Exhibit 10.2


 


NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. 
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.


 


THE
SECURITIES REPRESENTED HEREBY ARE SUBJECT TO A SECURED CONVERTIBLE NOTE
PURCHASE AGREEMENT, DATED AS OF DECEMBER 18, 2007, BY AND BETWEEN THE COMPANY
AND THE INVESTOR REFERRED TO THEREIN (THE “PURCHASE AGREEMENT”), AND BOTH THE
COMPANY AND THE HOLDER OF THE NOTE, BY ACCEPTANCE OF THIS NOTE, AGREE TO BE
BOUND BY ALL APPLICABLE PROVISIONS OF THE PURCHASE AGREEMENT.  THE SECURITIES REPRESENTED HEREBY ARE ALSO
SUBJECT TO THE REGISTRATION REQUIREMENTS SET FORTH IN THE PURCHASE AGREEMENT
AND BOTH THE COMPANY AND THE HOLDER OF THE NOTE, BY ACCEPTANCE OF THIS NOTE,
AGREE TO BE BOUND BY THE REGISTRATION REQUIREMENTS SET FORTH IN THE PURCHASE
AGREEMENT.


 


Original Issue Date: December 18, 2007


Original Conversion Price (subject to adjustment herein): $63.84


 


$20,000,000


 


2.5% SECURED CONVERTIBLE PROMISSORY NOTE


DUE DECEMBER 18, 2009


 


FOR
VALUE RECEIVED, Ebix, Inc., a Delaware corporation with its principal
place of business at 5 Concourse Parkway, Suite 3200, Atlanta, Georgia
30328 (the “Company”), hereby 


 

















 


promises
to pay in lawful money of the United States to the order of Whitebox VSC Ltd.,
a limited partnership organized under the laws of the British Virgin Islands or
its registered successors or assigns (the “Holder”), at the office of
the Holder at 3033 Excelsior Boulevard, Suite 300, Minneapolis, Minnesota
55416, or at such other place as the Holder may from time to time designate in
writing, (1) the principal sum of TWENTY MILLION AND NO/100 DOLLARS
($20,000,000)  on December 18,
2009 (the “Maturity Date”), which Maturity Date may be extended at the
option of the Holder until December 18, 2011 if and only if the closing
price of the Company’s Common Stock on its Trading Market shall not exceed $75
per share (as adjusted for any cash or stock dividends or stock splits in the
manner described in Section 5 below) for any 30 consecutive Trading Days
prior to December 18, 2009; provided, that the Holder shall give
ten (10) days’ written notice prior to the initial Maturity Date of its
intent to extend the Maturity Date for an additional two (2) years;
and (2) interest to the Holder on the aggregate unconverted and
then-outstanding principal amount of this Note in accordance with the
provisions hereof.  This Note is being
issued in connection with that certain Secured Convertible Note Purchase
Agreement, dated as of the date hereof, between the Company and the Holder (the
“Purchase Agreement”).  This Note
is subject to the following additional provisions:


 


Section 1.               Definitions.  For the purposes hereof, in addition to the
terms defined elsewhere in this Note, (a) capitalized terms not otherwise
defined herein shall have the meanings set forth in the Purchase Agreement and (b) the
following terms shall have the following meanings:


 


“Alternate Consideration” shall have
the meaning set forth in Section 5(c).


 


“Bankruptcy Event” means any of the
following events: (a) the Company or any Significant Subsidiary (as such
term is defined in Rule 1-02(w) of Regulation S-X) thereof commences
a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar law of any jurisdiction relating to the Company or any Significant
Subsidiary thereof; (b) there is commenced against the Company or any
Significant Subsidiary thereof any such case or proceeding that is not
dismissed within 60 days after commencement; (c) the Company or any
Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any
order of relief or other order approving any such case or proceeding is
entered; (d) the Company or any Significant Subsidiary thereof suffers any
appointment of any custodian or the like for it or any substantial part of its
property that is not discharged or stayed within 60 calendar days after such
appointment; (e) the Company or any Significant Subsidiary thereof makes a
general assignment for the benefit of creditors; (f) the Company or any
Significant Subsidiary thereof calls a meeting of its creditors with a view to
arranging a composition, adjustment or restructuring of its debts; or (g) the
Company or any Significant Subsidiary thereof, by any act or failure to act,
expressly indicates its consent to, approval of or acquiescence in any of the
foregoing or takes any corporate or other action for the purpose of effecting
any of the foregoing.


 


2

















 


“Business Day” means any day except
Saturday, Sunday, any day which shall be a federal legal holiday in the United
States or any day on which banking institutions in the State of New York are
authorized or required by law or other governmental action to close.


 


“Change in Control Date” shall mean
the date on which a Change of Control Transaction shall occur.


 


“Change in Control Optional Redemption”
shall have the meaning set forth in Section 6(c).


 


“Change in Control Put” shall have the
meaning set forth in Section 6(a).


 


“Change of Control Transaction” means
the occurrence after the date hereof of any of (i) an acquisition after
the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated
under the Exchange Act) of effective control (whether through legal or
beneficial ownership of capital stock of the Company, by contract or otherwise)
of in excess of 50% of the voting securities or 50% of the assets of the Company
(other than by means of conversion or exercise of the Notes and the Securities
issued together with the Notes).


 


“Common Stock” means the common stock,
par value $.10 per share, of the Company and stock of any other class of
securities into which such securities may hereafter be reclassified or changed
into.


 


“Common Stock Equivalents” means any
securities of the Company or the Subsidiaries which would entitle the holder
thereof to acquire at any time Common Stock, including, without limitation, any
debt, preferred stock, rights, options, warrants or other instrument that is at
any time convertible into or exercisable or exchangeable for, or otherwise
entitles the holder thereof to receive, Common Stock.


 


“Conversion Date” shall have the
meaning set forth in Section 4(a).


 


“Conversion Price” shall have the
meaning set forth in Section 4(b).


 


“Conversion Shares” means,
collectively, the shares of Common Stock issuable upon conversion of this Note
in accordance with the terms hereof.


 


“Delaware Courts” shall have the
meaning set forth in Section 9(d).


 


“Effective Date” shall mean the
effective date of any registration statement filed with the SEC covering all or
such portion of the Conversion Shares as may be specified in such registration
statement.


 


“Event of Default” shall have the meaning set
forth in Section 8.


 


3

















 


“Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.


 


Exempt Issuance” means
(a) the vesting of shares of Common Stock or options to employees,
officers, consultants or directors of the Company pursuant to the Company’s
1996 Stock Incentive Plan, as amended (provided that any such vesting shall not
exceed 10% of the Company’s outstanding shares and/or options, in the
aggregate, in any twelve-month period), (b) the issuance of securities
upon the exercise or exchange of or conversion of any securities issued
pursuant to the Purchase Agreement and/or other securities exercisable or
exchangeable for or convertible into shares of Common Stock issued and
outstanding on the date of this Agreement, provided that such securities have
not been amended since the date of this Agreement to increase the number of
such securities or to decrease the exercise, exchange or conversion price of
such securities, and (c) the issuance of securities issued pursuant to
acquisitions or strategic transactions approved by a majority of the
disinterested directors of the Company, provided any such issuance shall only
be to a person which is, itself or through its subsidiaries, an operating
company in a business synergistic with or complementary to the business of the
Company and in which the Company receives benefits in addition to the
investment of funds.


 


“Fundamental Transaction” shall have
the meaning set forth in Section 5(c).


 


“GAAP” means United States generally
accepted accounting principles applied on a consistent basis during the periods
involved.


 


                “Interest
Payment Date” shall have the meaning set forth in Section 2(a).


 


“Liens”
means a lien, charge, security interest, encumbrance, right of first refusal,
preemptive right or other restriction.


 


“Mandatory Default Amount” means an
amount designed to compensate the Holder for the loss of the value of the
conversion feature of this Note, which shall equal the sum of (i) the
greater of (A) 110% of the outstanding principal amount of this Note, plus
all accrued and unpaid interest hereon, or (B) the outstanding principal
amount of this Note, plus all accrued and unpaid interest hereon, divided by
the Conversion Price on the date the Mandatory Default Amount is either (a) demanded
(if demand or notice is required to create an Event of Default) or otherwise
due or (b) paid in full, whichever has a lower Conversion Price,
multiplied by the VWAP on the date the Mandatory Default Amount is either (x) demanded
or otherwise due or (y) paid in full, whichever has a higher VWAP, and (ii) all
other amounts, costs, expenses and liquidated damages due in respect of this
Note.


 


4

















 


“Note Register” shall have the meaning
set forth in Section 2(c).


 


“Notice of Conversion” shall have the
meaning set forth in Section 4(a).


 


“Original Issue Date” means the date
of the first issuance of the Notes, regardless of any transfers of any Note and
regardless of the number of instruments which may be issued to evidence such
Notes.


 


“Permitted Indebtedness” means, except
as otherwise approved by the Holder, an amount such that the sum of the
interest on all indebtedness of the Company is less than 40% of the Company’s
operating cash flows for any fiscal year, as calculated on a quarterly
basis.  For purposes of this definition,
the Company’s operating cash flows shall be calculated by taking the product of
(x) the sum of (i) the prior quarter’s reported operating cash flows
(as reported on the Company’s Form 10-K or Form 10-Q, as applicable)
multiplied by four, plus (ii) the last quarterly operating cash
flow of any entity acquired by the Company (as reported on the Company’s Form 10-K
or Form 10-Q, as applicable, or the acquired entity’s audited financial
statements, as the case may be), multiplied by (y) four (4).


 


“Permitted Lien” means the individual
and collective reference to the following: (a) Liens for taxes,
assessments and other governmental charges or levies not yet due or Liens for
taxes, assessments and other governmental charges or levies being contested in
good faith and by appropriate proceedings for which adequate reserves (in the
good faith judgment of the management of the Company) have been established in
accordance with GAAP; (b) Liens imposed by law which were incurred in the
ordinary course of the Company’s business, such as carriers’, warehousemen’s
and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens
arising in the ordinary course of the Company’s business, and which (x) do
not individually or in the aggregate materially detract from the value of such
property or assets or materially impair the use thereof in the operation of the
business of the Company and its consolidated Subsidiaries or (y) are being
contested in good faith by appropriate proceedings, which proceedings have the
effect of preventing for the foreseeable future the forfeiture or sale of the
property or asset subject to such Lien; (c) Liens incurred in connection
with Permitted Indebtedness.


 


“Person” means an individual or
corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or
an agency or subdivision thereof) or other entity of any kind.


 


“Purchase Agreement” means the Secured
Convertible Note Purchase Agreement, dated as of December 18, 2007, between the Company and the original
Holder, as the same may be amended, modified or supplemented from time to time
in accordance with its terms.


 


“Registrable Securities” means (i) all
of the shares of Common Stock issuable upon conversion in full of the Notes, (ii) any
additional shares of Common Stock issuable 


 


5

















 


in connection with any adjustment mechanisms contained herein and (iii) any
securities issued or issuable upon any stock split, stock dividend, subsequent
rights offering or other distribution, recapitalization or other transaction
set forth in Section 5.


 


“Registration Statement” means a
registration statement that registers the resale of the Conversion Shares
required under the terms set forth in Section 6.12 of the Purchase
Agreement, names the Holder as a “selling stockholder” therein and meets all
other requirements set forth in the Purchase Agreement.


 


“SEC” shall mean the United States
Securities and Exchange Commission.


 


“SEC Reports” means all reports,
schedules, forms, statements and other documents required to be filed by the
Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) and
15(d) thereof.


 


“Securities Act” means the Securities
Act of 1933, as amended, and the rules and regulations promulgated
thereunder.


 


“Share Delivery Date” shall have the
meaning set forth in Section 4(d).


 


“Subsidiary” shall have the meaning
set forth in the Purchase Agreement.


 


“Trading Day” means a day on which the
Nasdaq Stock Market (or any Trading Market on which the Company’s Common Stock
is then traded) is open for trading.


 


“Trading Market” means the following
markets or exchanges on which the Common Stock is listed or quoted for trading
on the date in question: the American Stock Exchange, the Nasdaq Capital Market,
the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange or the OTC Bulletin Board.


 


“Transaction Documents” shall have the
meaning set forth in the Purchase Agreement.


 


“VWAP” means, for any date, the price
determined by the first of the following clauses that applies: (a) if the
Common Stock is then listed or quoted on a Trading Market, the daily volume
weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed
or quoted for trading as reported by Bloomberg L.P. (based on a Trading Day
from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time); (b)  if the OTC Bulletin Board is not a Trading Market, the volume
weighted average price of the Common Stock for such date (or the nearest
preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not
then quoted for trading on the OTC Bulletin Board and if prices for the Common
Stock are then reported in the “Pink Sheets” published by Pink Sheets, LLC (or
a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so reported;
or (d) in all 


 


6

















 


other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by the Holder and
reasonably acceptable to the Company.


 


Section 2.               Interest.


 


a)             Payment of
Interest in Cash. The Company shall pay interest to the Holder on the
aggregate unconverted and then outstanding principal amount of this Debenture
at the rate of 2.5% per annum, payable annually on each December 18, on
each Conversion Date (as to that principal amount then being converted), and on
the Maturity Date (each such date, an “Interest Payment Date”) (if any
Interest Payment Date is not a Business Day, then the applicable payment shall
be due on the next succeeding Business Day), in cash.  All overdue accrued and unpaid interest to be
paid hereunder shall entail a late fee at an interest rate equal to 14% per
annum until such amount is paid in full.


 


b)            Interest
Calculations. Interest shall be calculated on the basis of a 365-day year,
and shall accrue daily commencing on the Original Issue Date until payment in
full of the principal sum, together with all accrued and unpaid interest,
liquidated damages and other amounts which may become due hereunder, has been
made.  Interest shall cease to accrue
with respect to any principal amount converted, provided that the Company
actually delivers the Conversion Shares within the time period required by Section 4(d)(ii) herein.  Interest hereunder will be paid to the Person
in whose name this Note is registered on the records of the Company regarding
registration and transfers of this Note (the “Note Register”).


 


c)             Prepayment.  The Company may not prepay any portion of the
principal amount of this Note without the prior written consent of the Holder.


 


Section 3.               Registration of Transfers and
Exchanges.


 


a)             Different
Denominations. This Note is exchangeable for an equal aggregate principal
amount of Notes of different authorized denominations, as requested by the
Holder surrendering the same.  No service
charge will be payable for such registration of transfer or exchange.


 


b)            Investment
Representations. This Note has been issued subject to certain investment
representations of the original Holder set forth in the Purchase Agreement and
may be transferred or exchanged only in compliance with the Purchase Agreement
and applicable federal and state securities laws and regulations.


 


c)             Reliance on Note
Register. Prior to due presentment for transfer to the Company of this
Note, the Company and any agent of the Company may treat the Person in whose
name this Note is duly registered on the Note Register as the owner hereof for
the purpose of receiving payment as herein provided and for all other purposes,
whether or not this Note is overdue, and neither the Company nor any such agent
shall be affected by notice to the contrary.


 


7

















 


Section 4.               Conversion.


 


a)             Voluntary
Conversion. At any time after the Original Issue Date until this Note is no
longer outstanding, this Note shall be convertible, in whole or in part, into
shares of Common Stock at the option of the Holder, at any time and from time
to time (subject to the conversion limitations set forth in Section 4(c) hereof).  The Holder shall effect conversions by
delivering to the Company a Notice of Conversion, the form of which is attached
hereto as Annex A (a “Notice of Conversion”), specifying therein
the principal amount of this Note to be converted and the date on which such
conversion shall be effected (such date, the “Conversion Date”).  If no Conversion Date is specified in a
Notice of Conversion, the Conversion Date shall be the date that such Notice of
Conversion is deemed delivered hereunder. 
To effect conversions hereunder, the Holder shall not be required to
physically surrender this Note to the Company unless the entire principal
amount of this Note, plus all accrued and unpaid interest thereon, has been so
converted. Conversions hereunder shall have the effect of lowering the
outstanding principal amount of this Note in an amount equal to the applicable
conversion.  The Holder and the Company
shall maintain records showing the principal amount(s) converted and the
date of such conversion(s).  The Company
may deliver an objection to any Notice of Conversion within 1 Business Day of
delivery of such Notice of Conversion.  The Holder, and any assignee by acceptance of this Note, acknowledges
and agrees that, by reason of the provisions of this paragraph, following
conversion of a portion of this Note, the unpaid and unconverted principal amount
of this Note may be less than the amount stated on the face hereof.


 


b)            Conversion Price.  The conversion price in effect on any
Conversion Date shall be equal to $63.84,
subject to adjustment as described herein (the “Conversion Price”).


 


c)             Conversion
Limitations.  The Company shall not
effect any conversion of this Note, and a Holder shall not have the right to
convert any portion of this Note, to the extent that after giving effect to the
conversion set forth on the applicable Notice of Conversion, such Holder
(together with such Holder’s Affiliates, and any other person or entity acting
as a group together with such Holder or any of such Holder’s Affiliates) would
beneficially own in excess of the Beneficial Ownership Limitation (as defined
below).  For purposes of the foregoing sentence, the number of shares of
Common Stock beneficially owned by such Holder and its Affiliates shall include
the number of shares of Common Stock issuable upon conversion of this Note with
respect to which such determination is being made, but shall exclude the number
of shares of Common Stock which are issuable upon (A) conversion of the
remaining, unconverted principal amount of this Note beneficially owned by such
Holder or any of its Affiliates and (B) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company  subject to a limitation on conversion or
exercise analogous to the limitation contained herein (including, without
limitation, any other Notes) beneficially owned by such Holder or any of its
Affiliates.  Except as set forth in the preceding sentence, for purposes
of this Section 4(c), beneficial ownership shall be calculated in
accordance with 


 


8

















 


Section 13(d) of
the Exchange Act and the rules and regulations promulgated
thereunder.  To the extent that the
limitation contained in this Section 4(c) applies, the determination
of whether this Note is convertible (in relation to other securities owned by
such Holder together with any Affiliates) and of which principal amount of this
Note is convertible shall be in the sole discretion of such Holder, and the
submission of a Notice of Conversion shall be deemed to be such Holder’s
determination of whether this Note may be converted (in relation to other
securities owned by such Holder together with any Affiliates) and which
principal amount of this Note is convertible, in each case subject to such
aggregate percentage limitations. To ensure compliance with this restriction,
each Holder will be deemed to represent to the Company each time it delivers a
Notice of Conversion that such Notice of Conversion has not violated the
restrictions set forth in this paragraph, and the Company shall have no
obligation to verify or confirm the accuracy of such determination.  In addition, a determination as to any “group”
status as contemplated above shall be determined in accordance with Section 13(d) of
the Exchange Act and the rules and regulations promulgated
thereunder.   For purposes of this Section 4(c),
in determining the number of outstanding shares of Common Stock, a Holder may
rely on the number of outstanding shares of Common Stock as stated in the most
recent of the following: (A) the Company’s most recent Quarterly Report on
Form10-Q or Annual Report on Form 10-K, as the case may be; (B) a
more recent public announcement by the Company; or (C) a more recent
notice by the Company or the Company’s transfer agent setting forth the number
of shares of Common Stock outstanding.  Upon the written or oral request
of a Holder, the Company shall within two Trading Days confirm orally and in
writing to such Holder the number of shares of Common Stock then
outstanding.  In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Note, by such Holder or its
Affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. The “Beneficial Ownership Limitation” shall
be 9.99% of the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock issuable upon
conversion of this Note held by the Holder. 
The Beneficial Ownership Limitation provisions of this Section 4(c) may
be waived by such Holder, at the election of such Holder, upon not less than 61
days’ prior notice to the Company, to change or eliminate the Beneficial
Ownership Limitation.  The limitations
contained in this paragraph shall apply to a successor holder of this Note.


 


d)            Mechanics of
Conversion.


 


i.              Conversion
Shares Issuable Upon Conversion of Principal Amount.  The number of shares of Common Stock issuable
upon a conversion hereunder shall be determined by the quotient obtained by
dividing (x) the outstanding principal amount of this Note to be converted
by (y) the Conversion Price; provided, that the amount of principal
to be converted pursuant to clause (x) shall include any accrued but
unpaid interest through the date of such conversion (based on the number of
days in such interest period up to and including the date of such conversion).


 


9

















 


ii.             Delivery of
Certificate Upon Conversion. Not later than three Trading Days after each
Conversion Date (the “Share Delivery Date”), the Company shall deliver,
or cause to be delivered, to the Holder a certificate or certificates
representing the Conversion Shares which (A) prior to the Effective Date
with respect to such Conversion Shares, shall contain such restrictive legends
as may be required pursuant to the Securities Act and (B) on or after the
Effective Date with respect to such Conversion Shares, shall be free of
restrictive legends and trading restrictions (other than those which may then
be required pursuant to the Purchase Agreement).  Such certificate or certificates shall
represent the number of shares of Common Stock being acquired upon the
conversion of this Note. On or after the Effective Date with respect to such
Conversion Shares, the Company shall use its best efforts to deliver any
certificate or certificates required to be delivered by the Company under this Section 4
electronically through the Depository Trust Company or another established
clearing corporation performing similar functions.


 


iii.            Failure to
Deliver Certificates.  If in the case
of any Notice of Conversion such certificate or certificates are not delivered
to or as directed by the applicable Holder by the third Trading Day after the
Conversion Date, the Holder shall be entitled to elect by written notice to the
Company at any time on or before its receipt of such certificate or
certificates, to rescind such Conversion, in which event the Company shall
promptly return to the Holder any original Note delivered to the Company and
the Holder shall promptly return the Common Stock certificates representing the
principal amount of this Note tendered for conversion to the Company.


 


iv.            Obligation
Absolute.  The Company’s obligations
to issue and deliver the Conversion Shares upon conversion of this Note in
accordance with the terms hereof are absolute and unconditional, irrespective
of any action or inaction by the Holder to enforce the same, any waiver or
consent with respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or
any violation or alleged violation of law by the Holder or any other Person,
and irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of such
Conversion Shares.  Failure to deliver
the Conversion Shares upon conversion of this Note in accordance with the terms
hereof shall constitute an Event of Default hereunder.


 


v.             Reservation of
Shares Issuable Upon Conversion. The Company covenants that it will at all
times reserve and keep available out of its authorized and unissued shares of
Common Stock for the sole purpose of issuance upon conversion of this Note and
payment of interest on this Note, each as herein provided, free from preemptive
rights or any other actual contingent purchase 


 


10

















 


rights of Persons
other than the Holder (and the other holders of the Notes), not less than such
aggregate number of shares of the Common Stock as shall (subject to the terms
and conditions set forth in the Purchase Agreement) be issuable (taking into
account the adjustments and restrictions of Section 5) upon the conversion
of the outstanding principal amount of this Note and payment of interest
hereunder.  The Company covenants that
all shares of Common Stock that shall be so issuable shall, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable and, if the
Registration Statement is then effective under the Securities Act, shall be
registered for public sale in accordance with such Registration Statement.


 


vi.            Fractional
Shares. Upon a conversion hereunder, the Company shall not be required to
issue stock certificates representing fractions of shares of Common Stock, but
may if otherwise permitted, make a cash payment in respect of any final
fraction of a share based on the VWAP at such time.  If the Company elects not, or is unable, to
make such a cash payment, the Holder shall be entitled to receive, in lieu of
the final fraction of a share, 1 whole share of Common Stock.


 


vii.           Transfer Taxes.  The issuance of certificates for shares of
the Common Stock on conversion of this Note shall be made without charge to the
Holder hereof for any documentary, stamp or similar taxes that may be payable
in respect of the issue or delivery of such certificates, provided that the
Company shall not be required to pay any tax that may be payable in respect of
any transfer involved in the issuance and delivery of any such certificate upon
conversion in a name other than that of the Holder of this Note so converted,
and the Company shall not be required to issue or deliver such certificates
unless or until the person or persons requesting the issuance thereof shall
have paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.


 


Section 5.               Certain Adjustments.


 


a)             Stock Dividends
and Stock Splits.  If the Company, at
any time while this Note is outstanding: (A) pays a stock dividend or
otherwise makes a distribution or distributions payable in shares of Common
Stock on shares of Common Stock or any Common Stock Equivalents (which, for
avoidance of doubt, shall not include any shares of Common Stock issued by the
Company upon conversion of, or payment of interest on, the Notes); (B) subdivides
outstanding shares of Common Stock into a larger number of shares; (C) combines
(including by way of a reverse stock split) outstanding shares of Common Stock
into a smaller number of shares; or (D) issues, in the event of a
reclassification of shares of the Common Stock, any shares of capital stock of
the Company, then the Conversion Price shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock (excluding
any treasury shares of the Company) outstanding immediately prior to such event
and of which the denominator shall be the number of shares of Common Stock
outstanding immediately 


 


11

















 


after such
event.  Any adjustment made pursuant to
this Section shall become effective immediately after the record date for
the determination of shareholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision, combination or re-classification.


 


b)            Subsequent Rights
Offerings.  If the Company, at any
time while the Note is outstanding, shall issue rights, options or warrants to
all holders of Common Stock, such issuance will also be granted to Holders on
an as-converted basis without the Holder having to convert in order to be
entitled to such issuance.


 


c)             Fundamental
Transaction. If, at any time while this Note is outstanding, (A) the
Company effects any merger or consolidation of the Company with or into another
Person, (B) the Company effects any sale of all or substantially all of
its assets in one transaction or a series of related transactions, (C) any
tender offer or exchange offer (whether by the Company or another Person) is
completed pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, or (D) the
Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into
or exchanged for other securities, cash or property (in any such case, a “Fundamental
Transaction”), then, upon any subsequent conversion of this Note, the
Holder shall have the right to receive, for each Conversion Share that would
have been issuable upon such conversion immediately prior to the occurrence of
such Fundamental Transaction, the same kind and amount of securities, cash or
property as it would have been entitled to receive upon the occurrence of such
Fundamental Transaction if it had been, immediately prior to such Fundamental
Transaction, the holder of one (1) share of Common Stock (the “Alternate
Consideration”).  For purposes of any
such conversion, the determination of the Conversion Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one (1) share of
Common Stock in such Fundamental Transaction, and the Company shall apportion
the Conversion Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration.  If holders of Common
Stock are given any choice as to the securities, cash or property to be
received in a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any conversion of
this Note following such Fundamental Transaction.  To the extent necessary to effectuate the
foregoing provisions, any successor to the Company or surviving entity in such
Fundamental Transaction shall issue to the Holder a new Note consistent with
the foregoing provisions and evidencing the Holder’s right to convert such Note
into Alternate Consideration. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this Section 5(c) and
ensuring that this Note (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.


 


12

















 


d)            Calculations.  All calculations under this Section 5
shall be made to the nearest cent or the nearest 1/100th of a share, as the
case may be.  For purposes of this Section 5,
the number of shares of Common Stock deemed to be issued and outstanding as of
a given date shall be the sum of the number of shares of Common Stock
(excluding any treasury shares of the Company) issued and outstanding.


 


e)             Notice to the
Holder.


 


i.              Adjustment to
Conversion Price.  Whenever the
Conversion Price is adjusted pursuant to any provision of this Section 5,
the Company shall promptly mail to each Holder a notice setting forth the
Conversion Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment.


 


ii.             Notice to Allow
Conversion by Holder.  If (A) the
Company shall declare a dividend (or any other distribution in whatever form)
on the Common Stock, (B) the Company shall declare a special nonrecurring
cash dividend on or a redemption of the Common Stock, (C) the Company
shall authorize the granting to all holders of the Common Stock of rights or
warrants to subscribe for or purchase any shares of capital stock of any class or
of any rights, (D) the approval of any stockholders of the Company shall
be required in connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale or transfer
of all or substantially all of the assets of the Company, of any compulsory
share exchange whereby the Common Stock is converted into other securities,
cash or property or (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company, then, in each case, the Company shall cause to be filed at each office
or agency maintained for the purpose of conversion of this Note, and shall
cause to be delivered to the Holder at its last address as it shall appear upon
the Note Register, at least 20 calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record
shall be entitled to exchange their shares of the Common Stock for securities,
cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer or share exchange, provided that the failure to deliver
such notice or any defect therein or in the delivery thereof shall not affect
the validity of the corporate action required to be specified in such
notice.  The Holder is entitled to
convert this Note during the 20-day period commencing on the date of such
notice through the effective date of the event triggering such notice.


 


13

















 


Section 6.               Redemption upon a Change of
Control.


 


a)             Redemption Upon a Change in Control.  At any time after the date hereof, in
the event of a Change of Control Transaction, in addition to any other rights
hereunder, the Holder shall have the right (the “Change in Control Optional
Redemption”) to put the then-outstanding principal amount of the Note to the
Company (the “Change in Control Put”). 
The Holder shall notify the Company of its exercise of the Change in
Control Put not less than three (3) days prior to such Change in Control
Date.  Upon the exercise of the Change of
Control Put, the Company shall be required to pay to the Holder an amount in
cash equal to 110% multiplied by the greater of (i) the then-current  Principal Amount or (ii) the VWAP for
the 20 Trading Days preceding the Change in Control Date multiplied by the
number of Conversion Shares into which this Note shall then be entitled to be
converted.


 


b)            Redemption
Procedure.  Any amounts required to be
paid pursuant to Section 6(a) above shall be payable by the Company
in cash on the date of such optional redemption or put set forth in the
foregoing sections.  If any portion of
the payment(s) required to be paid pursuant to Section 6(a) shall
not be paid by the Company by the applicable due date, such payment failure
shall constitute an Event of Default hereunder, and interest shall accrue
thereon at an interest rate equal to the lesser of 18% per annum or the maximum
rate permitted by applicable law until such amount is paid in full.


 


Section 7.               Negative Covenants. As long as
any portion of this Note remains outstanding, unless the Holder shall have
otherwise given prior written consent, the Company shall not, and shall not
permit any of its subsidiaries (whether or not a Subsidiary on the Original
Issue Date) to, directly or indirectly:


 


a)             other than
Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer
to exist any indebtedness for borrowed money of any kind, including but not
limited to, a guarantee, on or with respect to any of its property or assets
now owned or hereafter acquired or any interest therein or any income or
profits therefrom; provided, however, that any consent by Holder pursuant to
this subsection 7(a) shall not be unreasonably withheld if such
indebtedness for borrowed money relates to acquisitions of a business whether
through merger, asset purchase, stock purchase or similar purchase agreement;


 


b)            other than Permitted
Liens, enter into, create, incur, assume or suffer to exist any Liens of any
kind, on or with respect to any of its property or assets now owned or
hereafter acquired or any interest therein or any income or profits therefrom;
provided, however, that any consent by Holder pursuant to this subsection 7(b) shall
not be unreasonably withheld if such Liens relate to acquisitions of a business
whether through merger, asset purchase, stock purchase or similar purchase
agreement;


 


c)             amend its charter
documents, including, without limitation, its certificate of incorporation and
bylaws, in any manner that materially and adversely affects any rights of the
Holder;


 


14

















 


d)            pay cash dividends
or distributions on any equity securities of the Company;


 


e)             enter into any
agreement with respect to any of the foregoing.


 


Section 8.               Events of Default.


 


a)             “Event of
Default” means, wherever used herein, any of the following events (whatever
the reason for such event and whether such event shall be voluntary or
involuntary or effected by operation of law or pursuant to any judgment, decree
or order of any court, or any order, rule or regulation of any
administrative or governmental body):


 


i.              any default in the
payment of (A) the principal amount of any Note or (B) interest,
liquidated damages and other amounts owing to a Holder on any Note, as and when
the same shall become due and payable (whether on a Conversion Date or the
Maturity Date or by acceleration or otherwise) which default, in the case of a
principal payment or other default under (A) above or an interest payment
or other default under clause (B) above, is not cured within 3 Trading
Days;


 


ii.             the Company shall
fail to observe or perform any other covenant or agreement contained in the
Notes (other than a breach by the Company of its obligations to deliver shares
of Common Stock to the Holder upon conversion, which breach is addressed in
clause (x) below) which failure is not cured, if possible to cure, within
the earlier to occur of (A) 10 Trading Days after notice of such failure
sent by the Holder or by any other Holder and (B) 15 Trading Days after
the Company has become or should have become aware of such failure;


 


iii.            a default or event
of default by the Company shall occur under (A) any of the Transaction
Documents or (B) any other material agreement, lease, document or
instrument to which the Company or any Subsidiary is obligated (and not covered
by clause (vi) below), which default is not cured, if possible to cure,
within the lesser of (a) thirty days from such default or event of default
or (b) such lesser period as may be provided in the applicable agreement,
document or instrument);


 


iv.            any representation
or warranty made in this Note, any other Transaction Documents, any written
statement pursuant hereto or thereto or any other report, financial statement
or certificate made or delivered to the Holder or any other Holder shall be
untrue or incorrect in any material respect as of the date when made or deemed
made;


 


v.             the Company or any
Subsidiary shall be subject to a Bankruptcy Event;


 


15

















 


vi.            the Company or any
Subsidiary shall default on any of its obligations under any mortgage, credit
agreement or other facility, indenture agreement, factoring agreement or other
instrument under which there may be issued, or by which there may be secured or
evidenced, any indebtedness for borrowed money or money due under any long term
leasing or factoring arrangement that (a) involves an obligation greater
than $100,000, whether such indebtedness now exists or shall hereafter be
created, and (b) results in such indebtedness becoming or being declared
due and payable prior to the date on which it would otherwise become due and
payable;


 


vii.           the Common Stock
shall not be eligible for listing or quotation for trading on a Trading Market
and shall not be eligible to resume listing or quotation for trading thereon
within five Trading Days;


 


viii.          a Registration
Statement shall not have been declared effective within the applicable period(s) specified
in Section 6.12 of the Purchase Agreement;


 


ix.            if, after the
Registration Statement has been declared effective and any Registrable
Securities are still outstanding, either (a) the effectiveness of the
Registration Statement lapses for any reason or (b) the Holder shall not
be permitted to resell Registrable Securities under the Registration Statement
in accordance with the terms set forth in Section 6.12 of the Purchase
Agreement; provided, however, that if the Company is negotiating
a merger, consolidation, acquisition or sale of all or substantially all of its
assets or a similar transaction and, in the written opinion of counsel to the
Company, the Registration Statement would be required to be amended to include
information concerning such pending transaction(s) or the parties thereto
which information is not available or may not be publicly disclosed at the
time, the Company shall be permitted an additional 10 consecutive Trading Days
during any 12-month period pursuant to this Section 8(a)(ix);


 


x.             the Company shall
fail for any reason to deliver certificates to a Holder prior to the third
Trading Day after a Conversion Date or the Company shall provide at any time
notice to the Holder, including by way of public announcement, of the Company’s
intention to not honor requests for conversions of any Notes in accordance with
the terms hereof;


 


xi.            any monetary
judgment, writ or similar final process shall be entered or filed against the
Company, any Subsidiary or any of their respective property or other assets for
more than $100,000, and such judgment, writ or similar final process shall
remain unvacated, unbonded or unstayed for a period of 45 calendar days;


 


xii.           any amounts payable
upon the exercise of a Change in Control Put shall not have been paid in
accordance with the terms set forth in Section 6;


 


16

















 


xiii.          the Company shall
have failed to file any of its SEC Reports on a timely basis; provided, however,
that such SEC Reports shall be deemed to be filed on a timely basis if the
Company has received a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of such extension; or


 


xiv.          the Company shall
fail to enter into the Security Agreement, Guaranty and any intercreditor
arrangements described in the Purchase Agreement within thirty (30) days of the
date of this Note.


 


b)            Remedies Upon
Event of Default. If any Event of Default shall have occurred, at the
Holder’s election, (i) the outstanding principal amount of this Note, plus
accrued but unpaid interest, liquidated damages and other amounts owing in
respect thereof through the date of acceleration, shall become immediately due
and payable in cash at the Mandatory Default Amount or (ii) commencing 5
days after the occurrence of any Event of Default that results in the eventual
acceleration of this Note, the interest rate on this Note shall accrue at an
interest rate equal to the lesser of 18% per annum or the maximum rate
permitted under applicable law.  Upon the
payment in full of the Mandatory Default Amount, the Holder shall promptly
surrender this Note to or as directed by the Company.  In connection with such acceleration
described herein, the Holder need not provide, and the Company hereby waives,
any presentment, demand, protest or other notice of any kind, and the Holder
may immediately and without expiration of any grace period enforce any and all
of its rights and remedies hereunder and all other remedies available to it
under applicable law.  Such acceleration
may be rescinded and annulled by Holder at any time prior to payment hereunder
and the Holder shall have all rights as a holder of the Note until such time,
if any, as the Holder receives full payment pursuant to this Section 8(b).  No such rescission or annulment shall affect
any subsequent Event of Default or impair any right consequent thereon.


 


Section 9.               Miscellaneous.


 


a)             Notices.  Any and all notices or other communications
or deliveries to be provided by the Holder hereunder, including, without
limitation, any Notice of Conversion, shall be in writing and delivered
personally, by facsimile, or sent by a nationally recognized overnight courier
service, addressed to the Company, at the address set forth above, facsimile
number  (678) 281-2019, Attention:  Robin
Raina or such other facsimile number or address as the Company may
specify for such purpose by notice to the Holder delivered in accordance with
this Section 9(a).  Any and all
notices or other communications or deliveries to be provided by the Company
hereunder shall be in writing and delivered personally, by facsimile, or sent
by a nationally recognized overnight courier service addressed to each Holder
at the facsimile number or address of such Holder appearing on the books of the
Company, or if no such facsimile number or address appears, at the principal
place of business of the Holder.  Any
notice or other communication or deliveries hereunder shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice
or communication is delivered via 


 


17

















 


facsimile at the
facsimile number specified in this Section 9(a) prior to 5:30 p.m.
(New York City time), (ii) the date immediately following the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section 9(a) between 5:30 p.m.
(New York City time) and 11:59 p.m. (New York City time) on any date, (iii) the
second Business Day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the
party to whom such notice is required to be given.


 


b)            Absolute
Obligation. Except as expressly provided herein, no provision of this Note
shall alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of, liquidated damages and accrued
interest, as applicable, on this Note at the time, place, and rate, and in the
coin or currency, herein prescribed. 
This Note is a direct debt obligation of the Company.


 


c)             Lost or
Mutilated Note.  If this Note shall
be mutilated, lost, stolen or destroyed, the Company shall execute and deliver,
in exchange and substitution for and upon cancellation of a mutilated Note, or
in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note
for the principal amount of this Note so mutilated, lost, stolen or destroyed,
but only upon receipt of evidence of such loss, theft or destruction of such
Note, and of the ownership hereof, reasonably satisfactory to the Company.


 


d)            Governing Law.  All questions concerning the construction,
validity, enforcement and interpretation of this Note shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Delaware, without regard to the principles of conflict of laws thereof.  Each party agrees that all legal proceedings
concerning the interpretation, enforcement and defense of the transactions
contemplated by any of the Transaction Documents (whether brought against a
party hereto or its respective Affiliates, directors, officers, shareholders,
employees or agents) shall be commenced in the state and federal courts sitting
in Dover, Delaware (the “Delaware Courts”).  Each party hereto hereby irrevocably submits
to the exclusive jurisdiction of the Delaware Courts for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the
enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of such Delaware Courts,
or such Delaware Courts are improper or inconvenient venue for such
proceeding.  Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating
to this Note or the transactions contemplated hereby. If either party shall
commence an action or proceeding to enforce any provisions of this Note, then
the prevailing party in such action or proceeding shall be reimbursed by the
other party for its attorneys fees and other costs and expenses incurred in the
investigation, preparation and prosecution of such action or proceeding.


 


18

















 


e)             Waiver.  Any waiver by the Company or the Holder of a
breach of any provision of this Note shall not operate as or be construed to be
a waiver of any other breach of such provision or of any breach of any other
provision of this Note.  The failure of
the Company or the Holder to insist upon strict adherence to any term of this
Note on one or more occasions shall not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to that term or
any other term of this Note.  Any waiver
by the Company or the Holder must be in writing.


 


f)             Severability.  If any provision of this Note is invalid,
illegal or unenforceable, the balance of this Note shall remain in effect, and
if any provision is inapplicable to any Person or circumstance, it shall
nevertheless remain applicable to all other Persons and circumstances.  If it shall be found that any interest or
other amount deemed interest due hereunder violates the applicable law
governing usury, the applicable rate of interest due hereunder shall
automatically be lowered to equal the maximum rate of interest permitted under
applicable law. The Company covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law or other law which would prohibit or forgive the Company from paying
all or any portion of the principal of or interest on this Note as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this indenture, and the Company (to
the extent it may lawfully do so) hereby expressly waives all benefits or
advantage of any such law, and covenants that it will not, by resort to any
such law, hinder, delay or impeded the execution of any power herein granted to
the Holder, but will suffer and permit the execution of every such as though no
such law has been enacted.


 


g)            Next Business Day.  Whenever any payment or other obligation
hereunder shall be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day.


 


h)            Headings.  The headings contained herein are for
convenience only, do not constitute a part of this Note and shall not be deemed
to limit or affect any of the provisions hereof.


 


i)              Assumption. 
Any successor to the Company or any surviving entity in a Fundamental
Transaction shall (i) assume, prior to such Fundamental Transaction, all
of the obligations of the Company under this Note and the other Transaction
Documents pursuant to written agreements in form and substance satisfactory to
the Holder (such approval not to be unreasonably withheld or delayed) and (ii) issue
to the Holder a new Note of such successor entity evidenced by a written
instrument substantially similar in form and substance to this Note, including,
without limitation, having a principal amount and interest rate equal to the
principal amount and the interest rate of this Note and having similar ranking
to this Note, which shall be satisfactory to the Holder (any such approval not
to be unreasonably withheld or delayed).  The provisions of this Section 9(i) 


 


19

















 


shall apply
similarly and equally to successive Fundamental Transactions and shall be
applied without regard to any limitations of this Note.


 


*********************


 


20

















 


IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed by a duly authorized officer as of the date first above indicated.


 


 


	
   

  	
  EBIX, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:  

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


21

















 


ANNEX A


 


NOTICE OF CONVERSION


 


The undersigned hereby elects to convert principal under the 2.5%
Secured Convertible Note due December 18, 2009 of Ebix, Inc., a
Delaware corporation (the “Company”), into shares of common stock, par value $.10 per share (the “Common Stock”),
of the Company according to the conditions hereof, as of the date written
below.  If shares of Common Stock are to
be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates and opinions as reasonably requested by the Company
in accordance therewith.  No fee will be
charged to the holder for any conversion, except for such transfer taxes, if
any.


 


By the delivery of this Notice of Conversion the undersigned represents
and warrants to the Company that its ownership of the Common Stock does not
exceed the amounts specified under Section 4 of this Note, as determined
in accordance with Section 13(d) of the Exchange Act.


 


The undersigned agrees to comply with the prospectus delivery
requirements under the applicable securities laws in connection with any
transfer of the aforesaid shares of Common Stock.


 


Conversion calculations:


 


	
   

  	
  Date to Effect Conversion:

  
	
   

  	
   

  
	
   

  	
  Principal Amount of Note to be Converted:

  
	
   

  	
   

  
	
   

  	
  Payment of Interest in Common Stock      yes
       no

  
	
   

  	
  If yes, $         of
  Interest Accrued on Account of 

  Conversion at Issue.

  
	
   

  	
   

  
	
   

  	
  Number of shares of Common Stock to be issued:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature:

  
	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
   

  
	
   

  	
  Address:

  



 


A-1

















 


Schedule 1


 


CONVERSION SCHEDULE


 


The 2.5% Secured Convertible
Notes due on December 18, 2007 in the aggregate principal amount of
$20,000,000 are issued by Ebix, Inc.  This Conversion Schedule reflects
conversions made under Section 4 of the above referenced Note.


 


Dated:


 


	
  Date
  of Conversion

  (or for first entry,

  Original Issue Date)

  	
   

  	
  Amount of 

  Conversion

  	
   

  	
  Aggregate

  Principal

  Amount

  Remaining

  Subsequent to

  Conversion

  (or original

  Principal

  Amount)

  	
   

  	
  Company Attest