(1)	Includes the offering price of any additional shares of Class A common stock that the underwriters have the right to purchase to cover overallotments.

(2)	Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933.

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•	make additional acquisitions;

•	market our products and services;

•	expand our client support and service operations;

•	hire additional marketing, client support and administrative personnel; and

•	implement new and upgraded operational and financial systems, procedures and controls.

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•	loss of revenues;

•	loss of clients;

•	loss of client and cardholder data;

•	fines imposed by payment networks;

•	harm to our business or reputation resulting from negative publicity;

•	exposure to fraud losses or other liabilities;

•	additional operating and development costs; or

•	diversion of management, technical and other resources, among other consequences.

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•	we may not be able to identify suitable acquisition candidates or acquire additional assets on favorable terms;

•	we may compete with others to acquire assets, which competition may increase, and any level of competition could result in decreased availability or increased prices for acquisition candidates;

•	we may compete with others for select acquisitions and our competition may consist of larger, better-funded organizations with more resources and easier access to capital;

•	we may experience difficulty in anticipating the timing and availability of acquisition candidates;

•	we may not be able to obtain the necessary financing, on favorable terms or at all, to finance any of our potential acquisitions; and

•	we may not be able to generate cash necessary to execute our acquisition strategy.

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•	incur liens on property, assets or revenues;

•	incur or guarantee additional debt or amend our debt and other material agreements;

•	declare or make distributions and redeem or repurchase equity interests or issue preferred stock;

•	prepay, redeem or repurchase debt;

•	make loans and investments;

•	enter into any sale-and-leaseback of property;

•	engage in certain business activities; and

•	engage in mergers and asset sales.

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•	prohibiting the use of cumulative voting for the election of directors;

•	advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings; and

•	certain limitations on convening special stockholder meetings.

•	prior to such time, our Board of Directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

•	upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the votes of our voting stock outstanding at the time the transaction commenced, excluding certain shares; or

•	at or subsequent to that time, the business combination is approved by our Board of Directors and by the affirmative vote of holders of at least 66 2/3% of the votes of our outstanding voting stock that is not owned by the interested stockholder.

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•	our ability to generate revenues sufficient to maintain profitability and positive cash flow;

•	competition in our industry and our ability to compete effectively;

•	our dependence on non-exclusive distribution partners to market our products and services;

•	our ability to keep pace with rapid developments and changes in our industry and provide new products and services;

•	liability and reputation damage from unauthorized disclosure, destruction or modification of data or disruption of our services;

•	technical, operational and regulatory risks related to our information technology systems and third-party providers’ systems;

•	reliance on third parties for significant services;

•	exposure to economic conditions and political risks affecting consumer and commercial spending, including the use of credit cards;

•	our ability to increase our existing vertical markets, expand into new vertical markets and execute our growth strategy;

•	our ability to successfully complete acquisitions and effectively integrate those acquisitions into our services;

•	degradation of the quality of our products, services and support;

•	our ability to retain clients, many of which are SMBs, which can be difficult and costly to retain;

•	our ability to successfully manage our intellectual property;

•	our ability to attract, recruit, retain and develop key personnel and qualified employees;

•	risks related to laws, regulations and industry standards;

•	our indebtedness and potential increases in our indebtedness;

•	operating and financial restrictions imposed by our Senior Secured Credit Facility; and

•	the other factors described in “Risk Factors.”

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•	our ability to generate revenues sufficient to maintain profitability and positive cash flow;

•	competition in our industry and our ability to compete effectively;

•	our dependence on non-exclusive distribution partners to market our products and services;

•	our ability to keep pace with rapid developments and changes in our industry and provide new products and services;

•	liability and reputation damage from unauthorized disclosure, destruction or modification of data or disruption of our services;

•	technical, operational and regulatory risks related to our information technology systems and third-party providers’ systems;

•	reliance on third parties for significant services;

•	exposure to economic conditions and political risks affecting consumer and commercial spending, including the use of credit cards;

•	our ability to increase our existing vertical markets, expand into new vertical markets and execute our growth strategy;

•	our ability to successfully complete acquisitions and effectively integrate those acquisitions into our services;

•	degradation of the quality of our products, services and support;

•	our ability to retain clients, many of which are SMBs, which can be difficult and costly to retain;

•	our ability to successfully manage our intellectual property;

•	our ability to attract, recruit, retain and develop key personnel and qualified employees;

•	risks related to laws, regulations and industry standards;

•	our indebtedness and potential increases in our indebtedness;

•	operating and financial restrictions imposed by our Senior Secured Credit Facility; and

•	the other factors described in “Risk Factors.”

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•

We will amend and restate the existing limited liability company agreement of i3 Verticals, LLC to, among other things, (1) convert all existing Class A units, common units (including common units issued upon the exercise of existing warrants held by the existing Warrant Holders) and Class P units of ownership interest in i3 Verticals, LLC into either             Class A voting common units of i3 Verticals, LLC or                Class B non-voting common units of i3 Verticals, LLC, and (2) appoint i3 Verticals, Inc. as the sole managing member of i3 Verticals, LLC upon its acquisition of common units in connection with this offering.

•

We will amend and restate i3 Verticals, Inc.’s certificate of incorporation to provide for, among other things, Class A common stock and Class B common stock. Each share of Class A common stock and Class B common stock will entitle its holder to one vote on all matters to be voted on by stockholders. Shares of our Class B common stock, however, may be held only by the Continuing Equity Owners and their permitted transferees in proportion to the number of outstanding common units of i3 Verticals, LLC they hold as described in “Description of Capital Stock—Class B Common Stock.” Class B common stock has no economic rights.

•

Immediately following the Initial Recapitalization, we will consummate a merger by and among i3 Verticals, LLC, i3 Verticals, Inc. and MergerSub whereby: (1) MergerSub will merge with and into i3 Verticals, LLC, with i3 Verticals, LLC as the surviving entity; (2) Class A voting common units will be converted into newly issued common units in i3 Verticals, LLC together with an equal number of shares of Class B common stock of i3 Verticals, Inc., and (3) Class B common units will be converted into Class A common stock of i3 Verticals, Inc.

•	We will issue                 shares of our Class A common stock pursuant to a voluntary private conversion of Junior Subordinated Notes by certain related and unrelated creditors of i3 Verticals, LLC. In this conversion, certain eligible holders of Junior Subordinated Notes have elected to convert approximately $        in aggregate indebtedness into Class A common stock.

•	We will issue                 shares of our Class A common stock to the purchasers in this offering (or            shares if the underwriters exercise their overallotment option in full) in exchange for net proceeds of approximately $        million (or approximately $        million if the underwriters exercise the overallotment option in full).

•

We will use all of the net proceeds from this offering to purchase (1)                newly issued common units (or                 common units if the underwriters exercise their overallotment option in full) directly from i3 Verticals, LLC at a price per unit equal to the initial public offering price per share of Class A common stock in this offering less the underwriting discounts and commissions, and (2)                  common units directly from certain of the Continuing Equity Owners at the initial public offering price of Class A common stock in this offering less underwriting discounts and commissions. We will own       % of i3 Verticals, LLC’s outstanding common units following this offering (or       % if the underwriters exercise their overallotment option in full).

•	i3 Verticals, LLC intends to use the net proceeds from the sale of common units to i3 Verticals, Inc. to repay as described under “Use of Proceeds” a total of approximately $                  in outstanding debt

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•	i3 Verticals, Inc. will enter into (1) the Tax Receivable Agreement with i3 Verticals, LLC and each of the Continuing Equity Owners and (2) the Registration Rights Agreement with certain Continuing Equity Owners. For a description of the terms of the Tax Receivable Agreement and the Registration Rights Agreement, see “Certain Relationships and Related Party Transactions.”

•

The Former Equity Owners (1) will own        shares of Class A common stock of i3 Verticals, Inc., representing approximately      % of the combined voting power of all of the common stock of i3 Verticals, Inc. and approximately      % of the economic interest in i3 Verticals, Inc. (or approximately      % of the combined voting power and approximately      % of the economic interest if the underwriters exercise their overallotment option in full), and (2) through i3 Verticals, Inc.’s ownership of i3 Verticals, LLC’s common units, indirectly will hold approximately      % of the economic interest in i3 Verticals, LLC.

•	i3 Verticals, Inc. will be a holding company and its principal asset will consist of common units it purchased from i3 Verticals, LLC and certain of the Continuing Equity Owners and common units it acquired from the Former Equity Owners.

•	i3 Verticals, Inc. will be the sole managing member of i3 Verticals, LLC and will control the business and affairs of i3 Verticals, LLC and its subsidiaries. We will have a board of directors and executive officers, but will have no employees. The functions of all of our employees are expected to reside at i3 Verticals, LLC or its subsidiaries.

•	i3 Verticals, Inc. will own, directly or indirectly,              common units of i3 Verticals, LLC, representing approximately        % of the economic interest in i3 Verticals, LLC (or                 common units, representing approximately      % of the economic interest in i3 Verticals, LLC, if the underwriters exercise their overallotment option in full).

•	The purchasers in this offering:

–

will own           shares of Class A common stock of i3 Verticals, Inc. (or          shares of Class A common stock of i3 Verticals, Inc. if the underwriters exercise their overallotment option in full), representing approximately       % of the economic interest in i3 Verticals, Inc. and approximately % of the combined voting power of all of the common stock of i3 Verticals, Inc. (or approximately       % of the economic interest and approximately % of the combined voting power if the underwriters exercise their overallotment option in full), and

–	will indirectly hold approximately      % of the economic interest in i3 Verticals, LLC (or approximately      % if the underwriters exercise their overallotment option in full).

•	The Continuing Equity Owners:

–	will own               common units of i3 Verticals, LLC, representing approximately      % of the economic interest in i3 Verticals, LLC (or approximately      % of the economic interest in i3 Verticals, LLC if the underwriters exercise their overallotment option in full), and

–	will own           shares of Class B common stock of i3 Verticals, Inc., representing approximately      % of the combined voting power of all of the common stock of i3 Verticals, Inc. (or approximately      % if the underwriters exercise their overallotment option in full).

•	The Former Equity Owners:

–

will own        shares of Class A common stock of i3 Verticals, Inc., representing approximately      % of the economic interest in i3 Verticals, Inc. and approximately % of the combined voting power of all of the common stock of i3 Verticals, Inc. (or approximately      % of the economic interest and approximately      % of the combined voting power if the underwriters exercise their overallotment option in full), and

–	will indirectly hold approximately % of the economic interest of i3 Verticals, LLC through i3 Verticals, Inc.’s ownership of i3 Verticals, LLC’s common units.

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•	to repay the Mezzanine Notes in full;

•	to repay the outstanding Junior Subordinated Notes in full; and

•	to repay approximately $           million of the revolving loan of our Senior Secured Credit Facility.

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•	i3 Verticals, LLC and its subsidiaries on an actual basis;

•	i3 Verticals, Inc. and its subsidiaries on a pro forma basis after giving effect to the Reorganization Transactions, excluding this offering; and

•

i3 Verticals, Inc. and its subsidiaries on a pro forma basis after giving effect to the Reorganization Transactions, and further adjusted to include the sale of shares of Class A common stock in this offering at an assumed initial public offering price of $             per share (which is the midpoint of the range set forth on the cover page of this prospectus), after deducting the estimated underwriting discounts and commissions and estimated offering expenses that we expect to pay, and the application of the net proceeds from this offering as described under “Use of Proceeds.”

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(1)	On a pro forma basis and a pro forma as adjusted basis, includes the ownership interests not owned by i3 Verticals, Inc., which represents      % and      % of the outstanding common units of i3 Verticals, LLC, respectively. The Continuing Equity Owners will hold the      % and      % non-controlling interest in i3 Verticals, LLC on a pro forma and pro forma as adjusted basis, respectively.

(2)

Each $1.00 increase or decrease in the assumed initial public offering price of $      per share (which is the midpoint of the price range set forth on the cover page of this prospectus) would increase or decrease each of cash, additional paid-in capital, total members’ / stockholders’ equity and total capitalization on a pro forma as adjusted basis by approximately $      million, assuming the number of shares offered, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses that we expect to pay.

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•	the Reorganization Transactions (excluding this offering) described in “Our Organizational Structure”;

•

this offering and our payment of fees and expenses related to this offering and the use of a portion of the proceeds by i3 Verticals, LLC (from the sale of common units to us using the proceeds of this offering) to repay approximately $       of the indebtedness outstanding under the Junior Subordinated Notes, the Mezzanine Notes and the Senior Secured Credit Facility as described under “Use of Proceeds”;

•	the purchase of all of the outstanding stock of San Diego Cash Register Company, Inc. (“SDCR, Inc.”);

•	the purchase of certain assets and assumed certain liabilities of Fairway Payments, LLC (“Fairway”); and

•	a provision for federal, state and local income taxes of i3 Verticals, Inc. as a taxable corporation at an effective rate of:

◦

30.9% for the six months ended March 31, 2018, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates applied to income apportioned to each state and local jurisdiction, and is computed using the federal income tax rate in effect for the three months ended December 31, 2017 and the reduced federal income tax rate for the remaining nine months for the fiscal year ending September 30, 2018.

◦	39.6% for the year ended September 30, 2017, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates applied to income apportioned to each state and local jurisdiction, and is computed using the federal income tax rate in effect during the fiscal year.

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(a)	i3 Verticals, Inc. was formed on January 17, 2018, and will have no material assets or results of operations until the completion of this offering and therefore its historical financial position is not shown in a separate column in this unaudited pro forma condensed consolidated balance sheet.

(b)

In connection with the Reorganization Transactions, we will convert all existing Class A units, common units (including common units issued upon the exercise of existing warrants held by the existing Warrant Holders) and Class P units (profits interests) of ownership interest in i3 Verticals, LLC into either (i) Class A voting common units of i3 Verticals, LLC (such holders of Class A voting common units, the Continuing Equity Owners) or (ii) Class B non-voting common units of i3 Verticals, LLC (such holders of Class B non-voting common units, the Former Equity Owners) (collectively, the Initial Recapitalization).

(c)	Immediately following the Initial Recapitalization and prior to this offering, we will consummate a merger by and among i3 Verticals, LLC, i3 Verticals, Inc. and a to-be-formed wholly-owned subsidiary of i3 Verticals, Inc. (MergerSub) whereby:

(1)	MergerSub will merge with and into i3 Verticals, LLC, with i3 Verticals, LLC as the surviving entity.

(2)

The Class A voting common units held by the Continuing Equity Holders will be converted into newly issued common units in i3 Verticals, LLC together with an equal number of shares of Class B common stock of i3 Verticals, Inc. Holders of our Class B common stock along with the holders of our Class A common stock will have certain voting rights as described under “Description of Capital Stock,” but holders of our Class B common stock will not be entitled to receive any distributions from or participate in any dividends declared by our Board of Directors.

(3)	The Class B common units held by Former Equity Owners will be converted into             shares of Class A common stock of i3 Verticals, Inc.

(d)

Upon completion of the Reorganization Transactions, we will become the sole managing member of i3 Verticals, LLC. As a result, we will consolidate the financial results of i3 Verticals, LLC and will report a non-controlling interest related to the Class B common stock held by the Continuing Equity Owners on our consolidated balance sheet. The computation of the non-controlling interest following the consummation of this offering is as follows:

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(e)	We estimate that the net proceeds from this offering will be approximately $        million. This amount has been determined based on the assumption that the underwriters’ option to purchase additional shares in our Class A common stock is not exercised. A reconciliation on the gross proceeds from this offering to the net proceeds is set forth below:

(f)	We will issue            shares of our Class A common stock pursuant to a voluntary private conversion of Junior Subordinated Notes by certain related and unrelated creditors of i3 Verticals, LLC. In this conversion, certain eligible holders of Junior Subordinated Notes have elected to convert $         in aggregate indebtedness into Class A common stock.

(g)	i3 Verticals, LLC intends to use the $         million in net proceeds it receives from the sale of common units to i3 Verticals, Inc. as follows:

•	to repay the Mezzanine Notes in full in the amount of $         ;

•	to repay the outstanding Junior Subordinated Notes in full in the amount of $         ; and

•	to repay approximately $            million of the outstanding borrowings under the revolving loan of our Senior Secured Credit Facility.

(h)	We expect to obtain an increase in the tax basis of our share of the assets of i3 Verticals, LLC when common units are redeemed or exchanged by the Continuing Equity Owners. This increase in tax basis may have the

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(i)	The reconciliation of i3 Verticals, LLC members’ deficit to i3 Verticals, Inc. accumulated deficit as of March 31, 2018 is as follows ($ in thousands):

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(a)	i3 Verticals, Inc. was formed on January 17, 2018 and will have no results of operations until the completion of this offering. Therefore, its historical results of operations are not shown in a separate column in this unaudited pro forma interim condensed consolidated statement of operations.

(b)	SDCR, Inc.’s financial statements presented in the accompanying unaudited pro forma interim condensed consolidated statement of operations reflect the historical results of operations for the one month ended October 31, 2017. The operating results of SDCR, Inc. since the date of acquisition have been included in our historical results of operations for the six months ended March 31, 2018.

(c)	In accordance with the rules of Article 11 of Regulation S-X, the following adjustments were made for the acquisition of SDCR, Inc. (amounts in thousands):

(1)

Adjusted executive compensation is based on arrangements negotiated in conjunction with the acquisitions. The adjustments account for market-based compensation considerations and the actual historical compensation of specific executives who were offered new employment arrangements in connection with the acquisitions. We adjusted such compensation to reflect amounts they are expected to receive under their respective employment arrangements post-acquisition.

(2)	Increased amortization expense reflects identified intangible assets in the acquisition of SDCR, Inc. The weighted-average amortization period for all intangibles acquired is eleven years.

(3)	Direct, incremental transaction costs, which are reflected in our interim condensed consolidated results of operations for the six months ended March 31, 2018, are removed.

(4)	Interest has been adjusted to reflect the increased borrowings to fund the acquisition using a 6.25% interest rate, which represents our incremental borrowing rate as of October 31, 2017. If the interest rate were increased or decreased by 0.125%, it would result in a $6,000 change in net interest expense for the six months ended March 31, 2018.

(5)	Income tax expense has been adjusted to reflect the increased pre-tax income for SDCR, Inc., a C corporation subject to an estimated federal and state blended tax rate of 30.9%.

(d)

Represents the increase in compensation expense we expect to incur following the completion of this offering. We expect to grant options to purchase approximately            shares of our Class A common stock to certain of our directors, executive officers and other employees in connection with this offering. This amount was calculated assuming the stock options were granted on October 1, 2017 with the stock options having an exercise price equal to $           per share, the assumed initial public offering price based on the midpoint of the price range set forth on the cover page of this prospectus. The grant date fair values of the stock options were determined using the Black-Scholes valuation model using the following assumptions:

(e)	i3 Verticals, LLC has been, and will continue to be, treated as a partnership for U.S. federal and state income tax purposes. As such, income generated by i3 Verticals, LLC will flow through to its partners, including us,

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(f)

Upon completion of the Reorganization Transactions, i3 Verticals, Inc. will become the sole managing member of i3 Verticals, LLC. As a result, we will consolidate the financial results of i3 Verticals, LLC and will report a non-controlling interest related to the common units of i3 Verticals, LLC held by the Continuing Equity Owners on our consolidated statements of income. Following this offering, assuming the underwriters do not exercise their option to purchase additional shares of Class A common stock, i3 Verticals, Inc. will own        % of the common units of i3 Verticals, LLC and the Continuing Equity Owners will own the remaining         % of the common units of i3 Verticals, LLC. Net income attributable to non-controlling interest will represent         % of the income before income taxes of i3 Verticals, Inc. These amounts have been determined based on the assumption that the underwriters’ option to purchase         additional shares of Class A common stock is not exercised. If the underwriters exercise their option to purchase additional shares of Class A common stock in full, i3 Verticals Inc. will own        % of the common units of i3 Verticals, LLC, the Continuing Equity Owners will own the remaining         % of the common units of i3 Verticals, LLC and net income attributable to non-controlling interest will represent         % of the income before income taxes of i3 Verticals, Inc.

(g)

As described in “Use of Proceeds,” we intend to use a portion of the net proceeds from this offering (assuming that the underwriters’ option to purchase additional shares of our Class A common stock is not exercised) to purchase common units directly from i3 Verticals, LLC at a price per unit equal to the initial public offering price per share of Class A common stock in this offering less the underwriting discounts and commissions. i3 Verticals, LLC intends to use the $        million in net proceeds it receives from the sale of

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(h)

Pro forma basic net income per share is computed by dividing the net income available to Class A common stockholders by the weighted-average shares of Class A common stock outstanding during the period. Pro forma diluted net income per share is computed by adjusting the net income available to Class A common stockholders and the weighted-average shares of Class A common stock outstanding to give effect to potentially dilutive securities. Shares of our Class B common stock are not entitled to receive any distributions or dividends and have no rights to convert into Class A common stock. When a common unit is exchanged for, at our election, cash or Class A common stock by a Continuing Equity Owner who holds shares of our Class B common stock, such Continuing Equity Owner will be required to surrender a share of Class B common stock, which we will cancel for no consideration. Therefore, we did not include shares of our Class B common stock in the computation of pro forma basic or diluted net loss per share. The following table sets forth a reconciliation of the numerators and denominators used to compute pro forma basic and diluted net loss per share (in thousands, except per share data):

(1)

We plan to use a portion of the net proceeds from this offering (assuming that the underwriters’ option to purchase additional shares of our Class A common stock is not exercised) to purchase common units directly from i3 Verticals, LLC at a price per unit equal to the offering price per share of Class A common stock in this offering less the underwriting discounts and commissions and, in turn, i3 Verticals, LLC intends to use the $        million in net proceeds it receives from the sale of common units to i3 Verticals, Inc. to repay our Mezzanine Notes in full, our Junior Subordinated Notes in full and $      million of outstanding borrowings under our Senior Secured Credit Facility.

(2)	In calculating pro forma basic net income per share for the six months ended March 31, 2018, unvested options to purchase approximately           shares of our Class A common stock that we expect to grant to certain of our directors, executive officers and other employees in connection with this offering that would have vested as of September 30, 2017 have not been included because

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(3)

The reallocation of net income (loss) assuming conversion of common units represents the tax effected net income (loss) attributable to non-controlling interest using the effective income tax rates described in footnote (c) above and assuming all common units of i3 Verticals, LLC were exchanged for Class A common stock at the beginning of the period. The common units of i3 Verticals, LLC held by the Continuing Equity Owners are potentially dilutive securities, and the computations of pro forma diluted net income (loss) per share assume that all common units of i3 Verticals, LLC were exchanged for shares of Class A common stock at the beginning of the period. This adjustment was made only for purposes of calculating pro forma diluted net income per share and does not necessarily reflect the amount of exchanges that may occur subsequent to this offering.

(4)	Includes           outstanding shares of Class A common stock issuable upon the exchange of common units to be held by the Continuing Equity Owners prior to this offering and           shares of unvested common units and options.

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(a)	i3 Verticals, Inc. was formed on January 17, 2018 and will have no results of operations until the completion of this offering and therefore its historical results of operations are not shown in a separate column in this unaudited pro forma consolidated statement of operations.

(b)

We purchased Fairway on August 1, 2017 after its conversion to a Virginia limited liability company. The audited historical financial statements of Fairway Payments, Inc. for the seven months ended July 31, 2017 and the year ended December 31, 2016, prior to its conversion to a limited liability company, are included within this prospectus. The operating results of Fairway since the date of acquisition have been included in our consolidated results of operations for the year ended September 30, 2017. We have included the audited Fairway Payments, Inc. results of operations for the seven months ended July 31, 2017 in this unaudited pro forma statement of operations. We have also included Fairway Payments, Inc.’s historical results of operations for the three months ended December 31, 2016 in this unaudited pro forma statement of operations. The following shows the calculation of the pro forma results of operations for the ten months ended July 31, 2017 (amounts in thousands).

(c)	SDCR, Inc.’s financial statements presented in the accompanying unaudited pro forma condensed statement of operations reflect the historical results of operations for the year ended October 31, 2017 from the audited financial statements. In accordance with Regulation S-X 11-02(c)(3), no adjustments were required to modify the period of SDCR, Inc.’s historical condensed statement of operations.

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(d)	In accordance with the rules of Regulation S-X Article 11, the following adjustments were made for the significant acquisitions (amounts in thousands):

(1)

Adjusted executive compensation is based on arrangements negotiated in conjunction with the acquisitions. The adjustments account for market-based compensation considerations and the actual historical compensation of specific executives who were offered new employment arrangements in connection with the acquisitions. We adjusted such compensation to reflect amounts they are expected to receive under their respective employment arrangements post-acquisition.

(2)	Increased amortization expense reflects identified intangible assets in the acquisitions. For Fairway, the weighted-average amortization period for all intangibles acquired is fifteen years. For SDCR, Inc., the weighted-average amortization period for all intangibles acquired is eleven years.

(3)	Direct, incremental transaction costs of the respective acquisition, which are reflected in our consolidated results of operations for the year ended September 30, 2017, are removed.

(4)

Interest has been adjusted to reflect the increased borrowings to fund the acquisitions using a 5.73% and a 6.25% interest rate, which represents our incremental borrowing rate as of the date of the Fairway and SDCR, Inc. acquisitions, respectively. If the interest rate were increased or decreased by 0.125%, it would result in a $41,000 and $25,000 change in net interest expense for Fairway and SDCR, Inc., respectively.

(5)	Income tax expense has been adjusted to reflect the increased pre-tax income for SDCR, Inc., a C corporation subject to an estimated federal and state blended tax rate of 39.6%.

(e)

Represents the increase in compensation expense we expect to incur following the completion of this offering. We expect to grant options to purchase approximately            shares of our Class A common stock to certain of our directors, executive officers and other employees in connection with this offering. This amount was calculated assuming the stock options were granted on October 1, 2016 with the stock options having an exercise price equal to $           per share, the assumed initial public offering price based on the midpoint of the price range set forth on the cover page of this prospectus. The grant date fair values of the stock options were determined using the Black-Scholes valuation model using the following assumptions:

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(f)

i3 Verticals, LLC has been, and will continue to be, treated as a partnership for U.S. federal and state income tax purposes. As such, income generated by i3 Verticals, LLC will flow through to its partners, including us, and is generally not subject to tax at the i3 Verticals, LLC level. Following the Reorganization Transactions, we will be subject to U.S. federal income taxes, in addition to state and local income taxes with respect to our allocable share of any taxable income of i3 Verticals, LLC. As a result, the unaudited pro forma consolidated statements of income reflect adjustments to our income tax expense to reflect an effective income tax rate of       % for the year ended September 30, 2017, which was calculated assuming the U.S. federal rates currently in effect and the highest statutory rates apportioned to each applicable state, local and foreign jurisdiction.

(g)

Upon completion of the Reorganization Transactions, i3 Verticals, Inc. will become the sole managing member of i3 Verticals, LLC. As a result, we will consolidate the financial results of i3 Verticals, LLC and will report a non-controlling interest related to the common units of i3 Verticals, LLC held by the Continuing Equity Owners on our consolidated statements of income. Following this offering, assuming the underwriters do not exercise their option to purchase additional shares of Class A common stock, i3 Verticals, Inc. will own        % of the common units of i3 Verticals, LLC and the Continuing Equity Owners will own the remaining         % of the common units of i3 Verticals, LLC. Net income attributable to non-controlling interest will represent         % of the income before income taxes of i3 Verticals, Inc. These amounts have been determined based on the assumption that the underwriters' option to purchase         additional shares of Class A common stock is not exercised. If the underwriters exercise their option to purchase additional shares of Class A common stock in full, i3 Verticals Inc. will own        % of the common units of i3 Verticals, LLC, the Continuing Equity Owners will own the remaining         % of the common units of i3 Verticals, LLC and net income attributable to non-controlling interest will represent         % of the income before income taxes of i3 Verticals, Inc.

(h)	As described in “Use of Proceeds,” we intend to use a portion of the net proceeds from this offering (assuming that the underwriters’ option to purchase additional shares of our Class A common stock is not exercised) to purchase common units directly from i3 Verticals, LLC at a price per unit equal to the initial

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(i)

Pro forma basic net income per share is computed by dividing the net income available to Class A common stockholders by the weighted-average shares of Class A common stock outstanding during the period. Pro forma diluted net income per share is computed by adjusting the net income available to Class A common stockholders and the weighted-average shares of Class A common stock outstanding to give effect to potentially dilutive securities. Shares of our Class B common stock are not entitled to receive any distributions or dividends and have no rights to convert into Class A common stock. When a common unit is exchanged for, at our election, cash or Class A common stock by a Continuing Equity Owner who holds shares of our Class B common stock, such Continuing Equity Owner will be required to surrender a share of Class B common stock, which we will cancel for no consideration. Therefore, we did not include shares of our Class B common stock in the computation of pro forma basic or diluted net loss per share. The following table sets forth a reconciliation of the numerators and denominators used to compute pro forma basic and diluted net loss per share (in thousands, except per share data):

(1)

We plan to use a portion of the net proceeds from this offering (assuming that the underwriters’ option to purchase additional shares of our Class A common stock is not exercised) to purchase common units directly from i3 Verticals, LLC at a price per unit equal to the offering price per share of Class A common stock in this offering less the underwriting discounts and commissions and, in turn, i3 Verticals, LLC intends to use the $        million in net proceeds it receives from the sale of common units to i3 Verticals, Inc. to repay our Mezzanine Notes in full, our Junior Subordinated Notes in full and $      million of outstanding borrowings under our Senior Secured Credit Facility.

(2)	In calculating pro forma basic net income per share for the year ended September 30, 2017, unvested options to purchase approximately           shares of our Class A common stock that we expect to grant to certain of our directors, executive officers and other employees in connection with this offering that would have vested as of September 30, 2017 have not been included because

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(3)

The reallocation of net income (loss) assuming conversion of common units represents the tax effected net income (loss) attributable to non-controlling interest using the effective income tax rates described in footnote (c) above and assuming all common units of i3 Verticals, LLC were exchanged for Class A common stock at the beginning of the period. The common units of i3 Verticals, LLC held by the Continuing Equity Owners are potentially dilutive securities, and the computations of pro forma diluted net income (loss) per share assume that all common units of i3 Verticals, LLC were exchanged for shares of Class A common stock at the beginning of the period. This adjustment was made only for purposes of calculating pro forma diluted net income per share and does not necessarily reflect the amount of exchanges that may occur subsequent to this offering.

(4)	Includes           outstanding shares of Class A common stock issuable upon the exchange of common units to be held by the Continuing Equity Owners prior to this offering and           shares of unvested common units and options.

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(1)	Payment volume is the net dollar value of both 1) Visa, Mastercard and other payment network transactions processed by our clients and settled to clients by us and 2) ACH transactions processed by our clients and settled to clients by us.

(2)	Number of clients represents an approximate number of our clients who are actively processing payment volume as of the end of the period.

(3)

Net revenue is calculated as revenue less certain network fees and other costs described below. Adjusted net income is calculated as net income before certain non-cash changes in the fair value of contingent consideration, non-cash changes in the fair value of warrant liabilities, other non-core cash items and the other items described below. Adjusted EBITDA is equal to adjusted net income before interest, income taxes, depreciation and amortization. Net revenue, adjusted net income and adjusted EBITDA eliminate the effects of items that we do not consider indicative of our core operating performance. As a result, we consider net revenue, adjusted net income and adjusted EBITDA to be important indicators of our operational strength and the performance of our business. Management believes the uses of net revenue, adjusted net income and adjusted EBITDA are appropriate to provide additional information to investors about certain material non-cash items and about unusual items that we do not expect to continue at the same level in the future. By providing these non-GAAP financial measures, together with a reconciliation to GAAP results, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our business strategies. We believe investors use net revenue, adjusted net income and adjusted EBITDA as supplemental measures to evaluate the overall operating performance of companies in our industry. The way we present net revenue, adjusted net income and adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

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(a)	Includes costs associated with forming i3 Verticals, Inc. and other expenses directly related to the Reorganization Transactions.

(b)	Non-cash change in fair value of contingent consideration reflects the changes in management’s estimates of future cash consideration to be paid in connection with prior acquisitions from the amount estimated as of the later of the most recent balance sheet date forming the beginning of the income statement period or the original estimates made at the closing of the applicable acquisition.

(c)	Non-cash change in warrant liability reflects the fair value change in certain warrants for our common units associated with our Mezzanine Notes. These warrants are accounted for as liabilities on our Consolidated Balance Sheets.

(d)	We did not expense any share-based compensation for the periods presented, but we currently anticipate share-based compensation in the periods following this offering.

(e)	Acquisition-related expenses are the professional service and related costs directly related to our acquisitions and are not part of our core performance.

(f)	Other taxes consist of franchise taxes, commercial activity taxes and other non-income based taxes. Taxes related to salaries or employment are not included.

(g)	Legal settlement is a charge from certain legal proceedings and is further discussed in “Business—Legal Proceedings.”

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•	the dollar volume of payments our clients process through us (“payment volume”);

•	the portion of our payment volume that is produced by integrated transactions; and

•	period-to-period payment volume attrition.

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a.	make cash distributions to the holders of our equity in order to pay taxes incurred by owners of equity in i3 Verticals, LLC, by reason of such ownership,

b.	move intercompany cash between subsidiaries that are joined to the Senior Secured Credit Facility,

c.	use up to $1.5 million per year to repurchase equity from employees, directors, officers or consultants after the restructuring of the Company in connection with this offering, and

d.	make other dividends or distributions in an aggregate amount not to exceed 5% of the net cash proceeds received from any additional common equity issuance after our initial public offering.

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(a)

We have non-exclusive agreements with several processors to provide us services related to transaction processing and transmittal, transaction authorization and data capture, and access to various reporting tools. Certain of these agreements require us to submit a minimum monthly number of transactions for processing. If we submit a number of transactions that is lower than the minimum, we are required to pay to the processor the fees it would have received if we had submitted the required minimum number of transactions.

(b)	We estimated interest payments through the maturity of our 2016 Senior Secured Credit Facility by applying the interest rate of 5.75% in effect on our revolver as of September 30, 2017, plus an unused fee rate of 0.25%. On October 30, 2017, we replaced our 2016 Senior Secured Credit Facility with the Senior Secured Credit Facility.

(c)	We estimated interest payments through the maturity of our Junior Subordinated Notes by applying the applicable interest rate of 10.0%.

(d)

We estimated interest payments through the maturity of our Mezzanine Notes by applying the applicable interest rate of 12.0%. As of September 30, 2017, there were 1,424 Mezzanine Warrants outstanding and exercisable to purchase common units in i3 Verticals, LLC. The intrinsic value of the Mezzanine Warrants was $767 as of September 30, 2017. For additional information, see Note 5 in our audited consolidated financial statements included elsewhere in this prospectus.

(e)

In connection with certain of our acquisitions, we may be obligated to pay the seller of the acquired entity certain amounts of contingent consideration as set forth in the relevant purchasing documents, whereby additional consideration may be due upon the achievement of certain specified financial performance targets. i3 Verticals, Inc. accounts for the fair values of such contingent payments in accordance with the Level 3 financial instrument fair value hierarchy at the close of each subsequent reporting period. The acquisition-date fair value of contingent consideration is valued using a Monte Carlo simulation. i3 Verticals, Inc. subsequently reassesses such fair value based on probability estimates with respect to the acquired entity’s likelihood of achieving the respective financial performance targets.

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Education—We assist schools in completing payment processing functions such as accepting payments for school lunches (online, at school, or at the POS), school activities, selling products from the online student store while managing inventory, ticket sales and attendance at athletic and other events, enabling parents and students to complete forms electronically and enabling parents to make installment payments on higher-priced items.

•	Non-profit—We simplify the payment process for donations, charity auctions, church contributions and tickets to fundraising events, among others, empowering our clients to increase both their revenues and the time they devote to their core activities.

•	Public Sector—We assist public entities by efficiently collecting taxes, fines and certain fees; providing customer service responses to customer calls; and increasing the means available to make payments (online, in person or via mobile).

•	Property Management—We assist landlords and property managers in the rent collection process by providing centralized reporting for card and ACH payments, bank-level PCI DSS compliant security and solutions that integrate with third-party accounting software. This solution is becoming a popular option in the fast-growing shared workspace industry.

•	Healthcare—We enable clients in our healthcare vertical to accept payments through mobile and POS solutions; to use consumer-facing payment devices that allow receptionists and clerical staff to focus their attention elsewhere; and to use revenue cycle management tools to help shrink the volume of accounts that they turn over to collection agencies.

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•	enable superior data management by aggregating multiple small merchants under our “master” account, resulting in the collection and management of data not historically readily available;

•	streamline and simplify merchant onboarding, often resulting in client approval in minutes or hours rather than days or weeks; and

•	provide ease of reporting and reconciliation, allowing our clients to accept electronic payments in a faster, more convenient fashion.

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•	Non-Bank Merchant Acquirers—These providers use their own proprietary platforms to sell merchant acquiring solutions delivering fully integrated end-to-end capabilities. Examples include Global Payments, First Data and WorldPay. These providers typically generate revenue based on dollar volume processed as well as transaction and other ancillary service fees (e.g., PCI compliance fees).

•	Banks—A few banks in the United States, such as JPMorgan Chase and U.S. Bancorp, possess in-house processing functions, but most outsource their merchant acquiring services to a non-bank merchant acquirer. Banks typically sell merchant acquiring services in combination with other commercial banking products (e.g., bank accounts, loans, treasury services).

•	Independent Sales Organizations (ISOs)—These providers typically use a sales force to sell payment services to businesses and organizations (at a retail price) in a specific market segment or geographic region. ISOs typically outsource merchant acquiring functions and some back office support functions to a bank or non-bank merchant acquirer (at a wholesale price).

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•	Other Acquirers—These providers are typically less established and early-stage vendors seeking to offer new payment methods and devices, such as healthcare organizations creating their own technology for electronic payments.

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•	Cross-sell Opportunities: We provide our distribution partners with the opportunity to market new products as they become available, making available new content that enhances the value of our distribution partners to their members.

•	Event Participation: We identify opportunities to engage with client opportunities through event participation, including by sponsoring luncheons, attending tradeshows, and presenting at user conferences.

•	Electronic Marketing: Our marketing team utilizes a variety of marketing techniques to enhance the awareness of our offerings to the distribution partner network, which align with our outbound sales effort and are intended to monitor the level of client engagement.

•	Content Development: Our sales and marketing team partners with our distribution network to identify key topics of interest to their members, and we intend to continue work to craft new content covering popular topics related to the electronic payment industry.

•	Incentive Programs: Our sales and marketing team works directly with our distribution partners to launch incentive programs intended to increase new referral activity through a variety of competitions and programs implemented each year.

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•	integrate with a broad number of client business management systems;

•	perform a broad range of risk management, transaction processing and value-added services beneficial to our clients;

•	increase convenience to our clients;

•	provide ease of use and greater functionality for our clients; and

•	offer PCI-compliant security and extensive reporting tools.

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•	i3 Portal: i3 Portal is a web-based application with the ability to process payment card, ACH and check sales, schedule recurring payments and report on transactions processed.

•	i3 API Suite: i3 API Suite is a robust set of APIs available through a developer portal allowing ISVs to easily integrate traditional merchant processing, check and ACH as well as PayFac processing.

•	Traditional Merchant Processing: Burton Platform supports the routing of transactions in real-time to the appropriate back-end processing system for authorization and settlement, while our front-end API supports

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•	ACH Processing: Burton Platform supports ACH as well as remote deposit capture and Check 21 capability. This system communicates with check processors and originating depository financial institutions (ODFIs) to handle payment submission from account information, check MICR scanners and Check 21 image scanners.

•	PayFac Merchant Processing: Burton Platform enables our PayFac solution to allow ISVs to quickly onboard new accounts, use dynamic pay-out to handle complex payment models and provide enhanced reconciliation reporting to their customers.

•	i3 Microservices: The i3 Microservices subsystem is intended to be a suite of tools to help ISVs bring incremental functionality to their applications including tokenization, recurring payment and hosted application with digital signature, automated onboarding and fraud protection. These components remain under development, but many are available already on Burton Platform.

•	i3 Tool Set: We expect our i3 Tool Set within Burton Platform to permit ISVs to add complete sub-systems to their software to bring additional value to their customers. We expect these components to include invoice/bill presentment and payment, event management and forms management all using Single Sign On (SSO) and centralized identity management.

•	i3 Enterprise: We intend i3 Enterprise to integrate the operational components of our business and to provide a comprehensive proprietary system designed to strengthen client accounts sales with (a) faster account onboarding, (b) new management features, and (c) enhanced reporting. We expect this solution to include:

–	CRM: A lead / opportunity tracking system for internal sales and agent partners to increase the volume of new client accounts and maintain existing accounts;

–	Automated Account Boarding: Automated boarding (including KYC and OFAC checks) on the Burton Platform system as well as third-party processors and gateways;

–	Client Support and Retention: Sophisticated reporting to enable troubleshooting of client issues;

–	Risk Management and Fraud Monitoring: Advanced tools which will use activity rules for both pre-authorization and pre-settlement transactions;

–	Dispute and Chargeback Monitoring: An online system for logging disputes and tracking status; and

–	Residual Reporting: Calculations and financial reporting to track commissions.

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(1)	trust, including a strong reputation for quality service and trusted distribution partners;

(2)	convenience, such as speed in approving applications, client onboarding and dispute resolution;

(3)	service, including product functionality, value-added solutions and strong customer support; and

(4)	economics, including fees charged to clients and residuals and incentives offered to distribution partners.

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•	Alexandria, VA

•	Canton, OH

•	Cincinnati, OH

•	Centennial, CO

•	Honolulu, HI

•	Long Beach, CA

•	New York, NY

•	Owensboro, KY

•	San Diego, CA

•	Santa Barbara, CA

•	Seattle, WA

•	Shamokin Dam, PA

•	Wellington, FL

•	Wixom, MI

•	Woodstock, GA.

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•	our Board of Directors will not be classified, with each of our directors subject to re-election annually;

•	we expect that a majority of our directors will satisfy the Nasdaq listing standards for independence;

•	generally, all matters to be voted on by stockholders will be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all stockholders present in person or represented by proxy, voting together as a single class;

•	we intend to comply with the requirements of the Nasdaq marketplace rules, including having committees comprised solely of independent directors; and

•	we do not have a stockholder rights plan.

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•	evaluating the performance, independence and qualifications of our independent auditors and determining whether to retain our existing independent auditors or engage new independent auditors;

•	reviewing and approving the engagement of our independent auditors to perform audit services and any permissible non-audit services;

•	reviewing our annual and quarterly financial statements and reports and discussing the statements and reports with our independent auditors and management;

•	reviewing with our independent auditors and management significant issues that arise regarding accounting principles and financial statement presentation, and matters concerning the scope, adequacy and effectiveness of our financial controls;

•	reviewing with management and our auditors any earnings announcements and other public announcements regarding material developments;

•	establishing procedures for the receipt, retention and treatment of complaints we receive regarding accounting, internal accounting controls or auditing matters and other matters;

•	preparing the report of the Audit Committee that the SEC requires in our annual proxy statement;

•	overseeing risks associated with financial matters such as accounting, internal controls over financial reporting and financial policies;

•	reviewing and providing oversight with respect to any related party transactions and monitoring compliance with our code of ethics; and

•	reviewing and evaluating, at least annually, the performance of the Audit Committee, including compliance of the Audit Committee with its charter.

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•	reviewing and recommending to our Board of Directors the compensation and other terms of employment of our executive officers;

•	reviewing and recommending to our Board of Directors performance goals and objectives relevant to the compensation of our executive officers;

•	evaluating and approving the equity incentive plans, compensation plans and similar programs advisable for us, as well as modification or termination of existing plans and programs;

•	evaluating and recommending to our Board of Directors the type and amount of compensation to be paid or awarded to Board members;

•	administering our equity incentive plans;

•	reviewing and recommending to our Board of Directors policies with respect to incentive compensation and equity compensation arrangements;

•	reviewing the competitiveness of our executive compensation programs and evaluating the effectiveness of our compensation policy and strategy in achieving expected benefits to us;

•	evaluating and overseeing risks associated with compensation policies and practices;

•	reviewing and recommending to our Board of Directors the terms of any employment agreements, severance arrangements, change in control protections and any other compensatory arrangements for our executive officers and other members of senior management;

•	preparing the report of the Compensation Committee that the SEC requires in our annual proxy statement;

•	reviewing the adequacy of its charter on an annual basis; and

•	reviewing and evaluating, at least annually, the performance of the Compensation Committee, including compliance of the Compensation Committee with its charter.

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•	Gregory Daily, Chief Executive Officer;

•	Clay Whitson, Chief Financial Officer; and

•	Rick Stanford, President.

(1)	The salary paid to Mr. Daily equals the employee cost of Mr. Daily’s health insurance premium.

(2)	Represents discretionary cash incentive bonuses paid to each of our named executive directors in May 2017.

(3)

In fiscal year 2017, Mr. Whitson and Mr. Stanford were each granted an aggregate of 135,113 Class P units (35,113 units were granted on November 29, 2016, and 100,000 units were granted on August 10, 2017), and no Class P units were granted to Mr. Daily. The Class P units cliff vest three years from the anniversary of the applicable grant date, subject to the individual’s continued employment with i3 Verticals, LLC. The Class P units represent a right to a fractional portion of the profits and distributions of i3 Verticals, LLC in excess of a “participation threshold” that is set equal to an amount, as determined by the Board, that would be distributable to the members if immediately prior to the grant of the Class P units, i3 Verticals, LLC sold all of its assets for fair market value, paid all of its liabilities, and liquidated. As the Class P units issued to Messrs. Whitson and Stanford were issued at a participation threshold above the valuation of i3 Verticals, LLC on the grant date, the grant date fair value computed in accordance with ASC Topic 718 is zero.

(4)	Represents health insurance premiums paid by i3 Verticals, LLC.

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(1)	There is no public market for the Class P units. For purposes of this disclosure, we have valued the Class P units using a third-party valuation of the value per share of Class P units as of September 30, 2017. The amount reported above under the heading “Market Value of Profits Interests That Have Not Vested” reflects the intrinsic value of the profits interests as of September 30, 2017.

•

Base Salaries: There were no salary changes for Messrs. Daily, Whitson and Stanford for fiscal year 2018. Mr. Daily will continue to receive a nominal salary to cover the cost of health insurance. Messrs. Whitson and Stanford will continue to receive base salaries of $200,000 and $240,000, respectively. Upon completion of the offering, Mr. Daily’s nominal salary will remain unchanged and the salaries for Messrs. Whitson and Stanford will increase to $225,000 and $275,000, respectively.

•

Annual Cash Incentive Awards: Consistent with its historical practice of awarding cash incentive awards following each calendar year, in March 2018, the compensation committee of i3 Verticals, LLC determined it appropriate to approve the following cash incentive bonuses to the named executive officers: no bonus for Mr. Daily, $50,000 for Mr. Whitson and $60,000 for Mr. Stanford. The annual incentive bonuses awarded to each named executive officer in March 2018 were ultimately based on a discretionary performance evaluation conducted by our compensation committee and Chief Executive Officer, in consultation with other executive officers. The determination involved an analysis of both (i) the Company’s overall performance, including significant growth in fiscal year 2017 and (ii) the performance of the individual officer and his contributions to the Company. The compensation committee decided, in consultation with Mr. Daily, to award no bonus to Mr. Daily due to his considerable ownership share in our Company.

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(1)	we at all times maintain a ratio of one common unit we own, directly or indirectly, for each share of Class A common stock we issue, and

(2)	i3 Verticals, LLC at all times maintains (a) a one-to-one ratio between the number of shares of Class A common stock we issue and the number of common units we own and (b) a one-to-one ratio between the number of shares of Class B common stock owned by the Continuing Equity Owners and the number of common units owned by the Continuing Equity Owners.

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(1)	any registration statement pursuant to which the resale of the Class A common stock to be registered for such Continuing Equity Owner at or immediately following the consummation of the redemption shall have ceased to be effective pursuant to any action or inaction by the SEC or no such resale registration statement has yet become effective;

(2)	we failed to cause any related prospectus to be supplemented by any required prospectus supplement necessary to effect such redemption;

(3)	we exercised our right to defer, delay or suspend the filing or effectiveness of a registration statement and such deferral, delay or suspension shall affect the ability of such Continuing Equity Owner to have its Class A common stock registered at or immediately following the consummation of the redemption;

(4)	such Continuing Equity Owner is in possession of any material non-public information concerning us, the receipt of which results in such Continuing Equity Owner being prohibited or restricted from selling Class A common stock at or immediately following the redemption without disclosure of such information (and we do not permit disclosure);

(5)	any stop order relating to the registration statement pursuant to which the Class A common stock was to be registered by such Continuing Equity Owner at or immediately following the redemption shall have been issued by the SEC;

(6)	there shall have occurred a material disruption in the securities markets generally or in the market or markets in which the Class A common stock is then traded;

(7)	there shall be in effect an injunction, a restraining order or a decree of any nature of any governmental entity that restrains or prohibits the redemption;

(8)	we shall have failed to comply in all material respects with our obligations under the Registration Rights Agreement, and such failure shall have affected the ability of such Continuing Equity Owner to consummate the resale of the Class A common stock to be received upon such redemption pursuant to an effective registration statement, as applicable; or

(9)	the redemption date would occur three business days or less prior to, or during, a black-out period.

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•	the timing of any future redemptions or exchanges—for instance, the increase in any tax deductions will vary depending on the fair value, which may fluctuate over time, of the depreciable or amortizable assets of i3 Verticals, LLC at the time of each redemption or exchange;

•

the price of shares of our Class A common stock when we purchase common units from the Continuing Equity Owners in connection with this offering and when redemptions or exchanges of common units occur in the future—the Basis Adjustments, as well as any related increase in any tax deductions, are directly related to the price of shares of our Class A common stock at the time of such purchases or future redemptions or exchanges;

•	the extent to which such redemptions or exchanges are taxable—if a redemption or exchange is not taxable for any reason, increased tax deductions will not be available; and

•

the amount and timing of our income—the Tax Receivable Agreement generally will require us to pay 85% of the tax benefits as and when those benefits are treated as realized under the terms of the Tax Receivable Agreement. If i3 Verticals, Inc. does not have taxable income, we generally will not be required (absent a change of control or other circumstances requiring an early termination payment and treating any outstanding common units held by members other than i3 Verticals, Inc. as having been exchanged for Class A common stock for purposes of determining such early termination payment) to make payments under the Tax Receivable Agreement for that taxable year because no tax benefits will have been actually realized. However, any tax benefits that do not result in realized tax benefits in a given taxable year will likely generate tax attributes that may be used to generate tax benefits in future taxable years. The use of any such tax attributes will result in payments under the Tax Receivable Agreement.

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•	we have been or are to be a participant;

•	the amount involved exceeded or will exceed $120,000; and

•	any of our directors, executive officers, beneficial holders of more than 5% of our capital stock, or any member of their immediate family or person sharing their household had or will have a direct or indirect material interest.

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•	each person, or group of affiliated persons, who is known by us to own more than 5% of our Class A or Class B common stock;

•	each of the directors, director nominees and named executive officers individually; and

•	all directors, director nominees and executive officers as a group.

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*	Represents beneficial ownership of less than 1% of our outstanding common stock.

(1)

Each common unit (other than common units we hold and                  common units held by certain of the former Class P unit profits interests holders that are initially subject to time-based or service-based vesting requirements) is redeemable from time to time at each holder’s option for, at our election, newly-issued shares of our Class A common stock on a one-for-one basis or a cash payment equal to a volume weighted average market price of one share of Class A common stock for each common unit redeemed, in each case, in accordance with the terms of the i3 Verticals LLC Agreement; provided that, at our election, we may effect a direct exchange by i3 Verticals, Inc. of such Class A common stock or such cash, as applicable, for such common units. The Continuing Equity Owners may exercise such redemption right for as long as their common units remain outstanding. See “Certain Relationships and Related Party Transactions—i3 Verticals LLC Agreement.” In these tables, beneficial ownership of common units has been reflected as beneficial ownership of shares of our Class A common stock for which such common units may be exchanged. When a common unit is exchanged by a Continuing Equity Owner who holds shares of our Class B common stock, a corresponding share of Class B common stock will be canceled.

(2)

Represents the percentage of voting power of our Class A common stock and Class B common stock voting as a single class. Each share of Class A common stock and each share of Class B common stock entitles the registered holder thereof to one vote per share on all matters presented to stockholders for a vote generally, including the election of directors. The Class A common stock and Class B common stock will vote as a single class on all matters except as required by law or the amended and restated certificate of incorporation.

(3)

Includes (a)          shares of Class A common stock held by First Avenue Partners II, L.P., (b)          shares of Class A common stock held by First Avenue-ETC Partners, L.P., (c)          shares of Class A common stock held by Front Street Equities, LLC (together with First Avenue Partners II, L.P. and First Avenue-ETC Partners, L.P., “First Avenue Partners”). Front Street Equities, LLC is the General Partner of First Avenue Partners II, L.P. and First Avenue-ETC Partners, L.P. Mr. Wilds serves as the sole limited partner and managing member of First Avenue Partners II, L.P., as the managing member of First Avenue-ETC Partners, L.P., and as the sole member of Front Street Equities, LLC. Decisions regarding the voting or disposition of the shares held by First Avenue Partners are made by Mr. Wilds. The address of First Avenue Partners is 30 Burton Hills Blvd, Ste 550, Nashville, Tennessee.

(4)

Includes          shares of Class A common stock held by Harbert Mezzanine Partners III, L.P. HMP III GP, LLC is the General Partner of Harbert Mezzanine Partners III, L.P. Decisions regarding the voting or disposition of the shares held by the foregoing are made by an investment committee or committees (or authorized sub-committees or designees thereof). The current voting members of these committees are: John Harrison, Rob Bourquin, John Scott, Mike Luce, Sonja Keeton and Trey Ferguson. Each of Mr. Harrison, Mr. Bourquin, Mr. Scott, Mr. Luce, Ms. Keeton and Mr. Ferguson disclaims beneficial ownership of the Class A common stock held by HMP III

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(5)

Includes (a)          shares of Class A common stock held by CCSD II, L.P., (b)          shares of Class A common stock held by Claritas Capital Specialty Debt Fund, L.P., (c)          shares of Class A common stock held by CF i3 Corporation. CCSD GP II, LLC is the general partner of CCSD II, L.P. and CCSD GP LLC is the general partner of Claritas Capital Specialty Debt Fund, L.P. Decisions regarding the voting or disposition of the shares held by the CCSD II, L.P. and Claritas Capital Specialty Debt Fund, L.P. are made by an investment committee or committees (or authorized sub-committees or designees thereof). The current voting members of these committees are: Burton Harvey, Lee Ballew and Mark McManigal. Decisions regarding the voting or disposition of the shares held by the CF i3 Corporation are made by its officers, Mr. Harvey and Mr. Ballew. Each of Mr. Harvey, Mr. Ballew and Mr. McManigal disclaims beneficial ownership of the Class A common stock held by CCSD II, L.P., Claritas Capital Specialty Debt Fund, L.P. and CF i3 Corporation. The address of CCSD II, L.P., Claritas Capital Specialty Debt Fund, L.P., CF i3 Corporation, CCSD GP, LLC and CCSD GP II, LLC is 40 Burton Hills Blvd, Ste 250, Nashville, Tennessee.

(6)

Includes (a)          shares of Class A common stock held of record by Greg Daily and Collie Daily, Mr. Daily’s spouse, of which Mr. Daily has shared voting and investment power, (b)          shares of Class A common stock held of record by Courtney Daily, Mr. Daily’s daughter and (c)          shares of Class A common stock held by Daily Family Investments, LLC, of which Mr. Daily serves as tax matters member. Decisions regarding the voting or disposition of the shares held by the Daily Family Investments, LLC are made by its sole manager, Jeffrey Gould. Each of Mr. Daily and Mr. Gould disclaims beneficial ownership of the Class A common stock held by Daily Family Investments, LLC. The address of Daily Family Investments, LLC is 5353 Hillsboro Pike, Nashville, Tennessee.

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•	prior to such time, our Board of Directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

•	upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the votes of our voting stock outstanding at the time the transaction commenced, excluding certain shares; or

•	at or subsequent to that time, the business combination is approved by our Board of Directors and by the affirmative vote of holders of at least 66 2/3% of the votes of our outstanding voting stock that is not owned by the interested stockholder.

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in the case of an annual meeting of stockholders, not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to the date of such annual meeting and not later than the close of business on the later of the 90th day prior to the date of such annual meeting or, if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the 10th day following the day on which we first make a public announcement of the date of such meeting; and

•

in the case of a special meeting of stockholders called for the purpose of electing directors, not earlier than the close of business on the 120th day prior to such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the date on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting was made, whichever first occurs.

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•	1% of the number of shares of our Class A common stock then outstanding, which will equal approximately                shares immediately after this offering; or

•	the average weekly trading volume of our Class A common stock on the Nasdaq Global Select Market during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale;

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•	a non-resident alien individual, other than certain former citizens and residents of the United States subject to tax as expatriates;

•	a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of a jurisdiction other than the United States or any state or political subdivision thereof or the District of Columbia;

•	a trust if it (1) is not subject to the primary supervision of a court within the United States, or no United States persons have the authority to control all substantial decisions of the trust, and (2) does not have a valid election in effect under applicable United States Treasury regulations to be treated as a United States person; or

•	an estate, other than an estate the income of which is subject to U.S. federal income taxation regardless of its source.

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•	the gain is effectively connected with a trade or business of the non-U.S. holder in the United States, (and, if required by an applicable income tax treaty, is attributable to a United States permanent establishment of the non-U.S. holder);

•	the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of that disposition, and certain other conditions are met; or

•	we are or have been a U.S. real property holding corporation, as defined in the Code, and the non-U.S. holder held, directly or indirectly, more than 5% of our common stock at any time within the shorter of the five-year period ending on the date of the disposition and the non-U.S. holder’s holding period, and certain other conditions are met.

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•	the history of, and prospects for, our company and the industry in which we compete;

•	our past and present financial information;

•	an assessment of our management; its past and present operations, and the prospects for, and timing of, our future revenues;

•	the present state of our development;

•	the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours.

•	Stabilizing transactions permit bids to purchase shares of common stock so long as the stabilizing bids do not exceed a specified maximum, and are engaged in for the purpose of preventing or retarding a decline in the market price of the common stock while the offering is in progress.

•

Overallotment transactions involve sales by the underwriters of shares of common stock in excess of the number of shares the underwriters are obligated to purchase. This creates a syndicate short position which may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the overallotment option. In a naked short position, the number of shares involved is greater than the number of shares in the overallotment option. The underwriters may close out any short position by exercising their overallotment option and/or purchasing shares in the open market.

•

Syndicate covering transactions involve purchases of common stock in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared with the price at which they may purchase shares through exercise of the overallotment option. If the underwriters sell more shares than could be covered by exercise of the overallotment option and, therefore, have a naked short position, the position can be closed out only by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that after pricing there could be downward pressure on the price of the shares in the open market that could adversely affect investors who purchase in the offering.

•	Penalty bids permit the Representatives to reclaim a selling concession from a syndicate member when the common stock originally sold by that syndicate member is purchased in stabilizing or syndicate covering transactions to cover syndicate short positions.

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•

it has not made or will not make an offer of the securities to the public in the United Kingdom within the meaning of section 102B of the Financial Services and Markets Act 2000 (as amended) (FSMA) except to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities or otherwise in circumstances which do not require the publication by us of a prospectus pursuant to the Prospectus Rules of the Financial Services Authority (FSA);

•

it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) to persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or in circumstances in which section 21 of FSMA does not apply to us; and

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

•	to any legal entity which is a qualified investor, as defined in the European Prospectus Directive;

•	to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the European Prospectus Directive), subject to obtaining the prior consent of the relevant dealer or dealers nominated by us for any such offer; or

•	in any other circumstances falling within Article 3(2) of the European Prospectus Directive,

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(1)	This debt matures on the earlier of October 30, 2022 or 181 days before the maturity date of the Company’s notes payable in aggregate principal amount of $10,500 (the “Mezzanine Notes”).

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(a)	Processing margin is equal to revenue less interchange and network fees, less other costs of services. $6,728 and $70 of residual expense, a component of other costs of services, are added back to the Merchant Services segment and Other category, respectively.

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(a)	Processing margin is equal to revenue less interchange and network fees, less other costs of services. $5,534 and $170 of residual expense, a component of other costs of services, are added back to the Merchant Services segment and Other category, respectively.

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(a)	Processing margin is equal to revenue less interchange and network fees, less other costs of services. $11,875 and $223 of residual expense, a component of other costs of services, are added back to the Merchant Services segment and Other category, respectively.

(a)	Processing margin is equal to revenue less interchange and network fees, less other costs of services. $8,391 and $467 of residual expense, a component of other costs of services, are added back to the Merchant Services segment and Other category, respectively.

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*	To be filed by amendment.

#	Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. i3 Verticals, Inc. hereby undertakes to furnish supplementally copies of any of the omitted schedules and exhibits upon request by the Securities and Exchange Commission.

+	Denotes a management contract or compensatory plan or arrangement.

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1.

Joinder to the Tax Receivable Agreement. Upon the execution of this Joinder by the undersigned and delivery hereof to the Corporation, the undersigned hereby is and hereafter will be a Member under the Tax Receivable Agreement and a Party thereto, with all the rights, privileges and responsibilities of a Member thereunder. The undersigned hereby agrees that it shall comply with and be fully bound by the terms of the Tax Receivable Agreement as if it had been a signatory thereto as of the date thereof.

2.	Incorporation by Reference. All terms and conditions of the Tax Receivable Agreement are hereby incorporated by reference in this Joinder as if set forth herein in full.

3.	Address. All notices under the Tax Receivable Agreement to the undersigned shall be direct to:

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1.01	Defined Terms.

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1.02	Other Interpretive Provisions.

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1.03	Accounting Terms.

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1.05	Times of Day; Rates.

1.06	Letter of Credit Amounts.

2.01	Revolving Loans and Term Loan.

2.02	Borrowings, Conversions and Continuations of Loans.

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2.03	Letters of Credit.

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2.04	Swingline Loans.

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2.05	Prepayments.

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2.06	Termination or Reduction of Aggregate Revolving Commitments.

2.07	Repayment of Loans.

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2.08	Interest.

2.09	Fees.

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(b)	Other Fees.

2.10	Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate.

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2.11	Evidence of Debt.

2.12	Payments Generally; Administrative Agent’s Clawback.

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2.13	Sharing of Payments by Lenders.

2.14	Cash Collateral.

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2.15	Defaulting Lenders.

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2.16	Incremental Facility Loans.

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3.01	Taxes.

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3.02	Illegality.

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3.03	Inability to Determine Rates.

3.04	Increased Costs; Reserves on Eurodollar Rate Loans.

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3.05	Compensation for Losses.

3.06	Mitigation Obligations; Replacement of Lenders.

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3.07	Survival.

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5.06	Litigation.

5.07	No Default.

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5.08	Ownership of Property.

5.09	Environmental Compliance.

5.10	Insurance.

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5.11	Taxes.

5.12	ERISA Compliance.

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5.13	Subsidiaries.

5.14	Margin Regulations; Investment Company Act.

5.15	Disclosure.

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5.17	Intellectual Property; Licenses, Etc.

5.18	Solvency.

5.19	Perfection of Security Interests in the Collateral.

5.20	Business Locations; Taxpayer Identification Number.

5.21	OFAC.

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5.22	Anti-Corruption Laws.

5.23	No EEA Financial Institution.

6.01	Financial Statements.

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6.02	Certificates; Other Information.

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6.03	Notices.

6.05	Preservation of Existence, Etc.

6.06	Maintenance of Properties.

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6.07	Maintenance of Insurance.

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6.11	Use of Proceeds.

6.12	ERISA Compliance.

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6.13	Additional Guarantors.

6.14	Pledged Assets.

6.15	Anti-Corruption Laws.

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6.16	Post-Closing Matters.

7.01	Liens.

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(f)	Guarantees permitted by Section 7.03;

(g)	Permitted Acquisitions;

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7.03	Indebtedness.

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7.04	Fundamental Changes.

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7.05	Dispositions.

7.06	Restricted Payments.

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7.07	Change in Nature of Business.

7.08	Transactions with Affiliates.

7.09	Burdensome Agreements.

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7.10	Use of Proceeds.

7.11	Financial Covenants.

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7.13	Organization Documents; Fiscal Year; Legal Name, State of Formation and Form of Entity.

7.14	Ownership of Subsidiaries.

7.15	Sale Leasebacks.

7.16	Anti-Corruption Laws.

7.17	Sanctions.

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8.02	Remedies Upon Event of Default.

8.03	Application of Funds.

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9.01	Appointment and Authority.

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9.02	Rights as a Lender.

9.03	Exculpatory Provisions.

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9.04	Reliance by Administrative Agent.

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9.05	Delegation of Duties.

9.06	Resignation of Administrative Agent.

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9.07	Non-Reliance on Administrative Agent and Other Lenders.

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9.08	No Other Duties; Etc.

9.09	Administrative Agent May File Proofs of Claim; Credit Bidding.

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9.10	Collateral and Guaranty Matters.

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9.11	Secured Cash Management Agreements and Secured Hedge Agreements.

9.12	ERISA Matters.

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10.01	The Guaranty.

10.02	Obligations Unconditional.

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10.03	Reinstatement.

10.04	Certain Additional Waivers.

10.05	Remedies.

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10.06	Rights of Contribution.

10.07	Guarantee of Payment; Continuing Guarantee.

10.08	Keepwell.

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11.01	Amendments, Etc.

(a)	no such amendment, waiver or consent shall:

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11.02	Notices; Effectiveness; Electronic Communications.

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11.03	No Waiver; Cumulative Remedies; Enforcement.

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11.04	Expenses; Indemnity; Damage Waiver.

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11.05	Payments Set Aside.

11.06	Successors and Assigns.

(i)	Minimum Amounts.

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(g)	Disqualified Institutions

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11.07	Treatment of Certain Information; Confidentiality.

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11.08	Rights of Setoff.

11.09	Interest Rate Limitation.

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11.10	Counterparts; Integration; Effectiveness.

11.11	Survival of Representations and Warranties.

11.12	Severability.

11.13	Replacement of Lenders.

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11.14	Governing Law; Jurisdiction; Etc.

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11.15	Waiver of Jury Trial.

11.16	No Advisory or Fiduciary Responsibility.

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11.17	Electronic Execution of Assignments and Certain Other Documents.

11.18	USA PATRIOT Act Notice.

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11.19	Subordination of Intercompany Indebtedness.

11.20	Acknowledgement and Consent to Bail-In of EEA Financial Institutions.

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Re:

Credit Agreement (as amended, modified, supplemented and extended from time to time, the “Credit Agreement”) dated as of October 30, 2017 by and among i3 Verticals, LLC, a Delaware limited liability company (the “Borrower”), the Guarantors party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent. Capitalized terms used but not otherwise defined herein have the meanings provided in the Credit Agreement.

1.	On __________, 20__ (a Business Day).

2.	In the amount of $__________.

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TO:	Bank of America, N.A., as [Administrative Agent][Swing Line Lender]

RE:

Credit Agreement, dated as of dated as of October 30, 2017 by and among i3 Verticals, LLC, a Delaware limited liability company (the “Borrower”), the Guarantors party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent (as amended, modified, extended, restated, replaced, or supplemented from time to time, the “Credit Agreement”; capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement)

DATE:	[Date]

2	Specify date of such prepayment.

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¨	Check for distribution to public and private side Lenders

(a)	The Borrower has delivered the year-end audited financial statements required by Section 6.01(a) of the Credit Agreement for the fiscal year of the Borrower ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section.

(a)

The Borrower has delivered the unaudited financial statements required by Section 6.01(b) of the Credit Agreement for the fiscal quarter of the Borrower ended as of the above date. Such consolidated financial statements fairly present the financial condition, results of operations, shareholders’ equity and cash flows of the Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.

(b)	Since ___________ (the date of the last similar certification, or, if none, the Closing Date) no Default or Event of Default has occurred under the Credit Agreement;

(c)	(select one):

¨

Attached hereto are such supplements to Schedules 5.13 (Subsidiaries), 5.17 (IP Rights), 5.20(a) (Locations of Real Property), 5.20(b) (Location of Chief Executive Office, Taxpayer Identification Number, Etc.), 5.20(c) (Changes in Legal Name, State of Formation and Structure) and 5.20(d) (Deposit and Investment Accounts) of the Credit Agreement, such that, as supplemented, such Schedules are accurate and complete as of the date hereof.

¨	No such supplements are required at this time.

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6	Term Loan or Revolving Loans.

7	Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g. “Revolving Commitment,” “Term Loan Commitment,” etc.)

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8	Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

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10	To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement.

11	To be added only if the consent of the Borrower and/or other parties (e.g. L/C Issuer) is required by the terms of the Credit Agreement.

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1.	Definitions.

(b)	In addition, the following terms shall have the meanings set forth below:

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(a)	Instruments/Chattel Paper/Pledged Equity/Control.

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7.	Remedies.

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(i)	with respect to a specified Person,

(A)	any other Person who directly or indirectly Controls, is directly or indirectly Controlled by, or is directly or indirectly under common Control with, the specified Person;

(B)	any other Person who owns any material interest in, is owned as to any material interest by, or is under common ownership as to any material interest with, the specified Person (ownership of any Equity Interest in a Borrower, and of five percent (5%) or more of the voting Equity Interests of any other Person, shall be deemed "material" for this purpose);

(C)	any other Person who serves as a director, manager, officer, partner, executor, trustee, or similar senior management capacity with the specified Person;

(D)	any other Person with respect to which the specified Person serves as a director, manager, officer, partner, executor, trustee, or similar senior management capacity;

(E)	if a Person who is an Affiliate under any of the foregoing requirements is a natural Person, each member of such individual's Immediate Family; and

(F)	each Affiliate of each other Person deemed to be an Affiliate of the specified Person under any of the foregoing provisions;

(ii)	for purposes of this definition, the "Immediate Family" of an individual includes (A) the individual's spouse, (B) any other individual who resides with such individual, and (C) any other individual who is related to such individual or related to a Person described in the foregoing (A) or (B), in each case within the first degree; and

(iii)	notwithstanding the foregoing, Lenders shall not in any event be deemed Affiliates of Borrowers.

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(i)	if pro forma EBITDA immediately before issuing such additional Debt,

(ii)

if pro forma EBITDA immediately before issuing such additional debt, giving effect for any completed acquisitions as if the Company had the benefit of a full year of operations, is less than $15,000,000, then unsecured Debt issued by i3 Verticals after the Closing Date (i) in compliance with all securities Laws and other Laws, (ii) with no payments of principal due prior to the Term Loan Maturity Date, (iii) providing for interest at a rate approved by the Required Lenders, in their reasonable discretion (but in no event at a rate in excess of that accruing on the Term Loans), and (iv) otherwise on terms and conditions approved by the Required Lenders, in their reasonable discretion (approvals under subsections (iii) and (v) shall not be unreasonably withheld, delayed, or conditioned).

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(i)	before and after giving effect to such Acquisition, no Default or Event of Default has occurred and is continuing or would result therefrom, and all representations and warranties of each Borrower set forth in the Loan Documents shall be and remain true and correct in all material respects;

(ii)

before and after giving effect to such Acquisition, on a Pro Forma Basis, Borrowers are in compliance with each of the financial covenants set forth in Article 8, measuring and calculating the financial covenants set forth in Article 8 as of the last day of the most recently ended Fiscal Quarter for which financial statements are required to have been delivered pursuant to Section 6.5(a) or (c) as if such Acquisition had occurred, and any Debt incurred in connection therewith was incurred, on the first (1st) day of the relevant period for testing compliance, and Borrowers shall have delivered to Lenders a pro forma compliance certificate signed by a Responsible Officer certifying to the foregoing at least fifteen (15) days (or such shorter period as Lenders may permit) prior to the date of the consummation of such Acquisition;

(iii)

at least ten (10) days (or such shorter period as Lenders may permit) prior to the date of the consummation of such Acquisition, Borrowers shall have delivered to Lenders notice of such Acquisition, together with historical financial information and analysis with respect to the Person whose stock or assets are being acquired and copies of the acquisition agreement and related documents (including, to the extent required by the underlying acquisition agreement, financial information and analysis, environmental assessments and reports, opinions, certificates and lien searches) and information reasonably requested by any Lenders;

(iv)	such Acquisition is consensual and approved by the board of directors (or the equivalent thereof) of the Person whose stock or assets are being acquired;

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(v)	the Person or assets being acquired is in the same type of business conducted by Borrowers on the date hereof or any business reasonably related thereto;

(vi)	such Acquisition is consummated in compliance with all Laws, and all consents and approvals from any Governmental Authority or other Person required in connection with such Acquisition and the pledge of assets to the Collateral Agent with respect to such Acquisition have been obtained;

(vii)	before and after giving effect to such Acquisition and any Debt incurred in connection therewith, each Borrower is Solvent;

(viii)	after giving effect to such Acquisition and any Debt incurred in connection therewith, Liquidity (that is either unencumbered or in accounts controlled by Collateral Agent) of Borrowers is at least $2,500,000;

(ix)	the Acquisition is for a total purchase price (including management's best estimate at closing of the Acquisition of Contingent Consideration that will ultimately be paid in connection with such Acquisition) below $10,000,000;

(x)	Borrowers shall execute and deliver to execute and deliver, at the closing of the Acquisition (or such longer period as Lenders may permit) all collateral documents and other related documents required under Section 6.20 and within the timeframe described in Section 6.20;

(xi)	Borrowers have delivered to the Lenders a certificate executed by a Responsible Officer certifying that each of the conditions set forth above has been satisfied; and

(xii)	any Acquisition (including management's best estimate at closing of the Acquisition of Contingent Consideration that will ultimately be paid in connection with such Acquisition) that exceeds a purchase price of $3,500,000 will require third party due diligence acceptable to the Lenders.

(i)	Encumbrances securing any of the Obligations;

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(ii)	Encumbrances securing the Senior Loan;

(iii)	Encumbrances presently securing other Debt as described in Schedule 5.11;

(iv)	Encumbrances secunng Purchase Money Security Interests permitted under Section 7.1;

(v)	Encumbrances securing Taxes not yet delinquent or, if reserve has been made therefor as required by GAAP, those which are due but are being contested in good faith by appropriate action promptly initiated and diligently conducted;

(vi)

mechanics', repairmen's, materialmen's, and other like liens arising from isolated transactions by operation of law in the ordinary course of business securing accounts that are not delinquent or that are being contested diligently and in good faith by appropriate proceedings and as to which Borrowers have set aside reserves on their books in accordance with GAAP or the payment of which obligations are otherwise secured in a manner satisfactory to the Required Lenders (to avoid doubt, landlord's liens are not Permitted Encumbrances and Lenders may require their waiver or subordination);

(vii)	zoning ordinances, easements, licenses, reservations, provisions, covenants, conditions, waivers, restrictions, and other such Encumbrances on real property not securing monetary obligations and which are of a type customarily placed on real property and do not materially impair the value of the affected Property;

(viii)	Encumbrances arising in the ordinary course of business by virtue of any contractual, statutory or common law provision relating to banker's liens, rights of set-off or similar rights and remedies covering deposit or securities accounts, but only to the extent securing administrative charges unless otherwise expressly permitted under the applicable Control Agreement;

(ix)	pledges or deposits under workers' compensation, unemployment laws, social security, or other similar statutory obligations made in the ordinary course of business and securing obligations that are not delinquent;

(x)	reasonable and necessary cash deposits made in the ordinary course of business to secure the performance of utility contracts and other such contracts for which pledges or deposits are customary; and

(xi)	Encumbrances granted to any settlement bank, sponsor bank and/or processor in funds, instruments or deposit accounts held by such entities, but only so

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(i)	establish the existence and authority of all Borrowers and other Persons executing Loan Documents;

(ii)	evidence the Obligations;

(iii)	secure the Obligations with the real and personal property Collateral provided by Borrowers, with the priority required in this Agreement;

(iv)	provide assurances to Lenders from landlords of Borrowers' locations (if not available at the Closing, such assurances shall be delivered within forty-five (45) days after the Closing);

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(v)	provide Control Agreements with respect to Borrowers' deposit and securities accounts, approved by Lenders (if not available at the Closing, such documents shall be delivered within forty-five (45) days after the Closing);

(vi)	evidence that the required key man insurance on Greg Daily is in effect and pledged to secure the Obligations;

(vii)	secure the Obligations with the Equity Interests of i3 Verticals, with the priority required in this Agreement;

(viii)	evidence that all other required insurance is in effect;

(ix)	evidence the issuance of the Warrants;

(x)	evidence Borrowers' counsel's opinions as to customary matters;

(xi)	comply with all applicable SBA Laws;

(xii)	evidence the subordination of the Daily Loan; and

(xiii)	otherwise serve such purposes incidental to the Closing as Lenders or Collateral Agent may reasonably require.

(i)	satisfactory completion of financial, accounting, tax, management, legal, environmental, insurance, industry, compliance, vendor, customer, and other due diligence by Lenders and their diligence consultants;

(ii)	Lenders' satisfaction that the combined EBITDA of Borrowers (including the historical EBITDA of USDC, adjusted as Lenders may require) will be at least $2,100,000 at the Closing;

(iii)	Lenders' approval of the final sources and uses of funds, including transaction fees;

(iv)	Lenders' approval of employment agreements, non-compete agreements, non-solicitation agreements, and other such agreements with all key employees of Borrowers;

(v)	Lenders' approval of all Material Contracts;

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(vi)	the approval of Lenders' Investment Committees shall have been obtained;

(vii)	there must be no Material Adverse Change respecting a Borrower since the date of their applicable Financial Statements;

(viii)	Borrowers' payment of all of Lenders' reasonable out-of-pocket diligence expenses and the fees and expenses of Lenders' counsel; and

(ix)	such other conditions as Lenders or Collateral Agent may reasonably require.

(i)	all of the documents that were conditions to the Initial Advance and additional documents to in like manner evidence and secure the Obligations and Collateral Agent's security interests and liens securing the Obligations, taking into account the acquisition of assets of USDC Partners;

(ii)	copies of all documents evidencing the Acquisition of USDC Partners;

(iii)	a written request for advance at least ten (10) days prior to the date on which the closing of the Acquisition of USDC Partners, and the Second Advance, are to occur; and

(iv)	a closing certificate issued by Borrowers as of the date of the Second Advance, confirming (i) the accuracy of all representations and warranties made in this Agreement (updated to be effective as of the making of the Second Advance and giving effect to the Acquisition of USDC Partners) and (ii) the absence of any Default, any Event of Default, and any Material Adverse Change.

(i)	Lenders' satisfaction that all conditions to the Initial Advance listed in Section 4.2 were satisfied and, to the extent applicable, remain so as ofthe making of the Second Advance (to avoid doubt, this does not require additional Investment Committee approval);

(ii)	Lenders' satisfaction that the combined EBITDA of Borrowers (including the historical EBITDA of USDC Partners, adjusted as Lenders may require) will be at least $2,100,000 at the Closing;

(iii)	the absence of a Default or Event of Default; and

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(iv)	the absence of a Material Adverse Change.

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(a)

Capitalization Table. Schedule 5.32 describes (i) the Equity Interests of Borrowers and holders thereof, as outstanding and also on a fully-diluted basis (assuming conversion of all convertible securities and the exercise of all options, regardless of pricing or conditions), (ii) with respect to all outstanding warrants, options, and other such rights, the total number of shares or interests issuable upon exercise thereof, the exercise prices thereunder, and the expiration date thereof, and (iii) any obligation (contingent or otherwise) to repurchase, redeem, retire, or otherwise acquire any of its Equity Interests.

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(b)	Phantom Equity. Schedule 5.32 also lists all of Borrowers' obligations to payor otherwise compensate any employee or other Person based upon the enterprise value of Borrowers or occasioned by a sale of assets or equity of a Borrower under any phantom equity plan, employment agreement with a participation feature, or other such Contract.

(c)	Validity of Equity Interests. All of the outstanding Equity Interests of Borrowers are validly issued, fully paid, and nonassessable.

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(i)	all taxes that they may be required to pay because of the execution, delivery, filing, performance or enforcement of the Loan Documents or the Obligations, excepting taxes based upon the income of Lenders or franchise, excise, excess profits or similar tax on Lenders;

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(ii)	all reasonable costs of the preparation of this Agreement and any other related documents and the administration of the Obligations (except for Lenders' usual overhead incurred in the acceptance and processing of payments, the routine review of financial statements, review of certifications, and reports);

(iii)	all reasonable costs of preserving, insuring, preparing for sale (whether by improvement, repair, or otherwise), or selling any Collateral securing the Obligations;

(iv)	the reasonable cost of the assessment of any Event of Default, the taking of any action in the enforcement of rights under the Loan Documents (whether or not involving litigation), and all court costs and other reasonable costs of collecting any of the Obligations;

(v)

all reasonable costs arising from any other litigation, investigation, or administrative proceeding (whether or not Lenders or Collateral Agent are parties thereto) that Lenders or Collateral Agent may incur as a result of the Obligations or as a result of their association with a Borrower, including, without limitation, expenses incurred in connection with a case or proceeding involving a Borrower under any Debtor Relief Laws; and

(vi)	with respect to any of the foregoing matters, the reasonable fees and expenses of Lenders' and Collateral Agent's attorneys.

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(i)	the Obligations;

(ii)	any Senior Loan outstanding at the time of determination;

(iii)	Capital Leases and Debt secured by Purchase Money Security Interests in the aggregate principal amount not exceeding $250,000;

(iv)	endorsements of negotiable or similar instruments for collection or deposit in the ordinary course of business;

(v)	Debt listed on Schedule 5.11;

(vi)	Debt secured by Permitted Encumbrances;

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(vii)	Debt arising in the ordinary course of business in relation to performance, surety, statutory, or appeal bonds;

(viii)	the Daily Loan;

(ix)	Subordinated Seller Debt;

(x)	Anticipated Additional Debt;

(xi)	Debt among Bonowers and Guaranties by Borrowers for obligations of other Bonowers;

(xii)	Other Debt not exceeding $100,000 in the aggregate; and

(xiii)	Contingent Consideration incuned in connection with a Permitted Acquisition.

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(j)	Discontinuance of Business. A Borrower's dissolution or discontinuance of its usual business.

(k)	Senior Loan Default. The occurrence of an "Event of Default" under a Senior Loan.

(n)	Insolvency. Borrowers are no longer Solvent on a consolidated basis.

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(o)	Insurance. A Borrower's failure to maintain any insurance required in any Loan

(s)	Material Adverse Change. The occurrence of a Material Adverse Change.

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10.3	Exculpatory Provisions.

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(i)	shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default has occurred and is continuing;

(ii)	shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that Collateral Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of Lenders as shall be

(iii)	shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to a Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as Collateral Agent or any of its Affiliates in any capacity.

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(i)

to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans 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 Lenders and Collateral Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of Lenders and Collateral Agent and their respective agents and counsel and all other amounts due Lenders and Collateral Agent under the Loan Documents that are allowed in such judicial proceeding); and

(ii)	to collect and receive any monies or other Property payable or deliverable on any such claims and to distribute the same; and

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(i)

to release any Encumbrance on any Property granted to or held by Collateral Agent under any Loan Document (x) upon termination of all commitments and payment in full of all Obligations (other than contingent indemnification obligations), (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 Loan Documents, or (z) if approved, authorized, or ratified in writing by the Required Lenders;

(ii)	to subordinate any Encumbrance on any Property granted to or held by Collateral Agent under any Loan Document to the holder of any Encumbrance on such Property that is permitted by this Agreement; and

(iii)	to release a Borrower from its liability for the Obligations if such Person ceases to be an Affiliate of the remaining Borrower(s) as a result of a transaction permitted under the Loan Documents.

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(i)	if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(ii)	the provisions of this paragraph shall not be construed to apply to (x) any payment made by Borrowers pursuant to and in accordance with the express terms of this Agreement, or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans, other than to Borrowers (as to which the provisions of this paragraph shall apply).

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1.	Amended and Restated Term Loan Agreement and Revolving Loan Agreement dated as of the date hereof (the “Senior Loan Agreement”) among Borrowers, certain lenders signatory thereto, and First Bank, as Administrative Agent for such lenders. Each Borrower has granted a security interest in substantially all its assets to secure each Borrower’s obligations under the Senior Loan Agreement.

2.	Third Amended and Restated 10% Subordinated Convertible Promissory Note dated of even date herewith, in the principal sum of $1,000,000 executed by i3 in favor of Gregory S. Daily and Collie F. Daily.

3.	Term Notes dated February 14, 2014, in the aggregate principal sum of $16,608,000, and Term Notes dated June 30, 2014, in the aggregate principal sum of $1,000,000 executed by i3 in favor of various Friends and Family investors, pursuant to that certain Master Note Purchase Agreement dated as of February 14, 2014.

4.	Subordinated Promissory Note dated May 9, 2014, in the principal sum of $1,000,000 executed by CP-APS in favor of Advanced Payment Solutions, LLC

5.	Subordinated Promissory Note dated May 23, 2014, in the principal sum of $500,000 executed by CP-DBS in favor of Data Business Systems of Colorado, Inc.

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1.	i3 Verticals, LLC

a.	40 Burton Hills Blvd, Suite 200, Nashville, TN 37215*

2.	CP-TOPS, LLC

a.	2500 Cumberland Parkway, Atlanta, GA 30339

3.	CP-USDC, LLC

a.	800 Westchester Avenue, Rye Brook, NY 10573

b.	2761 E. Skelly Drive, Suite 105, Tulsa, OK 74015

4.	CP-PS, LLC

a.	n/a

5.	CP-APS, LLC

a.	40 Burton Hills Blvd, Suite 200, Nashville, TN 37215*

6.	CP-DBS, LLC

a.	6622 Esmerelda, Castle Rock, CO 80108**

7.	i3 Verticals Management Services, Inc.

a.	n/a

8.	i3-RS, LLC

a.	115 East 23rd Street, Number 325, New York, New York 10010

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1.	i3 Verticals, LLC

2.	CP-TOPS, LLC

a.	www.trustonepaymentservices.com

b.	www.trustoneps.com

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3.	CP-USDC, LLC

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1.	i3 Verticals, LLC

a.	100% of Equity Interests of CP-TOPS, LLC, CP-USDC, LLC, CP-PS, LLC, CP-APS, LLC, CP-DBS, LLC, i3 Verticals Management Services, Inc., and i3-RS, LLC

2.	CP-TOPS, LLC

a.	None

3.	CP-USDC, LLC

a.	None

4.	CP-PS, LLC

a.	None

5.	CP-APS, LLC

a.	None

6.	CP-DBS, LLC

a.	None

7.	i3 Verticals Management Services, Inc.

a.	None

8.	i3-RS, LLC

a.	None

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1.	i3 Verticals, LLC

a.	Third Amended and Restated 10% Subordinated Convertible Promissory Note dated August 14, 2013, in the principal sum of $1,000,000 executed by i3 Verticals, LLC in favor of Gregory S. Daily and Collie F. Daily.

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ii.	No outstanding warrants, options, and other such rights, other than Mezzanine Lenders warrants in (i) above.

iii.	Section 11.1 of the LLC Agreement provides for a redemption of the Class A Units held by FAP out of funds lawfully available therefor at any time on or after the date Gregory S. Daily ceases to be active in the Company as President and CEO.

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1.	Employment Agreement dated August 14, 2013, between CP-USDC, LLC and Peter Gatof

2.	Employment Agreement dated May 9, 2014, between CP-APS, LLC and Jennifer Brinkman

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1.	i3 Verticals, LLC

a.	Board of Directors

i.	David M. Wilds

ii.	Timothy McKenna

iii.	John C. Harrison

iv.	Gregory S. Daily

v.	Clay Whitson

vi.	Thomas H. Bryant

b.	Management

i.	Gregory S. Daily, President and CEO

ii.	Clay Whitson, CFO and Secretary

iii.	Scott Meriwether, Vice President

2.	CP-TOPS, LLC

a.	Management

i.	Gregory S. Daily, President and CEO

ii.	Clay Whitson, CFO and Secretary

iii.	Scott Meriwether, Vice President

3.	CP-USDC, LLC

a.	Management

i.	Gregory S. Daily, President and CEO

ii.	Clay Whitson, CFO and Secretary

iii.	Scott Meriwether, Vice President

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4.	CP-PS, LLC

a.	Management

i.	Gregory S. Daily, President and CEO

ii.	Clay Whitson, CFO and Secretary

iii.	Scott Meriwether, Vice President

5.	CP-APS, LLC

a.	Management

i.	Gregory S. Daily, President and CEO

ii.	Clay Whitson, CFO and Secretary

iii.	Scott Meriwether, Vice President

6.	CP-DBS, LLC

a.	Management

i.	Gregory S. Daily, President and CEO

ii.	Clay Whitson, CFO and Secretary

iii.	Scott Meriwether, Vice President

7.	i3 Verticals Management Services, Inc.

a.	Management

8.	i3-RS, LLC

a.	Management

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1.	USDC: First Data 2002 ISO Agreement as amended

2.	USDC: Chase Paymentech 2010 ISO Agreement as amended

3.	USDC: RBS Worldpay 2007 ISO Agreement and Sponsorship Agreement

4.	TOPS: Global Payments 2005 Merchant Services Agreement as amended

5.	PS: None.

6.	APS: Global Payments 2006 Merchant Services Agreement as amended

7.	APS: Sage Payment Solutions 2007 ISO Services Agreement as amended

8.	DBS: Vantiv and Fifth Third Bank 2013 Bank Card Merchant Agreement as amended

9.	i3: First Data 2013 Wholesale ISO Agreement

10.	i3-RS: Merchant Warehouse - Merchant Processing Application and Agreement

11.	i3-RS: Crescent Processing Company - Merchant Application and Agreement

1.	USDC: Lease Agreement dated as of May 30, 2006, as amended May 30, 2013, as further amended August 14, 2013, by and between USDC, as tenant and 800-60 Westchester Avenue, LLC, as landlord regarding the real property located at 800 Westchester Avenue, Rye Brook, NY 10573.

2.	USDC: Office Building Lease dated March 1, 2013, by and between USDC as tenant-by-assignment from Dave Miley, and Skelly & Utica Partnership, as landlord regarding the real property located at 2761 E. Skelly Drive, Suite 105, Tulsa, OK 74015.

3.	i3: Office Lease dated May 27, 2014, by and between i3, as tenant, and GPI Bayport, Ltd., as landlord regarding the real property located at 2500 Cumberland Parkway, Atlanta, GA 30339

4.	i3: Lease Agreement dated July 28, 2014, by and between i3, as tenant, and Burton Hills IV Investments, Inc., as landlord regarding the real property located at 40 Burton Hills Blvd, Suite 415, Nashville, TN 37215.

5.	i3: Sublease dated May 23, 2014, by and between i3, as subtenant, and AmSurg Corporation, as sublandlord, regarding the real property located at 40 Burton Hills Blvd, Suite 200, Nashville, TN 37215.

6.	PS: None.

7.	DBS: None.

8.	i3 Verticals Management Services, Inc.: None.

9.	i3-RS, LLC: CoWorkrs LLC License Agreement, by and between COWORKRS LLC, as landlord, and i3-RS, LLC (as successor-in-interest to RentShare, Inc.), regarding the real property located at 115 East 23rd Street, Number 325, New York, New York 10010

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2.	TOPS: IMP Solutions IAA

3.	TOPS: Global Payments 2005 Merchant Services Agreement as amended

4.	PS: None.

5.	APS: Global Payments 2006 Merchant Services Agreement as amended

6.	APS: Sage Payment Solutions 2007 ISO Services Agreement as amended

7.	DBS: Vantiv and Fifth Third Bank 2013 Bank Card Merchant Agreement as amended

8.	i3: First Data 2013 Wholesale ISO Agreement

9.	i3: Century II Staffing, Inc. PEO Client Service Agreement

10.	i3-RS: Merchant Warehouse - Merchant Processing Application and Agreement

11.	i3-RS: Crescent Processing Company - Merchant Application and Agreement

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1.	i3 Verticals, LLC

a.	Non-Competition and Non-Solicitation Agreement dated August 14, 2013, between i3 and Gregory S. Daily

2.	CP-TOPS, LLC

a.	Residual Payment, Confidentiality, Non-Competition and Non-Solicitation Agreement dated December, 2012, between CP-TOPS, LLC and Robert Cason

b.	Independent Agent Agreement dated May 1, 2013 between CP-TOPS, LLC and Raul Anthony Orue

c.	Other Agents

3.	CP-USDC, LLC

a.	Employment Agreement dated August 14, 2013, between CP-USDC, LLC and Peter Gatof

b.	Asset Purchase Agreement dated August 14, 2013 between CP-USDC, LLC, Charge Payment, LLC, U.S. Data Capture, Inc. and Peter Gatof

c.	Purchase Option Agreement dated August 14, 2013 between CP-USDC, LLC, Charge Payment, LLC, USDC Partners, LLC and Peter Gatof.

d.	Agents/Referral Partners

3.	CP-PS LLC

a.	Confidentiality, Non-Competition and Non-Solicitation Agreement dated as of February 14, 2014 by and between Merchant Processing Solutions, and Matthew Wiltsey and acknowledged and agreed to by CP-PS, LLC

4.	i3-RS, LLC

a.	Confidentiality, Non-Competition and Non-Solicitation Agreement dated as of December 31, 2014 by and between i3-RS, LLC and Henry Lau

b.	Confidentiality, Non-Competition and Non-Solicitation Agreement dated as of December 31, 2014 by and between i3-RS, LLC and Ian Halpern

c.	Confidentiality, Non-Competition and Non-Solicitation Agreement dated as of December 31, 2014 by and between i3-RS, LLC and Trevor Geise

d.	Confidentiality, Non-Competition and Non-Solicitation Agreement dated as of December 31, 2014 by and between i3-RS, LLC and Christopher Toppino

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5.	Substantially all other employees of Borrowers have entered into a form of Non-Compete, Non-Solicitation, Confidentiality and Proprietary Rights Agreement.

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•	True ü False___ You (i) were not formed, and (ii) are not being utilized, primarily for the purpose of making an investment in the Company.

•	True___ False ü You are (i) an "employee benefit plan" within the meaning of Section 3(3) of ERISA, whether or not such plan is subject to Title I of ERlSA, (ii) a "plan" (as defined in Section 4975(e)(l) of

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•	True___ False ü You are an entity organized under the laws of a jurisdiction other than those of the United Stales or any state, territory or possession of the United States (a "Foreign Entity").

•	True___ False ü You are a corporation or limited liability company of which, in the aggregate, more than one-fourth of the equity capital is owned of record or voted by Foreign Citizens, Foreign Entities, Foreign Corporations (as defined below) or Foreign Partnerships (as defined below) (a "Foreign Corporation").

•	True___ False ü You control or are an entity controlled by, any of the entities listed above.

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(i)	with respect to a specified Person,

(A)	any other Person who directly or indirectly Controls, is directly or indirectly Controlled by, or is directly or indirectly under common Control with, the specified Person;

(B)	any other Person who owns any material interest in, is owned as to any material interest by, or is under common ownership as to any material interest with, the specified Person (ownership of any Equity Interest in a Borrower, and of five percent (5%) or more of the voting Equity Interests of any other Person, shall be deemed “material” for this purpose);

(C)	any other Person who serves as a director, manager, officer, partner, executor, trustee, or similar senior management capacity with the specified Person;

(D)	any other Person with respect to which the specified Person serves as a director, manager, officer, partner, executor, trustee, or similar senior management capacity;

(E)	if a Person who is an Affiliate under any of the foregoing requirements is a natural Person, each member of such individual’s Immediate Family; and

(F)	each Affiliate of each other Person deemed to be an Affiliate of the specified Person under any of the foregoing provisions;

(ii)	for purposes of this definition, the “Immediate Family” of an individual includes (A) the individual’s spouse, (B) any other individual who resides with such individual, and (C) any other individual who is related to such individual or related to a Person described in the foregoing (A) or (B), in each case within the first degree; and

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(iii)	notwithstanding the foregoing, Lenders shall not in any event be deemed Affiliates of Borrowers.

(i)

if pro forma EBITDA immediately before issuing such additional Debt, giving effect for any completed acquisitions as if the Company had the benefit of a full year of operations, is $15,000,000 or greater, then unsecured Debt issued by i3 Verticals after the Closing Date (i) in compliance with all securities Laws and other Laws, (ii) with no payments of principal due prior to the Term Loan Maturity Date, (iii) providing for interest at a rate not exceeding that accruing on the Term Loans plus 3%, and (iv) for which the incurrence of such Debt will not, giving it pro forma effect, cause Borrowers to breach any financial covenant or otherwise cause a Default or Event of Default, as demonstrated by a certificate of the Chief Financial Officer of i3 Verticals delivered to Lenders at least five (5) days prior to the issuance of such Debt; and

(ii)

if pro forma EBITDA immediately before issuing such additional debt, giving effect for any completed acquisitions as if the Company had the benefit of a full year of operations, is less than $15,000,000, then unsecured Debt issued by i3 Verticals after the Closing Date (i) in compliance with all securities Laws and other Laws, (ii) with no payments of principal due prior to the Term Loan Maturity Date, (iii) providing for interest at a rate approved by the Required Lenders, in

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(i)	before and after giving effect to such Acquisition, no Default or Event of Default has occurred and is continuing or would result therefrom, and all representations and warranties of each Borrower set forth in the Loan Documents shall be and remain true and correct in all material respects;

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(ii)

before and after giving effect to such Acquisition, on a Pro Forma Basis, Borrowers are in compliance with each of the financial covenants set forth in Article 8, measuring and calculating the financial covenants set forth in Article 8 as of the last day of the most recently ended Fiscal Quarter for which financial statements are required to have been delivered pursuant to Section 6.5(a) or (c) as if such Acquisition had occurred, and any Debt incurred in connection therewith was incurred, on the first (1st) day of the relevant period for testing compliance, and Borrowers shall have delivered to Lenders a pro forma compliance certificate signed by a Responsible Officer certifying to the foregoing at least fifteen (15) days (or such shorter period as Lenders may permit) prior to the date of the consummation of such Acquisition;

(iii)

at least ten (10) days (or such shorter period as Lenders may permit) prior to the date of the consummation of such Acquisition, Borrowers shall have delivered to Lenders notice of such Acquisition, together with historical financial information and analysis with respect to the Person whose stock or assets are being acquired and copies of the acquisition agreement and related documents (including, to the extent required by the underlying acquisition agreement, financial information and analysis, environmental assessments and reports, opinions, certificates and lien searches) and information reasonably requested by any Lenders;

(iv)	such Acquisition is consensual and approved by the board of directors (or the equivalent thereof) of the Person whose stock or assets are being acquired;

(v)	the Person or assets being acquired is in the same type of business conducted by Borrowers on the date hereof or any business reasonably related thereto;

(vi)	such Acquisition is consummated in compliance with all Laws, and all consents and approvals from any Governmental Authority or other Person required in connection with such Acquisition and the pledge of assets to the Collateral Agent with respect to such Acquisition have been obtained;

(vii)	before and after giving effect to such Acquisition and any Debt incurred in connection therewith, each Borrower is Solvent;

(viii)	after giving effect to such Acquisition and any Debt incurred in connection therewith, Liquidity (that is either unencumbered or in accounts controlled by Collateral Agent) of Borrowers is at least $2,500,000;

(ix)	the Acquisition is for a total purchase price (including management’s best estimate at closing of the Acquisition of Contingent Consideration that will ultimately be paid in connection with such Acquisition) below $15,000,000;

(x)	Borrowers shall execute and deliver to execute and deliver, at the closing of the Acquisition (or such longer period as Lenders may permit) all collateral

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(xi)	Borrowers have delivered to the Lenders a certificate executed by a Responsible Officer certifying that each of the conditions set forth above has been satisfied; and

(xii)	any Acquisition (including management’s best estimate at closing of the Acquisition of Contingent Consideration that will ultimately be paid in connection with such Acquisition) that exceeds a purchase price of $5,000,000 will require third party due diligence acceptable to the Lenders.

(i)	Encumbrances securing any of the Obligations;

(ii)	Encumbrances securing the Senior Loan;

(iii)	Encumbrances presently securing other Debt as described in Schedule 5.11;

(iv)	Encumbrances securing Purchase Money Security Interests permitted under Section 7.1;

(v)	Encumbrances securing Taxes not yet delinquent or, if reserve has been made therefor as required by GAAP, those which are due but are being contested in good faith by appropriate action promptly initiated and diligently conducted;

(vi)	mechanics’, repairmen’s, materialmen’s, and other like liens arising from isolated transactions by operation of law in the ordinary course of business securing accounts that are not delinquent or that are being contested diligently and in good faith by appropriate proceedings and as to which Borrowers have set aside

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(vii)	zoning ordinances, easements, licenses, reservations, provisions, covenants, conditions, waivers, restrictions, and other such Encumbrances on real property not securing monetary obligations and which are of a type customarily placed on real property and do not materially impair the value of the affected Property;

(viii)	Encumbrances arising in the ordinary course of business by virtue of any contractual, statutory or common law provision relating to banker’s liens, rights of set-off or similar rights and remedies covering deposit or securities accounts, but only to the extent securing administrative charges unless otherwise expressly permitted under the applicable Control Agreement;

(ix)	pledges or deposits under workers’ compensation, unemployment laws, social security, or other similar statutory obligations made in the ordinary course of business and securing obligations that are not delinquent;

(x)	reasonable and necessary cash deposits made in the ordinary course of business to secure the performance of utility contracts and other such contracts for which pledges or deposits are customary; and

(xi)

Encumbrances granted to any settlement bank, sponsor bank and/or processor in (i) funds, instruments or deposit accounts held by such entities or any other direct or indirect subsidiary or affiliate of such entities and/or any other deposit accounts into which funds are deposited by any settlement bank, sponsor bank and/or processor pursuant to or in connection with any sponsorship or processing agreement to which any Borrower is a party (provided that (x) the applicable Borrower has not opened or maintained any deposit account with any such entity or its direct or indirect subsidiaries or affiliates other than solely in connection with a sponsorship or processing agreement and (y) no funds other than those paid pursuant to or in connection with such sponsorship or processing agreement are deposited therein), or (ii) in all of any Borrower’s rights relating to any such sponsorship or processing agreement with such entities and in all related future sales transactions, but only so long as (i) such Encumbrances are granted in the ordinary course of business under the terms of a sponsorship or processing agreement to which the applicable Borrower is a party, and (ii) such Encumbrances secure only (x) ordinary course liabilities arising under any such sponsorship or processing agreement and (y) any other obligations and liabilities of the applicable Borrower arising under any other agreement between such Borrower and such entities (provided that such Borrower has incurred no obligations or liabilities to any such entity other than those arising under a sponsorship or processing agreement with such entity) and (iii) any such Encumbrance does not extend to any Property of any applicable Borrower other

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(xi)	Settlement Liens;

(xii)

Encumbrances securing Acquired Indebtedness permitted hereunder; provided that (i) such Encumbrances do not at any time encumber any property other than property of the Person acquired in the applicable Permitted Acquisition at the time of such Permitted Acquisition and (ii) such Encumbrances shall exist prior to the applicable Permitted Acquisition and shall not be incurred in anticipation of the applicable Permitted Acquisition; and

(xiii)	other Encumbrances of a type not otherwise contemplated by this definition that secure obligations in an aggregate amount not to exceed $1,000,000.

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(i)	establish the existence and authority of all Borrowers and other Persons executing Loan Documents;

(ii)	evidence the Obligations;

(iii)	secure the Obligations with the real and personal property Collateral provided by Borrowers, with the priority required in this Agreement;

(iv)	provide assurances to Lenders from landlords of Borrowers’ locations (if not available at the Closing, such assurances shall be delivered within forty- five (45) days after the Closing);

(v)	provide Control Agreements with respect to Borrowers’ deposit and securities accounts, approved by Lenders (if not available at the Closing, such documents shall be delivered within forty-five (45) days after the Closing);

(vi)	evidence that the required key man insurance on Greg Daily is in effect and pledged to secure the Obligations;

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(vii)	secure the Obligations with the Equity Interests of i3 Verticals, with the priority required in this Agreement;

(viii)	evidence that all other required insurance is in effect;

(ix)	evidence the issuance of the Warrants;

(x)	evidence Borrowers’ counsel’s’ counsel’s opinions as to customary matters;

(xi)	comply with all applicable SBA Laws;

(xii)	evidence the subordination of the Daily Loan; and

(xii)	(xiii) otherwise serve such purposes incidental to the Closing as Lenders or Collateral Agent may reasonably require.

(i)	satisfactory completion of financial, accounting, tax, management, legal, environmental, insurance, industry, compliance, vendor, customer, and other due diligence by Lenders and their diligence consultants;

(ii)	Lenders’ satisfaction that the combined EBITDA of Borrowers (including the historical EBITDA of USDC, adjusted as Lenders may require) will be at least $2,100,000 at the Closing;

(iii)	Lenders’’ approval of the final sources and uses of funds, including transaction fees;

(iv)	Lenders’’ approval of employment agreements, non-compete agreements, non-solicitation agreements, and other such agreements with all key employees of Borrowers;

(v)	Lenders’’ approval of all Material Contracts;

(vi)	the approval of Lenders’ Investment Committees shall have been obtained;

(vii)	there must be no Material Adverse Change respecting a Borrower since the date of their applicable Financial Statements;

(viii)	Borrowers’ payment of all of Lenders’ reasonable out-of-pocket diligence expenses and the fees and expenses of Lenders’ counsel; and

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(ix)	such other conditions as Lenders or Collateral Agent may reasonably require.

(i)	all of the documents that were conditions to the Initial Advance and additional documents to in like manner evidence and secure the Obligations and Collateral Agent’s security interests and liens securing the Obligations, taking into account the acquisition of assets of USDC Partners;

(ii)	copies of all documents evidencing the Acquisition of USDC Partners;

(iii)	a written request for advance at least ten (10) days prior to the date on which the closing of the Acquisition of USDC Partners, and the Second Advance, are to occur; and

(iv)	a closing certificate issued by Borrowers as of the date of the Second Advance, confirming (i) the accuracy of all representations and warranties made in this Agreement (updated to be effective as of the making of the Second Advance and giving effect to the Acquisition of USDC Partners) and (ii) the absence of any Default, any Event of Default, and any Material Adverse Change.

(i)	Lenders’ satisfaction that all conditions to the Initial Advance listed in Section 4.2 were satisfied and, to the extent applicable, remain so as of the making of the Second Advance (to avoid doubt, this does not require additional Investment Committee approval);

(ii)	Lenders’ satisfaction that the combined EBITDA of Borrowers (including the historical EBITDA of USDC Partners, adjusted as Lenders may require) will be at least $2,100,000 at the Closing;

(iii)	the absence of a Default or Event of Default; and

(iv)	the absence of a Material Adverse Change.

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(i)	all taxes that they may be required to pay because of the execution, delivery, filing, performance or enforcement of the Loan Documents or the Obligations, excepting taxes based upon the income of Lenders or franchise, excise, excess profits or similar tax on Lenders;

(ii)	all reasonable costs of the preparation of this Agreement and any other related documents and the administration of the Obligations (except for Lenders’ usual overhead incurred in the acceptance and processing of payments, the routine review of financial statements, review of certifications, and reports);

(iii)	all reasonable costs of preserving, insuring, preparing for sale (whether by improvement, repair, or otherwise), or selling any Collateral securing the Obligations;

(iv)	the reasonable cost of the assessment of any Event of Default, the taking of any action in the enforcement of rights under the Loan Documents (whether or not involving litigation), and all court costs and other reasonable costs of collecting any of the Obligations;

(v)

all reasonable costs arising from any other litigation, investigation, or administrative proceeding (whether or not Lenders or Collateral Agent are parties thereto) that Lenders or Collateral Agent may incur as a result of the Obligations or as a result of their association with a Borrower, including, without limitation, expenses incurred in connection with a case or proceeding involving a Borrower under any Debtor Relief Laws; and

(vi)	with respect to any of the foregoing matters, the reasonable fees and expenses of Lenders’ and Collateral Agent’s attorneys.

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(i)	the Obligations;

(ii)	any Senior Loan outstanding at the time of determination;

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(iii)	Capital Leases and Debt secured by Purchase Money Security Interests in the aggregate principal amount not exceeding $500,0005,000,000;

(iv)	endorsements of negotiable or similar instruments for collection or deposit in the ordinary course of business;

(v)	Debt listed on Schedule 5.11;

(vi)	Debt secured by Permitted Encumbrances;

(vii)	Debt arising in the ordinary course of business in relation to performance, surety, statutory, or appeal bonds;

(viii)	the Daily Loan;

(viii)	(ix) Subordinated Seller Debt;

(x)	Anticipated Additional Debt;

(ix)

Existing Subordinated Debt, and any refinancings and extensions thereof; provided, that (i) the amount of such Debt is not increased at the time of such refinancing or extension, (ii) the material terms taken as a whole of such refinancing or extension are not materially less favorable in any material respect to the Borrowers and its Subsidiaries or the Lenders than the terms of the Existing Subordinated Debt, (iii) such refinanced or extended Debt is not subject to any amortization payments or any mandatory prepayments or sinking fund payments (other than in connection with a change of control, asset sale or event of loss and customary acceleration rights after an event of default) in each case, prior to the date that is six (6) months after the Term Loan Maturity Date, (iv) such refinanced or extended Debt shall not mature at any time on or prior to the date that is six (6) months after the Term Loan Maturity Date, and (v) such refinanced or extended Debt is unsecured and subordinated to the Term Loans on terms not materially less favorable in any material respect to the Collateral Agent and Lenders than the terms of the Existing Subordinated Debt;

(x)	(xi) Debt among Borrowers and Guaranties by Borrowers for obligations of other Borrowers;

(xii)	Other Debt not exceeding $100,000 in the aggregate; and

(xi)	(xiii) Contingent Consideration incurred in connection with a Permitted Acquisition.

(xii)	Debt in an aggregate amount not to exceed $5,000,000 outstanding at any one time acquired in Permitted Acquisitions (“Acquired Indebtedness”), provided that such Acquired Indebtedness shall exist prior to the applicable Permitted Acquisition and shall not have been incurred in anticipation of the applicable Permitted Acquisition; and

(xiii)	other Debt not exceeding $1,000,000 in the aggregate; and

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(i)	shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default has occurred and is continuing;

(ii)

shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that Collateral Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that Collateral Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose Collateral Agent to liability or that is contrary to any Loan 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; and

(iii)	shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to a Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as Collateral Agent or any of its Affiliates in any capacity.

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(i)

to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans 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 Lenders and Collateral Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of Lenders and Collateral Agent and their respective agents and counsel and all other amounts due Lenders and Collateral Agent under the Loan Documents that are allowed in such judicial proceeding); and

(ii)	to collect and receive any monies or other Property payable or deliverable on any such claims and to distribute the same; and

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(i)

to release any Encumbrance on any Property granted to or held by Collateral Agent under any Loan Document (x) upon termination of all commitments and payment in full of all Obligations (other than contingent indemnification obligations), (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 Loan Documents, or (z) if approved, authorized, or ratified in writing by the Required Lenders;

(ii)	to subordinate any Encumbrance on any Property granted to or held by Collateral Agent under any Loan Document to the holder of any Encumbrance on such Property that is permitted by this Agreement; and

(iii)	to release a Borrower from its liability for the Obligations if such Person ceases to be an Affiliate of the remaining Borrower(s) as a result of a transaction permitted under the Loan Documents.

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(i)	if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(ii)	the provisions of this paragraph shall not be construed to apply to (x) any payment made by Borrowers pursuant to and in accordance with the express terms of this Agreement, or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans, other than to Borrowers (as to which the provisions of this paragraph shall apply).

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1.	Establishment and Purpose

2.	Definitions

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3.	Administration

(i)

Plan Participation. The Committee shall have absolute discretion to grant Awards under the Plan and prescribe the form of Class P Unit Agreements evidencing such Awards. The Committee in its discretion may grant Awards to employees, consultants and directors of the Company or an Affiliate of the Company. The Committee may also grant Awards to prospective employees, consultants or directors in connection with hiring, retention or otherwise, provided that vesting of Class P Units may not occur until the Award recipient has commenced providing services to the Company or an Affiliate. An individual who receives an Award under the Plan will be designated a Participant.

(ii)

Terms of Awards. The Committee is authorized to: (A) determine the eligible persons to whom, and the time or times at which, Awards shall be granted; (B) determine the number of Class P Units to be covered by each Award; (C) impose such terms, limitations, restrictions and conditions upon any such Award as the Committee shall deem appropriate, including, but not limited to, those relating to the vesting of Awards, if any; and (D) modify or amend outstanding Awards.

(iii)

Plan and Award Interpretation. The Committee shall have full power and authority, in its sole and absolute discretion, to administer, construe and interpret the Plan, Class P Unit Agreements and all other documents relevant to the Plan and Awards issued thereunder, to establish, amend, rescind and interpret such rules, regulations, agreements, guidelines and instruments for the administration of the Plan and for the conduct of its business as the Committee deems necessary or advisable, and to correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award in the manner and to the extent the Committee shall deem it desirable to carry it into effect.

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4.	Awards

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5.	Termination, Amendment and Modification of the Plan.

6.	Miscellaneous

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(1)

an acquisition (other than directly from the Corporation) of any voting securities of the Corporation (the “Voting Securities”) by any “Person” (as the term Person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) immediately after which such Person has “Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty-five percent (35%) or more of the combined voting power of the then outstanding Voting Securities; provided, however, that in determining whether a Change in Control has occurred, Voting Securities which are acquired in a Non-Control Acquisition (as hereinafter defined) shall not constitute an acquisition which would cause a Change in Control. A “Non-Control Acquisition” shall mean an acquisition by (i) an employee benefit plan (or a trust forming a part thereof)

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(2)

during any period of twelve (12) consecutive months, a majority of the members of the Board or other equivalent governing body of the Corporation cease to be composed of individuals (i) who were members of the Board or equivalent governing body on the first day of such period, (ii) whose election or nomination to the 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 the Board or equivalent governing body, or (iii) whose election or nomination to the 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 the Board or equivalent governing body; or consummation of: (A) a merger, consolidation or reorganization involving the Corporation, unless (1) the stockholders of the Corporation, immediately before such merger, consolidation or reorganization, own, directly or indirectly immediately following such merger, consolidation or reorganization, more than fifty percent (50%) of the combined voting power of the outstanding Voting Securities of the surviving entity or parent (the “Surviving Company”) in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, consolidation or reorganization; and (2) the individuals who were members of the incumbent Board immediately prior to the execution of the definitive agreement providing for such merger, consolidation or reorganization constitute more than fifty percent (50%) of the members of the board of directors of the Surviving Company; and (B) no Person (other than the Corporation, any Subsidiary, any employee benefit plan (or any trust forming a part thereof) maintained by the Corporation, the Surviving Company or any Subsidiary, or any Person who, immediately prior to such merger, consolidation or reorganization, had beneficial ownership of thirty-five percent (35%) or more of the then outstanding Voting Securities unless, as a result of such merger, consolidation or reorganization, such Person acquired or would acquire additional voting securities of the Surviving Company representing additional voting power) has beneficial ownership of thirty-five percent (35%) or more of the combined voting power of the Surviving Company’s then outstanding Voting Securities; (B) a complete liquidation or dissolution of the Corporation; or (C) the sale of all or substantially all of the assets of the Corporation to any Person (other than a transfer to an affiliate).

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(l)	dividends;

(m)	debt reduction;

(n)	strategic business objectives, consisting of one or more objectives based on meeting specified cost targets, business expansion goals and goals relating to acquisitions or divestitures; or

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(o)	any combination thereof.

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I.	conviction of the Employee for a felony which in the reasonable judgment of the Board materially affects Employee's ability to perform his duties pursuant to this Agreement;

II.	commission by Employee of an act of fraud, embezzlement, or material dishonesty against the Company or its affiliates;

III.	intentional neglect of or material inattention to Employee's duties, which neglect or inattention remains uncorrected for more than fifteen days following written notice from the Board detailing the Board's concern; or

IV.	the Employee taking any actions which would have a material detrimental effect on the Company or its affiliates or in any way materially harm the reputation of the

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I.	A material dimunition in Employee's position, responsibilities or status from that which was previously in effect;

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II.	A reduction in Employee's compensation that is payable pursuant to Section 2.1 or a substantial reduction in benefits provided to Employee that are described in Section 2.3, as such amounts were previously in effect.

III.	Relocation of Employee to a location that is more than 35 miles from the location of the Company's headquarters on the date this Agreement is executed.

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I.	One times Employee's annual base compensation determined by reference to his base salary in effect at the time of Change In Control.

II.	One times the annual bonus described in Section 2.1(b).

III.	Continuation of benefits described in Section 2.3 for a period of one year following termination of employment.

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I.	conviction of the Employee for a felony which in the reasonable judgment of the Board materially affects Employee's ability to perform his duties pursuant to this Agreement;

II.	commission by Employee of an act of fraud, embezzlement, or material dishonesty against the Company or its affiliates;

III.	intentional neglect of or material inattention to Employee's duties, which neglect or inattention remains uncorrected for more than fifteen days following written notice from the Board detailing the Board's concern; or

IV.	the Employee taking any actions which would have a material detrimental effect on the Company or its affiliates or in any way materially harm the reputation of the Company or its affiliates, and such actions are not cured within fifteen days of the Employee receiving written notification thereof.

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I.	A material diminution in Employee's position, responsibilities or status from that which was previously in effect;

II.	A reduction in Employee's base compensation and bonus opportunity or a substantial reduction in benefits provided by the Company to Employee, other than for a proportional reduction that is applied to all similarly situated employees of the Company; or

III.	Relocation of Employee to a location that is more than 35 miles from the location of the Company's headquarters on the date this Agreement is executed.

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IV.	Upon the occurrence of a Change in Control, the acquiror fails or refuses to assume the obligations of the Company under this Agreement.

I.	One times Employee's annual base compensation determined by reference to his base salary in effect at the time of Change In Control paid in a single sum.

II.	One times the target annual bonus for the Employee at the time of the Change in Control paid in a single sum.

III.	Continuation of Company provided health benefits, which may be through continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, for a period of one year following termination of employment; provided that Employee's cost for participation will be no greater that the cost of coverage under the Company's health plan for similarly situated active employees.

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1.	DEFINITIONS.

(a)	For purposes of this Agreement:

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(a)	If to Indemnitee, to the address appearing on the signature page hereof.

(b)	If to the Company to:

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