummated in accordance with this clause (g)(iii) shall not constitute usage of the annual dollar baskets in either clause (g)(i)(z) or clause (g)(ii)(z) above; provided, that none of the limitations in this clause (g) shall apply to the Yatra Acquisition or the TriMax Acquisition; the Administrative Agent shall have received, at the time of (or prior to) the(h) consummation of such Acquisition, a certificate of an Authorized Officer of the Borrower certifying that all the requirements set forth in clauses (b) through (g) of this definition have been satisfied with respect to such Acquisition, and such certificate shall include (x) reasonably detailed calculations of Consolidated EBITDA of the target of such Acquisition pursuant to clause (g)(i)(2) above (if such clause applies to such Acquisition) and (y) if the total consideration (including Earn Out Obligations) therefor is greater than $50,000,000, reasonably detailed calculations demonstrating satisfaction of the requirements set forth in clause (d) above; provided that in the case of an Acquisition the total consideration (including Earn Out Obligations) for which is less than or equal to $25,000,000, no certification under this clause (h) shall be required (it being understood that notwithstanding the lack of such certification, such proposed Acquisition must satisfy the requirements of clauses (a) through (g) above in order to constitute a Permitted Acquisition hereunder and any notice provided pursuant to clause (a) shall constitute a representation to such effect). “Permitted Disqualified Equity Interests” means any Equity Interest that constitutes a Disqualified Equity Interest but would not constitute a Disqualified Equity Interest if the period of “four years” in the definition of “Disqualified Equity Interests” was replaced with “181 days” in lieu thereof. “Permitted Encumbrances” means each of the following: Liens for Taxes not yet overdue or for Taxes if obligations with respect to such Taxes are(a) being contested in good faith by appropriate proceedings promptly instituted and diligently conducted;  30 130164155_5 142964982_4


 
statutory Liens of landlords, banks (including rights of set off), carriers, warehousemen,(b) mechanics, repairmen, workmen and materialmen, and other Liens imposed by law (other than any such Lien imposed pursuant to Section 430(k) of the Internal Revenue Code or Section 303(k) or 4068 of ERISA that would constitute an Event of Default under Section 9.1(h)), in each case incurred in the ordinary course of business (i) for amounts not yet overdue, or (ii) for amounts that are overdue and that are being contested in good faith by appropriate proceedings, so long as such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts; Liens incurred in the ordinary course of business in connection with workers’(c) compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, trade contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money or other Indebtedness), so long as no foreclosure, sale or similar proceedings have been commenced with respect to any portion of the assets on account thereof; easements, servitudes, rights-of-way, covenants, licenses, protrusions, zoning and other(d) restrictions, encroachments, and other minor defects or irregularities in title or other similar encumbrances, in each case which do not and will not, individually or in the aggregate, materially detract from the value of the properties of, or interfere in any material respect with the ordinary conduct of the business of, any Credit Party or any of their respective Subsidiaries, including all encumbrances shown on any policy of title insurance in favor of the Collateral Agent with respect to any Real Estate Asset; any interest or title of a licensor, sublicensor, lessor or sublessor with respect to any(e) assets under any license or lease agreement entered into in the ordinary course of business, provided that the same do not interfere in any material respect with the business of any Credit Party and its Subsidiaries, taken as a whole; Liens (i) solely on any cash earnest money deposits made by any Credit Party or any of(f) its Subsidiaries in connection with any letter of intent or purchase agreement in connection with an Investment or other acquisition permitted hereunder and (ii) consisting of customary restrictions (i.e. those that limit the transfer of certain property pending the consummation of its sale) contained in an agreement related to the consummation of a transaction permitted by Section 8.8, 8.9 or 8.10; purported Liens evidenced by the filing of precautionary UCC financing statements(g) relating solely to consignment of goods or operating leases of personal property entered into in the ordinary course of business, and not evidencing a security interest in any of the property of any Credit Party or any of its Subsidiaries; Liens in favor of customs and revenue authorities arising as a matter of law to secure(h) payment of customs duties in connection with the importation of goods; restrictions resulting from any zoning or similar law or right reserved to or vested in any(i) governmental office or agency to control or regulate the use of any real property; licenses, leases, sublicenses or subleases granted by any Credit Party or any of its(j) Subsidiaries to other Persons (including with respect to Intellectual Property Rights) in the ordinary course of business and not interfering in any respect with the ordinary conduct of the business of such Credit Party or such Subsidiary; Liens consisting of judgment or judicial attachment liens relating to judgments which do(k) not constitute an Event of Default under Section 9.1(h);  31 130164155_5 142964982_4


 
Liens (i) of a collecting bank arising in the ordinary course of business under Section(l) 4-210 of the UCC covering only the items being collected upon and (ii) attaching to commodity trading accounts or other commodities brokerage accounts incurred in the ordinary course of business and not for speculative purposes; Liens (including the right of set-off) in favor of a bank or other depository institution(m) arising as a matter of law encumbering deposits; Liens on insurance policies of any Credit Party or any of its Subsidiaries and the proceeds(n) thereof securing the financing of the premiums with respect to such insurance policies; Liens arising out of customary conditional sale, title retention, consignment or similar(o) arrangements for the sale of goods entered into in the ordinary course of business; and Liens that are customary rights of set off relating to pooled deposit or sweep accounts of(p) the Borrower or any of its Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business; provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness. “Permitted Liens” means each of the Liens permitted pursuant to Section 8.2. “Permitted Non-Credit Party Investments” means (a) a loan made by any Credit Party to any Non-Guarantor Subsidiary (each a “Subsidiary Loan”) so long as (i) no Event of Default has occurred and is continuing on the date such Subsidiary Loan is made or would result therefrom, (ii) such Subsidiary Loan is required by its terms to be repaid within ninety (90) days after the making thereof, (iii) such Subsidiary Loan does not remain outstanding for more than ninety (90) days, and (iv) the aggregate outstanding amount of all Subsidiary Loans does not at any time exceed (1) if the pro forma (as provided in Section 1.3) Consolidated Net Leverage Ratio as of the date of making of such Subsidiary Loan is greater than or equal to 3.25 to 1.00, $25,000,000 or (2) otherwise, $50,000,000, and (b) any other Investment by any Credit Party to any Non-Guarantor Subsidiary so long as the aggregate outstanding amount of all Investments under this clause (b) does not at any time exceed (1) if the pro forma (as provided in Section 1.3) Consolidated Net Leverage Ratio as of the date of making of such Investment is greater than or equal to 3.25 to 1.00, $10,000,000 or (2) otherwise, $25,000,000. For the purposes of clause (a) of this definition, any Subsidiary Loan used to repay an existing Subsidiary Loan shall be deemed to be an extension of such existing Subsidiary Loan (rather than a new Subsidiary Loan). For the avoidance of doubt, any Investment that is permitted to be outstanding as a Permitted Non-Credit Party Investment at the time it is made shall not cease to be a Permitted Non-Credit Party Investment solely because of any fluctuation in the Consolidated Net Leverage Ratio after the date thereof. “Permitted Refinancing” means any extension, renewal, modification, replacement or refinancing of any existing Indebtedness so long as any such extension, renewal, modification, replacement or refinancing of such Indebtedness (a) is subject to terms and conditions not materially less favorable to the obligor thereof or the Secured Parties than the Indebtedness being extended, renewed, modified, replaced or refinanced, (b) has an average life to maturity that is greater than that of the Indebtedness being extended, renewed, modified, replaced or refinanced, (c) does not include an obligor that was not an obligor with respect to the Indebtedness being extended, renewed, modified, replaced or refinanced (unless such obligor may otherwise incur such Indebtedness under another basket set forth in Section 8.1; it being understood that any incurrence of Indebtedness by such obligor pursuant to this clause (c) shall count as usage of such other basket), (d) is subordinated on substantially the same terms (or terms more  32 130164155_5 142964982_4


 
favorable to the obligees of the Obligations), if the Indebtedness being extended, renewed, modified, replaced or refinanced was subordinated to the prior payment of the Obligations (or any portion thereof), (e) does not exceed in principal amount the Indebtedness being extended, renewed, modified, replaced or refinanced plus reasonable fees and expenses incurred in connection therewith (except to the extent such excess principal amount may otherwise be incurred under another basket set forth in Section 8.1; it being understood that any such excess principal amount added to Indebtedness pursuant to this clause (e) shall count as usage of such other basket), and (f) is not incurred, created or assumed, if any Event of Default under Section 9.1(a), (f) or (g) has occurred and continues to exist or would result therefrom. “Permitted Restricted Payment” means any Restricted Payment made with respect to any Equity Interests of the Borrower or any Subsidiary so long as (a) both immediately before and immediately after giving effect thereto, no Event of Default exists or shall have occurred as a result thereof, (b) the Borrower is in pro forma (as provided in Section 1.3) compliance with the financial covenants set forth in Section 8.7 as of the date of such Restricted Payment and (c) the amount of such Restricted Payment, when combined with the aggregate amount of all other Restricted Payments made during such Fiscal Year and prior to such Restricted Payment, shall not cause the Permitted Restricted Payment Limit in effect at the time of such Restricted Payment for such Fiscal Year to be exceeded. “Permitted Restricted Payment Limit” means, as of the date of any Restricted Payment, an aggregate amount for the Fiscal Year in which such Restricted Payment is made equal to the following (with no unutilized portion being carried forward to, or used in, any subsequent Fiscal Year): (a) if the pro forma (as provided in Section 1.3) Consolidated Net Leverage Ratio as of the date of making of such Restricted Payment is greater than or equal to 3.25 to 1.00, (i) with respect to Restricted Payments consisting of dividends or other distributions (whether in cash, securities or other property) with respect to any Equity Interests of the Borrower or any Subsidiary, the lesser of (x) $0.30 per unit of such Equity Interests and (y) $13,000,000, (ii) with respect to Restricted Payments consisting of payments in cash on account of the purchase of any such Equity Interests in the ordinary course of business from any employee of the issuer of such Equity Interests, $1,500,000, and (iii) with respect to any other Restricted Payments, $0; (b) if the pro forma (as provided in Section 1.3) Consolidated Net Leverage Ratio as of the date of making of such Restricted Payment is greater than or equal to 2.50 to 1.00 but less than 3.25 to 1.00, $50,000,000; and (c) if the pro forma (as provided in Section 1.3) Consolidated Net Leverage Ratio as of the date of making of such Restricted Payment is less than 2.50 to 1.00, an unlimited amount; provided that on and after the Amendment No. 11 Effective Date, the Permitted Restricted Payment Limit for each Fiscal Year (including the Fiscal Year ending December 31, 2021) shall be limited to Restricted Payments consisting of dividends or other distributions (whether in cash, securities or other property) with respect to any Equity Interests of the Borrower or any Subsidiary in an amount equal to the lesser of (x) $0.30 per unit of such Equity Interests and (y) $13,000,000. “Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity. “Platform” has the meaning assigned thereto in Section 11.1(d).  33 130164155_5 142964982_4


 
“Pledge Agreement” means the Pledge Agreement dated as of the Closing Date made by the Credit Parties in favor of the Collateral Agent, for the benefit of the Secured Parties, as supplemented from time to time by the execution and delivery of Pledge Joinder Agreements and Pledge Agreement Supplements. “Pledge Agreement Supplement” means any Pledge Agreement Supplement, substantially in the form thereof attached to the Pledge Agreement or such other form as is reasonably satisfactory to the Collateral Agent and the other parties thereto, executed and delivered by a Credit Party to the Collateral Agent. “Pledge Joinder Agreement” means any Pledge Joinder Agreement, substantially in the form thereof attached to the Pledge Agreement or such other form as is reasonably satisfactory to the Collateral Agent and the other parties thereto, executed and delivered by a Subsidiary to the Collateral Agent. “Prime Rate” means the per annum rate which the Administrative Agent publicly announces from time to time to be its prime lending rate, as in effect from time to time. The Administrative Agent’s prime lending rate is a reference rate and does not necessarily represent the lowest or best rate charged to customers. “Principal Office” means, for the Administrative Agent, the Swingline Lender and the Issuing Bank, such Person’s “Principal Office” as set forth on Appendix B, or such other office as it may from time to time designate in writing to the Borrower and each Lender. “Property” means an interest of any kind in any property or asset, whether real, personal or mixed, and whether tangible or intangible. “PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time. “Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Credit Party that, at the time the Guaranty (or grant of security interest, as applicable) becomes or would become effective with respect to such Swap Obligation, has total assets exceeding $10,000,000 or such other Credit Party as constitutes an “eligible contract participant” under the Commodity Exchange Act and which may cause another Person to qualify as an “eligible contract participant” with respect to such Swap Obligation at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act. “Qualified Equity Interest” means any Equity Interest that is not a Disqualified Equity Interest. “Qualifying Swap Bank” means (a) any of Regions Bank and its Affiliates, (b) any Person that is a Lender or an Affiliate of a Lender at the time it enters into a Swap Agreement so long as such Person shall have provided a Secured Party Designation Notice to the Administrative Agent or (c) any Person that is a party to a Swap Agreement at the time it (or its Affiliate) becomes a Lender so long as such Person (or its Affiliate) shall have provided a Secured Party Designation Notice to the Administrative Agent. For purposes hereof, the term “Lender” shall be deemed to include the Administrative Agent. “Qualifying Treasury Management Bank” means (a) any of Regions Bank and its Affiliates, (b) any Person that is a Lender or an Affiliate of a Lender at the time it enters into a Treasury Management Agreement so long as such Person shall have provided a Secured Party Designation Notice to the Administrative Agent or (c) any Person that is a party to a Treasury Management Agreement at the time it (or its Affiliate) becomes a Lender so long as such Person (or its Affiliate) shall have provided a Secured  34 130164155_5 142964982_4


 
Party Designation Notice to the Administrative Agent. For purposes hereof, the term “Lender” shall be deemed to include the Administrative Agent. “Real Estate Asset” means, at any time of determination, any fee-owned interest in real property (including any improvements and fixtures thereon) held by a Credit Party. “Recipient” means (a) any Agent, (b) any Lender or (c) the Issuing Bank, as applicable. “Refunded Swingline Loans” has the meaning assigned thereto in Section 2.2(b)(iii). “Register” has the meaning assigned thereto in Section 11.5(c). “Reimbursement Date” has the meaning assigned thereto in Section 2.3(d). “Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates. “Release” means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Material), including the movement of any Hazardous Material through the air, soil, surface water or groundwater. “Removal Effective Date” has the meaning assigned thereto in Section 10.6(b). “Required Lenders” means, as of any date of determination, Lenders having Total Credit Exposure representing more than fifty percent of the Total Credit Exposures of all Lenders; provided that (a) at any time that there are three or fewer Lenders, “Required Lenders” shall require at least two Lenders (in addition to the Total Credit Exposure threshold set forth above) and (b) the Total Credit Exposure of any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders (including for making a determination of the total number of Lenders for purposes of clause (a)). “Resignation Effective Date” has the meaning assigned thereto in Section 10.6(a). “Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests of the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests or on account of any return of capital to the Borrower’s stockholders, partners or members (or the equivalent Person thereof), or any setting apart of funds or property for any of the foregoing. “Revolving Commitment” means the commitment of a Lender to make or otherwise fund any Revolving Loan and to acquire participations in Letters of Credit and Swingline Loans hereunder and “Revolving Commitments” means such commitments of all Lenders in the aggregate. The amount of each Lender’s Revolving Commitment is set forth on Appendix A or in the applicable Assignment Agreement, subject to any increase, adjustment or reduction pursuant to the terms and conditions hereof. The aggregate amount of the Revolving Commitments as of the Sixth Amendment Effective Date is $400,000,000.  35 130164155_5 142964982_4


 
“Revolving Commitment Percentage” means, for each Lender, a fraction (expressed as a percentage carried to the ninth decimal place), the numerator of which is such Lender’s Revolving Commitment and the denominator of which is the Aggregate Revolving Commitments then in effect. The initial Revolving Commitment Percentages are set forth on Appendix A. “Revolving Commitment Period” means the period from and including the Closing Date to the earlier of (a) (i) in the case of Revolving Loans and Swingline Loans, the Revolving Commitment Termination Date or (ii) in the case of the Letters of Credit, the expiration date thereof, or (b) in each case, the date on which the Revolving Commitments shall have been terminated as provided herein. “Revolving Commitment Termination Date” means the earliest to occur of (a) February 21, 2023; (b) the date the Revolving Commitments are permanently reduced to zero pursuant to Section 2.11(b); and (c) the date of the termination of the Revolving Commitments pursuant to Section 9.2. “Revolving Credit Exposure” means, as to any Lender at any time, the aggregate principal amount at such time of its outstanding Revolving Loans and such Lender’s participation in Letter of Credit Obligations and Swingline Loans at such time. “Revolving Loan” means a Loan made by a Lender to the Borrower pursuant to Section 2.1(a). “Revolving Loan Note” means a promissory note in the form of Exhibit 2.5-1, as it may be amended, supplemented or otherwise modified from time to time. “Revolving Obligations” means the Revolving Loans, the Letter of Credit Obligations and the Swingline Loans. “S&P” means Standard & Poor’s Ratings Services, a division of Standard & Poor’s Financial Services LLC, together with its successors. “Sanctioned Country” means (a) a country, region, territory or a government of a country, region or territory, (b) an agency of the government of a country, region or territory, or (c) an organization directly or indirectly owned or controlled by a country, region, territory or its government, that is subject to Sanctions. “Sanctioned Person” means (a) a Person named on the list of “Specially Designated Nationals” or any other Sanctions related list of designated Persons maintained by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union or any European Union member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b). “Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State, (b) the United Nations Security Council, (c) the European Union, (d) any European Union member state, (e) Her Majesty’s Treasury of the United Kingdom or (f) any other relevant sanctions authority. “SEC” means the United States Securities and Exchange Commission. “Second Amendment Effective Date” means June 17, 2016.  36 130164155_5 142964982_4


 
“Secured Parties” means, collectively, the Administrative Agent, the Collateral Agent, the Lenders, the Issuing Bank, the Qualifying Swap Banks, the Qualifying Treasury Management Banks, each co-agent or sub-agent appointed by the Administrative Agent or the Collateral Agent from time to time pursuant to Section 10.5, any other holder from time to time of any of any Obligations and, in each case, their respective successors and permitted assigns. “Secured Party Designation Notice” means a notice in the form of Exhibit 1.1 (or other writing in form and substance satisfactory to the Administrative Agent) from a Qualifying Swap Bank or a Qualifying Treasury Management Bank to the Administrative Agent that it holds Obligations entitled to share in the guaranties and collateral interests provided herein in respect of a Secured Swap Agreement or Secured Treasury Management Agreement, as appropriate. “Secured Swap Agreement” means any Swap Agreement between any of the Borrower and its Subsidiaries, on the one hand, and a Qualifying Swap Bank, on the other hand. For the avoidance of doubt, a holder of Obligations in respect of a Secured Swap Agreement shall be subject to the provisions of Sections 9.3 and 10.10. “Secured Swap Obligations” means all obligations owing to a Qualifying Swap Bank in connection with any Secured Swap Agreement including any and all cancellations, buy backs, reversals, terminations or assignments of any Secured Swap Agreement, any and all renewals, extensions and modifications of any Secured Swap Agreement and any and all substitutions for any Secured Swap Agreement, including all fees, costs, expenses and indemnities, whether primary, secondary, direct, fixed or otherwise (including any monetary obligations incurred during the pendency of any bankruptcy or insolvency proceedings, regardless of whether allowed or allowable in such bankruptcy or insolvency proceedings), in each case, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising. “Secured Treasury Management Agreement” means any Treasury Management Agreement between any of the Borrower and its Subsidiaries, on the one hand, and a Qualifying Treasury Management Bank, on the other hand. For the avoidance of doubt, a holder of Obligations in respect of a Secured Treasury Management Agreement shall be subject to the provisions of Sections 9.3 and 10.10. “Secured Treasury Management Obligations” means all obligations owing to a Qualifying Treasury Management Bank under a Secured Treasury Management Agreement, including all fees, costs, expenses and indemnities, whether primary, secondary, direct, fixed or otherwise (including any monetary obligations incurred during the pendency of any bankruptcy or insolvency proceedings, regardless of whether allowed or allowable in such bankruptcy or insolvency proceedings), in each case, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising. “Securities” means any stock, shares, partnership interests, limited liability company interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement (e.g., stock appreciation rights), options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing. “Security Agreement” means the Security Agreement dated as of the Closing Date made by the Credit Parties in favor of the Collateral Agent, for the benefit of the Secured Parties, as supplemented from time to time by the execution and delivery of Security Joinder Agreements.  37 130164155_5 142964982_4


 
“Security Joinder Agreement” means any Security Joinder Agreement, substantially in the form thereof attached to the Security Agreement or such other form as is reasonably satisfactory to the Collateral Agent and the other parties thereto, executed and delivered by a Subsidiary to the Collateral Agent. “Sixth Amendment” means that certain Amendment No. 6 to Credit Agreement dated as of, and effective upon, the Sixth Amendment Effective Date. “Sixth Amendment Effective Date” means February 21, 2018. “Solvent” means, with respect to any Person as of a particular date, that on such date (a) such Person is able to pay its debts and other liabilities, contingent obligations and other commitments as they mature in the ordinary course of business, (b) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature in their ordinary course, (c) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged or is to engage, (d) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person and (e) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. “Specified Credit Party” means, any Credit Party that is, at the time on which the Guaranty (or grant of security interest, as applicable) becomes effective with respect to a Swap Obligation, a corporation, partnership, proprietorship, organization, trust or other entity that would not be an “eligible contract participant” under the Commodity Exchange Act at such time but for the effect of Section 4.8. “Specified Transaction” means any Permitted Acquisition or any Disposition of one or more Subsidiaries or lines of business permitted hereunder. “Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity of which (a) more than fifty percent of the total voting power of Equity Interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or Controlled (directly or indirectly), or (b) the management of which is otherwise Controlled (directly or indirectly), or both, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof; provided that in determining the percentage of ownership interests of any Person Controlled by another Person pursuant to clause (a), no ownership interest in the nature of a “qualifying share” of the former Person shall be deemed to be outstanding and; provided, further, that in the case of a Person qualifying as a Subsidiary only pursuant to clause (b), the Borrower may elect that such Person not be treated as a Subsidiary hereunder so long as the applicable Subsidiary’s interest in such Person qualifies as a permitted Investment in accordance with Section 8.5(p). Unless otherwise provided, “Subsidiary” shall refer to a Subsidiary of the Borrower. “Swap Agreement” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or  38 130164155_5 142964982_4


 
forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, currency swap transactions, cross-currency rate swap transactions, currency options, cap transactions, floor transactions, collar transactions, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options or warrants to enter into any of the foregoing), whether or not any such transaction is governed by, or otherwise subject to, any master agreement or any netting agreement, and (b) any and all transactions or arrangements of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement (or similar documentation) published from time to time by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such agreement or documentation, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement; provided that the term “Swap Agreement” shall not include any Convertible Notes Hedges. “Swap Obligation” means with respect to any Guarantor any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act. “Swap Provider” means any Person that is a party to a Swap Agreement with any of the Borrower or its Subsidiaries. “Swap Termination Value” means, in respect of any one or more Swap Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Agreements, (a) for any date on or after the date such Swap Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s) and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Agreements (which may include a Lender or any Affiliate of a Lender). “Swingline Lender” means Regions Bank in its capacity as Swingline Lender hereunder, together with its permitted successors and permitted assigns in such capacity. “Swingline Loan” means a Loan made by the Swingline Lender to the Borrower pursuant to Section 2.2. “Swingline Note” means a promissory note in the form of Exhibit 2.5-2, as it may be amended, supplemented or otherwise modified from time to time. “Swingline Rate” means the Base Rate plus the Applicable Margin applicable to Base Rate Loans (or with respect to any Swingline Loan advanced pursuant to an Auto Borrow Agreement, such other rate as separately agreed in writing between the Borrower and the Swingline Lender). “Swingline Sublimit” means, at any time of determination, the lesser of (a) $15,000,000 and (b) the Aggregate Revolving Commitments then in effect. “Synthetic Lease” means a lease transaction under which the parties intend that (a) the lease will be treated as an “operating lease” by the lessee pursuant to Statement of Financial Accounting Standards No. 13, as amended and (b) the lessee will be entitled to various tax and other benefits ordinarily available to owners (as opposed to lessees) of like property.  39 130164155_5 142964982_4


 
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto. “Term Loan” means the Term Loan A and any additional term loan established under Section 2.1(d)(iii). “Term Loan A” means as defined in Section 2.1(b). “Term Loan A Commitment” means, for each Lender, the commitment of such Lender to make a portion of the Term Loan A hereunder on the Second Amendment Effective Date or the Sixth Amendment Effective Date, as applicable. The Term Loan A Commitment of each Lender as of the Sixth Amendment Effective Date is set forth on Appendix A. The aggregate principal amount of the Term Loan A Commitments of all of the Lenders as in effect on the Sixth Amendment Effective Date (all of which were outstanding or advanced as the Term Loan A on the Sixth Amendment Effective Date) is $250,000,000. “Term Loan A Commitment Percentage” means, for each Lender, a fraction (expressed as a percentage carried to the ninth decimal place), (a) the numerator of which is the Term Loan A Commitment of such Lender (or, after the termination of the Term Loan A Commitments, the outstanding principal amount of such Lender’s portion of the Term Loan A), and (b) the denominator of which is the aggregate Term Loan A Commitment of all Lenders (or, after termination of the Term Loan A Commitments, the aggregate outstanding principal amount of the Term Loan A). The initial Term Loan A Commitment Percentage of each Lender as of the Sixth Amendment Effective Date is set forth on Appendix A. “Term Loan A Maturity Date” means February 21, 2023. “Term Loan A Note” means a promissory note in the form of Exhibit 2.5-3, as it may be amended, supplemented or otherwise modified from time to time. “Term Loan Commitments” means (a) for each Lender, such Lender’s Term Loan A Commitment and (b) for each Lender providing an additional Term Loan pursuant to Section 2.1(d)(iii), the commitment of such Lender to make such additional Term Loan as set forth in the document(s) executed by the Borrower establishing such additional Term Loan. “Term Loan Commitment Percentage” means, for each Lender providing a portion of a Term Loan, a fraction (expressed as a percentage carried to the ninth decimal place), (a) the numerator of which is the Term Loan Commitment of such Lender (or, after the termination of the Term Loan Commitments, the outstanding principal amount of such Lender’s portion of such Term Loan), and (b) the denominator of which is the aggregate Term Loan Commitments of all Lenders (or, after termination of the Term Loan Commitments, the aggregate outstanding principal amount of such Term Loan). “Term Loan Notes” means the Term Loan A Note and any other promissory notes given to evidence Term Loans hereunder. “Total Credit Exposure” means, as to any Lender at any time, the Outstanding Amount of the Term Loans of such Lender at such time and the unused Revolving Commitments and Revolving Credit Exposure of such Lender at such time.  40 130164155_5 142964982_4


 
“Total Revolving Outstandings” means the aggregate Outstanding Amount of all Revolving Loans, all Swingline Loans and all Letter of Credit Obligations. “Treasury Management Agreement” means any agreement governing the provision of treasury or cash management services, including deposit accounts, funds transfer, automated clearinghouse, commercial credit cards, purchasing cards, cardless e-payable services, debit cards, stored value cards, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services. “Treasury Management Bank” means any Person that is a party to a Treasury Management Agreement with any of the Borrower or its Subsidiaries. “TriMax Acquisition” means the purchase of various assets of TriMax IT Infrastructure (“TriMax”) by the Borrower pursuant to that certain agreement dated November 14, 2019 between the Borrower and TriMax, with total cash consideration not to exceed $12,000,000. “Type of Loan” means a Base Rate Loan or a LIBOR Loan. “UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in the State of New York (or any other applicable jurisdiction, as the context may require). “United States” or “U.S.” means the United States of America. “U.S. Person” means any Person that is a “United States person” as defined in Section 7701(a)(30) of the Internal Revenue Code. “U.S. Tax Compliance Certificate” has the meaning assigned thereto in Section 3.3(f)(ii)(B)(3). “Wholly-Owned” means, with respect to a Subsidiary, that all of the Equity Interests of such Subsidiary are, directly or indirectly, owned or controlled by the Borrower and/or one or more of its Wholly-Owned Subsidiaries (except, solely in the case of Foreign Subsidiaries, for directors’ qualifying shares or other shares required by Applicable Law to be owned by a Person other than the Borrower and/or one or more of its Wholly-Owned Subsidiaries). “Withholding Agent” means any Credit Party and the Administrative Agent, as applicable. “Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule. “Yatra Acquisition” means the purchase of Yatra Online, Inc., a Cayman Islands exempted company limited by shares (“Yatra”), by the Borrower pursuant to that certain agreement between Borrower and Yatra dated July 16, 2019, as such agreement may be amended or otherwise modified after July 16, 2019 by the Borrower and Yatra to contemplate Equity Interests of the Borrower as the sole consideration for Yatra and to remove from the consideration the cash put option contemplated by the initial agreement. “Yatra Disqualified Equity Interests” means the preferred Equity Interests issued by the Borrower to the sellers of Yatra, solely for the purposes of consummating the Yatra Acquisition so long as such Equity Interests (a) have no maturity date, (b) are not mandatorily redeemable or otherwise subject to any  41 130164155_5 142964982_4


 
“put” at the option of the holder, (c) are only redeemable at the option of the issuer for (i) a 30-day period commencing on the date that is 36 months after the date of issuance thereof and (ii) a 30-day period commencing on the date that is 48 months after the date of issuance thereof, (d) do not provide for any scheduled payments of dividends in cash prior to the date that is four years after the date of issuance thereof and (e) after the date that is four years after the date of issuance thereof, are subject to an annual cash dividend not in excess of $5,300,000 in the aggregate. Accounting Terms.Section 1.2 Except as otherwise expressly provided herein, all accounting terms not otherwise(a) defined herein shall have the meanings assigned to them in conformity with GAAP. Financial statements and other information required to be delivered by the Borrower to the Lenders pursuant to clauses (a), (b), (c) and (d) of Section 7.1 shall be prepared in accordance with GAAP as in effect at the time of such preparation. If at any time any change in GAAP or in the consistent application thereof would affect the computation of any financial covenant or requirement set forth in any Credit Document, and either the Borrower or the Required Lenders shall object in writing to determining compliance based on such change, then the Lenders and Borrower shall negotiate in good faith to amend such financial covenant, requirement or applicable defined terms to preserve the original intent thereof in light of such change to GAAP, provided that, until so amended such computations shall continue to be made on a basis consistent with the most recent financial statements delivered pursuant to clauses (a), (b), (c) and (d) of Section 7.1 as to which no such objection has been made. Notwithstanding the above, for purposes of determining compliance with any covenant(b) (including the computation of any financial covenant) contained herein, Indebtedness of the Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded. Notwithstanding any other provision herein, leases shall continue to be classified and(c) accounted for on a basis consistent with that reflected in the audited financial statements for the Fiscal Year ending December 31, 2013 for all purposes of this Agreement, notwithstanding any change in GAAP relating thereto, unless the parties hereto shall enter into a mutually acceptable amendment addressing such changes, as provided for above. Pro Forma Calculations.Section 1.3 For purposes of calculating the Consolidated Fixed Charge Coverage Ratio and the(a) Consolidated Net Leverage Ratio for any purpose hereunder (including Permitted Acquisitions, Permitted Restricted Payments, Section 2.1(d) and Section 8.7), such calculations shall be made on a pro forma basis as follows: Consolidated Funded Indebtedness shall be calculated on the relevant date of(i) measurement of the Consolidated Net Leverage Ratio (whether the last day of a Fiscal Quarter or the date of a transaction with respect to which pro forma compliance is required), but in the case of measurement in connection with any event hereunder (and not for periodic compliance with the financial covenants under Section 8.7), giving pro forma effect to all Indebtedness to be incurred or repaid on such date (whether in connection with a Specified Transaction, a Permitted Restricted Payment, an increase of the Aggregate Commitments or the addition of an additional Term Loan pursuant to Section 2.1(d), or any other transaction for which pro forma compliance is being measured) and in the case of any such computation in connection with any increase or additional Term Loan pursuant to Section 2.1(d) the entire amount of such increase and/or additional Term Loan shall be assumed to be drawn;  42 130164155_5 142964982_4


 
Consolidated EBITDA shall be calculated for the period of four Fiscal Quarters(ii) most recently ended for which financial statements have been (or in the case of any periodic financial covenant compliance, are being) delivered, but giving pro forma effect to the Specified Transaction for which such measurement is being made (if any) and all other Specified Transactions (if any) that have occurred (A) during the period in respect of which such calculations are required to be made or (B) subsequent to such period and prior to or simultaneously with the event for which the pro forma calculation of either such ratio is being made (in the case of such calculation being made for a Specified Transaction, Permitted Restricted Payment, increase in the Aggregate Commitments or the addition of an additional Term Loan pursuant to Section 2.1(d) or other event, and not for periodic covenant compliance pursuant to Section 8.7), in each case by assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the period of four Fiscal Quarters in respect of which such calculation of Consolidated EBITDA is required to be made; and In the event that the Borrower or any Subsidiary incurs (including by assumption(iii) or guarantees) or repays (including by repurchase, redemption, repayment, retirement or extinguishment) any Indebtedness in connection with any Specified Transaction, Permitted Restricted Payment or an increase in the Aggregate Commitments or the addition of an additional Term Loan pursuant to Section 2.1(d) (or any other transaction for which pro forma compliance is being measured) (A) during the period in respect of which such calculations are required to be made or (B) subsequent to the end of such period and prior to or simultaneously with the event for which the pro forma calculation of either such ratio is being made, then in each such case the Consolidated Interest Charges component of the Consolidated Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence or repayment of Indebtedness (and any other incurrence or repayment of Indebtedness for which pro forma calculations have been required pursuant to this provision during such relevant period), to the extent required, by providing that (A) any such Indebtedness incurred or assumed in connection with such transaction shall be deemed to have been incurred as of the first day of the applicable period, and if such Indebtedness has a floating or formula rate of interest, shall have an implied rate of interest for the applicable period for purposes of this provision determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination and (B) any Indebtedness repaid by the Borrower or any Subsidiary (including any Person acquired) in connection with such transaction shall be deemed to have been so repaid on the first day of the applicable period. Whenever any financial covenant is to be computed on a pro forma basis hereunder, the(b) pro forma calculations shall be made in good faith by an Authorized Officer and in a manner reasonably acceptable to the Administrative Agent, subject, in the case of any Permitted Acquisition, to the Administrative Agent’s receipt of financial statements or other financial data with respect to the acquired Person or business reasonably acceptable to the Administrative Agent, including (i) the most recent financial statements with respect to the acquired Person or business prepared by such acquired Person or the seller thereof and (ii) to the extent available, the most recent audited and interim unaudited financial statements with respect to the acquired Person. If at any time the Borrower has made an LCA Election to test a financial ratio test or(c) condition at the time of the execution and delivery of the purchase agreement related to such Limited Condition Acquisition, then in connection with any subsequent calculation of any of the Consolidated Net Leverage Ratio or the Consolidated Fixed Charge Coverage Ratio for any purpose under this Agreement  43 130164155_5 142964982_4


 
(including any basket, measurement, or for purposes of Section 8.7) following the relevant date of execution of the definitive agreement with respect to such Limited Condition Acquisition and prior to the earlier of (i) the date on which such Limited Condition Acquisition is consummated or (ii) the date that the definitive agreement for such Limited Condition Acquisition is terminated or expires without consummation of such Limited Condition Acquisition, any such financial covenant shall be required to be satisfied both (x) on a pro forma basis hereunder assuming such Limited Condition Acquisition and other transactions in connection therewith (including the incurrence or assumption of Indebtedness and assuming any cash intended, by the anticipated sources and uses, to consummate such Limited Condition Acquisition has so been used (and thus is not netted in calculating the Consolidated Net Leverage Ratio)) have been consummated and (y) assuming such Limited Condition Acquisition and such other transactions in connection therewith have not been consummated. Rules of Interpretation.Section 1.4 The definitions of terms herein shall apply equally to the singular and plural forms of the(a) terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Credit Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “hereto”, “herein,” “hereof” and “hereunder,” and words of similar import when used in any Credit Document, shall be construed to refer to such Credit Document in its entirety and not to any particular provision hereof or thereof, (iv) all references in a Credit Document to Sections, Exhibits, Appendices and Schedules shall be construed to refer to Sections of, and Exhibits, Appendices and Schedules to, the Credit Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory rules, regulations, orders and provisions consolidating, amending, replacing or interpreting such law and any references to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. The terms lease and license shall include sub-lease and sub-license.(b) All terms not specifically defined herein or by GAAP, which terms are defined in the(c) UCC, shall have the meanings assigned to them in the UCC of the relevant jurisdiction, with the term “instrument” being that defined under Article 9 of the UCC of such jurisdiction. Unless otherwise expressly indicated, in the computation of periods of time from a(d) specified date to a later specified date, the word “from” means “from and including”, the words “to” and “until” each mean “to but excluding”, and the word “through” means “to and including”. To the extent that any of the representations and warranties contained in Section 6 under(e) this Agreement or in any of the other Credit Documents is qualified by “Material Adverse Effect” or another “materiality” standard, the qualifiers “in all material respects” and “in any material respect” in relation to the making of representations and warranties (whether contained in Section 2.1, 5.1, 5.2, 9.1(d) or otherwise) shall not apply.  44 130164155_5 142964982_4


 
This Agreement and the other Credit Documents are the result of negotiation among, and(f) have been reviewed by counsel to, among others, the Agents and the Credit Parties, and are the product of discussions and negotiations among all parties. Accordingly, this Agreement and the other Credit Documents are not intended to be construed against any of the Agents or any of the Lenders merely on account of any Agent’s or any Lender’s involvement in the preparation of such documents. Unless otherwise indicated, all references to a specific time shall be construed to Eastern(g) Standard Time or Eastern Daylight Savings Time, as the case may be. Unless otherwise expressly provided herein, all references to dollar amounts and “$” shall mean Dollars. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be(h) deemed to be the stated amount of such Letter of Credit in effect at such time (after giving effect to any permanent reduction in the stated amount of such Letter of Credit pursuant to the terms of such Letter of Credit); provided that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time. LOANS AND LETTERS OF CREDITSection 2 Revolving Loans and Term Loan A.Section 2.1 Revolving Loans. During the Revolving Commitment Period, subject to the terms and(a) conditions hereof, each Lender severally agrees to make revolving loans (each such loan, a “Revolving Loan”) to the Borrower in an aggregate amount up to but not exceeding such Lender’s Revolving Commitment; provided, that after giving effect to the making of any Revolving Loan, (i) the Total Revolving Outstandings shall not exceed the Aggregate Revolving Commitments, and (ii) the Revolving Credit Exposure of any Lender shall not exceed such Lender’s Revolving Commitment. Amounts borrowed pursuant to this Section 2.1(a) may be repaid and reborrowed without premium or penalty (subject to Section 3.1(c)) during the Revolving Commitment Period. The Revolving Loans may consist of Base Rate Loans, Adjusted LIBOR Rate Loans, or a combination thereof, as the Borrower may request. Each Lender’s Revolving Commitment shall expire on the Revolving Commitment Termination Date and all Revolving Loans and all other amounts owed hereunder with respect to the Revolving Loans and the Revolving Commitments shall be paid in full no later than such date. Term Loan A. Subject to the terms and conditions set forth herein, to the extent not(b) otherwise advanced on the Second Amendment Effective Date, each applicable Lender will make a single advance of its respective Term Loan A Commitment Percentage of a term loan (the amounts advanced on the Second Amendment Effective Date and on the Sixth Amendment Effective Date, collectively, the “Term Loan A”) in an amount not to exceed its Term Loan A Commitment, which Term Loan A will be disbursed to the Borrower in Dollars in one advance on the Second Amendment Effective Date and in one advance on the Sixth Amendment Effective Date, so that the aggregate outstanding amount of the Term Loan A and the relevant Term Loan A Commitment Percentages of the Lenders are, as of the Sixth Amendment Effective Date, as set forth on Appendix A to the Sixth Amendment. The Term Loan A may consist of Base Rate Loans, Adjusted LIBOR Rate Loans, or a combination thereof, as the Borrower may request. The obligation of the Lenders to advance a portion of the Term Loan A on the Second Amendment Effective Date or the Sixth Amendment Effective Date, as applicable, are several, and not joint, and upon the advance of the Term Loan A on the Second Amendment Effective Date or the Sixth  45 130164155_5 142964982_4


 
Amendment Effective Date, as applicable, the Term Loan A Commitment of each Lender shall be terminated. Amounts repaid on the Term Loan A may not be reborrowed. Mechanics for Revolving Loans and Term Loans.(c) All Revolving Loans and Term Loans that are (A) Adjusted LIBOR Rate Loans(i) shall be made in an aggregate minimum amount of $3,000,000 and integral multiples of $1,000,000 in excess of that amount and (B) Base Rate Loans shall be made in an aggregate minimum amount of $500,000 and integral multiples of $100,000 in excess of that amount. Whenever the Borrower desires that the Lenders make a Term Loan or a(ii) Revolving Loan, the Borrower shall deliver to the Administrative Agent a duly executed and completed Funding Notice no later than (x) 1:00 p.m. at least three Business Days in advance of the proposed Credit Date in the case of an Adjusted LIBOR Rate Loan and (y) 1:00 p.m. at least one Business Day in advance of the proposed Credit Date in the case of a Base Rate Loan. Except as otherwise provided herein, any Funding Notice for any Adjusted LIBOR Rate Loans shall be irrevocable on and after the related Interest Rate Determination Date, and the Borrower shall be bound to make a borrowing in accordance therewith. Notice of receipt of each Funding Notice in respect of each Revolving Loan or(iii) Term Loan, together with the amount of each Lender’s Revolving Commitment Percentage or Term Loan Commitment Percentage thereof, respectively, if any, together with the applicable interest rate, shall be provided by the Administrative Agent to each applicable Lender by facsimile (or such other electronic communication as may be permitted by Section 11.1(b)) with reasonable promptness, but (provided the Administrative Agent shall have received such notice by 1:00 p.m.) not later than 4:00 p.m. on the same day as the Administrative Agent’s receipt of such notice from the Borrower. Each Lender shall make its Revolving Commitment Percentage of the requested(iv) Revolving Loan or its Term Loan Commitment Percentage of the requested Term Loan available to the Administrative Agent not later than 11:00 a.m. on the applicable Credit Date by wire transfer of same day funds in Dollars, at the Administrative Agent’s Principal Office. Except as provided herein, upon satisfaction or waiver of the applicable conditions precedent specified herein, the Administrative Agent shall make the proceeds of such Credit Extension available to the Borrower on the applicable Credit Date by causing an amount of same day funds in Dollars equal to the proceeds of all Loans received by the Administrative Agent in connection with the Credit Extension from the Lenders to be credited to the account of the Borrower at the Administrative Agent’s Principal Office or such other account as may be designated in writing to the Administrative Agent by the Borrower. Increase in Commitments and Establishment of Additional Term Loans. The Borrower(d) may, at any time and from time to time after the Sixth Amendment Effective Date, upon prior written notice by the Borrower to the Administrative Agent, increase the Aggregate Revolving Commitments (but not the Letter of Credit Sublimit or the Swingline Sublimit), increase the Term Loan A Commitments and/or establish one or more additional Term Loans subject to the following: (i) the sum of the (A) aggregate principal amount of any increases in the Revolving Commitments pursuant to this Section 2.1(d) plus (B) aggregate principal amount of any increases in the Term Loan A Commitments pursuant to this Section 2.1(d) plus (C) the aggregate principal amount of any additional Term Loans pursuant to  46 130164155_5 142964982_4


 
this Section 2.1(d) in the aggregate after the Sixth Amendment Effective Date shall not exceed $150,000,000; (ii) any such increase or additional Term Loan may be provided by any existing Lender (without any obligation on the Borrower or the Administrative Agent to offer any existing Lender such opportunity) or any other Person selected by the Borrower and reasonably acceptable to the Administrative Agent and, in the case of an increase in the Aggregate Revolving Commitments, the Issuing Bank and the Swingline Lender; provided that: (A) any such increase or additional Term Loan shall be in a minimum principal amount of $10,000,000 and in integral multiples of $1,000,000 in excess thereof (or the entire remaining unused available amount of such increases); (B) after giving effect to the incurrence of any such increase or additional Term Loan (and giving effect to any Credit Extension to occur substantially simultaneously with such effectiveness), and the application of the proceeds therefrom, no Default or Event of Default shall exist, provided that in the case of any increase in the Term Loan A Commitments or the establishment of an additional Term Loan the proceeds of which are to be used to finance a Limited Condition Acquisition with respect to which the Borrower has made an LCA Election, to the extent agreed by the lenders providing such increase or additional Term Loan, such compliance may be measured at the time of the execution and delivery of the purchase agreement related to such Limited Condition Acquisition so long as no Event of Default under any of Sections 9.1(a), (f) or (g) shall have occurred and be continuing at the time of, or as a result of, the incurrence of any such increase or additional Term Loan (and any other transaction to occur in connection therewith, including the consummation of such Limited Condition Acquisition); (C) the Borrower shall be in compliance (as demonstrated in a certificate provided to the Administrative Agent), on a pro forma basis (as provided in Section 1.3) after giving effect to the incurrence of any such increase or additional Term Loan (and assuming that the full amount of such increase and/or additional Term Loan is fully funded), as applicable, with the financial covenants set forth in clauses (a) and (b) of Section 8.7, recomputed as of the last day of the most recently ended Fiscal Quarter of the Borrower for which financial statements have been delivered pursuant to Section 7.1, provided that in the case of any increase in the Term Loan A Commitments or the establishment of an additional Term Loan the proceeds of which are to be used to finance a Limited Condition Acquisition with respect to which the Borrower has made an LCA Election, to the extent agreed by the lenders providing such increase or additional Term Loan, such compliance may be measured at the time of the execution and delivery of the purchase agreement related to such Limited Condition Acquisition (and Section 1.3(c) shall then apply); (D) no existing Lender shall be under any obligation to increase its Revolving Commitment or Term Loan A Commitment or provide any portion of any additional Term Loan, and any such decision whether to increase its  47 130164155_5 142964982_4


 
Revolving Commitment or Term Loan A Commitment or provide any portion of any additional Term Loan, as applicable, shall be in such Lender’s sole and absolute discretion; (E) (1) any new Lender providing a Commitment in connection with any increase in Aggregate Commitments or additional Term Loan shall join this Agreement by executing such joinder documents reasonably required by the Administrative Agent and/or (2) any existing Lender electing to increase its Commitment or provide any portion of an additional Term Loan shall have executed a commitment or joinder agreement reasonably satisfactory to the Administrative Agent; (F) any such increase in the Aggregate Revolving Commitments or the Term Loan A Commitments or provision of any additional Term Loan shall be subject to receipt by the Administrative Agent of a certificate of the Borrower dated as of the date of such increase signed by an Authorized Officer of the Borrower (x) certifying and attaching the resolutions adopted by the Borrower and each Guarantor approving or consenting to such increase (along with, if requested by the Administrative Agent, the Organizational Documents (or bring-down representations) and incumbencies of and for each Credit Party), and (y) certifying that, after giving effect to such increase, (1) the representations and warranties contained in Section 6 and the other Credit Documents are true and correct in all material respects (without duplication of materiality qualifiers) on and as of the date of such increase, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (without duplication of materiality qualifiers) as of such earlier date, and except that for purposes of this Section 2.1(d), the representations and warranties contained in Section 6.7 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b) of Section 7.1, provided that in the case of any increase in the Term Loan A Commitments or the establishment of an additional Term Loan the proceeds of which are to be used to finance a Limited Condition Acquisition with respect to which the Borrower has made an LCA Election, to the extent agreed by the lenders providing such increase or incremental Term Loan, the applicable representations and warranties may be limited in a customary “SunGard” manner for limited conditionality acquisitions and (2) the conditions in clauses (B) and (C) above are satisfied; (G) each increase in the Aggregate Revolving Commitments shall be on the same terms as the outstanding Revolving Loans, and be part of the existing revolving credit facility hereunder; (H) each increase in the Term Loan A Commitments shall be on the same terms as the Term Loan A in effect on the Sixth Amendment Effective Date, and be part of the existing Term Loan A facility hereunder. (I) the Applicable Margin and (subject to clauses (J) and (K) below) amortization of any additional Term Loan shall be as set forth in the amendment documentation effectuating such additional Term Loan executed in connection therewith;  48 130164155_5 142964982_4


 
(J) the maturity date for any additional Term Loan shall be as set forth in the amendment documentation effectuating such additional Term Loan executed in connection therewith, provided that such date shall not be earlier than the Term Loan A Maturity Date or the maturity date of any other then existing Term Loan; (K) the scheduled principal amortization payments under any additional Term Loan shall be as set forth in the amendment documentation effectuating such additional Term Loan executed in connection therewith; provided that the weighted average life of any such additional Term Loan shall not be shorter than the weighted life to maturity of the Term Loan A and any other then existing Term Loan; and (L) the other terms and documentation in respect of any additional Term Loan, to the extent not consistent with the Term Loan A, will be reasonably satisfactory to the Administrative Agent and the Borrower and this Agreement shall be amended in connection with the effectuation of such additional Term Loan by an amendment among the Administrative Agent, the Borrower and the Lenders providing such additional Term Loan (without the need to obtain the consent of any Lender or the Issuing Bank other than the Lenders providing such additional Term Loans), in form and substance reasonably satisfactory to the Administrative Agent and the Borrower, to include (in addition to the Applicable Margin, maturity date and scheduled amortization) such terms as are customary for a term loan commitment, including mandatory prepayments, assignments and voting provisions; provided that the covenants, defaults and similar non-economic provisions applicable to any additional Term Loan, taken as a whole, (i) shall be no more restrictive than the corresponding terms set forth in the then existing Credit Documents and (ii) shall not contravene any of the terms of the then existing Credit Documents. Conflicting Provisions. This Section shall supersede any provisions in Section 2.14 or(e) 11.4 to the contrary. Swingline Loans.Section 2.2 Swingline Loans Commitments. During the Revolving Commitment Period, subject to(a) the terms and conditions hereof, the Swingline Lender may, in its sole discretion, make Swingline Loans to the Borrower in the aggregate amount up to but not exceeding the Swingline Sublimit; provided, that after giving effect to the making of any Swingline Loan, in no event shall (i) the Total Revolving Outstandings exceed the Aggregate Revolving Commitments and (ii) the Revolving Credit Exposure of any Lender exceed such Lender’s Revolving Commitment. Amounts borrowed pursuant to this Section 2.2 may be repaid and reborrowed during the Revolving Commitment Period. The Swingline Lender’s Revolving Commitment shall expire on the Revolving Commitment Termination Date and all Swingline Loans and all other amounts owed hereunder with respect to the Swingline Loans and the Revolving Commitments shall be paid in full no later than such date. Borrowing Mechanics for Swingline Loans.(b) Subject to clause (vi) below, whenever the Borrower desires that the Swingline(i) Lender make a Swingline Loan, the Borrower shall deliver to the Administrative Agent a duly executed and completed Funding Notice (which shall specify, among other things, the amount to  49 130164155_5 142964982_4


 
be borrowed, which shall be a minimum of $100,000, unless otherwise agreed by the Swingline Lender) no later than 11:00 a.m. on the proposed Credit Date. The Swingline Lender shall make the amount of its Swingline Loan available to(ii) the Administrative Agent not later than 3:00 p.m. on the applicable Credit Date by wire transfer of same day funds in Dollars, at the Administrative Agent’s Principal Office. Except as provided herein, upon satisfaction or waiver of the conditions precedent specified herein, the Administrative Agent shall make the proceeds of such Swingline Loans available to the Borrower on the applicable Credit Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Swingline Loans received by the Administrative Agent from the Swingline Lender to be credited to the account of the Borrower at the Administrative Agent’s Principal Office, or to such other account as may be designated in writing to the Administrative Agent by the Borrower. With respect to any Swingline Loans which have not been voluntarily prepaid by(iii) the Borrower pursuant to Section 2.11, the Swingline Lender may at any time in its sole and absolute discretion, deliver to the Administrative Agent (with a copy to the Borrower), no later than 11:00 a.m. on the day of the proposed Credit Date, a notice (which shall be deemed to be a Funding Notice given by the Borrower) requesting that each Lender holding a Revolving Commitment make Revolving Loans that are Base Rate Loans to the Borrower on such Credit Date in an amount equal to the amount of such Swingline Loans (the “Refunded Swingline Loans”) outstanding on the date such notice is given which the Swingline Lender requests Lenders to prepay. Anything contained in this Agreement to the contrary notwithstanding, (1) the proceeds of such Revolving Loans made by the Lenders other than the Swingline Lender shall be immediately delivered by the Administrative Agent to the Swingline Lender (and not to the Borrower) and applied to repay a corresponding portion of the Refunded Swingline Loans and (2) on the day such Revolving Loans are made, the Swingline Lender’s Revolving Commitment Percentage of the Refunded Swingline Loans shall be deemed to be paid with the proceeds of a Revolving Loan made by the Swingline Lender to the Borrower, and such portion of the Swingline Loans deemed to be so paid shall no longer be outstanding as Swingline Loans and shall no longer be due under the Swingline Note of the Swingline Lender but shall instead constitute part of the Swingline Lender’s outstanding Revolving Loans to the Borrower and shall be due under the Revolving Loan Note issued by the Borrower to the Swingline Lender. The Borrower hereby authorizes the Administrative Agent and the Swingline Lender to charge the Borrower’s accounts with the Administrative Agent and the Swingline Lender (up to the amount available in each such account) in order to immediately pay the Swingline Lender the amount of the Refunded Swingline Loans to the extent of the proceeds of such Revolving Loans made by the Lenders, including the Revolving Loans deemed to be made by the Swingline Lender, are insufficient to repay in full the Refunded Swingline Loans. If any portion of any such amount paid (or deemed to be paid) to the Swingline Lender should be recovered by or on behalf of the Borrower from the Swingline Lender in bankruptcy, by assignment for the benefit of creditors or otherwise, the loss of the amount so recovered shall be ratably shared among all Lenders in the manner contemplated by Section 2.14. If for any reason Revolving Loans are not made pursuant to Section 2.2(b)(iii) in(iv) an amount sufficient to repay any amounts owed to the Swingline Lender in respect of any outstanding Swingline Loans on or before the third Business Day after demand for payment thereof by the Swingline Lender, each Lender holding a Revolving Commitment shall be deemed to, and hereby agrees to, have purchased a participation in such outstanding Swingline Loans, and in an amount equal to its Revolving Commitment Percentage of the applicable unpaid amount  50 130164155_5 142964982_4


 
together with accrued interest thereon. On the Business Day that notice is provided by the Swingline Lender (or by the 11:00 a.m. on the following Business Day if such notice is provided after 2:00 p.m.), each Lender holding a Revolving Commitment shall deliver to the Swingline Lender an amount equal to its respective participation in the applicable unpaid amount in same day funds at the Principal Office of the Swingline Lender. In order to evidence such participation each Lender holding a Revolving Commitment agrees to enter into a participation agreement at the request of the Swingline Lender in form and substance reasonably satisfactory to the Swingline Lender. In the event any Lender holding a Revolving Commitment fails to make available to the Swingline Lender the amount of such Lender’s participation as provided in this paragraph, the Swingline Lender shall be entitled to recover such amount on demand from such Lender together with interest thereon for three Business Days at the rate customarily used by the Swingline Lender for the correction of errors among banks and thereafter at the Base Rate, as applicable. Notwithstanding anything contained herein to the contrary, (1) each Lender’s(v) obligation to make Revolving Loans for the purpose of repaying any Refunded Swingline Loans pursuant to clause (iii) above and each Lender’s obligation to purchase a participation in any unpaid Swingline Loans pursuant to the immediately preceding paragraph shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the Swingline Lender, any Credit Party or any other Person for any reason whatsoever; (B) the occurrence or continuation of a Default or Event of Default; (C) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of any Credit Party; (D) any breach of this Agreement or any other Credit Document by any party thereto; or (E) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing; provided that such obligations of each Lender are subject to the condition that the Swingline Lender had not received prior notice from the Borrower or the Required Lenders that any of the conditions under Section 5.2 to the making of the applicable Refunded Swingline Loans or other unpaid Swingline Loans were not satisfied at the time such Refunded Swingline Loans or other unpaid Swingline Loans were made; and (2) the Swingline Lender shall not be obligated to make any Swingline Loans (A) if it has elected not to do so after the occurrence and during the continuation of a Default or Event of Default, (B) it does not in good faith believe that all conditions under Section 5.2 to the making of such Swingline Loan have been satisfied or waived by the Required Lenders or (C) at a time when a Defaulting Lender exists, unless the Swingline Lender has entered into arrangements satisfactory to it and the Borrower to eliminate the Swingline Lender’s risk with respect to the Defaulting Lender’s participation in such Swingline Loan, including by Cash Collateralizing such Defaulting Lender’s Revolving Commitment Percentage of the outstanding Swingline Loans in a manner reasonably satisfactory to the Swingline Lender and the Administrative Agent. In order to facilitate the borrowing of Swingline Loans, the Borrower and the(vi) Swingline Lender may mutually agree to, and are hereby authorized to, enter into an auto borrow agreement in form and substance satisfactory to the Swingline Lender and the Administrative Agent (the “Auto Borrow Agreement”) providing for the automatic advance by the Swingline Lender of Swingline Loans under the conditions set forth in the Auto Borrow Agreement, subject to the conditions set forth herein. At any time an Auto Borrow Agreement is in effect, advances under the Auto Borrow Agreement shall be deemed Swingline Loans for all purposes hereof, except that Borrowings of Swingline Loans under the Auto Borrow Agreement shall be made in accordance with the Auto Borrow Agreement. For purposes of determining the Total Revolving Outstandings at any time during which an Auto Borrow Agreement is in effect, the Outstanding  51 130164155_5 142964982_4


 
Amount of all Swingline Loans shall be deemed to be the sum of the Outstanding Amount of Swingline Loans at such time plus the maximum amount available to be borrowed under such Auto Borrow Agreement at such time. Issuances of Letters of Credit and Purchase of Participations Therein.Section 2.3 Letters of Credit. During the Revolving Commitment Period, subject to the terms and(a) conditions hereof, the Issuing Bank agrees to issue Letters of Credit for the account of the Borrower or any of its Subsidiaries in the aggregate amount up to but not exceeding the Letter of Credit Sublimit; provided that (i) each Letter of Credit shall be denominated in Dollars; (ii) the stated amount of each Letter of Credit shall not be less than $50,000 or such lesser amount as is acceptable to the Issuing Bank; (iii) after giving effect to such issuance, in no event shall (x) the Total Revolving Outstandings exceed the Aggregate Revolving Commitments, (y) the Revolving Credit Exposure of any Lender exceed such Lender’s Revolving Commitment or (z) the Outstanding Amount of Letter of Credit Obligations exceed the Letter of Credit Sublimit; and (iv) in no event shall any Letter of Credit have an expiration date later than the earlier of (1) seven days prior to the Revolving Commitment Termination Date and (2) the date which is one year from the date of issuance of such Letter of Credit. Subject to the foregoing (other than clause (iv)) the Issuing Bank may agree that a Letter of Credit will automatically be extended for one or more successive periods not to exceed one year each, unless the Issuing Bank elects not to extend for any such additional period; provided that the Issuing Bank shall not extend any such Letter of Credit if it has received written notice that an Event of Default has occurred and is continuing at the time the Issuing Bank must elect to allow such extension; provided further that in the event that any Lender is at such time a Defaulting Lender, unless the Issuing Bank has entered into arrangements satisfactory to it (in its sole discretion) with the Borrower or such Defaulting Lender to eliminate the Issuing Bank’s Fronting Exposure with respect to such Lender (after giving effect to Section 2.16(a)(iv) and any Cash Collateral provided by the Defaulting Lender), including by Cash Collateralizing such Defaulting Lender’s Revolving Commitment Percentage of the Outstanding Amount of the Letter of Credit Obligations in a manner reasonably satisfactory to the Agents, the Issuing Bank shall not be obligated to issue or extend any Letter of Credit hereunder. The Issuing Bank may send a Letter of Credit or conduct any communication to or from the beneficiary via the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) message or overnight courier, or any other commercially reasonable means of communicating with a beneficiary. Notice of Issuance. Whenever the Borrower desires the issuance of a Letter of Credit, the(b) Borrower shall deliver to the Administrative Agent an Issuance Notice no later than 1:00 p.m. at least three Business Days or such shorter period as may be agreed to by the Issuing Bank in any particular instance, in advance of the proposed date of issuance. Upon satisfaction or waiver of the conditions set forth in Section 5.2, the Issuing Bank shall issue the requested Letter of Credit only in accordance its standard operating procedures (including the delivery by the Borrower of such executed documents and information pertaining to such requested Letter of Credit, including any Issuer Documents, as the Issuing Bank or the Administrative Agent may require). Upon the issuance of any Letter of Credit or amendment or modification to a Letter of Credit, the Issuing Bank shall promptly notify the Administrative Agent and each Lender of such issuance, which notice shall be accompanied by a copy of such Letter of Credit or amendment or modification to a Letter of Credit and the amount of such Lender’s respective participation in such Letter of Credit pursuant to Section 2.3(e). Responsibility of Issuing Bank With Respect to Requests for Drawings and Payments. In(c) determining whether to honor any drawing under any Letter of Credit by the beneficiary thereof, the Issuing Bank shall be responsible only to examine the documents delivered under such Letter of Credit with reasonable care so as to ascertain whether they appear on their face to be in accordance with the  52 130164155_5 142964982_4


 
terms and conditions of such Letter of Credit. As between the Borrower and the Issuing Bank, the Borrower assumes all risks of the acts and omissions of, or misuse of the Letters of Credit issued by the Issuing Bank, by the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank shall not be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) failure of the beneficiary of any such Letter of Credit to comply fully with any conditions required in order to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of the Issuing Bank, including any Governmental Acts; and in no event shall any of the foregoing affect or impair, or prevent the vesting of, the Issuing Bank’s rights or powers hereunder. Without limiting the foregoing and in furtherance thereof, any action taken or omitted by the Issuing Bank under or in connection with the Letters of Credit or any documents and certificates delivered thereunder, if taken or omitted in good faith, shall not give rise to any liability on the part of the Issuing Bank to any Credit Party. Notwithstanding anything to the contrary contained in this Section 2.3(c), the Borrower shall retain any and all rights it may have against the Issuing Bank for any liability arising solely out of the gross negligence or willful misconduct of the Issuing Bank, as determined by a court of competent jurisdiction in a final, non-appealable order. Reimbursement by the Borrower of Amounts Drawn or Paid Under Letters of Credit. In(d) the event the Issuing Bank has determined to honor a drawing under a Letter of Credit, it shall immediately notify the Borrower and the Administrative Agent, and the Borrower shall reimburse the Issuing Bank on or before the Business Day immediately following the date on which such drawing is honored (the “Reimbursement Date”) in an amount in Dollars and in same day funds equal to the amount of such honored drawing; provided, anything contained herein to the contrary notwithstanding, (i) unless the Borrower shall have notified the Administrative Agent and the Issuing Bank prior to 11:00 a.m. on the date such drawing is honored that the Borrower intends to reimburse the Issuing Bank for the amount of such honored drawing with funds other than the proceeds of Revolving Loans, the Borrower shall be deemed to have given a timely Funding Notice to the Administrative Agent requesting the Lenders to make Revolving Loans that are Base Rate Loans on the Reimbursement Date in an amount in Dollars equal to the amount of such honored drawing, and (ii) subject to satisfaction or waiver of the conditions specified in Section 5.2, the Lenders shall, on the Reimbursement Date, make Revolving Loans that are Base Rate Loans in the amount of such honored drawing, the proceeds of which shall be applied directly by the Administrative Agent to reimburse the Issuing Bank for the amount of such honored drawing; provided further that if for any reason proceeds of Revolving Loans are not received by the Issuing Bank on the Reimbursement Date in an amount equal to the amount of such honored drawing, the Borrower shall reimburse the Issuing Bank, on demand, in an amount in same day funds equal to the excess of the amount of such honored drawing over the aggregate amount of such Revolving Loans, if any, which are so received. Nothing in this Section 2.3(d) shall be deemed to relieve any Lender from its obligation to make Revolving Loans on the terms and conditions set forth herein, and the Borrower shall retain any and all rights it may have against any Lender resulting from the failure of such Lender to make such Revolving Loans under this Section 2.3(d).  53 130164155_5 142964982_4


 
Lenders’ Purchase of Participations in Letters of Credit. Immediately upon the issuance(e) of each Letter of Credit, each Lender having a Revolving Commitment shall be deemed to have purchased, and hereby agrees to irrevocably purchase, from the Issuing Bank a participation in such Letter of Credit and any drawings honored thereunder in an amount equal to such Lender’s Revolving Commitment Percentage (with respect to the Aggregate Revolving Commitments) of the maximum amount which is or at any time may become available to be drawn thereunder. In the event that the Borrower shall fail for any reason to reimburse the Issuing Bank as provided in Section 2.3(d), the Issuing Bank shall promptly notify each Lender of the unreimbursed amount of such honored drawing and of such Lender’s respective participation therein based on such Lender’s Revolving Commitment Percentage. Each Lender shall make available to the Issuing Bank an amount equal to its respective participation, in Dollars and in same day funds, at the office of the Issuing Bank specified in such notice, not later than 12:00 p.m. on the first Business Day (under the laws of the jurisdiction in which such office of such Issuing Bank is located) after the date notified by the Issuing Bank. In the event that any Lender fails to make available to the Issuing Bank on such Business Day the amount of such Lender’s participation in such Letter of Credit as provided in this Section 2.3(e), the Issuing Bank shall be entitled to recover such amount on demand from such Lender together with interest thereon for three Business Days at the rate customarily used by the Issuing Bank for the correction of errors among banks and thereafter at the Base Rate. Nothing in this Section 2.3(e) shall be deemed to prejudice the right of any Lender to recover from the Issuing Bank any amounts made available by such Lender to the Issuing Bank pursuant to this Section in the event that it is determined that the payment with respect to a Letter of Credit in respect of which payment was made by such Lender constituted gross negligence or willful misconduct on the part of the Issuing Bank, as determined by a court of competent jurisdiction in a final, non-appealable order. In the event the Issuing Bank shall have been reimbursed by other Lenders pursuant to this Section 2.3(e) for all or any portion of any drawing honored by the Issuing Bank under a Letter of Credit, the Issuing Bank shall distribute to each Lender which has paid all amounts payable by it under this Section 2.3(e) with respect to such honored drawing such Lender’s Revolving Commitment Percentage of all payments subsequently received by the Issuing Bank from the Borrower in reimbursement of such honored drawing when such payments are received. Any such distribution shall be made to a Lender at its primary address set forth below its name on Appendix B or at such other address as such Lender may request. Obligations Absolute. The obligation of the Borrower to reimburse the Issuing Bank for(f) drawings honored under the Letters of Credit issued by it and to repay any Revolving Loans made by the Lenders pursuant to Section 2.3(d) and the obligations of the Lenders under Section 2.3(e) shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms hereof under all circumstances including any of the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit; (ii) the existence of any claim, set-off, defense (other than that such drawing has been repaid) or other right which the Borrower or any Lender may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons for whom any such transferee may be acting), the Issuing Bank, a Lender or any other Person or, in the case of a Lender, against the Borrower, whether in connection herewith, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between the Borrower or any of its Subsidiaries and the beneficiary for which any Letter of Credit was procured); (iii) any draft or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Issuing Bank under any Letter of Credit against presentation of a draft or other document which does not substantially comply with the terms of such Letter of Credit; (v) any adverse change in the business, operations, properties, assets, or financial condition of the Borrower or any of its Subsidiaries; (vi) any breach hereof or any other Credit Document by any party thereto; (vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing; or (viii) the fact that an Event of Default or a Default shall have occurred and be  54 130164155_5 142964982_4


 
continuing; provided that in each case, that payment by the Issuing Bank under the applicable Letter of Credit shall not have constituted gross negligence or willful misconduct of the Issuing Bank under the circumstances in question, as determined by a court of competent jurisdiction in a final, non-appealable order. Indemnification. Without duplication of any obligation of the Credit Parties under(g) Section 11.2, in addition to amounts payable as provided herein, each of the Credit Parties hereby agrees, on a joint and several basis, to protect, indemnify, pay and save harmless the Issuing Bank from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable out-of-pocket fees, expenses and disbursements of counsel to the Issuing Bank) which the Issuing Bank may incur or be subject to as a consequence, direct or indirect, of (i) the issuance of any Letter of Credit by the Issuing Bank, other than as a result of (1) the gross negligence or willful misconduct of the Issuing Bank, as determined by a court of competent jurisdiction in a final, non-appealable order, or (2) the wrongful dishonor by the Issuing Bank of a proper demand for payment made under any Letter of Credit issued by it, or (ii) the failure of the Issuing Bank to honor a drawing under any such Letter of Credit as a result of any Governmental Act. Applicability of ISP. Unless otherwise expressly agreed by the Issuing Bank and the(h) Borrower when a Letter of Credit is issued, the rules of the ISP shall apply to each Letter of Credit. Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of Credit issued(i) or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary of the Borrower, the Borrower shall be obligated to reimburse the Issuing Bank hereunder for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit for the account of the Subsidiaries inures to the benefit of the Borrower, and that the Borrower’s business derives substantial benefits from the businesses of such Subsidiaries. Conflict with Issuer Documents. In the event of any conflict between the terms hereof(j) and the terms of any Issuer Document, the terms hereof shall control. Pro Rata Shares; Availability of Funds.Section 2.4 Pro Rata Shares. All Loans shall be made, and all participations purchased, by the(a) applicable Lenders simultaneously and proportionately to their respective pro rata shares of the Loans, it being understood that no Lender shall be responsible for any default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder or purchase a participation required hereby nor shall any Revolving Commitment or any Term Loan Commitment, or the portion of the aggregate outstanding principal amount of the Revolving Loans or the Term Loans, of any Lender be increased or decreased as a result of a default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder or purchase a participation required hereby. Availability of Funds.(b) Funding by Lenders; Presumption by Administrative Agent. Unless the(i) Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.1(c) or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.1(c) and may, in reliance upon such assumption, make  55 130164155_5 142964982_4


 
available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans, plus, in either case, any administrative, processing or similar fees customarily charged by the Administrative Agent in connection therewith. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent. Payments by the Borrower; Presumptions by Administrative Agent. Unless the(ii) Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the Issuing Bank, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. Notices given by the Administrative Agent under this subsection (b) shall be conclusive absent manifest error. Evidence of Debt; Register; Lenders’ Books and Records; Notes.Section 2.5 Lenders’ Evidence of Debt. Each Lender shall maintain on its internal records an(a) account or accounts evidencing the Obligations of the Borrower and each other Credit Party to such Lender, including the amounts of the Loans made by it and each repayment and prepayment in respect thereof. Any such recordation shall be conclusive and binding on the Borrower, absent manifest error; provided that the failure to make any such recordation, or any error in such recordation, shall not affect any Lender’s Commitment or the Borrower’s obligations in respect of any applicable Loans; and provided further that in the event of any inconsistency between the Register and any Lender’s records, the recordations in the Register shall govern in the absence of demonstrable error therein. Notes. The Borrower shall execute and deliver to each (i) Lender on the Closing Date,(b) (ii) Person who is a permitted assignee of such Lender pursuant to Section 11.5 and (iii) Person who becomes a Lender in accordance with Section 2.1(d), in each case to the extent requested by such Person,  56 130164155_5 142964982_4


 
a Note or Notes to evidence such Person’s portion of the Revolving Loans, Swingline Loans or Term Loans, as applicable. Scheduled Principal Payments.Section 2.6 Revolving Loans. The principal amount of Revolving Loans is due and payable in full(a) on the Revolving Commitment Termination Date. Swingline Loans. The principal amount of each Swingline Loan is due and payable in(b) full on the earlier to occur of (i) the date of demand by the Swingline Lender with respect to such Swingline Loan and (ii) the Revolving Commitment Termination Date. Term Loan A. The principal amount of the Term Loan A shall be repaid in quarterly(c) principal installments equal to (i) for the first six fiscal quarter payment dates after the Eighth Amendment Effective Date (commencing with the fiscal quarter ending December 31, 2018), $3,765,625.00 per quarter, (ii) for the next eight fiscal quarter payment dates, $5,648,437.50 per quarter each and (iii) for each fiscal quarter payment date thereafter, $7,531,250.00 per quarter (in each case, as such amount may be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.11), each such payment to be made on the last Business Day of each March, June, September and December, unless accelerated sooner pursuant to Section 9, and the final principal repayment installment of the Term Loan A shall be repaid on the Term Loan A Maturity Date in an amount equal to the aggregate principal amount of the Term Loan A outstanding on such date. Additional Term Loans. The principal amount of any Term Loan established after the(d) Sixth Amendment Effective Date pursuant to Section 2.1(d)(iii) shall be repaid in installments on the date and in the amounts set forth in the documents executed and delivered by the Borrower pursuant to which such additional Term Loan is established. Interest on Loans.Section 2.7 Except as otherwise set forth herein, each Loan shall bear interest on the unpaid principal(a) amount thereof from the date made through repayment (whether by acceleration or otherwise) thereof as follows: in the case of Revolving Loans or the Term Loan A:(i) if a Base Rate Loan (including a Base Rate Loan referencing the LIBOR(A) Index Rate), the Base Rate plus the Applicable Margin; or if an Adjusted LIBOR Rate Loan, the Adjusted LIBOR Rate plus the(B) Applicable Margin; and in the case of Swingline Loans, at the Swingline Rate; and(ii) in the case of any Term Loan established pursuant to Section 2.1(d)(iii), at the(iii) percentages per annum specified in the lender joinder agreement(s) and/or the commitment agreement(s) whereby such Term Loan is established. The basis for determining the rate of interest with respect to any Loan (except a(b) Swingline Loan, which may only be made and maintained at the Swingline Rate (unless and until converted into a Revolving Loan pursuant to the terms and conditions hereof)), and the Interest Period  57 130164155_5 142964982_4


 
with respect to any Adjusted LIBOR Rate Loan, shall be selected by the Borrower and notified to the Administrative Agent and the Lenders pursuant to the applicable Funding Notice or Conversion/Continuation Notice, as the case may be. If on any day a Loan is outstanding with respect to which a Funding Notice or Conversion/Continuation Notice has not been delivered to the Administrative Agent in accordance with the terms hereof specifying the applicable basis for determining the rate of interest, then for that day (i) if such Loan is an Adjusted LIBOR Rate Loan, such Loan shall become a Base Rate Loan and (ii) if such Loan is a Base Rate Loan, such Loan shall remain a Base Rate Loan. In connection with Adjusted LIBOR Rate Loans, there shall be no more than eight(c) Interest Periods outstanding at any time. In the event the Borrower fails to specify between a Base Rate Loan or an Adjusted LIBOR Rate Loan in the applicable Funding Notice or Conversion/Continuation Notice, such Loan (i) if outstanding as an Adjusted LIBOR Rate Loan, will be automatically converted into a Base Rate Loan on the last day of the then-current Interest Period for such Loan, and (ii) if outstanding as a Base Rate Loan will remain as, or (if not then outstanding) will be made as, a Base Rate Loan. In the event the Borrower fails to specify an Interest Period for any Adjusted LIBOR Rate Loan in the applicable Funding Notice or Conversion/Continuation Notice, the Borrower shall be deemed to have selected an Interest Period of one month. As soon as practicable after 10:00 a.m. on each Interest Rate Determination Date and each Index Rate Determination Date, the Administrative Agent shall determine (which determination shall, absent manifest error, be final, conclusive and binding upon all parties) the interest rate that shall apply to each of the LIBOR Loans for which an interest rate is then being determined (and for the applicable Interest Period in the case of Adjusted LIBOR Rate Loans) and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to the Borrower and each Lender. Interest payable pursuant to this Section 2.7 shall be computed on the basis of (i) for(d) interest at the Base Rate (including Base Rate Loans determined by reference to the LIBOR Index Rate), a year of three hundred sixty-five or three hundred sixty-six days, as the case may be, and (ii) for all other computations of fees and interest, a year of three hundred sixty days, in each case for the actual number of days elapsed in the period during which it accrues. In computing interest on any Loan, the date of the making of such Loan or the first day of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted from an Adjusted LIBOR Rate Loan, the date of conversion of such Adjusted LIBOR Rate Loan to such Base Rate Loan, as the case may be, shall be included, and the date of payment of such Loan or the expiration date of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted to an Adjusted LIBOR Rate Loan, the date of conversion of such Base Rate Loan to such Adjusted LIBOR Rate Loan, as the case may be, shall be excluded; provided that if a Loan is repaid on the same day on which it is made, one day’s interest shall be paid on that Loan. If, as a result of any restatement of or other adjustment to the financial statements of the(e) Borrower or for any other reason, the Borrower or the Lenders determine that (i) the Consolidated Net Leverage Ratio as calculated by the Borrower as of any applicable date was inaccurate and (ii) a proper calculation of the Consolidated Net Leverage Ratio would have resulted in higher pricing for such period, the Borrower shall immediately and retroactively be obligated to pay to the Administrative Agent for the account of the Lenders promptly on demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code or other Debtor Relief Law, automatically and without further action by the Administrative Agent or any Lender), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period. This subsection (e) shall not limit the rights of the Administrative Agent or any Lender, as the case may be, under any other provision of this Agreement. The Borrower’s obligations under this paragraph shall survive the termination of the Commitments and the repayment of all other Obligations.  58 130164155_5 142964982_4


 
Except as otherwise set forth herein, interest on each Loan shall accrue on a daily basis(f) and shall be payable in arrears (i) on and to each Interest Payment Date applicable to that Loan; (ii) upon any prepayment of that Loan (other than a voluntary prepayment of a Revolving Loan or Term Loan which interest shall be payable in accordance with clause (i) above), to the extent accrued on the amount being prepaid; and (iii) at maturity, including final maturity. The Borrower agrees to pay to the Issuing Bank, with respect to drawings honored under(g) any Letter of Credit issued by the Issuing Bank, interest on the amount paid by the Issuing Bank in respect of each such honored drawing from the date such drawing is honored to but excluding the date such amount is reimbursed by or on behalf of the Borrower at a rate equal to (i) for the period from the date such drawing is honored to but excluding the applicable Reimbursement Date, the rate of interest otherwise payable hereunder with respect to Revolving Loans that are Base Rate Loans, and (ii) thereafter, a rate which is the lesser of (y) two percent per annum in excess of the rate of interest otherwise payable hereunder with respect to Revolving Loans that are Base Rate Loans, and (z) the Highest Lawful Rate. Interest payable pursuant to Section 2.7(g) shall be computed on the basis of a year of(h) three hundred sixty days, for the actual number of days elapsed in the period during which it accrues, and shall be payable on demand or, if no demand is made, on the date on which the related drawing under a Letter of Credit is reimbursed in full. Promptly upon receipt by the Issuing Bank of any payment of interest pursuant to Section 2.7(g), the Issuing Bank shall distribute to each Lender, out of the interest received by the Issuing Bank in respect of the period from the date such drawing is honored to but excluding the date on which the Issuing Bank is reimbursed for the amount of such drawing (including any such reimbursement out of the proceeds of any Revolving Loans), the amount that such Lender would have been entitled to receive in respect of the letter of credit fee that would have been payable in respect of such Letter of Credit for such period if no drawing had been honored under such Letter of Credit. In the event the Issuing Bank shall have been reimbursed by the Lenders for all or any portion of such honored drawing, the Issuing Bank shall distribute to each Lender which has paid all amounts payable by it under Section 2.3(e) with respect to such honored drawing such Lender’s Revolving Commitment Percentage of any interest received by the Issuing Bank in respect of that portion of such honored drawing so reimbursed by the Lenders for the period from the date on which the Issuing Bank was so reimbursed by the Lenders to but excluding the date on which such portion of such honored drawing is reimbursed by the Borrower. Conversion/Continuation.Section 2.8 So long as no Default or Event of Default shall have occurred and then be continuing or(a) would result therefrom, the Borrower shall have the option: to convert all or part of any Loan from one Type of Loan to another Type of(i) Loan at any time in an amount equal to (A) in the case of any conversion to Adjusted LIBOR Rate Loans, $3,000,000 and integral multiples of $1,000,000 in excess of that amount and (B) in the case of any conversion to Base Rate Loans, $500,000 and integral multiples of $100,000 in excess of that amount; provided that an Adjusted LIBOR Rate Loan may only be converted on the expiration of the Interest Period applicable to such Adjusted LIBOR Rate Loan unless the Borrower shall pay all amounts due under Section 3.1(c) in connection with any such conversion; or upon the expiration of any Interest Period applicable to any Adjusted LIBOR(ii) Rate Loan, to continue all or any portion of such Loan as an Adjusted LIBOR Rate Loan.  59 130164155_5 142964982_4


 
The Borrower shall deliver a Conversion/Continuation Notice to the Administrative(b) Agent no later than 1:00 p.m. at least one Business Day in advance of the proposed Conversion/Continuation Date (in the case of a conversion to a Base Rate Loan) and at least three Business Days in advance of the proposed Conversion/Continuation Date (in the case of conversion to, or continuation of, an Adjusted LIBOR Rate Loan). Except as otherwise provided herein, a Conversion/Continuation Notice for conversion to, or continuation of, any Adjusted LIBOR Rate Loans (or telephonic notice in lieu thereof) shall be irrevocable on and after the related Interest Rate Determination Date, and the Borrower shall be bound to effect a conversion or continuation in accordance therewith. Default Rate of Interest.Section 2.9 If any amount of principal of any Loan is not paid when due, whether at stated maturity,(a) by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by Applicable Laws. If any amount (other than principal of any Loan) payable by any Credit Party under any(b) Credit Document is not paid when due (after the expiration of any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then at the request of the Required Lenders, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by Applicable Laws. During the continuance of an Event of Default under Section 9.1(f) or Section 9.1(g), the(c) Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by Applicable Laws. During the continuance of an Event of Default other than an Event of Default under(d) Section 9.1(f) or Section 9.1(g), the Borrower shall, at the request of the Required Lenders, pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by Applicable Laws. Accrued and unpaid interest on past due amounts (including interest on past due interest)(e) shall be due and payable upon demand. In the case of any Adjusted LIBOR Rate Loan, upon the expiration of the Interest Period(f) in effect at the time the Default Rate of interest is effective, each such Adjusted LIBOR Rate Loan shall thereupon become a Base Rate Loan and shall thereafter bear interest at the Default Rate then in effect for Base Rate Loans. Payment or acceptance of the increased rates of interest provided for in this Section 2.9 is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of the Administrative Agent, the Collateral Agent or any Lender. Fees.Section 2.10 Commitment Fee. The Borrower shall pay to the Administrative Agent for the account of(a) each Lender in accordance with its Revolving Commitment Percentage, a commitment fee (the “Commitment Fee”) equal to the Applicable Margin times the actual daily amount by which the Aggregate Revolving Commitments exceeds the Total Revolving Outstandings, subject to adjustments as provided in Section 2.16. The Commitment Fee shall accrue at all times during the Revolving Commitment Period, including at any time during which one or more of the conditions in Section 5 is not  60 130164155_5 142964982_4


 
met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the Revolving Commitment Termination Date. The Commitment Fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Margin during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Margin separately for each period during such quarter that such Applicable Margin was in effect. For purposes hereof, Swingline Loans shall not be counted toward or be considered as usage of the Aggregate Revolving Commitments, or included in the determination of “Total Revolving Outstandings” for purposes of computation thereof. Letter of Credit Fees.(b) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent, for(i) the account of each Lender in accordance with its Revolving Commitment Percentage, a fee for each Letter of Credit equal to the Applicable Margin multiplied by the daily maximum amount available to be drawn under such Letter of Credit (the “Letter of Credit Fee”). For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.4(h). The Letter of Credit Fee shall be computed on a quarterly basis in arrears, and shall be due and payable on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the expiration date thereof and thereafter on demand. If there is any change in the Applicable Margin during any quarter, the daily maximum amount available to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable Margin separately for each period during such quarter that such Applicable Margin was in effect. Notwithstanding anything to the contrary contained herein, during the continuance of an Event of Default under Section 9.1(f) and (g), all Letter of Credit Fees shall accrue at the Default Rate, and during the continuance of an Event of Default other than an Event of Default under Section 9.1(f) or (g), then upon the request of the Required Lenders, all Letter of Credit Fees shall accrue at the Default Rate. Fronting Fee and Documentary and Processing Charges Payable to Issuing Bank.(ii) The Borrower shall pay directly to the Issuing Bank for its own account a fronting fee with respect to each Letter of Credit at the rate per annum specified in the Fee Letter, computed on the daily amount available to be drawn under such Letter of Credit, on a quarterly basis in arrears. Such fronting fee shall be due and payable on the last Business Day of each March, June, September and December in respect of the most recently-ended quarterly period (or portion thereof, in the case of the first payment), commencing with the first such date to occur after the issuance of such Letter of Credit, on its expiration date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.4(h). In addition, the Borrower shall pay directly to the Issuing Bank for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the Issuing Bank relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable. Other Fees. The Borrower shall pay to Regions Capital Markets, a division of Regions(c) Bank, and the Administrative Agent for their own respective accounts fees in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever, except to the extent set forth in the Fee Letter. Prepayments/Commitment Reductions.Section 2.11  61 130164155_5 142964982_4


 
Voluntary Prepayments.(a) Any time and from time to time, the Loans may be repaid in whole or in part(i) without premium or penalty (subject to Section 3.1(c)): with respect to Base Rate Loans (including Base Rate Loans referencing(A) the LIBOR Index Rate), the Borrower may prepay any such Loans on any Business Day in whole or in part, in an aggregate minimum amount of $500,000 and integral multiples of $100,000 in excess of that amount; with respect to Adjusted LIBOR Rate Loans, the Borrower may prepay(B) any such Loans on any Business Day in whole or in part (together with any amounts due pursuant to Section 3.1(c)) in an aggregate minimum amount of $3,000,000 and integral multiples of $1,000,000 in excess of that amount; and with respect to Swingline Loans, the Borrower may prepay any such(C) Loans on any Business Day in whole or in part in any amount; All such prepayments shall be made:(ii) upon written or telephonic notice on the date of prepayment in the case(A) of Base Rate Loans or Swingline Loans; and upon not less than three Business Days’ prior written or telephonic notice(B) in the case of Adjusted LIBOR Rate Loans; in each case given to the Administrative Agent, or the Swingline Lender, as the case may be, by 11:00 a.m. on the date required and, if given by telephone, promptly confirmed in writing to the Administrative Agent (and the Administrative Agent will promptly transmit such telephonic or original notice of a prepayment to each Lender). Upon the giving of any such notice, the principal amount of the Loans specified in such notice shall become due and payable on the prepayment date specified therein. Any such voluntary prepayment shall be applied as specified in Section 2.12. Voluntary Commitment Reductions.(b) The Borrower may, from time to time upon not less than three Business Days’(i) prior written or telephonic notice confirmed in writing to the Administrative Agent (which original written or telephonic notice the Administrative Agent will promptly transmit by telefacsimile or telephone to each applicable Lender), at any time and from time to time terminate in whole or permanently reduce in part the Aggregate Revolving Commitments (ratably among the Lenders in accordance with their respective commitment percentage thereof); provided that (A) any such partial reduction of the Aggregate Revolving Commitments shall be in an aggregate minimum amount of $3,000,000 and integral multiples of $1,000,000 in excess of that amount, (B) the Borrower shall not terminate or reduce the Aggregate Revolving Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the aggregate Total Revolving Outstandings exceed the Aggregate Revolving Commitments and (C) if, after giving effect to any reduction of the Aggregate Revolving Commitments, the Letter of Credit Sublimit and/or the Swingline Sublimit exceed the amount of the Aggregate Revolving Commitments, the Letter of Credit Sublimit and/or the Swingline Sublimit, as applicable, shall be automatically reduced by the amount of such excess.  62 130164155_5 142964982_4


 
The Borrower’s notice to the Administrative Agent shall designate the date(ii) (which shall be a Business Day and at least three Business Days after the date of such notice) of such termination or reduction and the amount of any partial reduction, and such termination or reduction of the Aggregate Revolving Commitments shall be effective on the date specified in the Borrower’s notice and shall reduce the Revolving Commitment of each Lender proportionately to its Revolving Commitment Percentage thereof; provided that a notice of termination of the Aggregate Revolving Commitments may state that such notice is conditioned upon the effectiveness of other credit facilities or the receipt of the proceeds of the issuance of other Indebtedness or the occurrence of some other identifiable event or condition, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to 3:00 p.m. on the specified effective date of termination) if such condition is not satisfied (it being understood that the failure of such contingency shall not relieve the Borrower from its obligations under Section 3.1(c)). Mandatory Prepayments.(c) Revolving Commitments. If at any time (i) the Total Revolving Outstandings(i) shall exceed the Aggregate Revolving Commitments, (ii) the Outstanding Amount of Letter of Credit Obligations shall exceed the Letter of Credit Sublimit, or (iii) the Outstanding Amount of Swingline Loans shall exceed the Swingline Sublimit, the Borrower shall prepay Loans and/or Cash Collateralize Letter of Credit Obligations in an aggregate amount equal to such excess promptly on the date the Borrower becomes aware of the existence of such excess; provided that, except with respect to clause (ii), Letter of Credit Obligations will not be Cash Collateralized hereunder until the Revolving Loans and Swingline Loans have been paid in full. Asset Sales and Involuntary Dispositions. Prepayment will be made on the(ii) Obligations on the Business Day following receipt of Net Cash Proceeds required to be prepaid pursuant to the provisions hereof in an amount equal to one hundred percent (100%) of the Net Cash Proceeds received in excess of $10,000,000 in any Fiscal Year from any Asset Sale or Involuntary Disposition by the Borrower or any of its Subsidiaries; provided, however, that if (and only if) the pro forma (as provided in Section 1.3) Consolidated Net Leverage Ratio as of the date of such Asset Sale or Involuntary Disposition is less than 3.25 to 1.00, then with respect to any Net Cash Proceeds realized from an Asset Sale or Involuntary Disposition described in this Section 2.11(c)(ii), at the election of the Borrower (as notified by the Borrower to the Administrative Agent on or prior to the date of such Asset Sale or Involuntary Disposition, as applicable), and so long as no Event of Default shall have occurred and be continuing, the Borrower or such Subsidiary may reinvest all or any portion of such Net Cash Proceeds in operating assets so long as within 180 days after the receipt of such Net Cash Proceeds, such purchase shall have been consummated (as certified by the Borrower in writing to the Administrative Agent); and provided further, however, that any Net Cash Proceeds not subject to such definitive agreement or so reinvested shall be immediately applied to the prepayment of the Loans as set forth in this Section 2.11(c)(ii). Debt Transactions. Prepayment will be made on the Obligations in an amount(iii) equal to one hundred percent (100%) of the Net Cash Proceeds from any Debt Transactions on the Business Day following receipt thereof. Convertible Note Proceeds. Prepayment will be made on the Obligations in an(iv) amount equal to 50% of the Net Cash Proceeds of the issuance of any convertible notes pursuant to Section 8.1(r) on the Business Day following receipt thereof.  63 130164155_5 142964982_4


 
EbixCash Offering. Prepayment will be made on the Obligations in an amount(v) equal to 50% of the Net Cash Proceeds of the EbixCash Offering on the Business Day following receipt thereof. Excess Cash Flow. Within five Business Days after financial statements have(vi) been delivered pursuant to Section 7.1(a) and the related Compliance Certificate has been delivered pursuant to Section 7.1(c) (commencing with the Fiscal Year ending December 31, 2020), prepayment will be made on the Obligations in an amount equal to the excess (if any) of (A) 50% of Excess Cash Flow for the Fiscal Year covered by such financial statements over (B) the aggregate principal amount of Term Loan A prepaid pursuant to Section 2.11(a); provided that no such prepayment shall be required for any Fiscal Year if as of the last day of such Fiscal Year the Consolidated Net Leverage Ratio is less than 3.25 to 1.00. Application of Prepayments. Within each Loan, prepayments will be appliedSection 2.12 first to Base Rate Loans, then to LIBOR Loans in direct order of Interest Period maturities. In addition: Voluntary Prepayments. Voluntary prepayments will be applied as specified by the(a) Borrower; provided that if the Borrower fails to specify how such prepayments will be applied, such prepayments will be applied in accordance with clause (b)(ii) below. Mandatory Prepayments. Mandatory prepayments will be applied as follows:(b) Mandatory prepayments in respect of the Revolving Commitments under Section (i) 2.11(c)(i) above shall be applied to the respective Revolving Obligations as appropriate but without a permanent reduction thereof. Mandatory prepayments in respect of Asset Sales and Involuntary Dispositions(ii) under Section 2.11(c)(ii), Debt Transactions under Section 2.11(c)(iii), any issuance of convertible notes under Section 2.11(c)(iv), the EbixCash Offering under Section 2.11(c)(v) and Excess Cash Flow under Section 2.11(c)(vi) shall in any such case be applied as follows: first, ratably to the Term Loans, until paid in full, and then to the Revolving Obligations without a permanent reduction thereof. Mandatory prepayments with respect to each of the Term Loans will be applied to remaining principal installments thereunder in direct order of maturity to the next four quarterly principal installments and, thereafter, on a pro rata basis across the remaining principal installments thereof (including the final payment thereof on the Term Loan A Maturity Date or other applicable maturity date with respect to any additional Term Loan). Prepayments on the Obligations will be paid by the Administrative Agent to the Lenders(c) ratably in accordance with their respective interests therein (except for Defaulting Lenders where their share will be applied as provided in Section 2.16(a)(ii) hereof). General Provisions Regarding Payments.Section 2.13 All payments by the Borrower of principal, interest, fees and other Obligations hereunder(a) or under any other Credit Document shall be made in Dollars in immediately available funds, without defense, recoupment, setoff or counterclaim, free of any restriction or condition. The Administrative Agent shall, and the Borrower hereby authorizes the Administrative Agent to, debit a deposit account of the Borrower or any of its Subsidiaries held with the Administrative Agent or any of its Affiliates and designated for such purpose by the Borrower or such Subsidiary in order to cause timely payment to be made to the Administrative Agent of all principal, interest and fees due hereunder or under any other Credit Document (subject to sufficient funds being available in its accounts for that purpose).  64 130164155_5 142964982_4


 
In the event that the Administrative Agent is unable to debit a deposit account of the(b) Borrower or any of its Subsidiaries held with the Administrative Agent or any of its Affiliates in order to cause timely payment to be made to the Administrative Agent of all principal, interest and fees due hereunder or any other Credit Document (including because insufficient funds are available in its accounts for that purpose), payments hereunder and under any other Credit Document shall be delivered to the Administrative Agent, for the account of the Lenders, not later than 2:00 p.m. on the date due at the Principal Office of the Administrative Agent or via wire transfer of immediately available funds to an account designated by the Administrative Agent (or at such other location as may be designated in writing by the Administrative Agent from time to time); for purposes of computing interest and fees, funds received by the Administrative Agent after that time on such due date shall be deemed to have been paid by the Borrower on the next Business Day. All payments in respect of the principal amount of any Loan (other than voluntary(c) repayments of Revolving Loans) shall be accompanied by payment of accrued interest on the principal amount being repaid or prepaid, and all such payments (and, in any event, any payments in respect of any Loan on a date when interest is due and payable with respect to such Loan) shall be applied to the payment of interest then due and payable before application to principal. The Administrative Agent shall promptly distribute to each Lender at such address as(d) such Lender shall indicate in writing, such Lender’s applicable pro rata share of all payments and prepayments of principal and interest due to such Lender hereunder, together with all other amounts due with respect thereto, including all fees payable with respect thereto, to the extent received by the Administrative Agent. Notwithstanding the foregoing provisions hereof, if any Conversion/Continuation Notice(e) is withdrawn as to any Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of its pro rata share of any Adjusted LIBOR Rate Loans, the Administrative Agent shall give effect thereto in apportioning payments received thereafter. Subject to the provisos set forth in the definition of “Interest Period,” whenever any(f) payment to be made hereunder shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of interest hereunder or of the Commitment Fee hereunder, but such payment shall be deemed to have been made on the date therefor for all other purposes hereunder. The Administrative Agent may, but shall not be obligated to, deem any payment by or on(g) behalf of the Borrower hereunder that is not made in same day funds prior to 2:00 p.m. to be a non-conforming payment. Any such non-conforming payment shall not be deemed to have been received by the Administrative Agent until the later of (i) the time such funds become available funds, and (ii) the applicable next Business Day. The Administrative Agent shall give prompt telephonic notice to the Borrower and each applicable Lender (confirmed in writing) if any payment is non-conforming. Any non-conforming payment may constitute or become a Default or Event of Default in accordance with the terms of Section 9.1(a). Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding applicable Business Day) at the Default Rate (unless otherwise provided by the Required Lenders) from the date such amount was due and payable until the date such amount is paid in full. Sharing of Payments by Lenders. If any Lender shall, by exercising any right ofSection 2.14 setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its  65 130164155_5 142964982_4


 
Loans or other obligations hereunder resulting in such Lender receiving payment of a proportion of the aggregate amount of such Loans and accrued interest thereon or other such obligations greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them; provided that: if any such participations are purchased and all or any portion of the payment(i) giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and the provisions of this Section shall not be construed to apply to (A) any payment(ii) made by the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (B) any amounts applied by the Swingline Lender to outstanding Swingline Loans, (C) any amounts applied to Letter of Credit Obligations by the Issuing Bank or Swingline Loans by the Swingline Lender, as appropriate, from Cash Collateral provided under Section 2.15 or Section 2.16, or (D) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in Letter of Credit Obligations, Swingline Loans or other obligations hereunder to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this Section 2.14 shall apply). Each of the Credit Parties consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Credit Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Credit Party in the amount of such participation. Cash Collateral.Section 2.15 Existence of Defaulting Lender. At any time that there shall exist a Defaulting Lender,(a) within one Business Day following the written request of the Administrative Agent or the Issuing Bank (with a copy to the Administrative Agent), the Borrower shall Cash Collateralize the Issuing Bank’s Fronting Exposure with respect to such Defaulting Lender in an amount sufficient to cover the applicable Fronting Exposure (after giving effect to Section 2.16(a)(iv) and any Cash Collateral provided by the Defaulting Lender). Grant of Security Interest. The Borrower, and to the extent provided by any Defaulting(b) Lender, such Defaulting Lender, hereby grants to the Administrative Agent, for the benefit of the Issuing Bank, and agrees to maintain, a perfected first priority security interest in all such Cash Collateral as security for the Defaulting Lenders’ obligation to fund participations in respect of Letter of Credit Obligations, to be applied pursuant to clause (c) below. If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent and the Issuing Bank as herein provided, or that the total amount of such Cash Collateral is less than the applicable Fronting Exposure, the Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).  66 130164155_5 142964982_4


 
Application. Notwithstanding anything to the contrary contained in this Agreement,(c) Cash Collateral provided under this Section 2.15 or Section 2.16 in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of Letter of Credit Obligations (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein. Termination of Requirement. Cash Collateral (or the appropriate portion thereof)(d) provided to reduce the Issuing Bank’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section 2.15 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the Administrative Agent and the Issuing Bank that there exists excess Cash Collateral; provided that (x) Cash Collateral furnished by or on behalf of a Credit Party shall not be released during the continuance of a Default or Event of Default (and following application as provided in this Section 2.15 may be otherwise applied in accordance with Section 9.3) but shall be released upon the cure, termination or waiver of such Default or Event of Default in accordance with the terms of this Agreement, and (y) the Person providing Cash Collateral and the Issuing Bank may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations. Defaulting Lenders.Section 2.16 Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in(a) this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law: Waivers and Amendments. Such Defaulting Lender’s right to approve or(i) disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 11.4(a)(iii). Defaulting Lender Waterfall. Any payment of principal, interest, fees or other(ii) amount (other than fees which any Defaulting Lender is not entitled to receive pursuant to Section 2.16(a)(iii)) received by any Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 9 or otherwise, and including any amounts made available to any Agent by that Defaulting Lender pursuant to Section 11.3), shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by that Defaulting Lender to any Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by that Defaulting Lender to the Issuing Bank or the Swingline Lender hereunder; third, to Cash Collateralize the Issuing Bank’s Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.15; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a non-interest bearing deposit account and released in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the Issuing Bank’s future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.15; sixth, to the payment of any amounts owing to the Lenders, the Issuing Bank or the Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Bank or the Swingline Lender against that Defaulting Lender as a result of that Defaulting  67 130164155_5 142964982_4


 
Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or Letter of Credit Borrowings in respect of which that Defaulting Lender has not fully funded its appropriate share and (y) such Loans or Letter of Credit Borrowings were made at a time when the conditions set forth in Section 5.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and Letter of Credit Borrowings owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or Letter of Credit Borrowings owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in Letter of Credit Obligations and Swingline Loans are held by the Lenders pro rata in accordance with their Revolving Commitments without giving effect to Section 2.16(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.16(a)(ii) shall be deemed paid to (and the underlying obligations satisfied to the extent of such payment) and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto. Certain Fees.(iii) Such Defaulting Lender shall not be entitled to receive any Commitment(A) Fee for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such Commitment Fee that otherwise would have been required to have been paid to that Defaulting Lender). Each Defaulting Lender shall be entitled to receive Letter of Credit Fees(B) for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Revolving Commitment Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.15. With respect to any Letter of Credit Fee not required to be paid to any(C) Defaulting Lender pursuant to clause (B) above, the Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such Letter of Credit Fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in Letter of Credit Obligations that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to the Issuing Bank the amount of any such Letter of Credit Fee otherwise payable to such Defaulting Lender to the extent allocable to the Issuing Bank’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such Letter of Credit Fee. Reallocation of Participations to Reduce Fronting Exposure. All or any part of(iv) such Defaulting Lender’s participation in Letter of Credit Obligations and Swingline Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Revolving Commitment Percentages (calculated without regard to such Defaulting Lender’s Revolving Commitment) but only to the extent that (x) the conditions set forth in Section 5.2 are satisfied at the time of such reallocation and (y) such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender at such time to exceed such Non-Defaulting Lender’s Revolving Commitment. Subject to Section 11.22, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender  68 130164155_5 142964982_4


 
arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation. Cash Collateral, Repayment of Swingline Loans. If the reallocation described in(v) clause (iv) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under law, (x) first, prepay Swingline Loans in an amount equal to the Swingline Lender’s Fronting Exposure and (y) second, Cash Collateralize the Issuing Bank’s Fronting Exposure in accordance with the procedures set forth in Section 2.15. Defaulting Lender Cure. If the Borrower, the Administrative Agent, the Swingline(b) Lender and the Issuing Bank agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swingline Loans to be held pro rata by the Lenders in accordance with their respective Revolving Commitments (without giving effect to Section 2.16(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided further that, except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. New Swingline Loans/Letters of Credit. So long as any Lender is a Defaulting Lender,(c) (i) the Swingline Lender shall not be required to fund Swingline Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swingline Loan, and (ii) the Issuing Bank shall not be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto. Removal or Replacement of Lenders. If (a) any Lender requests compensationSection 2.17 under Section 3.2 and such Lender has declined or is unable to designate a different lending office in accordance with Section 3.4, (b) any Credit Party is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.3 and such Lender has declined or is unable to designate a different lending office in accordance with Section 3.4, (c) any Lender gives notice of an inability to fund LIBOR Loans under Section 3.1(b), (d) any Lender is a Defaulting Lender, or (e) any Lender (a “Non-Consenting Lender”) does not consent (including by way of a failure to respond in writing to a proposed amendment, consent or waiver by the date and time specified by the Administrative Agent) to a proposed amendment, consent, change, waiver, discharge or termination hereunder or with respect to any Credit Document that has been approved by the Required Lenders, then, in each case described in the foregoing clauses (a) through (e), the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.5) all of its interests, rights (other than its rights under Section 3.2, Section 3.3 and Section 11.2) and obligations under this Agreement and the related Credit Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:  69 130164155_5 142964982_4


 
the Borrower shall have paid to the Administrative Agent the assignment fee (if(i) any) specified in Section 11.5; such Lender shall have received payment of an amount equal to the outstanding(ii) principal of its Loans and participations in Letter of Credit Borrowings, as applicable, accrued and unpaid interest thereon, accrued and unpaid fees and all other amounts payable to it hereunder and under the other Credit Documents (including any amounts under Section 3.1(c)) from the assignee (to the extent of such outstanding principal and accrued and unpaid interest and fees) or the Borrower (in the case of all other amounts); in the case of any such assignment resulting from a claim for compensation under(iii) Section 3.2 or payments required to be made pursuant to Section 3.3, such assignment will result in a reduction in such compensation or payments thereafter; such assignment does not conflict with Applicable Law; and(iv) in the case of any such assignment resulting from a Non-Consenting Lender’s(v) failure to consent to a proposed amendment, consent, change, waiver, discharge or termination, the successor replacement Lender shall have consented to the proposed amendment, consent, change, waiver, discharge or termination. Each Lender agrees that in the event it, or its interests in the Loans and obligations hereunder, shall become subject to the replacement and removal provisions of this Section, it will cooperate with the Borrower and the Administrative Agent to give effect to the provisions hereof, including execution and delivery of an Assignment Agreement in connection therewith, but the replacement and removal provisions of this Section shall be effective regardless of whether an Assignment Agreement shall have been given. A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply. YIELD PROTECTIONSection 3 Making or Maintaining LIBOR Loans.Section 3.1 Inability to Determine Applicable Interest Rate. In the event that (i) the Administrative(a) Agent shall have determined (which determination shall be final and conclusive and binding upon all parties hereto), on any Interest Rate Determination Date or any Index Rate Determination Date with respect to any LIBOR Loans, that by reasons of circumstances affecting the London interbank market adequate and fair means do not exist for ascertaining the interest rate applicable to such LIBOR Loans on the basis provided for in the definition of Adjusted LIBOR Rate or LIBOR Index Rate, as applicable, or (ii) the LIBOR Scheduled Unavailability Date has occurred, the Administrative Agent shall give notice (by facsimile (or such other electronic communication as may be permitted by Section 11.1(b)) or by telephone confirmed in writing) to the Borrower and each Lender of such determination, whereupon (i) no Loans may be made as, or converted to, LIBOR Loans until such time as the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, and (ii) any Funding Notice or Conversion/Continuation Notice given by the Borrower with respect to the Loans in respect of which such determination was made shall be deemed to be rescinded by the Borrower and such Loans shall be automatically made or continued as, or converted to, as applicable, Base Rate Loans without reference to the LIBOR Index Rate component of the Base Rate.  70 130164155_5 142964982_4


 
Illegality or Impracticability of LIBOR Loans. In the event that on any date any Lender(b) shall have determined (which determination shall be final and conclusive and binding upon all parties hereto but shall be made only after consultation with the Borrower and the Administrative Agent) that the making, maintaining or continuation of its LIBOR Loans (i) has become unlawful as a result of compliance by such Lender in good faith with any law, treaty, governmental rule, regulation, guideline or order (or would conflict with any such treaty, governmental rule, regulation, guideline or order not having the force of law even though the failure to comply therewith would not be unlawful), or (ii) has become impracticable, as a result of contingencies occurring after the date hereof which materially and adversely affect the London interbank market or the position of such Lender in that market, then, and in any such event, such Lender shall be an “Affected Lender” and it shall on that day give notice (by facsimile (or such other electronic communication as may be permitted by Section 11.1(b)) or by telephone confirmed in writing) to the Borrower and the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each other Lender). Thereafter (1) the obligation of the Affected Lender to make Loans as, or to convert Loans to, LIBOR Loans shall be suspended until such notice shall be withdrawn by the Affected Lender, (2) to the extent such determination by the Affected Lender relates to a LIBOR Loan then being requested by the Borrower pursuant to a Funding Notice or a Conversion/Continuation Notice, the Affected Lender shall make such Loan as (or continue such Loan as or convert such Loan to, as the case may be) a Base Rate Loan without reference to the LIBOR Index Rate component of the Base Rate, (3) the Affected Lender’s obligation to maintain its outstanding LIBOR Loans (the “Affected Loans”) shall be terminated at the earlier to occur of the expiration of the Interest Period then in effect with respect to the Affected Loans or when required by law, and (4) the Affected Loans shall automatically convert into Base Rate Loans without reference to the LIBOR Index Rate component of the Base Rate on the date of such termination. Notwithstanding the foregoing, to the extent a determination by an Affected Lender as described above relates to a LIBOR Loan then being requested by the Borrower pursuant to a Funding Notice or a Conversion/Continuation Notice, the Borrower shall have the option, subject to the provisions of Section 3.1(a), to rescind such Funding Notice or Conversion/Continuation Notice as to all Lenders by giving notice (by facsimile (or such other electronic communication as may be permitted by Section 11.1(b)) or by telephone confirmed in writing) to the Administrative Agent of such rescission on the date on which the Affected Lender gives notice of its determination as described above (which notice of rescission the Administrative Agent shall promptly transmit to each other Lender). Except as provided in the immediately preceding sentence, nothing in this Section 3.1(b) shall affect the obligation of any Lender other than an Affected Lender to make or maintain Loans as, or to convert Loans to, LIBOR Loans in accordance with the terms hereof. Compensation for Breakage or Non-Commencement of Interest Periods. The Borrower(c) shall compensate each Lender, upon written request by such Lender (which request shall set forth the basis for requesting such amounts), for all reasonable out-of-pocket losses, expenses and liabilities (including any interest paid or calculated to be due and payable by such Lender to lenders of funds borrowed by it to make or carry its Adjusted LIBOR Rate Loans and any loss, expense or liability sustained by such Lender in connection with the liquidation or re-employment of such funds but excluding loss of anticipated profits) which such Lender sustains: (i) if for any reason (other than a default by such Lender) a borrowing of any Adjusted LIBOR Rate Loans does not occur on a date specified therefor in a Funding Notice or a telephonic request for borrowing, or a conversion to or continuation of any Adjusted LIBOR Rate Loans does not occur on a date specified therefor in a Conversion/Continuation Notice or a telephonic request for conversion or continuation; (ii) if any prepayment or other principal payment of, or any conversion of, any of its Adjusted LIBOR Rate Loans occurs on any day other than the last day of an Interest Period applicable to that Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or (iii) if any prepayment of any of its Adjusted LIBOR Rate Loans is not made on any date specified in a notice of prepayment given by the Borrower.  71 130164155_5 142964982_4


 
Booking of LIBOR Loans. Any Lender may make, carry or transfer LIBOR Loans at, to,(d) or for the account of any of its branch offices or the office of an Affiliate of such Lender. Assumptions Concerning Funding of Adjusted LIBOR Rate Loans. Calculation of all(e) amounts payable to a Lender under this Section 3.1 and under Section 3.2 shall be made as though such Lender had actually funded each of its relevant Adjusted LIBOR Rate Loans through the purchase of a LIBOR deposit bearing interest at the rate obtained pursuant to clause (i) of the definition of Adjusted LIBOR Rate in an amount equal to the amount of such Adjusted LIBOR Rate Loans and having a maturity comparable to the relevant Interest Period and through the transfer of such LIBOR deposit from an offshore office of such Lender to a domestic office of such Lender in the United States; provided that each Lender may fund each of its Adjusted LIBOR Rate Loans in any manner it sees fit and the foregoing assumptions shall be utilized only for the purposes of calculating amounts payable under this Section 3.1 and under Section 3.2. Certificates for Reimbursement. A certificate of a Lender setting forth in reasonable(f) detail the amount or amounts necessary to compensate such Lender, as specified in Section 3.1(c) and the circumstances giving rise thereto shall be delivered to the Borrower and shall be conclusive absent manifest error. In the absence of any such manifest error, the Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten Business Days after receipt thereof. Delay in Requests. The Borrower shall not be required to compensate a Lender pursuant(g) to this Section for any such amounts incurred more than six months prior to the date that such Lender delivers to the Borrower the certificate referenced in Section 3.1(f). LIBOR Replacement Rate. Notwithstanding anything to the contrary contained in this(h) Agreement or any other Credit Document, but without limiting Sections 3.1(a) and (b) above, if the Administrative Agent shall have determined (which determination shall be final and conclusive and binding upon all parties hereto), or the Borrower or Required Lenders notify the Administrative Agent (with in the case of the Required Lenders, a copy to the Borrower) that the Borrower or Required Lenders (as applicable) shall have determined (which determination likewise shall be final and conclusive and binding upon all parties hereto), that (i) the circumstances described in Section 3.1(a)(i) have arisen and that such circumstances are unlikely to be temporary, (ii) the relevant administrator of LIBOR or a Governmental Authority having or purporting to have jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which LIBOR shall no longer be made available, or used for determining interest rates for loans in the applicable currency (such specific date, the “LIBOR Scheduled Unavailability Date”), or (iii) syndicated credit facilities among national and/or regional banks active in leading and participating in such facilities currently being executed, or that include language similar to that contained in this Section 3.1(h), are being executed or amended (as applicable) to incorporate or adopt a new interest rate to replace LIBOR for determining interest rates for loans in the applicable currency, then, reasonably promptly after such determination by the Administrative Agent or receipt by the Administrative Agent of such notice, as applicable, the Administrative Agent and the Borrower may amend this Agreement to replace LIBOR with an alternate rate of interest, giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated syndicated credit facilities for such alternative rates of interest (any such proposed rate, a “LIBOR Replacement Rate”), and make such other related changes to this Agreement and the other Credit Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 3.1(h) (provided, that any definition of the LIBOR Replacement Rate shall specify that in no event shall such LIBOR Replacement Rate be less than 0.50% for purposes of this Agreement) and any such amendment shall become effective at 5:00 p.m. (New York time) on the fifth Business Day after the  72 130164155_5 142964982_4


 
Administrative Agent shall have posted such proposed amendment to all Lenders and the Borrower unless, prior to such time, Lenders comprising the Required Lenders have delivered to the Administrative Agent written notice that such Required Lenders do not accept such amendment. The LIBOR Replacement Rate shall be applied in a manner consistent with market practice; provided that, in each case, to the extent such market practice is not administratively feasible for the Administrative Agent, such LIBOR Replacement Rate shall be applied as otherwise reasonably determined by the Administrative Agent (it being understood that any such modification to application by the Administrative Agent made as so determined shall not require the consent of, or consultation with, any of the Lenders). For the avoidance of doubt, the parties hereto agree that unless and until a LIBOR Replacement Rate is determined and an amendment to this Credit Agreement is entered into to effect the provisions of this Section 3.1(h), if the circumstances under clauses (i) and (ii) of this Section 3.1(h) exist, the provisions of Section 3.1(a) shall apply. Increased Costs.Section 3.2 Increased Costs Generally. If any Change in Law shall:(a) impose, modify or deem applicable any reserve, special deposit, compulsory(i) loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the Adjusted LIBOR Rate or the LIBOR Index Rate) or the Issuing Bank; subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes(ii) described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or impose on any Lender or the Issuing Bank or the London interbank market any(iii) other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein; and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender, the Issuing Bank or such other Recipient of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender, the Issuing Bank or any other Recipient hereunder (whether of principal, interest or any other amount) by an amount deemed to be material by such Lender, Issuing Bank or other Recipient, as the case may be, then, upon request of such Lender, the Issuing Bank or such other Recipient, the Borrower will pay to such Lender, the Issuing Bank or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, the Issuing Bank or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered. Capital Requirements. If any Lender, the Issuing Bank or the Swingline Lender (for(b) purposes hereof, may be referred to collectively as “the Lenders” or a “Lender”) determines that any Change in Law affecting such Lender or any lending office of such Lender or such Lender’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the commitments of such Lender hereunder or the Loans made by, or participations in Letters of Credit and Swingline Loans held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or such Lender’s holding company  73 130164155_5 142964982_4


 
could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender, as the case may be, such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered. Certificates for Reimbursement. A certificate of a Lender or the Issuing Bank setting(c) forth in reasonable detail the amount or amounts necessary to compensate such Lender, the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section and the circumstances giving rise thereto shall be delivered to the Borrower and shall be conclusive absent manifest error. In the absence of any such manifest error, the Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten Business Days after receipt thereof. Delay in Requests. Failure or delay on the part of any Lender or the Issuing Bank to(d) demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs incurred or reductions suffered more than six months prior to the date that such Lender or the Issuing Bank, as the case may be, delivers to the Borrower the certificate referenced in Section 3.2(c) and notifies the Borrower of such Lender’s or the Issuing Bank’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect thereof). Taxes.Section 3.3 Issuing Banks. For purposes of this Section 3.3, the term “Lender” shall include the(a) Issuing Bank and the Administrative Agent and the term “Applicable Law” shall include FATCA. Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes. Any(b) and all payments by or on account of any obligation of any Credit Party hereunder or under any other Credit Document shall be made without deduction or withholding for any Taxes, except as required by Applicable Law. If any Applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with Applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Credit Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made. Payment of Other Taxes by the Credit Parties. The Credit Parties shall timely pay to the(c) relevant Governmental Authority in accordance with Applicable Law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes. Tax Indemnification.(d) Without duplication of any obligation under Section 3.3(b), the Credit Parties(i) shall jointly and severally indemnify each Recipient and shall make payment in respect thereof within ten Business Days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under  74 130164155_5 142964982_4


 
this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of any such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error. Each Lender shall severally indemnify the Administrative Agent within ten(ii) Business Days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Credit Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Credit Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.5(d) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Credit Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Credit Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this clause (ii). Evidence of Payments. As soon as practicable after any payment of Taxes by any Credit(e) Party to a Governmental Authority pursuant to this Section, such Credit Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of a return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent. Status of Lenders; Tax Documentation. (i) Any Lender that is entitled to an exemption(f) from or reduction of withholding Tax with respect to payments made under any Credit Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in clauses (ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender. Without limiting the generality of the foregoing, in the event that the Borrower is(ii) a U.S. Person,  75 130164155_5 142964982_4


 
any Lender that is a U.S. Person shall deliver to the Borrower and the(A) Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax; any Foreign Lender shall, to the extent it is legally entitled to do so,(B) deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable: in the case of a Foreign Lender claiming the benefits of an(1) income tax treaty to which the United States is a party (x) with respect to payments of interest under any Credit Document, executed originals of IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Credit Document, IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty; executed originals of IRS Form W-8ECI;(2) in the case of a Foreign Lender claiming the benefits of the(3) exemption for portfolio interest under Section 881(c) of the Internal Revenue Code, (x) a certificate substantially in the form of Exhibit 3.3-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Internal Revenue Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN or W-8BEN-E, as applicable; or to the extent a Foreign Lender is not the beneficial owner,(4) executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate substantially in the form of Exhibit 3.3-2 or Exhibit 3.3-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit 3.3-4 on behalf of each such direct and indirect partner; any Foreign Lender shall, to the extent it is legally entitled to do so,(C) deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the  76 130164155_5 142964982_4


 
reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by Applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and if a payment made to a Lender under any Credit Document would be(D) subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement. Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so. Treatment of Certain Refunds. Unless required by Applicable Law, at no time shall the(g) Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender, or have any obligation to pay to any Lender, any refund of Taxes withheld or deducted from funds paid for the account of such Lender. If any indemnified party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section (including by the payment of additional amounts pursuant to this Section), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of the indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.  77 130164155_5 142964982_4


 
Survival. Each party’s obligations under this Section 3.3 shall survive the resignation or(h) replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Credit Document. Designation of a Different Lending Office. If any Lender requests compensationSection 3.4 under Section 3.2, or requires the Borrower to pay any Indemnified Taxes or additional amounts to any Lender, the Issuing Bank or any Governmental Authority for the account of any Lender or the Issuing Bank pursuant to Section 3.3, then such Lender or the Issuing Bank shall (at the request of the Borrower) use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender or the Issuing Bank, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.2 or 3.3, as the case may be, in the future, and (ii) would not subject such Lender or the Issuing Bank, as the case may be, to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or the Issuing Bank, as the case may be. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment. GUARANTYSection 4 The Guaranty. Each of the Guarantors hereby jointly and severally guarantees toSection 4.1 the Collateral Agent, for the benefit of the Secured Parties, as primary obligor and not as surety, the prompt payment of the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory Cash Collateralization or otherwise) strictly in accordance with the terms thereof. The Guarantors hereby further agree that if any of the Obligations are not paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory Cash Collateralization or otherwise), the Guarantors will, jointly and severally, promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory Cash Collateralization or otherwise) in accordance with the terms of such extension or renewal. Notwithstanding any provision to the contrary contained herein, in any other of the Credit Documents, Swap Agreements, Treasury Management Agreements or other documents relating to the Obligations, (a) the obligations of each Guarantor under this Agreement and the other Credit Documents shall be limited to an aggregate amount equal to the largest amount that would not render such obligations subject to avoidance under the Debtor Relief Laws or any comparable provisions of any applicable state law and (b) the Obligations of a Guarantor shall exclude any Excluded Swap Obligations with respect to such Guarantor. Obligations Unconditional. The obligations of the Guarantors under Section 4.1Section 4.2 are joint and several, absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the Credit Documents, Swap Agreements or Treasury Management Agreements, or any other agreement or instrument referred to therein, or any substitution, release, impairment or exchange of any other guarantee of or security for any of the Obligations, and, to the fullest extent permitted by Applicable Law, irrespective of any law or regulation or other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 4.2 that the obligations of the Guarantors hereunder shall be absolute and unconditional under any and all circumstances. Each Guarantor agrees that such Guarantor shall have no right of subrogation, indemnity, reimbursement or contribution against the Borrower or any other Guarantor for amounts paid under this Section 4 until such time as the Obligations have been indefeasibly paid in full and the Commitments have expired or terminated. Without limiting the  78 130164155_5 142964982_4


 
generality of the foregoing, it is agreed that, to the fullest extent permitted by law, the occurrence of any one or more of the following shall not alter or impair the liability of any Guarantor hereunder, which shall remain absolute and unconditional as described above: at any time or from time to time, without notice to any Guarantor, the time for any(a) performance of or compliance with any of the Obligations shall be extended, or such performance or compliance shall be waived; any of the acts mentioned in any of the provisions of any of the Credit Documents, any(b) Swap Agreement between any Credit Party and any Swap Provider, or any Treasury Management Agreement between any Credit Party and any Treasury Management Bank, or any other agreement or instrument referred to in the Credit Documents, such Swap Agreements or such Treasury Management Agreements shall be done or omitted; the maturity of any of the Obligations shall be accelerated, or any of the Obligations shall(c) be modified, supplemented or amended in any respect, or any right under any of the Credit Documents, any Swap Agreement between any Credit Party and any Swap Provider or any Treasury Management Agreement between any Credit Party and any Treasury Management Bank, or any other agreement or instrument referred to in the Credit Documents, such Swap Agreements or such Treasury Management Agreements shall be waived or any other guarantee of any of the Obligations or any security therefor shall be released, impaired or exchanged in whole or in part or otherwise dealt with; any Lien granted to, or in favor of, the Administrative Agent, the Collateral Agent or any(d) Lender or Lenders as security for any of the Obligations shall fail to attach or be perfected; or any of the Obligations shall be determined to be void or voidable (including for the(e) benefit of any creditor of any Guarantor) or shall be subordinated to the claims of any Person (including any creditor of any Guarantor). With respect to its obligations hereunder, each Guarantor hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Administrative Agent, the Collateral Agent or any Lender exhaust any right, power or remedy or proceed against any Person under any of the Credit Documents, any Swap Agreement between any Credit Party and any Swap Provider or any Treasury Management Agreement between any Credit Party and any Treasury Management Bank, or any other agreement or instrument referred to in the Credit Documents, such Swap Agreements or such Treasury Management Agreements, or against any other Person under any other guarantee of, or security for, any of the Obligations. Reinstatement. The obligations of the Guarantors under this Section 4 shall beSection 4.3 automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the Obligations is rescinded or must be otherwise restored by any holder of any of the Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and each Guarantor agrees that it will indemnify the Administrative Agent, the Collateral Agent and each Lender on demand for all reasonable costs and expenses (including the fees, charges and disbursements of counsel) incurred by the Administrative Agent, the Collateral Agent or such Lender in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law. Certain Additional Waivers. Each Guarantor agrees that such Guarantor shallSection 4.4 have no right of recourse to security for the Obligations, except through the exercise of rights of  79 130164155_5 142964982_4


 
subrogation pursuant to Section 4.2 and through the exercise of rights of contribution pursuant to Section 4.6. Remedies. The Guarantors agree that, to the fullest extent permitted by law, asSection 4.5 between the Guarantors, on the one hand, and the Agents and the Lenders, on the other hand, the Obligations may be declared to be forthwith due and payable as provided in Section 9.2 (and shall be deemed to have become automatically due and payable in the circumstances provided in said Section 9.2) for purposes of Section 4.1 notwithstanding any stay, injunction or other prohibition preventing such declaration (or preventing the Obligations from becoming automatically due and payable) as against any other Person and that, in the event of such declaration (or the Obligations being deemed to have become automatically due and payable), the Obligations (whether or not due and payable by any other Person) shall forthwith become due and payable by the Guarantors for purposes of Section 4.1. The Guarantors acknowledge and agree that their obligations hereunder are secured in accordance with the terms of the Collateral Documents and that the Agents and the Lenders may exercise their remedies thereunder in accordance with the terms thereof. Rights of Contribution. The Guarantors agree among themselves that, inSection 4.6 connection with payments made hereunder, each Guarantor shall have contribution rights against the other Guarantors as permitted under Applicable Law. Such contribution rights shall be subordinate and subject in right of payment to the obligations of such Guarantors under the Credit Documents and no Guarantor shall exercise such rights of contribution until all Obligations have been indefeasibly paid in full and the Commitments have terminated. Guarantee of Payment; Continuing Guarantee. The guarantee in this Section 4 isSection 4.7 a guaranty of payment and not of collection, is a continuing guarantee, and shall apply to all Obligations whenever arising. Keepwell. Each Qualified ECP Guarantor hereby jointly and severallySection 4.8 absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each Specified Credit Party to honor all of such Specified Credit Party’s obligations under the Guaranty and the Collateral Documents in respect of Swap Obligations (provided that each Qualified ECP Guarantor shall only be liable under this Section 4.8 for the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP Guarantor’s obligations and undertakings under this Section 4, voidable under applicable Debtor Relief Laws, and not for any greater amount). The obligations and undertakings of each Qualified ECP Guarantor under this Section 4.8 shall remain in full force and effect until the Obligations have been indefeasibly paid and performed in full and the commitments relating thereto have expired or terminated, or, with respect to any Guarantor, if earlier, such Guarantor is released from its obligations and undertakings under this Section 4 in accordance with Section 10.10(a). Each Qualified ECP Guarantor intends that this Section 4.8 constitute, and this Section 4.8 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each Specified Credit Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act. CONDITIONS PRECEDENTSection 5 Conditions Precedent to Initial Credit Extensions. The obligation of each LenderSection 5.1 to make a Credit Extension on the Closing Date is subject to the satisfaction of the following conditions on or before the Closing Date: Executed Credit Documents. The Administrative Agent shall have received executed(a) counterparts of this Agreement, the Notes (if requested), the Security Agreement, the Pledge Agreement,  80 130164155_5 142964982_4


 
the Environmental Indemnity Agreement and a Mortgage with respect to the real property commonly known as 6375 Hospital Parkway, Johns Creek, Georgia 30097, in each case, in form and substance satisfactory to the Agents and the Lenders and duly executed by the appropriate parties thereto. Certificates. The Administrative Agent shall have received the following:(b) Organizational Documents Certificate. (i) Copies of the Organization(i) Documents, certified (to the extent applicable) as of a recent date by the appropriate Governmental Authority, (ii) copies of resolutions approving the transactions contemplated in connection with the financing and authorizing execution, delivery and performance of the Credit Documents, (iii) copies of certificates of good standing, existence or the like of a recent date from the appropriate Governmental Authority of its jurisdiction of formation or organization and (iv) incumbency certificates, in each case, for each of the Credit Parties and certified by an Authorized Officer in form and substance reasonably satisfactory to the Administrative Agent. Closing Certificate. One or more certificates from an Authorized Officer of the(ii) Borrower (in the case of (F) below, from the Chief Financial Officer of the Borrower), in form and substance reasonably satisfactory to the Administrative Agent, confirming, among other things, (A) all consents, approvals, authorizations, registrations, or filings required to be made or obtained by the Borrower and the other Credit Parties, if any, in connection with this Agreement and the other Credit Documents and the transactions contemplated herein and therein have been obtained and are in full force and effect (and attaching copies of any such items), (B) no investigation or inquiry by any Governmental Authority regarding this Agreement and the other Credit Documents and the transactions contemplated herein and therein is ongoing, (C) the absence of any action, suit, investigation or proceeding pending or, to the knowledge of the Borrower, threatened in any court or before any arbitrator or Governmental Authority that could reasonably be expected to have a Material Adverse Effect, (D) since December 31, 2013, there has been no event or circumstance which has had or could be reasonably expected to have a Material Adverse Effect, (E) the audited financial statements for the Fiscal Year ended December 31, 2013 were prepared in accordance with GAAP consistently applied, except as noted therein, and fairly presents in all material respects the financial condition and results from operations of the Borrower and its Subsidiaries, and (F) the Borrower and its Subsidiaries, taken as a whole on a consolidated basis, are Solvent after giving effect to the transactions contemplated hereby and the incurrence of Indebtedness related thereto. Opinions of Counsel. The Administrative Agent shall have received customary opinions(c) of counsel for each of the Credit Parties, including, among other things, opinions regarding the due authorization, execution and delivery of the Credit Documents and the enforceability thereof. Collateral. The Collateral Agent shall have received each of the following:(d) UCC Financing Statements. Such UCC financing statements necessary or(i) appropriate to perfect the security interests in the personal property Collateral, as determined by the Collateral Agent. Intellectual Property Filings. Such patent, trademark and copyright notices,(ii) filings and recordations necessary or appropriate to perfect the security interests in the U.S. Intellectual Property Rights constituting Collateral, as determined by the Collateral Agent. Reserved.(iii)  81 130164155_5 142964982_4


 
Mortgaged Property Support Documents. Such Mortgaged Property Support(iv) Documents as the Administrative Agent or the Collateral Agent may request with respect to any real property being encumbered by a Mortgage on the Closing Date. Evidence of Insurance. Certificates of insurance for casualty, liability and any(v) other insurance required by the Credit Documents, identifying the Collateral Agent as loss payee with respect to the casualty insurance and additional insured with respect to the liability insurance, as appropriate. Landlord Waivers and Access Letters. Such landlord waivers and access letters(vi) as may be requested by the Administrative Agent with respect to any Material Leased Property (it being understood that no such landlord waiver or access letter shall be required if it is unable to be obtained by the Credit Parties following the use of commercially reasonable efforts). Other Perfection Action. Satisfactory evidence that all filings, recordations and(vii) searches necessary or desirable in connection with the Liens under the Collateral Documents shall have been (or concurrently with the closing, will be) duly made, all filing and recording fees and taxes shall have been (or concurrently with the closing, will be) duly paid and the Collateral Agent, on behalf of the Secured Parties, shall have (or concurrently with the closing, will have) a valid and perfected first priority (subject to Permitted Liens) Lien in the Collateral. Notwithstanding anything in this clause (vii), no Credit Party shall be required to take any Excluded Perfection Action. Financial Information. The Administrative Agent shall have received, and be satisfied(e) with its review of, copies of (i) the internally prepared financial statements of the Borrower and its Subsidiaries on a consolidated basis for the most recently ended Fiscal Quarter ended at least forty-five days prior to the Closing Date and (ii) the audited financial statements of the Borrower and its Subsidiaries on a consolidated basis for the Fiscal Year ended December 31, 2013. Funding Notice; Funds Disbursement Instructions. The Administrative Agent shall have(f) received (i) a duly executed and completed Funding Notice with respect to the Credit Extension to occur on the Closing Date and (ii) duly executed and completed disbursement instructions (with wiring instructions and account information) for all disbursements to be made on the Closing Date. PATRIOT ACT, Etc. The Lenders shall have received, in form and substance reasonably(g) satisfactory to the Lenders, documentation and other information that is required by regulatory authorities under applicable “know your customer” and anti-money-laundering rules and regulations, including the PATRIOT Act, requested not later than five days prior to the Closing Date. Existing Credit Agreement. All principal, interest, fees and expenses due and owing and(h) other amounts outstanding under or in connection with the Existing Credit Agreement shall have been (or, concurrent with the making of the Loans on the Closing Date, shall be) paid in full (other than with respect to contingent obligations for which no claim has been made and letters of credit which have been cash collateralized or otherwise backstopped in a manner reasonably satisfactory to the Administrative Agent), all obligations, commitments and indebtedness under the Existing Credit Agreement shall have been terminated, and any Liens securing any such obligations shall have been (or, concurrent with the making of the Loans on the Closing Date, shall be) terminated. Fees and Expenses. The Administrative Agent shall have confirmation that all fees(i) payable under this Agreement and under the Fee Letter and all reasonable out-of-pocket fees and  82 130164155_5 142964982_4


 
expenses required to be paid on or before the Closing Date have been paid, including the reasonable out-of-pocket fees and expenses of counsel for the Administrative Agent. For purposes of determining compliance with the conditions specified in this Section 5.1, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto. The funding of the initial Loans hereunder shall evidence the satisfaction of the foregoing conditions. Conditions to Each Credit Extension. The obligation of each Lender to fund itsSection 5.2 Term Loan Commitment Percentage or Revolving Commitment Percentage of any Credit Extension on any Credit Date, including the Second Amendment Effective Date and the Sixth Amendment Effective Date, are subject to the satisfaction, or waiver in accordance with Section 11.4, of the following conditions precedent: the Administrative Agent shall have received a fully executed and delivered Funding(a) Notice, together with the documentation and certifications required therein with respect to each Credit Extension; after making the Credit Extension requested on such Credit Date, the (i) aggregate(b) outstanding principal amount of the Revolving Loans shall not exceed the aggregate Revolving Commitments then in effect and (ii) the aggregate outstanding principal amount of the Term Loans shall not exceed the respective Term Loan Commitments then in effect; as of such Credit Date, the representations and warranties contained herein and in the(c) other Credit Documents shall be true and correct in all material respects on and as of that Credit Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date; and as of such Credit Date, no event shall have occurred and be continuing or would result(d) from the consummation of the applicable Credit Extension that would constitute an Event of Default or a Default. Notwithstanding the foregoing, in the case of the extension of any increase of the Term Loan A Commitments or additional Term Loan being provided pursuant to Section 2.1(d), all or a portion of the proceeds of which are to be used to finance a Limited Condition Acquisition for which an LCA Election has been made, clauses (c) and (d) above shall be superseded by the relevant provisions of Section 2.1(d). REPRESENTATIONS AND WARRANTIESSection 6 In order to induce the Agents, the Lenders and the Issuing Bank to enter into this Agreement and to make each Credit Extension to be made hereby, the Borrower and each other Credit Party represents and warrants to each Agent, each Lender and the Issuing Bank, that the following statements are true and correct: Organization; Requisite Power and Authority; Qualification. Each of the CreditSection 6.1 Parties and each of their respective Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, (b) has all requisite power and authority to own  83 130164155_5 142964982_4


 
and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Credit Documents to which it is a party and to carry out the transactions contemplated thereby, and (c) is qualified to do business and in good standing in every jurisdiction where necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or in good standing has not had, and could not be reasonably expected to have, a Material Adverse Effect. Information, Equity Interests and Ownership. Schedule 6.2 correctly sets forthSection 6.2 (a) the exact legal name and jurisdiction of organization of each Credit Party and each of their respective Subsidiaries as of the Sixth Amendment Effective Date, (b) the true and correct U.S. taxpayer identification number (or foreign equivalent, if any) of each Credit Party and each of their respective Subsidiaries as of the Sixth Amendment Effective Date and (c) the ownership interest of the Borrower or Subsidiary owning the Equity Interests in each Subsidiary of the Borrower as of the Sixth Amendment Effective Date. The Equity Interests of each Credit Party and its Subsidiaries have been duly authorized and validly issued and are fully paid and non-assessable. As of the Sixth Amendment Effective Date, there is no existing option, warrant, call, right, commitment, buy-sell, voting trust or other shareholder agreement or other agreement to which any Subsidiary is a party requiring, and there is no membership interest or other Equity Interests of any Subsidiary outstanding which upon conversion or exchange would require, the issuance by any Subsidiary of any additional membership interests or other Equity Interests of any Subsidiary or other Securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase, a membership interest or other Equity Interests of any Subsidiary. Due Authorization. The execution, delivery and performance of the CreditSection 6.3 Documents have been duly authorized by all necessary action on the part of each Credit Party that is a party thereto. No Conflict. The execution, delivery and performance by Credit Parties of theSection 6.4 Credit Documents to which they are parties and the consummation of the transactions contemplated by the Credit Documents do not and will not (a) violate in any material respect any provision of any Applicable Laws relating to any Credit Party, any of the Organizational Documents of any Credit Party, or any order, judgment or decree of any court or other agency of government binding on any Credit Party; (b) except as could not reasonably be expected to have a Material Adverse Effect, conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any other Contractual Obligations of any Credit Party; (c) result in or require the creation or imposition of any Lien upon any of the properties or assets of any Credit Party (other than any Liens created under any of the Credit Documents in favor of the Collateral Agent for the benefit of the holders of the Obligations) whether now owned or hereafter acquired; or (d) require any approval of stockholders, members or partners or any approval or consent of any Person under any Contractual Obligation of any Credit Party. Governmental Consents. The execution, delivery and performance by the CreditSection 6.5 Parties of the Credit Documents to which they are parties and the consummation of the transactions contemplated by the Credit Documents do not and will not require, as a condition to the effectiveness thereof, any registration with, consent or approval of, or notice to, or other action to, with or by, any Governmental Authority except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to the Collateral Agent for filing and/or recordation, as of the Sixth Amendment Effective Date and other filings, recordings or consents which have been obtained or made and are in full force and effect, as applicable. Binding Obligation. Each Credit Document has been duly executed andSection 6.6 delivered by each Credit Party that is a party thereto and is the legally valid and binding obligation of  84 130164155_5 142964982_4


 
such Credit Party, enforceable against such Credit Party in accordance with its respective terms, except as may be limited by Debtor Relief Laws or by equitable principles relating to enforceability. Financial Statements.Section 6.7 The audited consolidated balance sheet of the Borrower and its Subsidiaries for the most(a) recent Fiscal Year ended, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such Fiscal Year, including the notes thereto (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, (ii) fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein and (iii) show all material indebtedness and other liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the date thereof, including material liabilities for taxes, material commitments and Indebtedness. The unaudited consolidated balance sheet of the Borrower and its Subsidiaries for the(b) most recent Fiscal Quarter ended, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such Fiscal Quarter (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, (ii) fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments and (iii) show all material indebtedness and other liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the date of such financial statements, including material liabilities for taxes, material commitments and Indebtedness. The consolidated forecasted balance sheet and statements of income and cash flows of the(c) Borrower and its Subsidiaries delivered pursuant to Section 7.1(d) were prepared in good faith on the basis of the assumptions stated therein, which assumptions were believed to be reasonable by the Borrower at the time made and at the time so furnished (it being understood and agreed that forecasts are not to be viewed as facts and that actual results during the period or periods covered thereby may differ from the forecasted results and such differences may be material). No Material Adverse Effect; No Default.Section 6.8 No Material Adverse Effect. Since December 31, 2015, no event, circumstance or(a) change has occurred that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect. No Default. No Default has occurred and is continuing.(b) Tax Matters. Each of the Credit Parties and their respective Subsidiaries (a) hasSection 6.9 filed all federal, state and other material tax returns and reports required to be filed, and have paid all Taxes shown to be owed on such returns and (b) have paid all federal, state and other material Taxes levied or imposed upon them or their respective properties, assets, income, businesses and franchises otherwise due and payable, except (i) so long as the audit disclosed on Schedule 6.9 has not been completed and the amount of taxes arising therefrom has not been determined (at which time such taxes shall be paid), those taxes that may result from such audit and (ii) those being contested in good faith and by appropriate proceedings and for which adequate reserves have been provided in accordance with  85 130164155_5 142964982_4


 
GAAP. There is no proposed tax assessment against any Credit Party or any of its Subsidiaries that would, if made, have a Material Adverse Effect. Properties.Section 6.10 Title. Each of the Credit Parties and their respective Subsidiaries has (i) good, sufficient(a) and legal title to (in the case of fee interests in real property), (ii) valid leasehold interests in (in the case of leasehold interests in real or personal property), and (iii) good title to (in the case of all other personal property), all of its properties and assets that are material to its business, in each case except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purpose. All such properties and assets are free and clear of Liens other than Permitted Liens. Real Estate. As of the Sixth Amendment Effective Date, Schedule 6.10(b) contains a(b) true, accurate and complete list of all Real Estate Assets and Material Leased Properties of the Credit Parties. Environmental Matters. (a) Neither any Credit Party nor any of their respectiveSection 6.11 Subsidiaries nor any of their respective current Facilities or operations, and to each Credit Party’s knowledge, no former Facilities, are subject to any outstanding order, consent decree or settlement agreement with any Person relating to any Environmental Law, any Environmental Claim, or any Hazardous Materials Activity that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect; (b) neither any Credit Party nor any of their respective Subsidiaries has received any letter or request for information under Section 104 of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9604) or any comparable state law; (c) there are no, and to each Credit Party’s knowledge have not been any, Hazardous Materials Activities which could reasonably be expected to form the basis of an Environmental Claim against such Credit Party or any of its Subsidiaries that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect; (d) neither any Credit Party nor any of their respective Subsidiaries has filed any notice under any Environmental Law indicating past or present treatment of Hazardous Materials at any Facility, and neither any Credit Party’s nor any of their respective Subsidiaries’ operations involves the generation, transportation, treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any equivalent state rule defining hazardous waste. Compliance with all current requirements pursuant to or under Environmental Laws could not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. No Defaults. Neither any Credit Party nor any of their respective Subsidiaries isSection 6.12 in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any of its Contractual Obligations, except in each case where the consequences, direct or indirect, of such default or defaults, if any, could not reasonably be expected to have a Material Adverse Effect. No Litigation or other Adverse Proceedings. There are no Adverse ProceedingsSection 6.13 that either (a) purport to affect or pertain to this Agreement or any other Credit Document, or any of the transactions contemplated hereby (solely with respect to this clause (a), except as and to the extent disclosed in the first paragraph of Part II, Item 1 of the quarterly report on Form 10-Q of the Borrower filed with the SEC on November 9, 2020 with respect to the pending proceeding by Yatra Online, Inc.) or (b) could reasonably be expected to have a Material Adverse Effect. Neither the Borrower nor any of its Subsidiaries is subject to or in default with respect to any final judgments, writs,  86 130164155_5 142964982_4


 
injunctions, decrees, rules or regulations of any Governmental Authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Governmental Regulation.Section 6.14 Neither any Credit Party nor any of their respective Subsidiaries is subject to regulation(a) under the Investment Company Act of 1940. Neither any Credit Party nor any of their respective Subsidiaries is an “investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940. Neither any Credit Party nor any of their respective Subsidiaries is an “enemy” or an(b) “ally of the enemy” within the meaning of Section 2 of the Trading with the Enemy Act of the United States of America (50 U.S.C. App. §§ 1 et seq.), as amended. Neither any Credit Party nor any of their respective Subsidiaries, to their knowledge, is in violation of (i) the Trading with the Enemy Act, as amended, or (ii) any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto. Neither any Credit Party nor any of their respective Subsidiaries (i) is a blocked person described in Section 1 of the Anti-Terrorism Order or (ii) to the best of its knowledge, engages in any dealings or transactions, or is otherwise associated, with any such blocked person. Each Credit Party and its Subsidiaries has implemented and maintains in effect policies(c) and procedures designed to ensure compliance by such Credit Party, its Subsidiaries and their respective directors, officers, employees and agents with applicable Sanctions, and such Credit Party, its Subsidiaries and their respective officers and employees and, to the knowledge of such Credit Party, its directors and agents, are in compliance with applicable Sanctions and are not engaged in any activity that would reasonably be expected to result in any Credit Party being designated as a Sanctioned Person. None of the Credit Parties, their Subsidiaries and their respective Affiliates is in violation of any of the country or list based economic and trade sanctions administered and enforced by OFAC that are described or referenced at http://www.ustreas.gov/offices/enforcement/ofac/ or as otherwise published from time to time. None of the Credit Parties and their Subsidiaries or, to the knowledge of each Credit(d) Party or its Subsidiaries, any of their respective directors, officers, employees or Affiliates (i) is a Sanctioned Person, (ii) has any of its assets located in a Sanctioned Country (unless approved by the Lenders), or (iii) derives any of its operating income from investments in, or transactions with Sanctioned Persons (unless approved by the Lenders). The proceeds of any Credit Extension or other transaction contemplated by this Agreement or any other Credit Document have not been used (x) in violation of any Sanctions, (y) to fund any operations in, finance any investments or activities in or make any payments to, a Sanctioned Person or a Sanctioned Country or (z) in any other manner that would result in a violation of Sanctions by any Person (including the Administrative Agent, the Collateral Agent, the Lenders or any other Person participation in the Credit Extensions, whether as an underwriter, advisor, investor or otherwise). Each of the Credit Parties and their Subsidiaries and, to the knowledge of each Credit(e) Party and its Subsidiaries, each of their respective directors, officers, employees and Affiliates, is in compliance with Anti-Corruption Laws. Each Credit Party and its Subsidiaries has implemented and maintains in effect policies and procedures designed to ensure compliance by such Credit Party, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws. None of the Credit Parties or their respective Subsidiaries has made a payment, offering, or promise to  87 130164155_5 142964982_4


 
pay, or authorized the payment of, money or anything of value (i) in order to assist in obtaining or retaining business for or with, or directing business to, any foreign official, foreign political party, party official or candidate for foreign political office, (ii) to a foreign official, foreign political party or party official or any candidate for foreign political office, and (iii) with the intent to induce the recipient to misuse his or her official position to direct business wrongfully to such Credit Party or any of its Subsidiaries or to any other Person, in violation of any Anti-Corruption Law. No part of the proceeds of any Credit Extension or other transaction contemplated by this Agreement or any other Credit Document will violate Anti-Corruption Laws. To the extent applicable, each Credit Party and each of their respective Subsidiaries are in(f) compliance with Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001) (as amended from time to time, the “PATRIOT Act”). Neither any Credit Party nor any of their respective Subsidiaries is engaged principally,(g) or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No part of the proceeds of the Loans will be used to purchase or carry any such Margin Stock or to extend credit to others for the purpose of purchasing or carrying any such Margin Stock or for any purpose that violates, or is inconsistent with, the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System as in effect from time to time. Intellectual Property.Section 6.15 As of the Sixth Amendment Effective Date, Part A of Schedule 6.15 is a complete list of(a) all Owned Intellectual Property. As of the Sixth Amendment Effective Date, except as disclosed on Part A of Schedule 6.15, (i) each Person owning Owned Intellectual Property owns such Owned Intellectual Property free and clear of all restrictions (including covenants not to sue a third party), court orders, injunctions, decrees, writs or Liens (other than Liens pursuant to the Collateral Documents), whether by written agreement or otherwise, (ii) no Person other than the Person identified on Schedule 6.15 as owning Owned Intellectual Property owns or has been granted any right in its Owned Intellectual Property (other than Liens pursuant to the Collateral Documents), (iii) all Owned Intellectual Property is valid, subsisting and enforceable and (iv) each Person owning Owned Intellectual Property has taken all commercially reasonable action necessary to maintain and protect its Owned Intellectual Property. Each Person owning Owned Intellectual Property has entered into, and maintains in(b) effect, a legally enforceable agreement with each of its employees and subcontractors obligating each such Person to assign to it, without any additional compensation, any Intellectual Property Rights created, discovered or invented by such Person in the course of such Person’s employment or engagement with it (except to the extent prohibited by Applicable Law), and further requiring such Person to cooperate with it, without any additional compensation, in connection with securing and enforcing any Intellectual Property Rights therein; provided that the foregoing shall not apply with respect to employees and subcontractors whose job descriptions are of the type such that no such assignments are reasonably foreseeable. As of the Sixth Amendment Effective Date, Part B of Schedule 6.15 is a complete list of(c) all agreements under which the Borrower or any of its Subsidiaries has licensed Intellectual Property (other than readily available, non-negotiated licenses of computer software and other intellectual property used solely for performing accounting, word processing and similar administrative tasks (“Off-The-Shelf Software”)) and a summary of any ongoing payments the licensee is obligated to make with respect thereto. As of the Sixth Amendment Effective Date, except as disclosed on Part B of Schedule 6.15, the  88 130164155_5 142964982_4


 
licenses of the Borrower and its Subsidiaries to use the Licensed Intellectual Property are free and clear of all restrictions, Liens (other than Liens pursuant to the Collateral Documents), court orders, injunctions, decrees, or writs, whether by written agreement or otherwise. As of the Sixth Amendment Effective Date, except as disclosed on Part B of Schedule 6.15, neither the Borrower nor any of its Subsidiaries is obligated or under any liability whatsoever to make any payments of a material nature by way of royalties, fees or otherwise to any owner of, licensor of, or other claimant to, any Intellectual Property Rights. The Owned Intellectual Property and the Licensed Intellectual Property described on(d) Schedule 6.15, together with all Owned Intellectual Property and all Licensed Intellectual Property described on the Compliance Certificates delivered hereunder, constitute all Intellectual Property Rights used or necessary to conduct the businesses of the Borrower and its Subsidiaries as presently conducted or as the Borrower reasonably foresees conducting it, except for Off-The-Shelf Software. Except as disclosed on Part C of Schedule 6.15 or as could not reasonably be expected to(e) have a Material Adverse Effect, neither the Borrower nor any of its Subsidiaries has any knowledge of, or has received any written claim or notice alleging, any infringement of another Person’s Intellectual Property Rights (including any written claim that the Borrower or any of its Subsidiaries must license or refrain from using the Intellectual Property Rights of any third party) nor, to the knowledge of the Borrower or any of its Subsidiaries, is there any threatened claim in writing or any reasonable basis for any such claim. Pension Plans. (a) Except as could not reasonably be expected to have a MaterialSection 6.16 Adverse Effect, each of the Credit Parties and their respective Subsidiaries are in compliance with all applicable provisions and requirements of ERISA and the Internal Revenue Code and the regulations and published interpretations thereunder with respect to its Pension Plan, and have performed all their obligations under each Pension Plan in all material respects, (b) each Pension Plan which is intended to qualify under Section 401(a) of the Internal Revenue Code has received a favorable determination letter or is the subject of a favorable opinion or advisory letter from the Internal Revenue Service indicating that such Pension Plan is so qualified and, to the knowledge of the Credit Parties, nothing has occurred subsequent to the issuance of such determination letter which would cause such Pension Plan to lose its qualified status except where such event could not reasonably be expected to result in a Material Adverse Effect, (c) except as could not reasonably be expected to have a Material Adverse Effect, no liability to the PBGC (other than required premium payments), the Internal Revenue Service, any Pension Plan (other than for routine claims and required funding obligations in the ordinary course) or any trust established under Title IV of ERISA with respect to a Pension Plan has been incurred by any Credit Party, any of their respective Subsidiaries or any of their respective ERISA Affiliates, (d) except as could not reasonably be expected to result in liability to any Credit Party or any of their respective Subsidiaries in excess of $5,000,000, no ERISA Event has occurred, (e) except to the extent required under Section 4980B of the Internal Revenue Code and Section 601 et seq. of ERISA or similar state laws and except as could not reasonably be expected to have a Material Adverse Effect, no “employee benefit plan” (as defined in Section 3(3) of ERISA provides health or welfare benefits (through the purchase of insurance or otherwise) for any retired or former employee of any Credit Party or any of their respective Subsidiaries and neither any Credit Party nor any of their respective Subsidiaries has ever sponsored, maintained, contributed to or had an obligation to make contributions to any such employee benefit plan and (f) as of the Sixth Amendment Effective Date, no Credit Party nor any of their Subsidiaries are or will be a Benefit Plan. Solvency. The Borrower and its Subsidiaries, on a consolidated basis, areSection 6.17 Solvent.  89 130164155_5 142964982_4


 
Compliance with Laws. Each Credit Party and each of their respectiveSection 6.18 Subsidiaries is in compliance with (a) the PATRIOT Act and OFAC rules and regulations as provided in Section 6.14 and (b) except such non-compliance with such other Applicable Laws that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, all other Applicable Laws. Each Credit Party and each of their respective Subsidiaries possesses all certificates, authorities or permits issued by appropriate Governmental Authorities necessary to conduct the business in which it is now engaged, except for such certificates, authorities or permits as to which the failure to have or retain could not reasonably be expected to have a Material Adverse Effect. Neither any Credit Party nor any of their respective Subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authority or permit the failure of which to have or retain could reasonably be expected to have a Material Adverse Effect. Disclosure. No representation or warranty of any Credit Party contained in anySection 6.19 Credit Document or in any other documents, certificates or written statements furnished to the Lenders by or on behalf of the Borrower or any of its Subsidiaries for use in connection with the transactions contemplated hereby (other than projections and pro forma financial information contained in such materials) contains any untrue statement of a material fact or omits to state a material fact (known to any Credit Party, in the case of any document not furnished by any of them) necessary in order to make the statements contained herein or therein not misleading in any material manner in light of the circumstances in which the same were made. Any projections and pro forma financial information contained in such materials are based upon good faith estimates and assumptions believed by the Credit Parties to be reasonable at the time made, it being recognized by the Administrative Agent and the Lenders that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results and that such differences may be material. There are no facts known to any Credit Party (other than matters of a general economic nature) that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect and that have not been disclosed herein or in such other documents, certificates and statements furnished to the Lenders. Insurance. The properties of the Credit Parties and their respective SubsidiariesSection 6.20 are insured with financially sound and reputable insurance companies not Affiliates of such Persons, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the applicable Credit Party or the applicable Subsidiary operates. The insurance coverage of the Borrower and its Subsidiaries as in effect on the Sixth Amendment Effective Date is outlined as to carrier, policy number, expiration date, type, amount and deductibles on Schedule 6.20. Pledge Agreement and Security Agreement. Each of the Pledge Agreement andSection 6.21 the Security Agreement is effective to create in favor of the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral identified therein, except to the extent the enforceability thereof may be limited by applicable Debtor Relief Laws affecting creditors’ rights generally and by equitable principles of law (regardless of whether enforcement is sought in equity or at law), and each of the Pledge Agreement and the Security Agreement shall create a fully perfected Lien on, and security interest in, all right, title and interest of the obligors thereunder in such Collateral, in each case prior and superior in right to any other Lien (a) with respect to any such Collateral that is a “security” (as such term is defined in the UCC) and is evidenced by a certificate, when such Collateral is delivered to the Collateral Agent with duly executed stock powers with respect thereto, (b) with respect to any such Collateral that is a “security” (as such term is defined in the UCC) but is not evidenced by a certificate, when UCC financing statements in appropriate form are filed in the appropriate filing offices in the jurisdiction of organization of the pledgor or when “control” (as such term  90 130164155_5 142964982_4


 
is defined in the UCC) is established by the Collateral Agent over such interests in accordance with the provision of Section 8-106 of the UCC, or any successor provision, and (c) with respect to any such Collateral that is not a “security” (as such term is defined in the UCC), when UCC financing statements in appropriate form are filed in the appropriate filing offices in the jurisdiction of organization of the pledgor (to the extent such security interest can be perfected by filing under the UCC). Mortgages. Each of the Mortgages when executed and delivered is effective toSection 6.22 create in favor of the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the Real Estate Assets identified therein in conformity with Applicable Laws, except to the extent the enforceability thereof may be limited by applicable Debtor Relief Laws affecting creditors’ rights generally and by equitable principles of law (regardless of whether enforcement is sought in equity or at law) and, when the Mortgages and UCC financing statements in appropriate form are duly recorded at the locations identified in the Mortgages, and recording or similar taxes, if any, are paid, the Mortgages shall constitute a legal, valid and enforceable Lien on, and security interest in, all right, title and interest of the grantors thereunder in such Real Estate Assets, in each case prior and superior in right to any other Lien (other than Permitted Liens). AFFIRMATIVE COVENANTSSection 7 Each Credit Party covenants and agrees that until the Obligations (other than with respect to contingent Obligations for which no claim has been made and Letters of Credit which have been cash collateralized or otherwise backstopped in a manner reasonably satisfactory to the Issuing Bank and the Administrative Agent) shall have been paid in full, and the Aggregate Revolving Commitments hereunder shall have expired or been terminated, such Credit Party shall perform, and shall cause each of its Subsidiaries to perform, all covenants in this Section 7. Financial Statements and Other Reports. The Borrower will deliver, or willSection 7.1 cause to be delivered, to the Administrative Agent: Quarterly Financial Statements for the Borrower and its Subsidiaries. Within forty-five(a) days after the end of each Fiscal Quarter of each Fiscal Year (excluding the fourth Fiscal Quarter), the consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such Fiscal Quarter and the related consolidated statement of income, stockholders’ equity and cash flows of the Borrower and its Subsidiaries for such Fiscal Quarter and for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter, setting forth in each case in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year, all in reasonable detail and consistent in all material respects with the manner of presentation as of the Closing Date, together with a Financial Officer Certification with respect thereto; Audited Annual Financial Statements for the Borrower and its Subsidiaries. Upon the(b) earlier of (x) the date that is ninety days after the end of each Fiscal Year orand (y) the date such information is required to be filed with the SEC (in the case of this clause (y), giving effect to any applicable extension period (that does not require special application to, and approval by, the SEC) for such filing in accordance with applicable SEC rules), (i) the consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such Fiscal Year and the related consolidated statement of income, stockholders’ equity and cash flows of the Borrower and its Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the previous Fiscal Year, in reasonable detail and consistent in all material respects with the manner of presentation as of the Closing Date, together with a Financial Officer Certification with respect thereto; and (ii) with a report thereon of Cherry Bekaert LLP or other independent certified public accountants of recognized national standing  91 130164155_5 142964982_4


 
selected by the Borrower, which report shall be unqualified as to going concern and scope of audit, and shall state that such consolidated financial statements fairly present, in all material respects, the consolidated financial position of the Borrower and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except as otherwise disclosed in such financial statements) and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards; Compliance Certificate. Together with each delivery of the financial statements pursuant(c) to clauses (a) and (b) of Section 7.1 a duly completed Compliance Certificate, which Compliance Certificate shall list (i) all applications by any Credit Party, if any, for any Owned Intellectual Property made since the date of the prior Compliance Certificate (or, in the case of the first such Compliance Certificate, the Closing Date), (ii) all issuances of registrations or letters on existing applications by any Credit Party for any Owned Intellectual Property received since the date of the prior Compliance Certificate (or, in the case of the first such Compliance Certificate, the Closing Date), and (iii) all agreements in respect of Licensed Intellectual Property (other than Off-The-Shelf Software) entered into by any Credit Party since the date of the prior Compliance Certificate (or, in the case of the first such Compliance Certificate, the Closing Date); Annual Budget. Within thirty days following the end of each Fiscal Year, forecasts(d) prepared by management of the Borrower, in form reasonably satisfactory to the Administrative Agent, of consolidated balance sheets and statements of income or operations and cash flows of the Borrower and its Subsidiaries on a quarterly basis for the immediately following Fiscal Year (including the Fiscal Year in which the Term Loan A Maturity Date, the maturity date of any Term Loan established after the Sixth Amendment Effective Date or the Revolving Commitment Termination Date occurs); Information Regarding Collateral. Each Credit Party will furnish to the Administrative(e) Agent and the Collateral Agent (i) prior written notice of any change (A) in such Credit Party’s legal name, (B) in such Credit Party’s corporate structure, or (C) in such Credit Party’s Federal Taxpayer Identification Number or (ii) prompt written notice (and in any event within five days of such occurrence) of any Subsidiary becoming a Material IP Subsidiary for any reason whatsoever (including, without limitation, as a result of an acquisition, the acquisition or creation of any material Intellectual Property Rights, any Intellectual Property Rights becoming material such that such Subsidiary becomes a Material IP Subsidiary, or the designation of any Subsidiary as a Material IP Subsidiary pursuant to clause (b) of the definition thereof); SEC Filings. Promptly after the same are available, copies of each annual report, proxy(f) or financial statement or other report or communication sent to the stockholders of the Borrower, and copies of all annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Exchange Act, or with any national securities exchange, and in any case not otherwise required to be delivered to the Administrative Agent pursuant hereto; Notice of Default and Material Adverse Effect. Promptly upon any Authorized Officer of(g) any Credit Party obtaining knowledge (i) of any condition or event that constitutes a Default or an Event of Default or that notice has been given to any Credit Party with respect thereto; (ii) that any Person has given any notice to any Credit Party or any of their respective Subsidiaries or taken any other action with respect to any event or condition set forth in Section 9.1(b); or (iii) the occurrence of any Material Adverse Effect, a certificate of an Authorized Officer of the Borrower setting forth the details of the occurrence(s) referred to therein and stating what action the Borrower and/or the other applicable Credit  92 130164155_5 142964982_4


 
Party has taken and proposes to take with respect thereto and, if applicable, describing with particularity any and all provisions of this Agreement and any other Credit Document that have been breached; ERISA. Promptly (i) upon becoming aware of the occurrence of or forthcoming(h) occurrence of any ERISA Event, a certificate of an Authorized Officer of the Borrower specifying the nature thereof, what action any Credit Party, any of their respective Subsidiaries or any of their respective ERISA Affiliates has taken, is taking or proposes to take with respect thereto and, when known, a certificate of an Authorized Officer of the Borrower specifying any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto; (ii) upon reasonable request of the Administrative Agent, copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed by any Credit Party, any of their respective Subsidiaries or any of their respective ERISA Affiliates with respect to each Pension Plan (including all schedules); and (iii) after receipt thereof, copies of all notices received by any Credit Party, any of their respective Subsidiaries or any of their respective ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event; SEC Investigations. Promptly, and in any event within five Business Days after receipt(i) thereof by any Credit Party or any Subsidiary thereof, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of any Credit Party or any Subsidiary thereof; and Other Information. (i) Promptly upon their becoming available, copies of all financial(j) statements, reports, notices and proxy statements sent or made available generally by the Borrower to its security holders acting in such capacity or by any Subsidiary of the Borrower to its security holders, if any, other than the Borrower or another Subsidiary of the Borrower, provided that no Credit Party shall be required to deliver to the Administrative Agent or any Lender the minutes of any meeting of its Board of Directors, and (ii) such other information and data with respect to the Borrower or any of its Subsidiaries as from time to time may be reasonably requested by the Administrative Agent or the Required Lenders. Any documents required to be delivered pursuant to Section 7.1(a), (b) or (f) shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website; or (ii) on which such documents are posted on the Borrower’s behalf on Syndtrak or another relevant website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided further that: (x) upon written request by the Administrative Agent, the Borrower shall deliver paper copies of such documents to the Administrative Agent for further distribution to each Lender until a written request to cease delivering paper copies is given by the Administrative Agent and (y) the Borrower shall notify (which may be by facsimile or such other electronic communication as may be permitted by Section 11.1(b)) the Administrative Agent of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Existence. Each Credit Party will, and will cause each of its Subsidiaries to, atSection 7.2 all times preserve and keep in full force and effect its existence and all rights and franchises, qualifications, licenses, Governmental Authorizations, Intellectual Property Rights and permits material to its business. Payment of Taxes and Claims. Each Credit Party will, and will cause each of itsSection 7.3 Subsidiaries to, pay (a) all federal, state and other material Taxes imposed upon it or any of its properties  93 130164155_5 142964982_4


 
or assets or in respect of any of its income, businesses or franchises before any penalty or fine accrues thereon and (b) all claims (including claims for labor, services, materials and supplies) for sums that have become due and payable and that by law have or may become a Lien upon any of its properties or assets, prior to the time when any penalty or fine shall be incurred with respect thereto; provided, no such Tax or claim need be paid if it is being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as (i) adequate reserve or other appropriate provision, as shall be required in conformity with GAAP shall have been made therefor, and (ii) in the case of a Tax or claim which has or may become a Lien against any of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such Tax or claim. The Borrower will not, nor will it permit any of its Subsidiaries to, file or consent to the filing of any consolidated income tax return with any Person (other than the Borrower or any Subsidiary). Maintenance of Properties. Each Credit Party will, and will cause each of itsSection 7.4 Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition, ordinary wear and tear excepted, all material properties used or useful in its business and from time to time will make or cause to be made all appropriate material repairs, necessary renewals and necessary replacements thereof. Insurance. Each Credit Party will, and will cause each of its Subsidiaries to,Section 7.5 maintain or cause to be maintained, with financially sound and reputable insurers, property insurance, such public liability insurance, third party property damage insurance with respect to liabilities, losses or damage in respect of the assets, properties and businesses of each Credit Party and its Subsidiaries as may customarily be carried or maintained under similar circumstances by Persons of established reputation engaged in similar businesses, in each case in such amounts, with such deductibles, covering such risks and otherwise on such terms and conditions as shall be customary for such Persons. Without limiting the generality of the foregoing, each Credit Party will, and will cause each of its Subsidiaries to, maintain or cause to be maintained flood insurance with respect to each Flood Hazard Property, if any, that is located in a community that participates in the National Flood Insurance Program, in each case in compliance with any applicable regulations of the Board of Governors of the Federal Reserve System. Each such policy of insurance shall (i) name the Collateral Agent, on behalf of the Secured Parties, as an additional insured thereunder as its interests may appear, and (ii) in the case of each property insurance policy, contain a loss payable clause or endorsement, reasonably satisfactory in form and substance to the Collateral Agent, that names the Collateral Agent, on behalf of the Secured Parties, as the loss payee thereunder and provides for at least thirty days’ prior written notice (or such shorter prior written notice as may be agreed by the Collateral Agent in its reasonable discretion) to the Collateral Agent of any modification or cancellation of such policy. Inspections. Each Credit Party will, and will cause each of its Subsidiaries to,Section 7.6 permit representatives and independent contractors of the Administrative Agent, the Collateral Agent and each Lender to visit and inspect any of its properties, to conduct field audits, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants (and the Borrower shall be given an opportunity to participate in any discussions with its accountants), all at such reasonable times during normal business hours and, subject to the limitation below, as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided that, excluding any such visits and inspections when an Event of Default exists, only the Administrative Agent on behalf of the Lenders may exercise visitation and inspection rights of the Administrative Agent and the Lenders under this Section 7.6 (and representatives of any Lender may accompany the Administrative Agent on any such visit at their own expense) and the Administrative Agent shall not exercise such rights more often than two times during any calendar year absent the existence of an Event of Default and only one such time shall be at  94 130164155_5 142964982_4


 
the Borrower’s expense; provided further that when an Event of Default exists the Administrative Agent, the Collateral Agent or, if organized by the Administrative Agent, any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice. Lenders Meetings. The Borrower will, upon the request of the AdministrativeSection 7.7 Agent or the Required Lenders, participate in a meeting of the Administrative Agent and the Lenders once during each Fiscal Year to be held at the Borrower’s corporate offices (or at such other location as may be agreed to by the Borrower and the Administrative Agent) at such time as may be agreed to by the Borrower and the Administrative Agent. Compliance with Laws and Material Agreements. Each Credit Party will, andSection 7.8 will cause each of its Subsidiaries to, comply with (a) the PATRIOT Act and OFAC rules and regulations, (b) all other Applicable Laws (including Environmental Laws) and (c) all indentures, agreements and other instruments binding upon it or its property, except, in the case of clauses (b) and (c), in such instances the failure to comply therewith could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Use of Proceeds. Each Credit Party will, and will cause each of its SubsidiariesSection 7.9 to, use the proceeds of the Credit Extensions (a) for working capital, capital expenditures and general corporate purposes, (b) in the case of the Loans made on the Closing Date, to repay in full concurrently with the closing of this Agreement all principal, interest, fees, expenses and other amounts outstanding under or in connection with the Existing Credit Agreement, (c) to finance Permitted Acquisitions and to pay fees, costs and expenses in connection therewith, whether or not consummated and/or (d) to pay transaction fees, costs and expenses related to credit facilities established pursuant to this Agreement and the other Credit Documents, in each case not in contravention of Applicable Laws or of any Credit Document. Books and Records. Each Credit Party will, and will cause each of itsSection 7.10 Subsidiaries to, keep proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities to the extent necessary to prepare the consolidated financial statements of the Borrower in conformity with GAAP. Additional Subsidiaries; Real Estate Assets. Each Credit Party will, and willSection 7.11 cause each of its Subsidiaries to: Additional Domestic Subsidiaries. Promptly (but in any event within five days or such(a) longer period to which the Administrative Agent may agree in its sole discretion) after the acquisition or creation of any Domestic Subsidiary (or the date any Person otherwise qualifies as a Domestic Subsidiary), provide notice thereof to the Administrative Agent, and thereafter (but in any event within thirty days after such notice or such longer period to which the Administrative Agent may agree in its sole discretion) cause to be delivered to the Administrative Agent and the Collateral Agent each of the following: unless such Domestic Subsidiary is an Excluded Subsidiary, a Guarantor Joinder(i) Agreement, duly executed by such Subsidiary; unless such Domestic Subsidiary is an Excluded Subsidiary, a Security Joinder(ii) Agreement, duly executed by such Subsidiary (with all schedules thereto appropriately completed);  95 130164155_5 142964982_4


 
unless such Domestic Subsidiary is an Excluded Subsidiary, if such Subsidiary(iii) owns Equity Interests in any other Subsidiary, a Pledge Joinder Agreement, as applicable, duly executed by such Subsidiary (with all schedules thereto appropriately completed); a Pledge Joinder Agreement or Pledge Agreement Supplement, as applicable,(iv) duly executed by each Credit Party owning the Equity Interests of such Subsidiary (in either case, with all schedules thereto appropriately completed); if any of the documents referenced in the foregoing clauses (i) through (iii) are(v) delivered (or required to be delivered) and if requested by the Administrative Agent, opinions of counsel to the applicable Credit Parties and such Subsidiary with respect to the documents delivered and the transactions contemplated by this Section 7.11(a), in form and substance reasonably acceptable to the Administrative Agent; and if any of the documents referenced in the foregoing clauses (i) through (iv) are(vi) delivered (or required to be delivered), copies of the documents of the types referred to in Section 5.1(b)(i) with respect to such Subsidiary, certified by an Authorized Officer in form and substance reasonably satisfactory to the Administrative Agent. Additional First Tier Foreign Subsidiaries. Promptly (but in any event within thirty days(b) or such longer period to which the Administrative Agent may agree in its sole discretion) after the acquisition or creation of any First Tier Foreign Subsidiary (or the date any Person otherwise qualifies as a First Tier Foreign Subsidiary), provide notice thereof to the Administrative Agent, and thereafter (but in any event within thirty days after such notice or such longer period to which the Administrative Agent may agree in its sole discretion) cause to be delivered to the Administrative Agent and the Collateral Agent a Pledge Joinder Agreement or Pledge Agreement Supplement, as applicable, duly executed by the Credit Party owning the Equity Interests of such First Tier Foreign Subsidiary (in either case, with all schedules thereto appropriately completed). Material Real Estate Assets. With respect to any Real Estate Asset that is (or, to the(c) knowledge of any Credit Party, becomes) a Material Real Estate Asset and is at any time owned by a Credit Party (whether by increase in value, acquisition of such Real Estate Asset or the owner of such Real Estate Asset becoming a Credit Party, or otherwise), provide prompt notice thereof to the Administrative Agent (but in any event within five days of such occurrence, or such longer period to which the Administrative Agent may agree in its sole discretion) and thereafter cause to be delivered to the Administrative Agent and the Collateral Agent promptly (but in any event within sixty days after such acquisition or such longer period as the Administrative Agent may agree in its sole discretion) a Mortgage and such Mortgaged Property Support Documents as the Administrative Agent or the Collateral Agent may reasonably request in order to cause such Material Real Estate Assets to be subject at all times to a first priority, perfected Lien (subject to Permitted Liens) in favor of the Collateral Agent for the benefit of the Secured Parties securing the Obligations, and take all such actions and cause to be delivered all such other documents, instruments, agreements, opinions and certificates as may be reasonably requested by the Administrative Agent or the Collateral Agent in connection therewith. Promptly following receipt of any notice described in this clause (c) from the Borrower or another Credit Party related to a Material Real Estate Asset, the Administrative Agent shall notify the Lenders of the same (such notice, the “Material Real Estate Asset Lender Notice”). On and after the date that is 30 days after the Administrative Agent delivers the Material Real Estate Asset Lender Notice, the Administrative Agent shall be permitted to cause such Material Real Estate Asset to be mortgaged or otherwise pledged as Collateral hereunder unless it has received written notice from a Lender within such 30 day period that it has not completed its flood insurance diligence and flood insurance compliance with respect to such  96 130164155_5 142964982_4


 
Material Real Estate Asset (it being understood that if the Administrative Agent has received no such written notice from a Lender, then on and after such date the Administrative Agent shall be permitted to assume that each Lender has completed its flood insurance diligence and flood insurance compliance with respect to such Material Real Estate Asset). If any Lender provides such written notice within such 30 day period, (x) such notice shall provide a description of the remaining items necessary to complete such Lender’s diligence and compliance, (y) such Lender shall diligently work to satisfy its remaining requirements in a timely manner, and (z) the Administrative Agent shall not cause the applicable Material Real Estate Asset to be mortgaged or otherwise pledged as Collateral hereunder until on or after the date on which the Administrative Agent receives confirmation from each such Lender that it has completed its flood insurance diligence and flood insurance compliance with respect to such Material Real Estate Asset; provided, further, that if a Lender delivers written notice pursuant to this sentence, a Credit Party shall not be required to mortgage or pledge the applicable Material Real Estate Asset or obtain or deliver any other documentation required under this subsection (c) with respect to such Material Real Estate Asset until the later to occur of (i) the date that is 60 days after the date such Real Estate Asset becomes a Material Real Estate Asset or such Material Real Estate Asset is acquired, as applicable, or (ii) the date that is 30 days after the date on which the Administrative Agent notifies the Borrower that it has received confirmation from each Lender delivering written notice pursuant to this sentence that it has completed its flood insurance diligence and flood insurance compliance with respect to such Material Real Estate Asset, in either case, or such later date as the Administrative Agent may permit in its sole discretion. Personal Property. The Borrower and each other Credit Party shall (i) cause all of its(d) personal property and assets (other than Excluded Property and limited, in the case of the voting Equity Interests of each First Tier Foreign Subsidiary, to a pledge of 65% of such Equity Interests) to be subject at all times to first priority (subject to any Permitted Lien), perfected Liens in favor of the Collateral Agent, for the benefit of the Secured Parties, to secure the Obligations pursuant to the terms and conditions of the Collateral Documents or, with respect to any such property acquired subsequent to the Closing Date, such other additional security documents as the Administrative Agent or the Collateral Agent shall reasonably request, and (ii) deliver such other documentation as the Administrative Agent or the Collateral Agent may reasonably request in connection with the foregoing, including (A) appropriate UCC financing statements, (B) certified resolutions and other organizational and authorizing documents of such Person, (C) opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to above and the perfection of the Collateral Agent’s Liens thereunder), (D) landlord waivers, estoppels or collateral access letters requested by the Administrative Agent with respect to any Material Leased Property, (E) updates to any applicable schedules of any Collateral Document in connection with any Material Commercial Tort Claim, (F) Qualifying Control Agreements (as defined in the Security Agreement) with respect to Material Accounts to the extent requested by the Administrative Agent, (G) perfection actions reasonably requested by the Administrative Agent or the Collateral Agent in connection with the perfection of any Material Letter of Credit Right and (H) other items reasonably requested by the Collateral Agent necessary in connection therewith to perfect the security interests therein, all in form, content and scope reasonably satisfactory to the Collateral Agent. Each Credit Party shall provide prompt notice of any acquisition or creation of any personal property and assets with respect to which any action may be required to be taken pursuant to this Section 7.11(d), including notice of any Material Account, Material Commercial Tort Claim, Material Leased Property or Material Letter of Credit Right, which notice shall in any event be provided within five days of the event requiring such notice (or such longer period to which the Administrative Agent may agree in its sole discretion). Material IP Subsidiary Pledges. Notwithstanding the foregoing, or any other provision of(e) this Agreement or any other Credit Document (including the definitions of Excluded Perfection Action and Excluded Property), at the request of the Administrative Agent, each Credit Party that owns, directly  97 130164155_5 142964982_4


 
or indirectly, any Equity Interests in any Material IP Subsidiary that is not a Credit Party shall cause the pledge of the Equity Interests in each of such Credit Party’s First Tier Foreign Subsidiaries (to the extent pledged pursuant to the Pledge Agreement) to be perfected pursuant to the Applicable Laws of the jurisdiction of formation of such First Tier Foreign Subsidiary (in addition to the grant and perfection thereof pursuant to the Pledge Agreement and related filings and possession of certificates with respect to any such Equity Interests), such perfection to be accomplished on the Closing Date with respect to any First Tier Foreign Subsidiary and related Material IP Subsidiary in existence on the Closing Date, and within 30 days (or such longer period as the Administrative Agent may agree) after any Material IP Subsidiary is created or acquired or any existing Subsidiary becomes a Material IP Subsidiary in the case of any such occurrence after the Closing Date. Notwithstanding anything to the contrary in this Section 7.11, other than Section 7.11(e)(f) above, no Credit Party shall be required to take any Excluded Perfection Action. Primary Depositary and Operating Accounts. At all times beginning on or afterSection 7.12 the date which is sixty days after the Closing Date (which period may be extended by the Administrative Agent in its sole discretion) each Credit Party will, and will cause each of its Subsidiaries to, maintain its primary depositary and operating accounts relating to the North American operations of the Borrower and its Subsidiaries with Regions Bank. Further Assurances. Each Credit Party will, and will cause each of itsSection 7.13 Subsidiaries to, take such action and execute, acknowledge and deliver, at its sole cost and expense, such agreements, instruments or other documents as are necessary, or as any Agent may reasonably request, from time to time in order to (a) carry out more effectively the purposes of this Agreement and the other Credit Documents, (b) subject to valid and perfected first priority Liens (subject only to Permitted Liens) any of the Collateral or any other property of any Credit Party and its Subsidiaries, (c) establish and maintain the validity and effectiveness of any of the Credit Documents and the validity, perfection and priority of the Liens intended to be created thereby, and (d) better assure, convey, grant, assign, transfer and confirm unto each Agent and each Lender the rights now or hereafter intended to be granted to it under this Agreement or any other Credit Document. Notwithstanding anything in this Section 7.13, no Credit Party shall be required to take any Excluded Perfection Action. Intellectual Property. Each Credit Party shall, and will cause each of itsSection 7.14 Subsidiaries to, enter into, and maintain in effect, a legally enforceable agreement with each of its employees and subcontractors obligating each such Person to assign to it, without any additional compensation, any Intellectual Property Rights created, discovered or invented by such Person in the course of such Person’s employment or engagement with it (except to the extent prohibited by Applicable Law), and further requiring such Person to cooperate with it, without any additional compensation, in connection with securing and enforcing any Intellectual Property Rights therein; provided that the foregoing shall not apply with respect to employees and subcontractors whose job descriptions are of the type such that no such assignments are reasonably foreseeable. NEGATIVE COVENANTSSection 8 Each Credit Party covenants and agrees that until the Obligations (other than with respect to contingent Obligations for which no claim has been made and Letters of Credit which have been cash collateralized or otherwise backstopped in a manner reasonably satisfactory to the Issuing Bank and the Administrative Agent) shall have been paid in full and the Aggregate Revolving Commitments hereunder shall have expired or been terminated, such Credit Party shall perform, and shall cause each of its Subsidiaries to perform, all covenants in this Section 8.  98 130164155_5 142964982_4


 
Indebtedness. No Credit Party shall, nor shall it permit any of its Subsidiaries to,Section 8.1 directly or indirectly, create, incur, assume or guaranty, or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, other than (subject to Section 8.16): the Obligations;(a) Indebtedness existing on the Sixth Amendment Effective Date and described in Schedule (b) 8.1, together with any Permitted Refinancing thereof; Indebtedness with respect to (x) Capital Leases and (y) purchase money Indebtedness,(c) including, in each case of clauses (x) and (y), any such Indebtedness acquired in connection with a Permitted Acquisition; provided, in the case of clause (x), that any such Indebtedness shall be secured only by the asset subject to such Capital Lease, and, in the case of clause (y), that any such Indebtedness shall be secured only by the asset acquired in connection with the incurrence of such Indebtedness; provided further that the sum of the aggregate principal amount of any Indebtedness under this clause (c) shall not exceed at any time $30,000,000; Guarantees with respect to Indebtedness owing by the Borrower or any of its Subsidiaries(d) so long as (i) such Indebtedness being Guaranteed is otherwise permitted under this Section 8.1 and (ii) the Indebtedness of any Subsidiary that is not a Guarantor may only be guaranteed pursuant to this clause (d) by another Subsidiary that is not a Guarantor or, to the extent permitted pursuant to Section 8.5(c)(ii), a Credit Party; unsecured intercompany Indebtedness:(e) owed by any Credit Party to another Credit Party;(i) owed by any Credit Party to any Non-Guarantor Subsidiary; provided that such(ii) Indebtedness shall be subordinated to the Obligations in a manner satisfactory to the Administrative Agent); owed by any Non-Guarantor Subsidiary to any other Non-Guarantor Subsidiary;(iii) and owed by any Non-Guarantor Subsidiary to any Credit Party to the extent(iv) permitted pursuant to Section 8.5(c)(ii); Indebtedness in respect of any Swap Agreement that is entered into in the ordinary course(f) of business to hedge or mitigate risks to which any Credit Party or any of its Subsidiaries is exposed in the conduct of its business or the management of its liabilities (it being acknowledged by each Credit Party that a Swap Agreement entered into for speculative purposes or of a speculative nature is not a Swap Agreement entered into in the ordinary course of business to hedge or mitigate risks); Indebtedness arising in connection with the financing of insurance premiums in the(g) ordinary course of business; Indebtedness owed to any person providing workers’ compensation, health, disability or(h) other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or indemnification obligations to such person, in each case incurred in the ordinary course of business;  99 130164155_5 142964982_4


 
Indebtedness of the Borrower or any Subsidiary in respect of performance bonds, bid(i) bonds, appeal bonds, surety bonds and similar obligations, in each case provided in the ordinary course of business; Indebtedness incurred by the Borrower or any of its Subsidiaries arising from agreements(j) providing for Earn Out Obligations incurred in connection with Permitted Acquisitions or dispositions of any business, assets or Subsidiary of the Borrower or any of its Subsidiaries permitted hereunder; provided that the aggregate amount of all Earn Out Obligations incurred, assumed or created in any Fiscal Year at a time when the pro forma (as provided in Section 1.3) Consolidated Net Leverage Ratio (measured as of the date of such incurrence, assumption or initial creation) is greater than or equal to 3.25 to 1.00 shall not exceed $15,000,000 (with amounts not used in any Fiscal Year not being carried forward to, or otherwise available in, any subsequent Fiscal Year); Indebtedness in respect of netting services, overdraft protections and similar services in(k) connection with customary deposit accounts maintained by the Borrower or any of its Subsidiaries as part of its ordinary cash management program so long as such Indebtedness is promptly repaid; performance Guarantees in the ordinary course of business of the obligations of suppliers,(l) customers, franchisees and licensees of the Borrower and its Subsidiaries; Indebtedness of the Borrower or any other Credit Party incurred to finance a Permitted(m) Acquisition; provided that such Indebtedness is unsecured and expressly subordinated to the Obligations in a manner acceptable to the Administrative Agent; endorsements for collection, deposit or negotiation and warranties of products or(n) services, in each case, incurred in the ordinary course of business; Indebtedness consisting of overpayments received and to be refunded in the ordinary(o) course of business; [reserved];(p) other unsecured Indebtedness in an aggregate principal amount not exceeding(q) $15,000,000 at any time outstanding; and Indebtedness in the form of unsecured convertible notes of up to $300,000,000 at any(r) time outstanding (along with (x) any bridge or similar short term interim financing entered into in connection with such unsecured convertible notes and paid-off in full thereby so long as such bridge or similar short term interim financing is unsecured and does not remain outstanding for longer than 270 days and (y) Convertible Notes Hedges entered into directly in connection with such issuance), so long as (i) before and immediately after the issuance of such unsecured convertible notes (as well as before and immediately after the incurrence of any related bridge), no Default or Event of Default shall have occurred and be continuing and (ii) the Borrower shall be in compliance on a pro forma basis (as provided in Section 1.3) after giving effect to the issuance of such unsecured convertible notes (as well as after giving effect to any related bridge) with the financial covenants set forth in Section 8.7, computed as of the last day of the most recently ended Fiscal Quarter of the Borrower for which financial statements have been delivered pursuant to Section 7.1; provided that such unsecured convertible notes shall (A) except as permitted by clause (B) below, provide for no amortization, scheduled repayment prior to maturity, sinking fund, mandatory redemptions, or maturity, in each case, prior to the date that is ninety-two (92) days after the latest of the Term Loan A Maturity Date, the maturity date of any Term Loan established after the Sixth Amendment Effective Date or the Revolving Commitment Termination 100 130164155_5 142964982_4


 
Date; and (B) contain no mandatory redemption or offer to purchase other than standard put rights (including upon a change of control) and/or market conversion triggers for “net share settled convertible notes”. Liens. No Credit Party shall, nor shall it permit any of its Subsidiaries to,Section 8.2 directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or asset of any kind (including any document or instrument in respect of goods or accounts receivable) of any Credit Party or any of its Subsidiaries, whether now owned or hereafter acquired, created or licensed or any income, profits or royalties therefrom, or file or permit the filing of, or permit to remain in effect, any financing statement or other similar notice of any Lien with respect to any such property, asset, income, profits or royalties under the UCC of any State or under any similar recording or notice statute or under any Applicable Laws related to intellectual property, except (subject to Section 8.16): Liens granted pursuant to any Credit Document;(a) Liens existing as of the Sixth Amendment Effective Date and described in Schedule 8.2(b) and any modifications, replacements, renewals or extensions thereof, provided that (i) the property covered thereby is not changed, (ii) any modification, replacement, renewal or extension of the obligations secured or benefited thereby is a Permitted Refinancing of such obligations and is otherwise permitted by Section 8.1 and (iii) the direct or any contingent obligor with respect thereto is not changed; Liens securing purchase money Indebtedness and Capital Leases to the extent permitted(c) pursuant to Section 8.1(c); provided, any such Lien shall encumber only the asset acquired with the proceeds of such Indebtedness or the assets subject to such Capital Lease, respectively; Permitted Encumbrances;(d) Liens granted by any Non-Guarantor Subsidiary in favor of the Borrower or another(e) Credit Party in respect of Indebtedness owed by such Non-Guarantor Subsidiary to the Borrower or such other Credit Party and permitted by Section 8.1; and Liens not otherwise permitted hereunder on assets other than the Collateral securing(f) Indebtedness or other obligations in the aggregate principal amount not to exceed $15,000,000 at any time outstanding. Restricted Payments. No Credit Party shall, nor shall it permit any of itsSection 8.3 Subsidiaries to, declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, other than (a) Restricted Payments by any Subsidiary to the Borrower, any other Subsidiary and any other Person that owns a direct Equity Interest in such Subsidiary, ratably according to their respective holdings of the type of Equity Interest in respect of which such Restricted Payment is being made, (b) the Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in the common stock or other common Equity Interests of such Person, (c) Permitted Restricted Payments and (d) the Borrower may exercise its rights (including making cash payments and/or deliveries of the Borrower’s common stock) under Convertible Notes Hedges. Burdensome Agreements. No Credit Party shall, nor shall it permit any of itsSection 8.4 Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of any Credit Party or any of their respective Subsidiaries to create, incur or permit to exist any Lien upon any of their respective property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any of its Equity Interests or to make or repay loans or advances to the Borrower or any 101 130164155_5 142964982_4


 
other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by Applicable Law or by any Credit Document, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 8.4 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of specific property (including the sale of a Subsidiary) not prohibited under this Agreement pending such sale, provided such restrictions and conditions apply only to the specific property that is to be sold and such sale is permitted hereunder and (iv) the foregoing clause (a) shall not apply to (1) restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (2) customary provisions in leases and other contracts restricting the assignment thereof, (3) without limiting any obligations of any Credit Party or Subsidiary under Section 7.11, contractual obligations that are binding on a Credit Party or a Subsidiary thereof at the time such Credit Party becomes a Credit Party or such Subsidiary first becomes a Subsidiary, so long as such contractual obligation was not entered into in contemplation of such Person becoming a Credit Party or Subsidiary thereof; (4) restrictions by reason of customary provisions restricting assignments, subletting or other transfers contained in leases, licenses and similar agreements entered into in the ordinary course of business (provided that such restrictions are limited to the property or assets secured by such Liens or the property or assets subject to such leases, licenses or similar agreements, as the case may be); (5) restrictions related to secured Indebtedness otherwise permitted to be incurred hereunder that limit the right of the obligor to dispose of the assets securing such Indebtedness or (6) contractual obligations that prohibit, restrict or impose any condition upon the pledge by a Credit Party or a Subsidiary of the Equity Interests in a joint venture permitted hereunder. Investments. No Credit Party shall, nor shall it permit any of its Subsidiaries to,Section 8.5 directly or indirectly, make or own any Investment in any Person, including any joint venture and any Foreign Subsidiary, except (subject to Section 8.12): Investments in cash and Cash Equivalents and deposit accounts or securities accounts in(a) connection therewith; equity Investments owned as of the Sixth Amendment Effective Date in any Subsidiary;(b) (i) Investments by (A) any Credit Party in any other Credit Party; and (B) any(c) Non-Guarantor Subsidiary in any other Non-Guarantor Subsidiary, and (ii) Permitted Non-Credit Party Investments; Investments existing on the Sixth Amendment Effective Date and described on Schedule (d) 8.5; Investments constituting Swap Agreements permitted by Section 8.1(f);(e) Permitted Acquisitions;(f) Guarantees constituting Indebtedness permitted by Section 8.1(d);(g) Investments consisting of extensions of credit in the nature of accounts receivable or(h) notes receivable arising from the grant of trade credit in the ordinary course of business, and investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss; 102 130164155_5 142964982_4


 
Investments consisting of loans and advances to directors, officers, members of(i) management or employees of the Borrower and its Subsidiaries made in the ordinary course of business (including any refinancings or such loans), in an aggregate amount not to exceed $1,000,000 at any time outstanding; advances of payroll payments to employees in the ordinary course of business;(j) promissory notes and other noncash consideration received in connection with(k) Dispositions permitted pursuant to Section 8.9 (subject to the proviso set forth therein) deposits of cash made in the ordinary course of business to secure performance of(l) operating leases; Investments held by a Person who is acquired after the Closing Date pursuant to a(m) Permitted Acquisition, to the extent such Investments were not made in contemplation of, or in connection with, such Permitted Acquisition and were in existence on the date of such Permitted Acquisition; Investments constituting deposits, prepayments and other credits to suppliers made in the(n) ordinary course of business of the Borrower and its Subsidiaries; loans by a Credit Party to non-Guarantor Subsidiaries so long as the proceeds of such(o) loans are used to consummate a Permitted Acquisition substantially concurrently with the receipt of such proceeds; Investments in joint ventures or similar arrangements so long as the Person or Property(p) invested in is in a similar or complementary line of business as those of the Borrower and its Subsidiaries on the date of such investment, either (i) outstanding on the Amendment No. 10 Effective Date or (ii) made after the Amendment No. 10 Effective Date in an aggregate amount at any one time outstanding not to exceed (x) if the pro forma (as provided in Section 1.3) Consolidated Net Leverage Ratio as of the date of making of such Investment is greater than or equal to 3.25 to 1.00, then $10,000,000 or (y) otherwise, $50,000,000 (it being understood that any Investment that is permitted to be outstanding pursuant to this clause (p) at the time it is made shall not cease to be permitted pursuant to this clause (p) solely because of any fluctuation in the Consolidated Net Leverage Ratio after the date thereof); Convertible Notes Hedges entered into by the Borrower in connection with its issuance of(q) convertible notes permitted by Section 8.1(r); and other Investments not listed above and not otherwise prohibited by this Agreement in an(r) aggregate amount outstanding at any time (on a cost basis) not to exceed $15,000,0005,000,000. Notwithstanding the foregoing, (x) in no event shall any Credit Party make any Investment which results in or facilitates in any manner any Restricted Payment not otherwise permitted under the terms of Section 8.3 and (y) no Investment in the nature of, or that otherwise would constitute, an Acquisition (whether a Permitted Acquisition pursuant to Section 8.5(f) or any other Acquisition under any other provision of this Section 8.5) shall be permitted at any time on or after the Amendment No. 11 Effective Date; provided that this clause (y) shall not restrict transactions solely between or among any of the Credit Parties and their Subsidiaries (or any combination thereof) that are otherwise permitted by this Section 8.5. 103 130164155_5 142964982_4


 
Use of Proceeds. No Credit Party shall, nor shall it permit any of its SubsidiariesSection 8.6 to, use the proceeds of any Credit Extension except pursuant to Section 7.9. No Credit Party shall use, and each Credit Party shall ensure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Credit Extension (i) to refinance any commercial paper, (ii) in any manner that causes or might cause such Credit Extension or the application of such proceeds to violate any applicable Sanctions, Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System as in effect from time to time or any other regulation thereof or to violate the Exchange Act, (iii) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, or (iv) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country. Financial Covenants.Section 8.7 Consolidated Net Leverage Ratio. No Credit Party shall, nor shall it permit any of its(a) Subsidiaries to, permit the Consolidated Net Leverage Ratio as of the last day of any Fiscal Quarter of the Borrower ending during the periods set forth below to be greater than the ratio set forth below opposite such period: Period Maximum Consolidated Net Leverage Ratio Sixth Amendment Effective Date through and including June 30, 2019 3.50 to 1.00 September 30, 2019 through and including December 31, 2019 3.70 to 1.00 March 31, 2020 5.00 to 1.00 June 30, 2020 5.35 to 1.00 September 30, 2020 through and including March 31, 2021 5.50 to 1.00 June 30, 2021 5.00 to 1.00 September 30, 2021 4.75 to 1.00 December 31, 2021 and thereafter 4.50 to 1.00 Consolidated Fixed Charge Coverage Ratio. No Credit Party shall, nor shall it permit(b) any of its Subsidiaries to, permit the Consolidated Fixed Charge Coverage Ratio as of the last day of any Fiscal Quarter of the Borrower to be less than 1.25 to 1.00. Global Unrestricted Cash. The Borrower shall not permit Global Unrestricted Cash to be(c) less than $40,000,000 as of the last day of any Fiscal Quarter of the Borrower with respect to which the Consolidated Net Leverage Ratio (as reported on the Compliance Certificate for such Fiscal Quarter) is greater than or equal to 3.50 to 1.00 (it being understood that this clause (c) shall not be tested for any Fiscal Quarter with respect to which the Consolidated Net Leverage Ratio is less than 3.50 to 1.00 as of the last day of such Fiscal Quarter). 104 130164155_5 142964982_4


 
Fundamental Changes. No Credit Party shall, nor shall it permit any of itsSection 8.8 Subsidiaries to, dissolve, liquidate, merge or consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that, so long as no Default exists or would result therefrom (subject to Section 8.12): (i) any Wholly-Owned Subsidiary of the Borrower may be merged, amalgamated or(a) consolidated with or into the Borrower so long as the Borrower is the continuing or surviving entity and (ii) any Wholly-Owned Subsidiary of the Borrower may be merged, amalgamated or consolidated with or into any Guarantor so long as the Guarantor shall be the continuing or surviving entity, or simultaneously with such transaction the continuing or surviving entity shall become a Guarantor and the Borrower and such Guarantor (and each other relevant Credit Party) shall otherwise comply with Section 7.11 in connection therewith; (i) any Non-Guarantor Subsidiary that is a Foreign Subsidiary may be merged,(b) amalgamated or consolidated with or into, or be liquidated into, any other Non-Guarantor Subsidiary and (ii) any Non-Guarantor Subsidiary that is a Domestic Subsidiary may be merged, amalgamated or consolidated with or into, or be liquidated into, any other Non-Guarantor Subsidiary that is a Domestic Subsidiary; any Subsidiary may dispose of all or substantially all of its assets (upon voluntary(c) liquidation, dissolution, winding up or otherwise) to the Borrower or any Guarantor, provided that, with respect to any such Disposition by any Non-Guarantor Subsidiary, the consideration for such disposition shall not exceed the fair value of such assets; (i) any Non-Guarantor Subsidiary that is a Foreign Subsidiary may dispose of all or(d) substantially all of its assets (upon voluntary liquidation, dissolution, winding up or otherwise) to any other Non-Guarantor Subsidiary and (ii) any Non-Guarantor Subsidiary that is a Domestic Subsidiary may dispose of all or substantially all of its assets (upon voluntary liquidation, dissolution, winding up or otherwise) to any other Non-Guarantor Subsidiary that is a Domestic Subsidiary; any Wholly-Owned Subsidiary of the Borrower may merge with or into the Person such(e) Wholly-Owned Subsidiary was formed to acquire in connection with any acquisition permitted hereunder (including any Permitted Acquisition), provided that in the case of any merger involving a Wholly-Owned Subsidiary that is a Domestic Subsidiary, (i) a Guarantor shall be the continuing or surviving entity or (ii) simultaneously with such transaction, the continuing or surviving entity shall become a Guarantor and the Borrower and such Guarantor (and each other relevant Credit Party) shall comply with Section 7.11 in connection therewith; any Person may merge into the Borrower or any of its Wholly-Owned Subsidiaries in(f) connection with a Permitted Acquisition, provided that (i) in the case of a merger involving the Borrower or a Guarantor, the continuing or surviving Person shall be the Borrower or such Guarantor and (ii) the continuing or surviving Person shall be the Borrower or a Wholly-Owned Subsidiary of the Borrower; and any Subsidiary that has no (or only de minimis) assets or operations at such time, and(g) owns no other Subsidiary (unless such other Subsidiary also has no (or only de minimis) assets or operations as such time) may be disposed, liquidated, dissolved, wound down or merged with and into any other Subsidiary (with such other Subsidiary being the surviving entity). 105 130164155_5 142964982_4


 
Dispositions. No Credit Party shall, nor shall it permit any of its Subsidiaries to,Section 8.9 Dispose of any asset, including any Equity Interest owned by it, nor will any Credit Party permit any of its Subsidiaries to issue any additional Equity Interest in such Subsidiary (other than to the Borrower or another Subsidiary in compliance with Section 8.5), except (subject to Section 8.12): Dispositions of (i) inventory in the ordinary course of business and (ii) used, obsolete,(a) worn out or surplus equipment or property in the ordinary course of business; Dispositions of assets to the Borrower or any Subsidiary; provided that any such sales,(b) transfers or dispositions involving a Non-Guarantor Subsidiary shall be made in compliance with Sections 8.5 and 8.11 and, if applicable, 8.8; Dispositions of accounts receivable in connection with the compromise, settlement or(c) collection thereof; Dispositions resulting from any casualty or other insured damage to, or any taking under(d) power of eminent domain or by condemnation or similar proceeding of, any property or asset of the Borrower or any Subsidiary; Dispositions of assets (other than Equity Interests in a Subsidiary unless all Equity(e) Interests in such Subsidiary are sold and such transaction is not otherwise prohibited by Section 8.8) that are not permitted by any other clause of this Section 8.9; provided that the aggregate fair market value of all assets Disposed of in reliance upon this clause (e) during any Fiscal Year shall not exceed $4,000,000; Dispositions of Investments in joint ventures to the extent required by, or made pursuant(f) to, customary buy/sell arrangements between the joint venture parties set forth in joint venture arrangements and similar binding arrangements; Dispositions of Equity Interests in connection with the incurrence of Indebtedness(g) permitted pursuant to Section 8.1(r); Disposition of Equity Interests of EbixCash to third parties pursuant to the EbixCash(h) Offering so long as (i) EbixCash continues to be a Subsidiary of the Borrower and (ii) the Net Cash Proceeds of the EbixCash Offering are applied as required by Section 2.11(c)(v); and the disposition of the Headquarters Real Estate Asset pursuant to a sale and leaseback(i) transaction permitted by proviso (ii) of Section 8.10; provided that all Dispositions permitted by this Section 8.9 (other than those permitted by paragraphs (b), (d) or (f) above) shall be made for fair value and for at least 75% cash consideration (it being understood, for the avoidance of doubt, that promissory notes do not constitute cash consideration). Sales and Lease-Backs. No Credit Party shall, nor shall it permit any of itsSection 8.10 Subsidiaries to, directly or indirectly, become or remain liable as lessee or as a guarantor or other surety with respect to any lease of any property (whether real, personal or mixed), whether now owned or hereafter acquired, which the Borrower or any Subsidiary (a) has sold or transferred or is to sell or to transfer to any other Person (other than the Borrower or any other Credit Party), or (b) intends to use for substantially the same purpose as any other property which has been or is to be sold or transferred by the Borrower to any Person (other than the Borrower or any other Credit Party) in connection with such lease; provided that this Section 8.10 shall not prohibit (i) the sale and leaseback resulting from the incurrence of any lease or purchase money financing with respect to any property or asset entered into 106 130164155_5 142964982_4


 
within 180 days of the acquisition of such property or asset for the purpose of providing permanent financing of such property or asset or (ii) the sale and leaseback of the Headquarters Real Estate Asset so long as (x) no Default has occurred and is continuing, (y) such sale and leaseback is for fair market value and (z) the Borrower continues to have the right to utilize the Headquarters Real Estate Asset for its operations. Transactions with Affiliates. No Credit Party shall, nor shall it permit any of itsSection 8.11 Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of the Borrower or any its Subsidiaries on terms that are less favorable to such Credit Party or such Subsidiary, as the case may be, than those that might be obtained at the time from a Person who is not an Affiliate of the Borrower or any of its Subsidiaries; provided that the foregoing restriction shall not apply to (a) any transaction between or among the Credit Parties and not involving any other Affiliate, (b) any transaction between or among Non-Guarantor Subsidiaries and not involving any other Affiliate and (c) any Restricted Payment permitted by Section 8.3. Conduct of Business. No Credit Party shall, nor shall it permit any of itsSection 8.12 Subsidiaries to, engage in any business other than the businesses engaged in by such Credit Party or such Subsidiary on the Sixth Amendment Effective Date and businesses that are substantially similar, related or incidental thereto. Accounting Policies; Fiscal Year. No Credit Party shall, nor shall it permit anySection 8.13 of its Subsidiaries to, make any change in (a) accounting policies or reporting practices, except as required by GAAP, or (b) its Fiscal Year end. Amendments to Organizational Agreements. No Credit Party shall, nor shall itSection 8.14 permit any of its Subsidiaries to, amend or permit any amendments to its Organizational Documents if such amendment could reasonably be expected to be adverse to the Lenders or any Agent. [Reserved.]Section 8.15 Material IP Subsidiaries. Notwithstanding anything to the contrary in thisSection 8.16 Agreement, including in any of Sections 8.1 or 8.2, no Credit Party shall, nor shall it permit any of its Subsidiaries to: permit any Material IP Subsidiary or any Subsidiary that is not a Credit Party that owns,(a) directly or indirectly, any Equity Interests of any Material IP Subsidiary, to have any Indebtedness other than (i) Indebtedness under the Credit Documents, (ii) intercompany Indebtedness otherwise permitted hereunder, (iii) Indebtedness permitted by any of clauses (g), (h), (j), (k), (n) or (o) of Section 8.1, and (iv) Indebtedness permitted by Section 8.1(i) to the extent issued or incurred by any Subsidiary domiciled in India up to an amount not to exceed $10,000,000 outstanding at any one time; permit any Material IP Subsidiary or any Subsidiary that is not a Credit Party that owns,(b) directly or indirectly, any Equity Interests of any Material IP Subsidiary, directly or indirectly, to create, incur, assume or permit to exist any Lien on or with respect to any property or asset of any kind (including any document or instrument in respect of goods or accounts receivable), whether now owned or hereafter acquired, created or licensed or any income, profits or royalties therefrom, or file or permit the filing of, or permit to remain in effect, any financing statement or other similar notice of any Lien with respect to any such property, asset, income, profits or royalties under the UCC of any State or under any similar recording or notice statute or under any Applicable Laws related to intellectual property, 107 130164155_5 142964982_4


 
except (i) Liens granted pursuant to any Credit Document, (ii) Liens granted to secure intercompany Indebtedness owing by such Material IP Subsidiary to a Credit Party and (iii) Permitted Encumbrances; permit any Intellectual Property Rights, any Owned Intellectual Property or any license to(c) use the Licensed Intellectual Property to fail at any time to be free and clear of all restrictions (other than restrictions contained in licensing arrangements), court orders, injunctions, decrees, writs or Liens, whether by written agreement or otherwise, except (i) Liens granted pursuant to any Credit Document, (ii) Liens granted to secure intercompany Indebtedness owing to a Credit Party and (iii) Permitted Encumbrances; permit the fair market value (as reasonably determined by the Borrower) of all(d) Intellectual Property Rights not owned by a Credit Party or a Material IP Subsidiary to exceed 20% of the fair market value of all Intellectual Property Rights of the Borrower and its Subsidiaries in the aggregate; provided that (x) such 20% limitation may be exceeded for 180 days (or such longer period as the Administrative Agent may agree) after the acquisition of Intellectual Property Rights (whether directly or through the acquisition of one or more Persons) and (y) this clause (d) shall not apply to Intellectual Property Rights owned by joint ventures of the Borrower or its Subsidiaries (including joint ventures which are Subsidiaries hereunder) to the extent such joint ventures are permitted under this Agreement and (and such Intellectual Property Rights shall be entirely excluded from the calculation of the 20% threshold set forth in this clause (d)); or permit any Intellectual Property Rights owned, licensed or otherwise held by any(e) Subsidiary (other than a Subsidiary that is a joint venture hereunder) to be transferred to any joint venture (including any joint venture which is a Subsidiary hereunder) if such transferee is excluded from the requirement of clause (d) above as a result of proviso (y) to such clause (d). EVENTS OF DEFAULT; REMEDIES; APPLICATION OF FUNDS.Section 9 Events of Default. If any one or more of the following conditions or events shallSection 9.1 occur: Failure to Make Payments When Due. Failure by any Credit Party to pay (i) the principal(a) of any Loan or any amount payable to the Issuing Bank in reimbursement of any drawing under a Letter of Credit, in either case when due, whether at stated maturity, by acceleration or otherwise or (ii) within three Business Days of when due any interest on any Loan or any fee or any other amount due hereunder; or Default in Other Agreements. (i) Failure of any Credit Party or any of their respective(b) Subsidiaries to pay when due any principal of or interest on or any other amount payable in respect of one or more items of Indebtedness (other than the Loans and Letters of Credit) in an aggregate principal amount of $5,000,000 or more, in each case beyond the grace or cure period, if any, provided therefor; or (ii) breach or default by any Credit Party or any of their respective Subsidiaries with respect to any other term of (x) one or more items of Indebtedness in the aggregate principal amounts referred to in clause (i) above, or (y) any loan agreement, mortgage, indenture or other agreement relating to such item(s) of Indebtedness, in each case beyond the grace or cure period, if any, provided therefor, if the effect of such breach or default is to cause, or to permit the holder or holders of that Indebtedness (or a trustee on behalf of such holder or holders) to cause, that Indebtedness to become or be declared due and payable (or subject to a compulsory repurchase or redeemable) prior to its stated maturity or the stated maturity of any underlying obligation, as the case may be; or 108 130164155_5 142964982_4


 
Breach of Certain Covenants. Failure of any Credit Party to perform or comply with any(c) term or condition contained in Section 7.1 (other than clause (e), (f), (g)(ii), (g)(iii), (h) or (j) thereof), Section 7.2 (with respect to the existence of any Credit Party), Section 7.9, Section 7.11 or any Section of Section 8; or Breach of Representations, etc. Any representation, warranty, certification or other(d) statement made or deemed made by any Credit Party in any Credit Document or in any statement or certificate at any time given by any Credit Party or any of their respective Subsidiaries in writing pursuant hereto or thereto or in connection herewith or therewith shall be false in any material respect as of the date made or deemed made; or Other Defaults Under Credit Documents. Any Credit Party shall default in the(e) performance of or compliance with any term contained herein or any of the other Credit Documents, other than any such term referred to in any other Section of this Section 9.1, and such default shall not have been remedied or waived within thirty days after the earlier of (i) an Authorized Officer of any Credit Party becoming aware of such default, or (ii) receipt by the Borrower of notice from the Administrative Agent or any Lender of such default; or Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A court of competent(f) jurisdiction shall enter a decree or order for relief in respect of any Credit Party or any of their respective Subsidiaries in an involuntary case under the Bankruptcy Code or Debtor Relief Laws now or hereafter in effect, which decree or order is not stayed; or any other similar relief shall be granted under any applicable federal or state law; or (ii) an involuntary case shall be commenced against any Credit Party or any of their respective Subsidiaries under the Bankruptcy Code or other Debtor Relief Laws now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over any Credit Party or any of their respective Subsidiaries, or over all or a substantial part of its property, shall have been entered; or there shall have occurred the involuntary appointment of an interim receiver, trustee or other custodian of any Credit Party or any of its Subsidiaries for all or a substantial part of its property; or a warrant of attachment, execution or similar process shall have been issued against any substantial part of the property of any Credit Party or any of its Subsidiaries, and any such event described in this clause (ii) shall continue for sixty days without having been dismissed, bonded or discharged; or Voluntary Bankruptcy; Appointment of Receiver, etc. (i) Any Credit Party or any of(g) their respective Subsidiaries shall have an order for relief entered with respect to it or shall commence a voluntary case under the Bankruptcy Code or other Debtor Relief Laws now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property; or any Credit Party or any of their respective Subsidiaries shall make any assignment for the benefit of creditors; (ii) any Credit Party or any of their respective Subsidiaries shall be unable, or shall fail generally, or shall admit in writing its inability, to pay its debts as such debts become due; or (iii) the board of directors (or similar governing body) of any Credit Party or any of their respective Subsidiaries or any committee thereof shall adopt any resolution or otherwise authorize any action to approve any of the actions referred to in clauses (i) or (ii) above or in Section 9.1(f); or Judgments and Attachments. (i) Any one or more money judgments, writs or warrants of(h) attachment or similar process involving an aggregate amount at any time in excess of $5,000,000 (to the extent not adequately covered by insurance as to which a solvent and unaffiliated insurance company has not denied coverage) shall be entered or filed against any Credit Party or any of their respective 109 130164155_5 142964982_4


 
Subsidiaries or any of their respective assets and shall remain undischarged, unvacated, unbonded or unstayed for a period of sixty days; or (ii) any non-monetary judgment or order shall be rendered against any Credit Party or any of their respective Subsidiaries that could reasonably be expected to have a Material Adverse Effect, and shall remain undischarged, unvacated, unbonded or unstayed for a period of sixty days; or Pension Plans. There shall occur one or more ERISA Events which individually or in the(i) aggregate results in liability of any Credit Party, any of their respective Subsidiaries or any of their respective ERISA Affiliates in excess of $5,000,000 during the term hereof and which is not paid by the applicable due date; or Change of Control. A Change of Control shall occur; or(j) Invalidity of Credit Documents and Other Documents. At any time after the execution(k) and delivery thereof, (i) this Agreement or any other Credit Document ceases to be in full force and effect (other than by reason of a release of Collateral in accordance with the terms hereof or thereof or the satisfaction in full of the Obligations (other than contingent and indemnified obligations not then due and owing) in accordance with the terms hereof) or shall be declared null and void, or the Collateral Agent shall not have or shall cease to have a valid and perfected Lien in any Collateral purported to be covered by the Collateral Documents with the priority required by the relevant Collateral Document, or (ii) any Credit Party shall contest the validity or enforceability of any Credit Document in writing or deny in writing that it has any further liability, including with respect to future advances by the Lenders, under any Credit Document to which it is a party. Remedies. Upon the occurrence of any Event of Default described in Section Section 9.2 9.1(f) or Section 9.1(g), automatically, and upon the occurrence and during the continuance of any other Event of Default, at the request of (or with the consent of) the Required Lenders, upon notice to the Borrower by the Administrative Agent, (a) the Commitments, if any, of each Lender and the obligation of the Issuing Bank to issue any Letter of Credit shall immediately terminate; (b) each of the following shall immediately become due and payable, in each case without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by each of the Credit Parties: (i) the unpaid principal amount of and accrued interest on the Loans, (ii) an amount equal to the maximum amount that may at any time be drawn under all Letters of Credit then outstanding (regardless of whether any beneficiary under any such Letter of Credit shall have presented, or shall be entitled at such time to present, the drafts or other documents or certificates required to draw under such Letters of Credit), and (iii) all other Obligations (other than Obligations under any Secured Swap Agreement or Secured Treasury Management Agreement); provided, the foregoing shall not affect in any way the obligations of the Lenders under Section 2.2(b)(iii) or Section 2.3(e); (c) the Administrative Agent may cause the Collateral Agent to enforce any and all Liens and security interests created pursuant to Collateral Documents; and (d) the Administrative Agent shall direct the Borrower to pay (and the Borrower hereby agrees upon receipt of such notice, or upon the occurrence of any Event of Default specified in Section 9.1(f) and Section 9.1(g) to pay) to the Administrative Agent such additional amounts of cash, to be held as security for such Borrower’s reimbursement Obligations in respect of Letters of Credit then outstanding under arrangements acceptable to the Administrative Agent, equal to the Outstanding Amount of the Letter of Credit Obligations at such time. Notwithstanding anything herein or otherwise to the contrary, any Event of Default occurring hereunder shall continue to exist (and shall be deemed to be continuing) until such time as such Event of Default has been cured to the satisfaction of the Required Lenders or waived in writing in accordance with the terms of Section 11.4. 110 130164155_5 142964982_4


 
Application of Funds. After the exercise of remedies provided for in Section 9.2Section 9.3 (or after the Loans have automatically become immediately due and payable), any amounts received on account of the Obligations shall be applied by each Agent in the following order: First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (other than principal, interest and Letter of Credit Fees but including all reasonable out-of-pocket fees, expenses and disbursements of any law firm or other counsel and amounts payable under Section 3.1, Section 3.2 and Section 3.3) payable to the Administrative Agent and the Collateral Agent, in each case in its capacity as such; Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders under the Credit Documents including all reasonable out-of-pocket fees, expenses and disbursements of any law firm or other counsel and amounts payable under Section 3.1, Section 3.2 and Section 3.3), ratably among the Lenders in proportion to the respective amounts described in this clause Second payable to them; Third, to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans, Letter of Credit Borrowings and other Obligations under the Credit Documents ratably among such parties in proportion to the respective amounts described in this clause Third payable to them; and Fourth, to (a) payment of that portion of the Obligations constituting unpaid principal of the Loans and Letter of Credit Borrowings, (b) payment of breakage, termination or other amounts owing in respect of any Secured Swap Agreement, to the extent such Secured Swap Agreement is permitted hereunder, (c) payments of amounts due under any Secured Treasury Management Agreement, and (d) the Administrative Agent for the account of the Issuing Bank, to Cash Collateralize that portion of the Letter of Credit Obligations comprised of the aggregate undrawn amount of Letters of Credit, ratably among such parties in proportion to the respective amounts described in this clause Fourth payable to them; and Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Applicable Laws. Subject to Section 2.3, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fourth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above. Excluded Swap Obligations with respect to any Guarantor shall not be paid with amounts received from such Guarantor or such Guarantor’s assets, but appropriate adjustments shall be made with respect to payments from other Credit Parties to preserve the allocation to Obligations otherwise set forth above in this Section. Notwithstanding the foregoing, Secured Swap Obligations and Secured Treasury Management Obligations shall be excluded from the application described above if the Administrative Agent has not received a Secured Party Designation Notice, together with such supporting documentation as the Administrative Agent may request, from the applicable Qualifying Swap Bank or Qualifying Treasury Management Bank, as the case may be. Each Qualifying Swap Bank or Qualifying Treasury Management Bank not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of each of 111 130164155_5 142964982_4


 
the Administrative Agent and the Collateral Agent pursuant to the terms of Section 10 for itself and its Affiliates as if a “Lender” party hereto. AGENCYSection 10 Appointment and Authority.Section 10.1 Each of the Lenders and the Issuing Bank hereby irrevocably appoints Regions Bank to(a) act on its behalf as the Administrative Agent hereunder and under the other Credit Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. Each of the Lenders and the Issuing Bank hereby irrevocably appoints Regions Bank to(b) act on its behalf as the Collateral Agent hereunder and under the other Credit Documents and authorizes the Collateral Agent to take such action on its behalf and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any Collateral Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere herein or in any Collateral Document, the Collateral Agent shall not have any duties or responsibilities, except those expressly set forth herein or therein, nor shall the Collateral Agent have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any Collateral Document or otherwise exist against the Collateral Agent. The Collateral Agent shall act on behalf of the Secured Parties with respect to any Collateral and the Collateral Documents, and the Collateral Agent shall have all of the benefits and immunities (i) provided to the Administrative Agent under the Credit Documents with respect to any acts taken or omissions suffered by the Collateral Agent in connection with any Collateral or the Collateral Documents as fully as if the term “Administrative Agent” as used in such Credit Documents included the Collateral Agent with respect to such acts or omissions, and (ii) as additionally provided herein or in the Collateral Documents with respect to the Collateral Agent. The provisions of this Section are solely for the benefit of the Administrative Agent, the(c) Collateral Agent, the Lenders and the Issuing Bank, and no Credit Party nor any of its Subsidiaries shall have rights as a third party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Credit Documents (or any other similar term) with reference to the Administrative Agent or the Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any Applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties. Rights as a Lender. Each Person serving as an Agent hereunder shall have theSection 10.2 same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not an Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include each Person serving as an Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary of the Borrower or other Affiliate thereof as if such Person were not an Agent hereunder and without any duty to account therefor to the Lenders. Exculpatory Provisions.Section 10.3 112 130164155_5 142964982_4


 
No Agent shall have any duties or obligations except those expressly set forth herein and(a) in the other Credit Documents, and each Agent’s duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, no Agent: shall be subject to any fiduciary or other implied duties, regardless of whether a(i) Default or an Event of Default has occurred and is continuing; shall have any duty to take any discretionary action or exercise any discretionary(ii) powers, except discretionary rights and powers expressly contemplated hereby or by the other Credit Documents that such Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Credit Documents), provided that no Agent shall be required to take any action that, in its opinion or the opinion of its counsel, may expose such Agent to liability or that is contrary to any Credit Document or Applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and shall, except as expressly set forth herein and in the other Credit Documents,(iii) have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as such Agent or any of its Affiliates in any capacity. No Agent shall be liable for any action taken or not taken by it (i) with the consent or at(b) the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as such Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 11.4 and 9.2) or (ii) in the absence of its own gross negligence or willful misconduct, as determined by a court of competent jurisdiction by final and nonappealable judgment. Each Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to such Agent in writing by the Borrower, a Lender or the Issuing Bank. No Agent shall be responsible for or have any duty to ascertain or inquire into (i) any(c) statement, warranty or representation made in or in connection with this Agreement or any other Credit Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Credit Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Section 5 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to such Agent. Reliance by Agents. Each Agent shall be entitled to rely upon, and shall notSection 10.4 incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. Each Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the Issuing Bank, the Administrative Agent may presume that such condition is 113 130164155_5 142964982_4


 
satisfactory to such Lender or the Issuing Bank unless the Administrative Agent shall have received notice to the contrary from such Lender or the Issuing Bank prior to the making of such Loan or the issuance of such Letter of Credit. Each Agent may consult with legal counsel (who may be counsel for the Borrower and its Subsidiaries), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. Delegation of Duties. Each Agent may perform any and all of its duties andSection 10.5 exercise its rights and powers hereunder or under any other Credit Document by or through any one or more sub-agents appointed by such Agent. Each Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Section shall apply to any such sub-agent and to the Related Parties of each Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent or Collateral Agent, as the case may be. No Agent shall be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and non-appealable judgment that such Agent acted with gross negligence or willful misconduct in the selection of such sub-agents. Resignation or Removal of Agents.Section 10.6 Any Agent may at any time give notice of its resignation to the Lenders, the Issuing Bank(a) and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty days after the retiring Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Agent may (but shall not be obligated to) on behalf of the Lenders and the Issuing Bank, appoint a successor Agent meeting the qualifications set forth above. Whether or not a successor has been appointed such resignation shall become effective in accordance with such notice on the Resignation Effective Date. If the Person serving as an Agent is a Defaulting Lender pursuant to clause (d) of the(b) definition thereof, the Required Lenders may, to the extent permitted by Applicable Law by notice in writing to the Borrower and such Person remove such Person as an Agent and, in consultation with the Borrower, appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date. With effect from the Resignation Effective Date or the Removal Effective Date (as(c) applicable) (1) the retiring or removed Agent shall be discharged from its duties and obligations hereunder and under the other Credit Documents (except that in the case of any collateral security held by such Agent on behalf of the Lenders or the Issuing Bank under any of the Credit Documents, the retiring or removed Agent shall continue to hold such collateral security until such time as a successor Agent is appointed) and (2) except for any indemnity payments or other amounts then owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the Issuing Bank directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Administrative 114 130164155_5 142964982_4


 
Agent or Collateral Agent, as the case may be, hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed Administrative Agent or Collateral Agent, as the case may be (other than any rights to indemnity payments or other payments then owed to the retiring or removed Administrative Agent or Collateral Agent, as the case may be), as of the Resignation Effective Date or the Removal Effective Date, as applicable, and the retiring or removed Agent shall be discharged from all of its duties and obligations hereunder or under the other Credit Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring or removed Agent’s resignation or removal hereunder and under the other Credit Documents, the provisions of this Section 10 and Section 11.2 shall continue in effect for the benefit of such retiring or removed Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Agent was acting as an Agent. Non-Reliance on Agents and Other Lenders. Each of the Lenders and the IssuingSection 10.7 Bank acknowledges that it has, independently and without reliance upon any Agent or any other Lender or any of their respective Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each of the Lenders and the Issuing Bank also acknowledges that it will, independently and without reliance upon any Agent or any other Lender or any of their respective Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Credit Document or any related agreement or any document furnished hereunder or thereunder. No Other Duties, etc. Anything herein to the contrary notwithstanding, none ofSection 10.8 the bookrunners, arrangers, documentation agents, syndication agents or other similar titles listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Credit Documents, except in its capacity, as applicable, as the Administrative Agent, the Collateral Agent, a Lender or the Issuing Bank hereunder. Administrative Agent May File Proofs of Claim. In case of the pendency of anySection 10.9 proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Credit Party, the Administrative Agent (irrespective of whether the principal of any Loan or Letter of Credit Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise: to file and prove a claim for the whole amount of the principal and interest owing and(a) unpaid in respect of the Loans, Letter of Credit Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Bank and the Agents (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuing Bank and the Agents and their respective agents and counsel and all other amounts due the Lenders, the Issuing Bank and the Agents under Section 2.10 and Section 11.2) allowed in such judicial proceeding; and to collect and receive any monies or other property payable or deliverable on any such(b) claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Agent, each Lender and the Issuing Bank to make such 115 130164155_5 142964982_4


 
payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Bank, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 2.10 and Section 11.2). Collateral Matters.Section 10.10 The Lenders (including in its capacities as a potential Swap Provider and potential(a) Treasury Management Bank) and the Issuing Bank irrevocably authorize the Administrative Agent and the Collateral Agent, at its option and in its discretion, to release any Lien on any property granted to or held under any Credit(i) Document securing the Obligations (x) upon termination of the commitments under this Agreement and payment in full of all Obligations (other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit (other than Letters of Credit as to which other arrangements satisfactory to the Administrative Agent and the Issuing Bank shall have been made), (y) that is sold or otherwise disposed of or to be sold or otherwise disposed of as part of or in connection with any sale or other disposition permitted under the Credit Documents or consented to in accordance with the terms of this Agreement, or (z) subject to Section 11.4, if approved, authorized or ratified in writing by the Required Lenders; to subordinate any Lien on any property granted to or held under any Credit(ii) Document securing the Obligations to the holder of any Lien on such property that is permitted by Section 8.2(c); and to release any Guarantor from its obligations under this Agreement and the other(iii) Credit Documents if such Person ceases to be a Subsidiary as a result of a transaction permitted under the Credit Documents. Upon request by the Administrative Agent or the Collateral Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s and the Collateral Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under this Agreement pursuant to this Section. Neither the Administrative Agent nor the Collateral Agent shall be responsible for or(b) have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent’s or the Collateral Agent’s Lien thereon, or any certificate prepared by any Credit Party in connection therewith, nor shall the Administrative Agent or the Collateral Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral. Anything contained in any of the Credit Documents to the contrary notwithstanding, each(c) of the Credit Parties, the Administrative Agent, the Collateral Agent and each holder of the Obligations hereby agree that (i) no holder of the Obligations shall have any right individually to realize upon any of the Collateral or to enforce this Agreement, the Notes or any other Credit Agreement, it being understood and agreed that all powers, rights and remedies hereunder may be exercised solely by the respective Agents, on behalf of the Secured Parties, in accordance with the terms hereof and all powers, rights and remedies under the Collateral Documents may be exercised solely by the Collateral Agent, and (ii) in the event of a foreclosure by the Collateral Agent on any of the Collateral pursuant to a public or private sale or other disposition, the Collateral Agent or any Lender may be the purchaser of any or all of such 116 130164155_5 142964982_4


 
Collateral at any such sale or other disposition and the Collateral Agent, as agent for and representative of the holders of the Obligations (but not any Lender or Lenders in its or their respective individual capacities unless the Required Lenders shall otherwise agree in writing) shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Obligations as a credit on account of the purchase price for any collateral payable by the Collateral Agent at such sale or other disposition. No Secured Swap Agreement or Secured Treasury Management Agreement will create(d) (or be deemed to create) in favor of any Qualifying Swap Bank or any Qualifying Treasury Management Bank, respectively, that is a party thereto any rights in connection with the management or release of any Collateral or of the obligations of the Borrower or any other Credit Party under the Credit Documents except as expressly provided herein or in the other Credit Documents. By accepting the benefits of the Collateral, each such Qualifying Swap Bank and Qualifying Treasury Management Bank shall be deemed to have appointed the Collateral Agent as its agent and agreed to be bound by the Credit Documents as a holder of the Obligations, subject to the limitations set forth in this clause (d). Furthermore, it is understood and agreed that the Qualifying Swap Banks and Qualifying Treasury Management Banks, in their capacity as such, shall not have any right to notice of any action or to consent to, direct or object to any action hereunder or under any of the other Credit Documents or otherwise in respect of the Collateral (including the release or impairment of any Collateral, or to any notice of or consent to any amendment, waiver or modification of the provisions hereof or of the other Credit Documents) other than in its capacity as a Lender and, in any case, only as expressly provided herein. MISCELLANEOUSSection 11 Notices; Effectiveness; Electronic Communications.Section 11.1 Notices Generally. Except in the case of notices and other communications expressly(a) permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows: if to any Agent, the Borrower or any other Credit Party, to the address, facsimile(i) number or telephone number specified in Appendix B; and if to any Lender, the Issuing Bank or the Swingline Lender, to the address,(ii) facsimile number or telephone number in its Administrative Questionnaire on file with the Administrative Agent. Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b). Electronic Communications. Notices and other communications to the Lenders and the(b) Issuing Bank hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that 117 130164155_5 142964982_4


 
the foregoing shall not apply to notices to any Lender or the Issuing Bank pursuant to Section 2 if such Lender or the Issuing Bank, as applicable, has notified the Administrative Agent and the Borrower that it is incapable of receiving notices under such Section by electronic communication. The Administrative Agent or any Credit Party may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor, provided that, with respect to clauses (i) and (ii) above, if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient. Change of Address, Etc. Any party hereto may change its address, facsimile or telephone(c) for notices and other communications hereunder by notice to the other parties hereto. Platform.(d) Each Credit Party agrees that the Administrative Agent may, but shall not be(i) obligated to, make the Communications (as defined below) available to the Issuing Bank and the other Lenders by posting the Communications on Debtdomain, Intralinks, Syndtrak or a substantially similar electronic transmission system (the “Platform”). The Platform is provided “as is” and “as available.” The Agent Parties (as(ii) defined below) do not warrant the adequacy of the Platform and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or the Platform. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower or any of the other Credit Parties, any Lender or any other Person or entity for damages of any kind, including direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of the Borrower’s, any other Credit Party’s or the Administrative Agent’s transmission of communications through the Platform. “Communications” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of any Credit Party pursuant to any Credit Document or the transactions contemplated therein which is distributed to the Administrative Agent, any Lender or the Issuing Bank by means of electronic communications pursuant to this Section, including through the Platform. Expenses; Indemnity; Damage Waiver.Section 11.2 Costs and Expenses. The Credit Parties shall pay (i) all reasonable and documented(a) out-of-pocket expenses incurred by each Agent and its Affiliates (including the reasonable and documented out-of-pocket fees, charges and disbursements of one primary counsel for the Agents and, if reasonably necessary, local and/or specialty counsel to the Agents, the Lenders and the Issuing Bank 118 130164155_5 142964982_4


 
taken as a whole (limited to one specialty counsel in any reasonably necessary specialty and to one local counsel in each reasonably necessary jurisdiction)) in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Credit Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable and documented out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all documented out-of-pocket expenses incurred by any Agent, any Lender or the Issuing Bank (including the reasonable and documented out-of-pocket fees, charges and disbursements of one primary counsel for the Agents, the Lenders and the Issuing Bank taken as a whole, one local counsel in each relevant jurisdiction for the Agents, the Lenders and the Issuing Bank taken as a whole, one specialty counsel in each relevant specialty for the Agents, the Lenders and the Issuing Bank taken as a whole and, solely in the case of a conflict of interest, one additional counsel to all such affected Persons similarly situated, taken as a whole) in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Credit Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit. Indemnification by the Credit Parties. The Credit Parties shall indemnify the(b) Administrative Agent (and any sub-agent thereof), the Collateral Agent (and any sub-agent thereof), each Lender and the Issuing Bank, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable and documented out-of-pocket fees, charges and disbursements of one primary counsel for the Indemnitees taken as a whole, if reasonably necessary, one local counsel in each relevant jurisdiction for the Indemnitees taken as a whole, if reasonably necessary, one specialty counsel in each relevant specialty for the Indemnitees taken as a whole and, solely in the case of a conflict of interest, one additional counsel to all such affected Persons similarly situated, taken as a whole), incurred by any Indemnitee or asserted against any Indemnitee by any Person (including the Borrower or any other Credit Party) other than such Indemnitee or its Related Parties arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Credit Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any of its Subsidiaries, and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from (x) the bad faith, gross negligence or willful misconduct of such Indemnitee or (y) disputes solely among Indemnitees (other than any claims against any Indemnitee in its capacity as the Administrative Agent, the Collateral Agent, a Joint Lead Arranger or Joint Book Runner, the Issuing Bank or the Swingline Lender or any similar role under this Agreement or any other Credit Document or any of their respective Related Parties (in each case, acting in its capacity as such)) and not arising out of or involving any act or omission of any Credit Party or any of their respective 119 130164155_5 142964982_4


 
Subsidiaries or Affiliates (including their respective officers, directors, employees or controlling persons). This Section 11.2(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim. Reimbursement by Lenders. To the extent that the Credit Parties for any reason fail to(c) indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the Collateral Agent (or any sub-agent thereof), the Issuing Bank or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the Collateral Agent (or any such sub-agent), the Issuing Bank or such Related Party, as the case may be, such Lender’s pro rata share (in each case, determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), the Collateral Agent (or any such sub-agent) or the Issuing Bank in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), the Collateral Agent (or any such sub-agent) or the Issuing Bank in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of this Agreement that provide that their obligations are several in nature, and not joint and several. Waiver of Consequential Damages, Etc. To the fullest extent permitted by Applicable(d) Law, no party hereto shall assert, and each hereby waives, any claim against any other such party, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Credit Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby. Payments. All amounts due under this Section shall be payable promptly, but in any(e) event within ten Business Days after written demand therefor (including delivery of copies of applicable invoices). Survival. The provisions of this Section shall survive resignation or replacement of the(f) Administrative Agent, the Collateral Agent, the Issuing Bank, the Swingline Lender or any Lender, termination of the commitments hereunder and repayment, satisfaction and discharge of the loans and obligations hereunder. Set-Off. If an Event of Default shall have occurred and be continuing, eachSection 11.3 Lender, the Issuing Bank, and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the Issuing Bank or any such Affiliate to or for the credit or the account of the Borrower or any other Credit Party against any and all of the obligations of the Borrower or such Credit Party now or hereafter existing under this Agreement or any other Credit Document to such Lender, the Issuing Bank or its respective Affiliates, irrespective of whether or not such Lender, the Issuing Bank or such Affiliate shall have made any demand under this Agreement or any other Credit Document and although such obligations of the Borrower or such Credit Party may be contingent or unmatured or are owed to a branch, office or Affiliate of such Lender or the 120 130164155_5 142964982_4


 
Issuing Bank different from the branch or office holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.16 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Bank and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, the Issuing Bank and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the Issuing Bank or its respective Affiliates may have. Each of the Lenders and the Issuing Bank agrees to promptly notify the Borrower and the Administrative Agent after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application. Amendments and Waivers.Section 11.4 Required Lenders’ Consent. Subject to Section 11.4(b) and Section 11.4(c), no(a) amendment, modification, termination or waiver of any provision of the Credit Documents (other than any amendment required to give effect to Section 2.1(c), which shall be subject only to the consent requirements set forth therein), or consent to any departure by any Credit Party therefrom, shall in any event be effective without the written concurrence of the Required Lenders and the delivery of such amendment, modification, termination or waiver to the Administrative Agent; provided that (i) the Administrative Agent may, with the consent of the Borrower only, amend, modify or supplement this Agreement to cure any ambiguity, omission, defect or inconsistency, so long as such amendment, modification or supplement does not adversely affect the rights of any Lender or the Issuing Bank, (ii) each of the Fee Letter and any Auto Borrow Agreement may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto, (iii) no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitments, Loans and/or Letter of Credit Obligations of such Lender may not be increased or extended without the consent of such Lender, (iv) each Lender is entitled to vote as such Lender sees fit on any bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code of the United States supersedes the unanimous consent provisions set forth herein and (v) the Required Lenders shall determine whether or not to allow any Credit Party to use cash collateral in the context of a bankruptcy or insolvency proceeding and such determination shall be binding on all of the Lenders. Affected Lenders’ Consent. Without the written consent of each Lender (other than a(b) Defaulting Lender except as provided in clause (a)(iii) above) that would be affected thereby, but subject to Section 3.1(h), no amendment, modification, termination, or consent shall be effective if the effect thereof would: extend the Revolving Commitment Termination Date;(i) waive, reduce or postpone any scheduled repayment (but not prepayment) or alter(ii) the required application of any prepayment pursuant to Section 2.12 or the application of funds pursuant to Section 9.3, as applicable; extend the stated expiration date of any Letter of Credit, beyond the Revolving(iii) Commitment Termination Date; 121 130164155_5 142964982_4


 
reduce the principal of or the rate of interest on any Loan (other than any waiver(iv) of the imposition of the Default Rate pursuant to Section 2.9) or any fee or premium payable hereunder; provided that only the consent of the Required Lenders shall be necessary (A) to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest at the Default Rate or (B) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or to reduce any fee payable hereunder; extend the time for payment of any such interest or fees;(v) reduce the principal amount of any Loan or any reimbursement obligation in(vi) respect of any Letter of Credit; amend, modify, terminate or waive any provision of this Section 11.4(b) or(vii) Section 11.4(c) or any other provision of this Agreement that expressly provides that the consent of all Lenders is required; change the percentage of the outstanding principal amount of Loans that is(viii) required for the Lenders or any of them to take any action hereunder or amend the definition of “Required Lenders,” “Revolving Commitment Percentage,” “Term Loan A Commitment Percentage,” or “Term Loan Commitment Percentage” or modify the amount of the Revolving Commitment, Term Loan A Commitment or Term Loan Commitment of any Lender; release all or substantially all of the Collateral or all or substantially all of the(ix) Guarantors from their obligations hereunder, in each case, except as expressly provided in the Credit Documents; or consent to the assignment or transfer by the Borrower of any of its rights and(x) obligations under any Credit Document (except pursuant to a transaction permitted hereunder). Other Consents. No amendment, modification, termination or waiver of any provision of(c) the Credit Documents, or consent to any departure by the Borrower or any other Credit Party therefrom, shall: increase any Revolving Commitment of any Lender over the amount thereof then(i) in effect without the consent of such Lender; provided, no amendment, modification or waiver of any condition precedent, covenant, Default or Event of Default shall constitute an increase in any Revolving Commitment of any Lender; amend, modify, terminate or waive any provision hereof relating to the Swingline(ii) Sublimit or the Swingline Loans without the consent of the Swingline Lender; amend, modify, terminate or waive any obligation of Lenders relating to the(iii) purchase of participations in Letters of Credit as provided in Section 2.3(e) without the written consent of the Administrative Agent and of the Issuing Bank; or amend, modify, terminate or waive any provision of this Section 11 as the same(iv) applies to any Agent, or any other provision hereof as the same applies to the rights or obligations of any Agent, in each case without the consent of such Agent. 122 130164155_5 142964982_4


 
Execution of Amendments, etc. The Administrative Agent may, but shall have no(d) obligation to, with the concurrence of any Lender, execute amendments, modifications, waivers or consents on behalf of such Lender. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given. No notice to or demand on any Credit Party in any case shall entitle any Credit Party to any other or further notice or demand in similar or other circumstances. Any amendment, modification, termination, waiver or consent effected in accordance with this Section 11.4 shall be binding upon each Lender at the time outstanding, each future Lender and, if signed by a Credit Party, on such Credit Party. Successors and Assigns.Section 11.5 Successors and Assigns Generally. The provisions of this Agreement shall be binding(a) upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Borrower nor any other Credit Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (e) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement. Assignments by Lenders. Any Lender may at any time assign to one or more financial(b) institutions all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments, Loans and obligations hereunder at the time owing to it); provided that any such assignment shall be subject to the following conditions: Minimum Amounts.(i) in the case of an assignment of the entire remaining amount of the(A) assigning Lender’s commitments and the loans at the time owing to it (in each case with respect to any credit facility) or contemporaneous assignments to Approved Funds that equal at least to the amounts specified in subsection (b)(i)(B) of this Section in the aggregate) or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and in any case not described in subsection (b)(i)(A) of this Section, the(B) aggregate amount of the commitment (which for this purpose includes loans and obligations in respect thereof outstanding thereunder) or, if the commitment is not then in effect, the principal outstanding balance of the loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment Agreement with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment Agreement, as of the Trade Date) shall not be less than $5,000,000, in the case of any assignment in respect of any Revolving Commitments and/or Revolving Loans, or $2,500,000, in the case of any assignment in respect of any Term Loan Commitments and/or Term Loans, unless each of the Administrative Agent 123 130164155_5 142964982_4


 
and, so long as no Event of Default shall have occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed). Proportionate Amounts. Each partial assignment shall be made as an assignment(ii) of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Commitments and Loans assigned, except that this clause (ii) shall not prohibit any Lender from assigning all or a portion of its rights and obligations on a non-pro rata basis as between its Revolving Commitment and/or Revolving Loans, on the one hand, and any Term Loan Commitment and/or Term Loans, on the other the hand. Required Consents. No consent shall be required for any assignment except to(iii) the extent required by subsection (b)(i)(B) of this Section and, in addition: the consent of the Borrower (such consent not to be unreasonably(A) withheld or delayed) shall be required unless (x) an Event of Default shall have occurred and is continuing at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five Business Days after having received notice thereof; the consent of the Administrative Agent (such consent not to be(B) unreasonably withheld or delayed) shall be required for assignments in respect of (i) commitments under revolving credit facilities and unfunded commitments under term loan facilities if such assignment is to a Person that is not a Lender with a commitment in respect of such facility, an Affiliate of such Lender or an Approved Fund with respect to such Lender or (ii) a funded Term Loan to a Person who is not a Lender, an Affiliate of a Lender or an Approved Fund; and the consent of the Issuing Bank and the Swingline Lender shall be(C) required for any assignment in respect of any Revolving Commitments. Assignment Agreement. The parties to each assignment shall execute and deliver(iv) to the Administrative Agent an Assignment Agreement, together with a processing and recordation fee in the amount of $3,500, unless waived, in whole or in part by the Administrative Agent in its discretion. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire. No Assignment Certain Persons. No such assignment shall be made to (A) the(v) Borrower or any of the Borrower’s Affiliates or Subsidiaries, (B) any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B) or (C) a natural Person. Certain Additional Payments. In connection with any assignment of rights and(vi) obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the 124 130164155_5 142964982_4


 
applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, the Issuing Bank, the Swingline Lender and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swingline Loans in accordance with its Revolving Commitment Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under Applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs. Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment Agreement, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment Agreement, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment Agreement, be released from its obligations under this Agreement (and, in the case of an Assignment Agreement covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.1, 3.2, 3.3 and 11.2 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. The Borrower will execute and deliver on request, at its own expense, Notes to the assignee evidencing the interests taken by way of assignment hereunder. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section. Register. The Administrative Agent, acting solely for this purpose as an agent of the(c) Borrower, shall maintain at one of its offices in the United States, a copy of each Assignment Agreement delivered to it (or the equivalent thereof in electronic form) and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans and Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice. This Section shall be construed such that the Loans are at all times maintained in registered form within the meanings of Sections 163(f), 871(h)(2) and 881(c)(2) of the Internal Revenue Code. Participations. Any Lender may at any time, without the consent of, or notice to, the(d) Borrower or the Administrative Agent, sell participations to any Person (other than a natural Person, a Defaulting Lender or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitments and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) the Borrower, the Administrative Agent, the Issuing Bank and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. For the 125 130164155_5 142964982_4


 
avoidance of doubt, each Lender shall be responsible for the indemnity under Section 11.2(c) with respect to any payments made by such Lender to its Participant(s). Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in clauses (b) or (c) of Section 11.4 that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.1, 3.2 and 3.3 (subject to the requirements and limitations therein, including the requirements under Section 3.3(f) (it being understood that the documentation required under Section 3.3(f) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 2.17 and 3.4 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Sections 3.2 or 3.3, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Sections 2.17 and 3.4 with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.3 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.14 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Credit Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Credit Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations or in connection with a Credit Party’s or the Administrative Agent’s request for such information to comply with FATCA. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register. Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or(e) any portion of its rights under this Agreement, or any promissory notes evidencing its interests hereunder, to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. Independence of Covenants. All covenants hereunder shall be given independentSection 11.6 effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or would otherwise be within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists. 126 130164155_5 142964982_4


 
Survival of Representations, Warranties and Agreements. All representations,Section 11.7 warranties and agreements made herein shall survive the execution and delivery hereof and the making of any Credit Extension. Notwithstanding anything herein or implied by law to the contrary, the agreements of each Credit Party set forth in Section 3.1(c), Section 3.2, Section 3.3, Section 11.2, Section 11.3, Section 11.13 and Section 11.14 and the agreements of the Lenders and the Agents set forth in Section 2.14, Section 10.3 and Section 11.2(c) shall survive the payment of the Loans, the cancellation, expiration or cash collateralization of the Letters of Credit, and the termination hereof. No Waiver; Remedies Cumulative. No failure or delay on the part of any AgentSection 11.8 or any Lender in the exercise of any power, right or privilege hereunder or under any other Credit Document shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other power, right or privilege. The rights, powers and remedies given to each Agent and each Lender hereby are cumulative and shall be in addition to and independent of all rights, powers and remedies existing by virtue of any statute or rule of law or in any of the other Credit Documents, any Swap Agreements or any Treasury Management Agreements. Any forbearance or failure to exercise, and any delay in exercising, any right, power or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it preclude the further exercise of any such right, power or remedy. Marshalling; Payments Set Aside. Neither any Agent nor any Lender shall beSection 11.9 under any obligation to marshal any assets in favor of any Credit Party or any other Person or against or in payment of any or all of the Obligations. To the extent that any Credit Party makes a payment or payments to any Agent, the Issuing Bank, the Swingline Lender or the Lenders (or to any Agent, on behalf of Lenders), or any Agent, the Issuing Bank or the Lenders enforce any security interests or exercise their rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any Debtor Relief Law, any other state or federal law, common law or any equitable cause, then, to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related thereto, shall be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or setoff had not occurred. Severability. If any provision of this Agreement or any other Credit DocumentSection 11.10 shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions of this Agreement and the other Credit Documents, or of such provision in any other jurisdiction, shall not in any way be affected or impaired thereby. Obligations Several; Independent Nature of Lenders’ Rights. The obligations ofSection 11.11 the Lenders hereunder are several and no Lender shall be responsible for the obligations or Revolving Commitment of any other Lender hereunder. Nothing contained herein or in any other Credit Document, and no action taken by the Lenders pursuant hereto or thereto, shall be deemed to constitute the Lenders as a partnership, an association, a joint venture or any other kind of entity. The amounts payable at any time hereunder to each Lender shall be a separate and independent debt, and, subject to Section 10.10(c), each Lender shall be entitled to protect and enforce its rights arising under this Agreement and the other Credit Documents and it shall not be necessary for any other Lender to be joined as an additional party in any proceeding for such purpose. 127 130164155_5 142964982_4


 
Headings. Section headings herein are included herein for convenience ofSection 11.12 reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect. Governing Law; Jurisdiction; Etc.Section 11.13 Governing Law. This Agreement shall be governed by, and construed in accordance(a) with, the law of the State of New York. Submission to Jurisdiction. Each party hereto irrevocably and unconditionally submits,(b) for itself and its property, to the nonexclusive jurisdiction of the courts of the State of New York sitting in the Borough of Manhattan and of the United States District Court of the Southern District, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Credit Document, or for recognition or enforcement of any judgment, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by Applicable Law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or in any other Credit Document shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Agreement or any other Credit Document against any Credit Party or its properties in the courts of any jurisdiction. Waiver of Venue. Each party hereto irrevocably and unconditionally waives, to the(c) fullest extent permitted by Applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Credit Document in any court referred to in subsection (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. Service of Process. Each party hereto irrevocably consents to service of process in the(d) manner provided for notices in Section 11.1. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by Applicable Law. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBYSection 11.14 IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. Confidentiality. Each of the Administrative Agent, the Collateral Agent, theSection 11.15 Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its Related Parties (it being 128 130164155_5 142964982_4


 
understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by Applicable Laws or regulations or by any subpoena or similar legal process; provided that the Administrative Agent, the Collateral Agent, the Issuing Bank or such Lender, as the case may be, hereby agrees that it will notify the Borrower as soon as practicable under the circumstances in the event of any such disclosure (other than any disclosure at the request of a regulatory agency or authority or in connection with a routine filing, examination, audit or review) by such Person unless such notification is prohibited by Applicable Law or regulation, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Credit Document or any action or proceeding relating to this Agreement or any other Credit Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in (including, for purposes hereof, any new lenders invited to join hereunder on an increase in the Loans and/or Commitments hereunder, whether by exercise of an accordion, by way of amendment or otherwise), any of its rights or obligations under this Agreement or (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower or its obligations, this Agreement or payments hereunder, (g) on a confidential basis to (i) any rating agency in connection with rating the Borrower or its Subsidiaries or the credit facilities provided for herein or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers or other market identifiers with respect to the credit facilities provided for herein, (h) with the consent of the Borrower, (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, the Collateral Agent, any Lender, the Issuing Bank or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower or (j) for purposes of establishing a “due diligence” defense. For purposes of this Section, “Information” means all information received from the Borrower or any of its Subsidiaries relating to the Borrower or any of its Subsidiaries or any of their respective businesses, other than any such information that is available to the Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank on a nonconfidential basis prior to disclosure by the Borrower or any of its Subsidiaries; provided that, in the case of information received from the Borrower or any of its Subsidiaries after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. Each of the Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders acknowledges that (i) the Information may include material non-public information concerning the Borrower or any Subsidiary, as the case may be, (ii) it has developed compliance procedures regarding the use of material non-public information and (iii) it will handle such material non-public information in accordance with Applicable Law, including United States federal and state securities laws. Usury Savings Clause. Notwithstanding any other provision herein, theSection 11.16 aggregate interest rate charged or agreed to be paid with respect to any of the Obligations, including all charges or fees in connection therewith deemed in the nature of interest under Applicable Laws shall not exceed the Highest Lawful Rate. If the rate of interest (determined without regard to the preceding sentence) under this Agreement at any time exceeds the Highest Lawful Rate, the aggregate outstanding 129 130164155_5 142964982_4


 
amount of the Loans made hereunder shall bear interest at the Highest Lawful Rate until the total amount of interest due hereunder equals the amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect. In addition, if when the Loans made hereunder are repaid in full the total interest due hereunder (taking into account the increase provided for above) is less than the total amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect, then to the extent permitted by law, the Borrower shall pay to the Administrative Agent an amount equal to the difference between the amount of interest paid and the amount of interest which would have been paid if the Highest Lawful Rate had at all times been in effect. Notwithstanding the foregoing, it is the intention of the Lenders and each of the Credit Parties to conform strictly to any applicable usury laws. Accordingly, if any Lender contracts for, charges, or receives any consideration which constitutes interest in excess of the Highest Lawful Rate, then any such excess shall be cancelled automatically and, if previously paid, shall at such Lender’s option be applied to the aggregate outstanding amount of the Loans made hereunder or be refunded to each of the applicable Credit Parties. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Highest Lawful Rate, such Person may, to the extent permitted by Applicable Laws, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest, throughout the contemplated term of the Obligations hereunder. Counterparts; Integration; Effectiveness. This Agreement may be executed inSection 11.17 counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Credit Documents and any separate letter agreements with respect to fees payable to the Administrative Agent, the Collateral Agent or the Issuing Bank, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 5, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic imaging means (e.g. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement. No Advisory of Fiduciary Relationship. In connection with all aspects of eachSection 11.18 transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Credit Document), each of the Credit Parties acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (a)(i) the arranging and other services regarding this Agreement provided by each Agent are arm’s-length commercial transactions between the Credit Parties, on the one hand, and each Agent, on the other hand, (ii) each of the Credit Parties has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) each of the Credit Parties is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Credit Documents; (b)(i) each Agent is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not and will not be acting as an advisor, agent or fiduciary, for any Credit Party or any of their respective Affiliates or any other Person and (ii) each Agent does not have any obligation to any Credit Party or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Credit Documents; and (c) each Agent and its Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Credit Parties and their respective Affiliates, and no Agent has any obligation to disclose any of such interests to any Credit Party or any of their respective 130 130164155_5 142964982_4


 
Affiliates. To the fullest extent permitted by law, each of the Credit Parties hereby waives and releases any claims that it may have against any Agent with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby. Electronic Execution of Assignments and Other Documents. The wordsSection 11.19 “execute,” “execution,” “signed,” “signature,” and words of like import in any Assignment Agreement or in any amendment, waiver, modification or consent relating hereto shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any Applicable Laws, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act. USA PATRIOT Act. Each Lender subject to the PATRIOT Act and each AgentSection 11.20 (for itself and not on behalf of any Lender) hereby notifies each of the Credit Parties that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies each of the Credit Parties, which information includes the name and address of each of the Credit Parties and other information that will allow such Lender or such Agent, as applicable, to identify each of the Credit Parties in accordance with the PATRIOT Act. The Credit Parties shall, promptly following a request by any Agent or any Lender, provide all documentation and other information that such Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Act and the Beneficial Ownership Regulation. Conflicts. In the event there is a conflict or inconsistency between thisSection 11.21 Agreement and any other Credit Document, the terms of this Agreement shall control; provided that any provision of the Collateral Documents which imposes additional burdens on the Borrower or any of its Subsidiaries or further restricts the rights of the Borrower or any of its Subsidiaries or gives the Administrative Agent or Lenders additional rights shall not be deemed to be in conflict or inconsistent with this Agreement and shall be given full force and effect. Acknowledgement and Consent to Bail-In of EEA Financial Institutions.Section 11.22 Notwithstanding anything to the contrary in any Credit Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an EEA Financial Institution arising under any Credit Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by: the application of any Write-Down and Conversion Powers by an EEA Resolution(a) Authority to any such liabilities arising hereunder which may be payable to it by any Lender that is an EEA Financial Institution; and the effects of any Bail-In Action on any such liability, including, if applicable:(b) a reduction in full or in part or cancellation of any such liability;(i) a conversion of all, or a portion of, such liability into shares or other instruments(ii) of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of 131 130164155_5 142964982_4


 
ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Credit Document; or the variation of the terms of such liability in connection with the exercise of the(iii) write-down and conversion powers of any EEA Resolution Authority. Certain ERISA Matters.Section 11.23 Each Lender (x) represents and warrants, as of the date such Person became a Lender(a) party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and each Lead Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Credit Party, that at least one of the following is and will be true: such Lender is not using “plan assets” (within the meaning of 29 CFR §(i) 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or the Commitments, the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a(ii) class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, (A) such Lender is an investment fund managed by a “Qualified Professional(iii) Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, or such other representation, warranty and covenant as may be agreed in writing(iv) between the Administrative Agent, in its sole discretion, and such Lender. In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with(b) respect to a Lender or such Lender has not provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and each Lead Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Credit Party, that: 132 130164155_5 142964982_4


 
none of the Administrative Agent or any Lead Arranger or any of their respective(i) Affiliates is a fiduciary with respect to the assets of such Lender (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Credit Document or any documents related to hereto or thereto), the Person making the investment decision on behalf of such Lender with respect(ii) to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is independent (within the meaning of 29 CFR § 2510.3-21) and is a bank, an insurance carrier, an investment adviser, a broker-dealer or other person that holds, or has under management or control, total assets of at least $50 million, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E), the Person making the investment decision on behalf of such Lender with respect(iii) to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies (including in respect of the Obligations), the Person making the investment decision on behalf of such Lender with respect(iv) to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is a fiduciary under ERISA or the Internal Revenue Code, or both, with respect to the Loans, the Letters of Credit, the Commitments and this Agreement and is responsible for exercising independent judgment in evaluating the transactions hereunder, and no fee or other compensation is being paid directly to the Administrative Agent(v) or any Lead Arranger or any their respective Affiliates for investment advice (as opposed to other services) in connection with the Loans, the Letters of Credit, the Commitments or this Agreement. The Administrative Agent and each Lead Arranger hereby informs the Lenders that each(c) such Person is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Letters of Credit, the Commitments and this Agreement, (ii) may recognize a gain if it extended the Loans, the Letters of Credit or the Commitments for an amount less than the amount being paid for an interest in the Loans, the Letters of Credit or the Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Credit Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing. [Signatures on Following Page(s)] 133 130164155_5 142964982_4


 

Exhibit 23.1





Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statements (Form S-8 NO. 333-128086, 333-64664, 333-174369 and Form S-4 No. 333-235963) of our reports dated March 1, 2019 included in this Annual Report on Form 10-K of Ebix, Inc. and subsidiaries (the Company) relating to the consolidated financial statements of the Company as of December 31, 2018 and the effectiveness of internal control over financial reporting of the Company for the year ended December 31, 2018.



/s/ T R CHADHA & CO LLP
Chartered Accountants
ICAI Firm reg. no.: 06711N/N500028

New Delhi, India
April 27, 2021



Exhibit 23.2





Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-128086, 333-64664, and 333-174369) of our report dated March 2, 2020, relating to the consolidated financial statements and the financial statement schedule of Ebix, Inc. as of and for the year ended December 31, 2019, appearing in this Annual Report on Form 10-K of Ebix, Inc. for the year ended December 31, 2020.


/s/ RSM US LLP

Atlanta, Georgia
April 27, 2021



Exhibit 23.3


CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statements (Form S-8 Nos. 333-128086, 333-64664, and 333-174369 and Form S-4 No. 333-235963) of our reports dated April 27, 2021, relating to the consolidated financial statements, the financial statement schedule and the effectiveness of internal control over financial reporting of Ebix, Inc., appearing in this Annual Report on Form 10-K of Ebix, Inc. for the year ended December 31, 2020.


/s/ KG Somani &Co.
Chartered Accountants
ICAI FRN: 006591N

New Delhi, India
April 27, 2021



Exhibit 31.1
Certification Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
for the Chief Executive Officer
I, Robin Raina, certify that:
1. I have reviewed this annual report on Form 10-K of Ebix, Inc.;
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 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 fourth fiscal quarter 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 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:
(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: By:   /s/ Robin Raina    
April 27, 2021   Robin Raina   
    Chief Executive Officer   
        (principal executive officer)
 




Exhibit 31.2
Certification Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
for the Chief Financial Officer
I, Steven M. Hamil, certify that:
1. I have reviewed this annual report on Form 10-K of Ebix, Inc.;
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 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 fourth fiscal quarter 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 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:
(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: By:   /s/ Steven M. Hamil  
April 27, 2021   Steven M. Hamil  
    Chief Financial Officer  
  (principal financial and accounting officer)


Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002



I, Robin Raina, state and attest that:


(1)   I am the Chief Executive Officer of Ebix, Inc. (the “Registrant”).
(2)   I hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge the Annual Report on Form 10-K of the Registrant for the year ended December 31, 2020 (the “periodic report”) containing financial statements fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and the information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the Registrant as of, and for, the periods presented.


         
Name:  
/s/ Robin Raina
 
Title: Chief Executive Officer
   
    Date: April 27, 2021    



Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002


I, Steven M. Hamil, state and attest that:
(1)   I am the Chief Financial Officer of Ebix, Inc. (the “Registrant”).
(2)   I hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge the Annual Report on Form 10-K of the Registrant for the year ended December 31, 2020 (the “periodic report”) containing financial statements fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and the information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the Registrant as of, and for, the periods presented.


         
Name:   /s/ Steven M. Hamil
 
Title: Chief Financial Officer
   
    Date: April 27, 2021