SEC Filing | ExlService Holdings, Inc.

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Amendment No. 1 to Form S-3

As filed with the Securities and Exchange Commission on November 20, 2009.

Registration No. 333-162335

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Amendment No. 1

FORM S-3

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

EXLSERVICE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


Delaware		82-0572194
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

350 Park Avenue

New York, New York 10022

(212) 277-7100

(Address, including zip code, and telephone number,

including area code, of registrant’s principal executive offices)

Amit Shashank, Esq.

Vice President, General Counsel and Secretary

ExlService Holdings, Inc.

350 Park Avenue

New York, New York 10022

(212) 277-7100

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

Copy to:

John C. Kennedy, Esq.

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, New York 10019-6064

(212) 373-3000

Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement.

If the only securities being registered on this Form are to be offered pursuant to dividend or interest reinvestment plans, please check the following box. ¨

If any of the securities being registered on this Form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ¨

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨

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

Large accelerated filer ¨ Accelerated filer x Non-accelerated filer ¨ Smaller reporting company ¨

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, dated November 20, 2009

PROSPECTUS

LOGO

ExlService Holdings, Inc.

Common Stock

Preferred Stock

Debt Securities

Depositary Shares

Warrants

Rights

Purchase Contracts

Units

We may offer and sell from time to time up to an aggregate of $200,000,000 of shares of our common stock, shares of our preferred stock, debt securities, depositary shares, warrants, rights, purchase contracts or units, or any combination thereof, in one or more offerings in amounts, at prices and on terms that we determine at the time of the offering. In addition, the selling stockholders to be named in a prospectus supplement may offer, from time to time and in one or more offerings, up to 6,000,000 shares of our common stock.

Each time we or the selling stockholders offer securities, we will provide a prospectus supplement containing more information about the particular offering together with this prospectus. The prospectus supplement also may add, update or change information contained in this prospectus. This prospectus may not be used to offer and sell securities without a prospectus supplement.

Our common stock is traded on the Nasdaq Global Select Market under the symbol “EXLS.”

Investing in these securities involves significant risks. We strongly recommend that you read carefully the risks we describe in this prospectus as well as in any accompanying prospectus supplement and the risk factors that are incorporated by reference in this prospectus from our filings made with the Securities and Exchange Commission. See “Risk Factors” beginning on page 3 of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is , 2009

TABLE OF CONTENTS


		Page
About This Prospectus		1
The Company		2
Forward-Looking Statements		2
Risk Factors		3
Use of Proceeds		4
Ratio of Earnings to Fixed Charges		4
Selling Stockholders		4
Description of Capital Stock		5
Description of the Debt Securities		8
Description of the Depositary Shares		18
Description of the Warrants		21
Description of the Rights		23
Description of the Purchase Contracts		24
Description of the Units		25
Plan of Distribution		26
Legal Matters		29
Experts		29
Where You Can Find More Information		29
Incorporation by Reference		30

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or the SEC, using a “shelf” registration process. Under this shelf registration process, we may offer and sell from time to time shares of our common stock, shares of our preferred stock, debt securities, depositary shares, warrants, rights, purchase contracts or units, or any combination thereof, in one or more offerings in amounts, at prices and on terms that we determine at the time of the offering, with an aggregate initial offering price of up to $200,000,000 and the selling stockholders may offer, from time to time in one or more offerings, up to an aggregate of 6,000,000 shares of our common stock. This prospectus provides you with a general description of the securities. Each time we offer the securities or the selling stockholders sell shares of common stock, we will provide a prospectus supplement that describes the terms of the offering. The prospectus supplement also may add, update or change information contained in this prospectus. Before making an investment decision, you should read carefully both this prospectus and any prospectus supplement together with the documents incorporated by reference into this prospectus as described below under the heading “Incorporation by Reference.”

The registration statement that contains this prospectus, including the exhibits to the registration statement and the information incorporated by reference, provides additional information about us and our securities. The registration statement can be read at the SEC web site (www.sec.gov) or at the SEC public reference room as discussed below under the heading “Where You Can Find More Information.”

You should rely only on the information provided in the registration statement, this prospectus and in any prospectus supplement, including the information incorporated by reference. Neither we nor the selling stockholders have authorized anyone to provide you with different information. You should not assume that the information in this prospectus or any supplement to this prospectus is accurate at any date other than the date indicated on the cover page of these documents. Neither we nor the selling stockholders are making an offer to sell the securities in any jurisdiction where the offer or sale is not permitted.

We and the selling stockholders may sell the securities to or through underwriters, dealers or agents or directly to purchasers. The securities may be sold for U.S. dollars, foreign-denominated currency or currency units. Amounts payable with respect to any securities may be payable in U.S. dollars or foreign-denominated currency or currency units as specified in the applicable prospectus supplement. We, the selling stockholders and our and their agents reserve the sole right to accept or reject in whole or in part any proposed purchase of the securities. The prospectus supplement, which we will provide each time we or the selling stockholders offer the securities, will set forth the names of any underwriters, dealers or agents involved in the sale of the securities, and any related fee, commission or discount arrangements. See “Plan of Distribution.”

The prospectus supplement may also contain information about any material U.S. federal income tax considerations relating to the securities covered by the prospectus supplement.

In this prospectus, the terms “ExlService,” “we,” “us,” “our” and the “Company” refer to ExlService Holdings, Inc.

THE COMPANY

ExlService Holdings, Inc. is a leading provider of outsourcing and transformation services. Our outsourcing services include a full spectrum of business process outsourcing services from offshore delivery centers requiring ongoing process management skills. Transformation services enable continuous improvement of client processes by bringing together our capabilities in reengineering including decision analytics, risk and financial management and operations and process excellence services. Headquartered in New York, we primarily serves the needs of Global 1000 companies in the insurance, utilities, financial services and transportation and logistics sectors.

For a description of our business, financial condition, results of operations and other important information regarding ExlService, we refer you to our filings with the SEC incorporated by reference in this prospectus. For instructions on how to find copies of these documents, see “Where You Can Find More Information.” More information about us is also available through our website at www.exlservice.com. The information on our website is not incorporated by reference into this prospectus or any accompanying prospectus supplement.

Our principal executive offices are located at 350 Park Avenue, New York, New York 10022, telephone (212) 277-7100.

FORWARD-LOOKING STATEMENTS

This prospectus and the documents incorporated by reference include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. In addition, we may make other written and oral communications from time to time that contain such statements. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Forward looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business strategy. These statements often include words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. These statements are based on assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you read and consider the information contained and incorporated by reference herein, you should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although we believe that these forward looking

statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward looking statements. These factors include but are not limited to:

•

our dependence on a limited number of clients in a limited number of industries;

•

worldwide political, economic or business conditions;

•

negative public reaction in the United States or elsewhere to offshore outsourcing

•

fluctuations in our earnings;

•

our ability to attract and retain clients;

•

restrictions on immigration;

•

our ability to hire and retain enough sufficiently trained employees to support our operations;

•

our ability to grow our business or effectively manage growth and international operations;

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increasing competition in our industry;

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telecommunications or technology disruptions;

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fluctuations in exchange rates between the currencies in which we receive our revenues and the currencies in which we incur our costs;

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regulatory, legislative and judicial developments, including the withdrawal of governmental fiscal incentives;

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technological innovation;

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political or economic instability in the geographies in which we operate;

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our ability to successfully consummate or integrate strategic acquisitions; and

•

adverse outcome of our disputes with the Indian tax authorities.

These and other factors are more fully discussed elsewhere herein and in the documents incorporated by reference herein. These and other risks could cause actual results to differ materially from those implied by forward looking statements herein and therein.

You should keep in mind that any forward looking statement made by us herein and in the documents incorporated by reference herein, or elsewhere, speaks only as of the date on which we make it. New risks and uncertainties come up from time to time, and it is impossible for us to predict these events or how they may affect us. We have no obligation to update any forward looking statements herein or therein after the date hereof or thereof, except as required by federal securities laws.

RISK FACTORS

Investing in our securities involves risk. You should carefully consider the specific risks discussed or incorporated by reference in the applicable prospectus supplement, together with all the other information contained in the prospectus supplement or incorporated by reference in this prospectus and the applicable prospectus supplement. You should also consider the risks, uncertainties and assumptions discussed under the caption “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2008, which is incorporated by reference in this prospectus. These risk factors may be amended, supplemented or superseded from time to time by other reports we file with the SEC in the future.

USE OF PROCEEDS

Unless we specify another use in the applicable prospectus supplement, we will use the net proceeds from the sale of the securities offered by us for general corporate purposes, which may include, among other things, debt repayment, working capital and/or capital expenditures.

We may also use such proceeds to fund acquisitions of businesses, technologies or product lines that complement our current business. We may set forth additional information on the use of net proceeds from the sale of the securities we offer under this prospectus in a prospectus supplement related to a specific offering.

We will not receive any proceeds from the resale of shares of our common stock by the selling stockholders.

RATIO OF EARNINGS TO FIXED CHARGES

Our ratios of earnings to fixed charges are shown in the table below. For purposes of calculating the below ratios, earnings consist of income before taxes plus fixed charges plus amortization of capitalized interest less interest capitalized during the period. Fixed charges means the sum of the following: (a) interest expensed and capitalized, (b) amortized premiums, discounts and capitalized expenses related to indebtedness, (c) an estimate of the interest within rental expense, and (d) preference security dividend requirements of consolidated subsidiaries. Preferred dividends include pre-tax amounts required to pay dividends in respect of our previously-outstanding Series A Preferred Stock.


	Nine Months Ended September 30,		Year Ended December 31,
	2009	2008	2008	2007	2006	2005(1)	2004
Ratio of earnings to fixed charges	6.7	6.2	6.5	16.0	7.5	—	2.7
Ratio of earnings to fixed charges and preferred dividends	6.7	6.2	6.5	16.0	4.7	—	2.7

(1)	Earnings were insufficient to cover fixed charges by $1.7 million and were insufficient to cover fixed charges and preferred dividends by $1.9 million in the year ended December 31, 2005.

SELLING STOCKHOLDERS

This prospectus relates in part to the possible sale by certain of our stockholders, or the selling stockholders, who own shares of common stock acquired through an exemption from registration under Section 4(2) of the Securities Act of 1933, for transactions by an issuer not involving a public offering. These shares consist of shares of common stock that were acquired in transactions completed in connection with the acquisition of the Company’s business from Conseco in 2002, shares of common stock that were issued in connection with a share split of our common stock completed prior to the completion of our initial public offering in October 2006, shares of common stock acquired pursuant to our equity compensation plans to the extent such shares were received prior to October 5, 2009 and shares of common stock held by certain trusts affiliated with certain of our pre-IPO stockholders to the extent such trusts acquired such shares prior to October 5, 2009. Information about the selling stockholders will be set forth in the applicable prospectus supplement.

DESCRIPTION OF CAPITAL STOCK

General

The following description of our capital stock summarizes certain terms and provisions of our common stock and preferred stock, par value $0.001 per share, to which any prospectus supplement may relate. This section also summarizes relevant provisions of Delaware law. The following description of our common stock and preferred stock does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the applicable provisions of Delaware law and our Amended and Restated Certificate of Incorporation and our Second Amended and Restated Bylaws, copies of which have been filed with the SEC as exhibits to the registration statement of which this prospectus forms a part.

Capital Stock

As of the date of this prospectus, our authorized capital stock consists of 100,000,000 shares of common stock and 15,000,000 of preferred stock. As of September 30, 2009, we had 28,931,983 outstanding shares of common stock, excluding 247,030 shares held in treasury and 405,380 shares of restricted stock, and no shares of preferred stock outstanding.

As of November 18, 2009, there were approximately 32 holders of record of our common stock.

Common Stock

The holders of our common stock are entitled to one vote per share on all matters submitted to a vote of stockholders, including the election of directors. Holders of the common stock do not have any preemptive rights or cumulative voting rights, which means that the holders of a majority of the outstanding common stock voting for the election of directors can elect all directors then being elected. The holders of our common stock are entitled to receive dividends when, as, and if declared by our board out of legally available funds. Upon our liquidation or dissolution, the holders of common stock will be entitled to share ratably in those of our assets that are legally available for distribution to stockholders after payment of liabilities and subject to the prior rights of any holders of preferred stock then outstanding. All of the outstanding shares of common stock are, and the shares of common stock to be sold in this offering when issued and paid for will be, fully paid and nonassessable. The rights, preferences and privileges of holders of common stock are subject to the rights of the holders of shares of any series of preferred stock that may be issued in the future.

Preferred Stock

We are authorized to issue up to 15,000,000 shares of preferred stock. Our board of directors is authorized, subject to limitations prescribed by Delaware law and our certificate of incorporation, to determine the terms and conditions of the preferred stock, including whether the shares of preferred stock will be issued in one or more series, the number of shares to be included in each series and the powers, designations, preferences and rights of the shares. Our board of directors also is authorized to designate any qualifications, limitations or restrictions on the shares without any further vote or action by the stockholders. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of the Company.

Certain Certificate of Incorporation, By-Law and Statutory Provisions

The provisions of our certificate of incorporation and by-laws and of the Delaware General Corporation Law summarized below may have an anti-takeover effect and may delay, defer or prevent a tender offer or takeover attempt of the Company.

Directors’ Liability; Indemnification of Directors and Officers

Our certificate of incorporation provides that a director will not be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except:

•

for any breach of the duty of loyalty;

•

for acts or omissions not in good faith or which involve intentional misconduct or knowing violations of law;

•

for liability under Section 174 of the Delaware General Corporation Law (relating to unlawful dividends, stock repurchases, or stock redemptions); or

•

for any transaction from which the director derived any improper personal benefit.

This provision does not limit or eliminate our rights or those of any stockholder to seek non-monetary relief such as an injunction or rescission in the event of a breach of a director’s duty of care. The provisions do not alter the liability of directors under federal securities laws. In addition, our certificate of incorporation and by-laws provide that we indemnify each director and the officers, employees, and agents determined by our board of directors to the fullest extent provided by the laws of the State of Delaware.

Special Meetings of Stockholders

Our certificate of incorporation provides that special meetings of stockholders may be called only by the chairman or by a majority of the members of our board. Stockholders are not permitted to call a special meeting of stockholders, to require that the chairman call such a special meeting, or to require that our board request the calling of a special meeting of stockholders.

Stockholder Action; Advance Notice Requirements for Stockholder Proposals and Director Nominations

Our certificate of incorporation provides that stockholders may not take action by written consent, but may only take action at duly called annual or special meetings, unless the action to be effected by written consent and the taking of such action by written consent have expressly been approved in advance by the board. In addition, our by-laws establish advance notice procedures for:

•

stockholders to nominate candidates for election as a director; and

•

stockholders to propose topics for consideration at stockholders’ meetings.

Stockholders must notify our corporate secretary in writing prior to the meeting at which the matters are to be acted upon or directors are to be elected. The notice must contain the information specified in our by-laws. To be timely, the notice must be received at our corporate headquarters not less than 90 days nor more than 120 days prior to the first anniversary of the date of the prior year’s annual meeting of stockholders. If the annual meeting is advanced by more than 30 days, or delayed by more than 70 days, from the anniversary of the preceding year’s annual meeting, or if no annual meeting was held in the preceding year or for the first annual meeting following this offering, notice by the stockholder, to be timely, must be received not earlier than the 120th day prior to the annual meeting and not later than the later of the 90th day prior to the annual meeting or the 10th day following the day on which we notify stockholders of the date of the annual meeting, either by mail or other public disclosure. In the case of a special meeting of stockholders called to elect directors, the stockholder notice must be received not earlier than 120 days prior to the special meeting and not later than the later of the 90th day prior to the special meeting or 10th day following the day on which we notify stockholders of the date of the special meeting, either by mail or other public disclosure. Notwithstanding the above, in the event that the number of directors to be elected to the board at an annual meeting is increased and we do not make any public announcement naming the nominees for the additional directorships at least 100 days before the first anniversary of the preceding year’s annual meeting, a stockholder notice of nomination shall also be considered timely, but only with respect to nominees for the additional directorships, if it is delivered not later than the close of business on the tenth day following the day on which such public announcement is first made.

Election and Removal of Directors

Our board is divided into three classes. The directors in each class serve for a three-year term, one class being elected each year by our stockholders. Our stockholders may only remove directors for cause and with the vote of at least 66²/3% of the total voting power of our issued and outstanding capital stock entitled to vote in the election of directors. Our board of directors may elect a director to fill a vacancy, including vacancies created by the expansion of the board of directors.

Our certificate of incorporation and by-laws do not provide for cumulative voting in the election of directors.

Amendment of the Certificate of Incorporation and By-Laws

Our certificate of incorporation provides that the affirmative vote of the holders of at least 66² /3% of the voting power of our issued and outstanding capital stock entitled to vote in the election of directors, is required to amend the following provisions of our certificate of incorporation:

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the provisions relating to our classified board of directors;

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the provisions relating to the number and election of directors, the appointment of directors upon an increase in the number of directors or vacancy, and the provisions relating to the removal of directors;

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the provisions requiring a 66²/3% stockholder vote for the amendment of certain provisions of our articles of incorporation and for the adoption, amendment or repeal of our by-laws;

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the provisions relating to the restrictions on stockholder actions by written consent; and

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the provisions relating to the calling of meetings of stockholders.

In addition, the board of directors is permitted to alter our by-laws without obtaining stockholder approval and the affirmative vote of holders of at least 66²/3% of the voting power of our issued and outstanding capital stock entitled to vote in the election of directors will be required for any amendment to our by-laws by the stockholders.

Anti-Takeover Provisions of Delaware Law

We are subject to the provisions of Section 203 of the Delaware General Corporation Law. In general, Section 203 prevents an interested stockholder (defined generally as a person owning 15% or more of the corporation’s outstanding voting stock) of a Delaware corporation from engaging in a business combination (as defined) for three years following the date that person became an interested stockholder unless various conditions are satisfied.

DESCRIPTION OF THE DEBT SECURITIES

General

The following description of the terms of our senior debt securities and subordinated debt securities (together, the “debt securities”) sets forth certain general terms and provisions of the debt securities to which any prospectus supplement may relate. Unless otherwise noted, the general terms and provisions of our debt securities discussed below apply to both our senior debt securities and our subordinated debt securities. Our debt securities may be issued from time to time in one or more series. The particular terms of any series of debt securities and the extent to which the general provisions may apply to a particular series of debt securities will be described in the prospectus supplement relating to that series.

The senior debt securities will be issued under an indenture between us and U.S. Bank National Association, as Senior Indenture Trustee (the “senior indenture”). The subordinated debt securities will be issued under an indenture between us and U.S. Bank National Association, as Subordinated Indenture Trustee (the “subordinated indenture” and, together with the senior indenture, the “indentures”). The Senior Indenture Trustee and the Subordinated Indenture Trustee are both referred to, individually, as the “Trustee.” The senior debt securities will constitute our unsecured and unsubordinated obligations and the subordinated debt securities will constitute our unsecured and subordinated obligations. A detailed description of the subordination provisions is provided below under the caption “—Ranking and Subordination—Subordination.” In general, however, if we declare bankruptcy, holders of the senior debt securities will be paid in full before the holders of subordinated debt securities will receive anything.

The statements set forth below are brief summaries of certain provisions contained in the indentures, which summaries do not purport to be complete and are qualified in their entirety by reference to the indentures, which are incorporated by reference as exhibits or filed as exhibits to the registration statement of which this prospectus forms a part. Terms used herein that are otherwise not defined shall have the meanings given to them in the indentures. Such defined terms shall be incorporated herein by reference.

The indentures will not limit the amount of debt securities that may be issued under the applicable indenture and debt securities may be issued under the applicable indenture up to the aggregate principal amount that may be authorized from time to time by us. Any such limit applicable to a particular series will be specified in the prospectus supplement relating to that series.

The prospectus supplement relating to any series of debt securities in respect to which this prospectus is being delivered will contain the following terms, among others, for each such series of debt securities:

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the designation and issue date of the debt securities;

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the date or dates on which the principal of the debt securities is payable;

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the rate or rates (or manner of calculation thereof), if any, per annum at which the debt securities will bear interest, if any, the date or dates from which interest will accrue and the interest payment date or dates for the debt securities;

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any limit upon the aggregate principal amount of the debt securities which may be authenticated and delivered under the applicable indenture;

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the period or periods within which, the redemption price or prices or the repayment price or prices, as the case may be, at which, and the terms and conditions upon which, the debt securities may be redeemed at our option or the option of the holder of such debt securities;

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the obligation, if any, of ExlService to purchase the debt securities pursuant to any sinking fund or analogous provisions or at the option of a holder of such debt securities and the period or periods within which, the price or prices at which and the terms and conditions upon which such debt securities will be purchased, in whole or in part, pursuant to such obligation;

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if other than denominations of $1,000 and any integral multiple thereof, the denominations in which the debt securities will be issuable;

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provisions, if any, with regard to the conversion or exchange of the debt securities, at the option of the holders of such debt securities or the Company, as the case may be, for or into new securities of a different series, our common stock or other securities;

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if other than U.S. dollars, the currency or currencies or units based on or related to currencies in which the debt securities will be denominated and in which payments of principal of, and any premium and interest on, such debt securities shall or may be payable;

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if the principal of (and premium, if any) or interest, if any, on the debt securities are to be payable, at the election of the Company or a holder of such debt securities, in a currency (including a composite currency) other than that in which such debt securities are stated to be payable, the period or periods within which, and the terms and conditions upon which, such election may be made;

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if the amount of payments of principal of (and premium, if any) or interest, if any, on the debt securities may be determined with reference to an index based on a currency (including a composite currency) other than that in which such debt securities are stated to be payable, the manner in which such amounts shall be determined;

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provisions, if any, related to the exchange of the debt securities, at the option of the holders of such debt securities, for other securities of the same series of the same aggregate principal amount or of a different authorized series or different authorized denomination or denominations, or both;

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the portion of the principal amount of the debt securities, if other than the principal amount thereof, which shall be payable upon declaration of acceleration of the maturity thereof as more fully described under the section “—Events of Default, Notice and Waiver” below;

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whether the debt securities will be issued in the form of global securities and, if so, the identity of the depositary with respect to such global securities;

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with respect to subordinated debt securities only, the amendment or modification of the subordination provisions in the subordinated indenture with respect to the debt securities; and

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any other specific terms.

We may issue debt securities of any series at various times and we may reopen any series for further issuances from time to time without notice to existing holders of securities of that series.

Some of the debt securities may be issued as original issue discount debt securities. Original issue discount debt securities bear no interest or bear interest at below-market rates. These are sold at a discount below their stated principal amount. If we issue these securities, the prospectus supplement relating to such series of debt securities will describe any special tax, accounting or other information which we think is important. We encourage you to consult with your own competent tax and financial advisors on these important matters.

Unless we specify otherwise in the applicable prospectus supplement relating to such series of debt securities, the covenants contained in the indentures will not provide special protection to holders of debt securities if we enter into a highly leveraged transaction, recapitalization or restructuring.

Unless otherwise set forth in the prospectus supplement relating to such series of debt securities, interest on outstanding debt securities will be paid to holders of record on the date that is 15 days prior to the date such interest is to be paid or, if not a business day, the next preceding business day. Unless otherwise specified in the prospectus supplement, debt securities will be issued in fully registered form only. Unless otherwise specified in

the prospectus supplement, the principal amount of the debt securities will be payable at the corporate trust office of the Trustee in New York, New York. The debt securities may be presented for transfer or exchange at such office unless otherwise specified in the prospectus supplement, subject to the limitations provided in the applicable indenture, without any service charge, but we may require payment of a sum sufficient to cover any tax or other governmental charges payable in connection therewith.

Ranking and Subordination

General

The debt securities will effectively rank junior in right of payment to any of our current or future secured obligations to the extent of the value of the assets securing such obligations. The debt securities will be effectively subordinated to all existing and future liabilities, including indebtedness and trade payables, of our subsidiaries. Unless otherwise set forth in the prospectus supplement relating to such series of debt securities, the indentures will not limit the amount of unsecured indebtedness or other liabilities that can be incurred by our subsidiaries.

Ranking of Debt Securities

The senior debt securities described in this prospectus will be unsecured, senior obligations of the Company and will rank equally with our other unsecured and unsubordinated obligations. The subordinated debt securities will be unsecured, subordinated obligations of the Company.

Subordination

If issued, the indebtedness evidenced by the subordinated debt securities will be subordinate to the prior payment in full of all our Senior Indebtedness (as defined below). During the continuance beyond any applicable grace period of any default in the payment of principal, premium, interest or any other payment due on any of our Senior Indebtedness, we may not make any payment of principal of, or premium, if any, or interest on the subordinated debt securities. In addition, upon any payment or distribution of our assets upon any dissolution, winding up, liquidation or reorganization, the payment of the principal of, or premium, if any, and interest on the subordinated debt securities will be subordinated to the extent provided in the subordinated indenture in right of payment to the prior payment in full of all our Senior Indebtedness. Because of this subordination, if we dissolve or otherwise liquidate, holders of our subordinated debt securities may receive less, ratably, than holders of our Senior Indebtedness. The subordination provisions do not prevent the occurrence of an event of default under the subordinated indenture.

The term “Senior Indebtedness” of a person means with respect to such person the principal of, premium, if any, interest on, and any other payment due pursuant to any of the following, whether outstanding on the date of the subordinated indenture or incurred by that person in the future:

•

all of the indebtedness of that person for borrowed money, including any indebtedness secured by a mortgage or other lien which is (1) given to secure all or part of the purchase price of property subject to the mortgage or lien, whether given to the vendor of that property or to another lender, or (2) existing on property at the time that person acquires it;

•

all of the indebtedness of that person evidenced by notes, debentures, bonds or other similar instruments sold by that person for money;

•

all of the lease obligations which are capitalized on the books of that person in accordance with generally accepted accounting principles;

•

all indebtedness of others of the kinds described in the first two bullet points above and all lease obligations of others of the kind described in the third bullet point above, in each case, that the person, in any manner, assumes or guarantees or that the person in effect guarantees through an agreement to purchase, whether that agreement is contingent or otherwise; and

•

all renewals, extensions or refundings of indebtedness of the kinds described in the first, second or fourth bullet point above and all renewals or extensions of leases of the kinds described in the third or fourth bullet point above;

unless, in the case of any particular indebtedness, lease, renewal, extension or refunding, the instrument or lease creating or evidencing it or the assumption or guarantee relating to it expressly provides that such indebtedness, lease, renewal, extension or refunding is not superior in right of payment to the subordinated debt securities. Our senior debt securities and any unsubordinated guarantee obligations of the Company constitute Senior Indebtedness for purposes of the subordinated indenture.

Pursuant to the subordinated indenture, the subordinated indenture may not be amended, at any time, to alter the subordination provisions of any outstanding subordinated debt securities without the consent of the requisite holders of each outstanding series or class of Senior Indebtedness (as determined in accordance with the instrument governing such Senior Indebtedness) that would be adversely affected thereby.

Optional Redemption

Unless we specify otherwise in the applicable prospectus supplement, we may redeem any of the debt securities as a whole at any time or in part from time to time, at our option, on at least 15 days, but not more than 45 days, prior notice mailed to the registered address of each holder of the debt securities to be redeemed, at respective redemption prices equal to the greater of:

•

100% of the principal amount of the debt securities to be redeemed, and

•

the sum of the present values of the Remaining Scheduled Payments, as defined below, discounted to the redemption date, on a semi-annual basis, assuming a 360 day year consisting of twelve 30 day months, at the Treasury Rate, as defined below, plus the number, if any, of basis points specified in the applicable prospectus supplement;

plus, in each case, accrued interest to the date of redemption that has not been paid (such redemption price, the “Redemption Price”).

“Comparable Treasury Issue” means, with respect to the debt securities, the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (“Remaining Life”) of the debt securities being redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the Remaining Life of such debt securities.

“Comparable Treasury Price” means, with respect to any redemption date for the debt securities: (1) the average of two Reference Treasury Dealer Quotations for that redemption date, after excluding the highest and lowest of four such Reference Treasury Dealer Quotations; or (2) if the Trustee obtains fewer than four Reference Treasury Dealer Quotations, the average of all quotations obtained by the Trustee.

“Independent Investment Banker” means one of the Reference Treasury Dealers, to be appointed by us.

“Reference Treasury Dealer” means four primary U.S. Government securities dealers to be selected by us.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, quoted in writing to the Trustee by such Reference Treasury Dealer at 3:00 p.m., New York City time, on the third business day preceding such redemption date.

“Remaining Scheduled Payments” means, with respect to each debt security to be redeemed, the remaining scheduled payments of the principal thereof and interest thereon that would be due after the related redemption

date but for such redemption; provided, however, that, if such redemption date is not an interest payment date with respect to such debt security, the amount of the next succeeding scheduled interest payment thereon will be deemed to be reduced by the amount of interest accrued thereon to such redemption date.

“Treasury Rate” means, with respect to any redemption date for the debt securities: (1) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury debt securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue; provided that if no maturity is within three months before or after the maturity date for the debt securities, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from those yields on a straight line basis, rounding to the nearest month; or (2) if that release, or any successor release, is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that redemption date. The Treasury Rate will be calculated on the third business day preceding the redemption date.

On and after the redemption date, interest will cease to accrue on the debt securities or any portion thereof called for redemption, unless we default in the payment of the Redemption Price, and accrued interest. On or before the redemption date, we shall deposit with a paying agent, or the applicable Trustee, money sufficient to pay the Redemption Price of and accrued interest on the debt securities to be redeemed on such date. If we elect to redeem less than all of the debt securities of a series, then the Trustee will select the particular debt securities of such series to be redeemed in a manner it deems appropriate and fair.

Consolidation, Merger, Conveyance or Transfer on Certain Terms

For so long as any debt securities are outstanding, except as described in the applicable prospectus supplement relating to such debt securities, we will not consolidate with or merge into any other entity or convey or transfer its properties and assets substantially as an entirety to any entity, unless:

•

the entity formed by such consolidation or into which the Company is merged or the entity that acquires by conveyance or transfer the properties and assets of the Company substantially as an entirety will expressly assume, by supplemental indenture, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest on all the debt securities and the performance of every covenant of the applicable indenture (as supplemented from time to time) on the part of the Company to be performed or observed;

•

immediately after giving effect to such transaction, no Event of Default (as defined below), and no event which, after notice or lapse of time, or both, would become an Event of Default, shall have happened and be continuing; and

•

we have delivered to the Trustee an officers’ certificate and an opinion of counsel each stating that such consolidation, merger, conveyance or transfer and such supplemental indenture comply with this covenant and that all conditions precedent provided for relating to such transaction have been complied with.

Upon any consolidation or merger, or any conveyance or transfer of the properties and assets of the Company substantially as an entirety as set forth above, the successor person formed by such consolidation or into which we are merged or to which such conveyance or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of the Company under the applicable indenture with the same effect as if such successor had been named as the Company in the applicable indenture. In the event of any such

conveyance or transfer, the Company as the predecessor shall be discharged from all obligations and covenants under the applicable indenture and the debt securities issued under such indenture and may be dissolved, wound up or liquidated at any time thereafter.

Certain Covenants

Any covenants of the Company pertaining to a series of debt securities will be set forth in a prospectus supplement relating to such series of debt securities.

Except as described in the prospectus and any applicable prospectus supplement relating to such series of debt securities, the indentures and the debt securities do not contain any covenants or other provisions designed to afford holders of debt securities protection in the event of a recapitalization or highly leveraged transaction involving us.

Certain Definitions

The following are certain of the terms defined in the indentures:

“GAAP” means generally accepted accounting principles as such principles are in effect in the United States as of the date of the applicable indenture.

“Significant Subsidiary” means any Subsidiary which would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act of 1933, as amended, as in effect on the date of the applicable indenture.

“Subsidiary” means, with respect to any person, any corporation more than 50% of the voting stock of which is owned directly or indirectly by such person, and any partnership, association, joint venture or other entity in which such person owns more than 50% of the equity interests or has the power to elect a majority of the board of directors or other governing body.

Defeasance

Except as otherwise set forth in the prospectus supplement relating to the debt securities, each indenture will provide that we, at our option,

(a)

will be discharged from any and all obligations in respect of any series of debt securities (except in each case for certain obligations to register the transfer or exchange of debt securities, replace stolen, lost or mutilated debt securities, maintain paying agencies and hold monies for payment in trust), or

(b)

need not comply with any restrictive covenants described in a prospectus supplement relating to such series of debt securities and certain Events of Default (other than those arising out of the failure to pay interest or principal on the debt securities of a particular series and certain events of bankruptcy, insolvency and reorganization) will no longer constitute Events of Default with respect to such series of debt securities,

in each case, if we deposit with the Trustee, in trust, money or the equivalent in securities of the government which issued the currency in which the debt securities are denominated or government agencies backed by the full faith and credit of such government, or a combination thereof, which through the payment of interest thereon and principal thereof in accordance with their terms will provide money in an amount sufficient to pay all the principal (including any mandatory sinking fund payments) of, and interest on, such series on the dates such payments are due in accordance with the terms of such series.

To exercise any such option, we are required, among other things, to deliver to the Trustee an opinion of counsel to the effect that the deposit and related defeasance would not cause the holders of such series to

recognize income, gain or loss for federal income tax purposes and, in the case of a discharge pursuant to clause (a) above, accompanied by a ruling to such effect received from or published by the U.S. Internal Revenue Service.

In addition, we are required to deliver to the Trustee an officers’ certificate stating that such deposit was not made by us with the intent of preferring the holders over other creditors of ours or with the intent of defeating, hindering, delaying or defrauding creditors of ours or others.

Events of Default, Notice and Waiver

Except as otherwise set forth in the prospectus supplement relating to such series of debt securities, each indenture will provide that, if an Event of Default specified therein with respect to any series of debt securities issued thereunder shall have happened and be continuing, either the Trustee thereunder or the holders of 33¹/ 3% in aggregate principal amount of the outstanding debt securities of such series (or 33¹/3% in aggregate principal amount of all outstanding debt securities under such indenture, in the case of certain Events of Default affecting all series of debt securities issued under such indenture) may declare the principal of all the debt securities of such series to be due and payable.

Except as otherwise set forth in the prospectus supplement relating to such series of debt securities, an “Event of Default” in respect of any series will be defined in the indentures as being any one of the following events:

•

default for 30 days in payment of any interest installment with respect to such series;

•

default in payment of principal of, or premium, if any, on, or any sinking or purchase fund or analogous obligation with respect to, debt securities of such series when due at their stated maturity, by declaration or acceleration, when called for redemption or otherwise;

•

default for 90 days after written notice to us by the Trustee thereunder or by holders of 33¹/3% in aggregate principal amount of the outstanding debt securities of such series in the performance, or breach, of any covenant or warranty pertaining to debt securities of such series; and

•

certain events of bankruptcy, insolvency and reorganization with respect to us or any Significant Subsidiary of ours which is organized under the laws of the United States or any political sub-division thereof or the entry of an order ordering the winding up or liquidation of our affairs.

Each indenture will provide that the Trustee thereunder will, within 90 days after the occurrence of a default with respect to the debt securities of any series issued under such indenture, give to the holders of the debt securities of such series notice of all uncured and unwaived defaults known to it; provided, however, that, except in the case of default in the payment of principal of, premium, if any, or interest, if any, on any of the debt securities of such series, the Trustee will be protected in withholding such notice if it in good faith determines that the withholding of such notice is in the interests of the holders of the debt securities of such series. The term “default” for the purpose of this provision means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to debt securities of such series.

Each indenture will contain provisions entitling the Trustee under such indenture, subject to the duty of the Trustee during an Event of Default to act with the required standard of care, to be indemnified to its reasonable satisfaction by the holders of the debt securities before proceeding to exercise any right or power under the applicable indenture at the request of holders of such debt securities.

Each indenture will provide that the holders of a majority in aggregate principal amount of the outstanding debt securities of any series issued under such indenture may direct the time, method and place of conducting proceedings for remedies available to the Trustee or exercising any trust or power conferred on the Trustee in respect of such series, subject to certain conditions.

Except as otherwise set forth in the prospectus supplement relating to the debt securities, in certain cases, the holders of a majority in principal amount of the outstanding debt securities of any series may waive, on behalf of the holders of all debt securities of such series, any past default or Event of Default with respect to the debt securities of such series except, among other things, a default not theretofore cured in payment of the principal of, or premium, if any, or interest, if any, on any of the senior debt securities of such series or payment of any sinking or purchase fund or analogous obligations with respect to such senior debt securities.

Each indenture will include a covenant that we will file annually with the Trustee a certificate of no default or specifying any default that exists.

Modification of the Indentures

Except as set forth in the prospectus supplement relating to the debt securities, we and the Trustee may, without the consent of the holders of the debt securities issued under the indenture governing such debt securities, enter into indentures supplemental to the applicable indenture for, among others, one or more of the following purposes:

(1)

to evidence the succession of another person to us and the assumption by such successor of the Company’s obligations under the applicable indenture and the debt securities of any series;

(2)

to add to the covenants of the Company or to surrender any rights or powers of the Company for the benefit of the holders of debt securities of any or all series issued under such indenture;

(3)

to cure any ambiguity, to correct or supplement any provision in the applicable indenture which may be inconsistent with any other provision therein, or to make any other provisions with respect to matters or questions arising under such indenture;

(4)

to add to the applicable indenture any provisions that may be expressly permitted by the Trust Indenture Act of 1939, as amended (the “TIA”), excluding the provisions referred to in Section 316(a)(2) of the TIA as in effect at the date as of which the applicable indenture was executed or any corresponding provision in any similar federal statute hereafter enacted;

(5)

to establish the form or terms of any series of debt securities to be issued under the applicable indenture, to provide for the issuance of any series of debt securities and/or to add to the rights of the holders of debt securities;

(6)

to evidence and provide for the acceptance of any successor Trustee with respect to one or more series of debt securities or to add or change any of the provisions of the applicable indenture as shall be necessary to facilitate the administration of the trusts thereunder by one or more trustees in accordance with the applicable indenture;

(7)

to provide any additional Events of Default;

(8)

to provide for uncertificated securities in addition to or in place of certificated securities; provided that the uncertificated securities are issued in registered form for certain federal tax purposes;

(9)

to provide for the terms and conditions of converting those debt securities that are convertible into common stock or another such similar security;

(10)

to secure any series of debt securities;

(11)

to make any change necessary to comply with any requirement of the SEC in connection with the qualification of the applicable indenture or any supplemental indenture under the TIA; and

(12)

to make any other change that does not adversely affect the rights of the holders of the debt securities.

No supplemental indenture for the purpose identified in clauses (2), (3) or (5) above may be entered into if to do so would adversely affect the rights of the holders of debt securities of any series issued under the same indenture in any material respect.

Except as set forth in the prospectus supplement relating to such series of debt securities, each indenture will contain provisions permitting us and the Trustee under such indenture, with the consent of the holders of a majority in principal amount of the outstanding debt securities of all series issued under such indenture to be affected voting as a single class, to execute supplemental indentures for the purpose of adding any provisions to or changing or eliminating any of the provisions of applicable indenture or modifying the rights of the holders of the debt securities of such series to be affected, except that no such supplemental indenture may, without the consent of the holders of affected debt securities, among other things:

•

change the maturity of the principal of, or the maturity of any premium on, or any installment of interest on, any such debt security, or reduce the principal amount or the interest or any premium of any such debt securities, or change the method of computing the amount of principal or interest on any such debt securities on any date or change any place of payment where, or the currency in which, any debt securities or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the maturity of principal or premium, as the case may be;

•

reduce the percentage in principal amount of any such debt securities the consent of whose holders is required for any supplemental indenture, waiver of compliance with certain provisions of the applicable indenture or certain defaults under the applicable indenture;

•

modify any of the provisions of applicable indenture related to (i) the requirement that the holders of debt securities issued under such indenture consent to certain amendments of the applicable indenture, (ii) the waiver of past defaults and (iii) the waiver of certain covenants, except to increase the percentage of holders required to make such amendments or grant such waivers; or

•

impair or adversely affect the right of any holder to institute suit for the enforcement of any payment on, or with respect to, such senior debt securities on or after the maturity of such debt securities.

In addition, the subordinated indenture will provide that we may not make any change in the terms of the subordination of the subordinated debt securities of any series in a manner adverse in any material respect to the holders of any series of subordinated debt securities without the consent of each holder of subordinated debt securities that would be adversely affected.

The Trustee

U.S. Bank National Association is the Trustee under each indenture. The Trustee and its affiliates may also provide banking, trustee and other services for us, and transact other banking business with us, in the normal course of business.

Governing Law

The indentures will be governed by, and construed in accordance with, the laws of the State of New York.

Global Securities

We may issue debt securities through global securities. A global security is a security, typically held by a depositary, that represents the beneficial interests of a number of purchasers of the security. If we do issue global securities, the following procedures will apply.

We will deposit global securities with the depositary identified in the prospectus supplement. After we issue a global security, the depositary will credit on its book-entry registration and transfer system the respective

principal amounts of the debt securities represented by the global security to the accounts of persons who have accounts with the depositary. These account holders are known as “participants.” The underwriters or agents participating in the distribution of the debt securities will designate the accounts to be credited. Only a participant or a person who holds an interest through a participant may be the beneficial owner of a global security. Ownership of beneficial interests in the global security will be shown on, and the transfer of that ownership will be effected only through, records maintained by the depositary and its participants.

We and the Trustee will treat the depositary or its nominee as the sole owner or holder of the debt securities represented by a global security. Except as set forth below, owners of beneficial interests in a global security will not be entitled to have the debt securities represented by the global security registered in their names. They also will not receive or be entitled to receive physical delivery of the debt securities in definitive form and will not be considered the owners or holders of the debt securities.

Principal, any premium and any interest payments on debt securities represented by a global security registered in the name of a depositary or its nominee will be made to the depositary or its nominee as the registered owner of the global security. None of us, the Trustee or any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the global security or maintaining, supervising or reviewing any records relating to the beneficial ownership interests.

We expect that the depositary, upon receipt of any payments, will immediately credit participants’ accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the global security as shown on the depositary’s records. We also expect that payments by participants to owners of beneficial interests in the global security will be governed by standing instructions and customary practices, as is the case with the securities held for the accounts of customers registered in “street names,” and will be the responsibility of the participants.

If the depositary is at any time unwilling or unable to continue as depositary and a successor depositary is not appointed by us within 90 days, we will issue registered securities in exchange for the global security. In addition, we may at any time in our sole discretion determine not to have any of the debt securities of a series represented by global securities. In that event, we will issue debt securities of that series in definitive form in exchange for the global securities.

DESCRIPTION OF THE DEPOSITARY SHARES

General

We may, at our option, elect to offer fractional shares rather than full shares of the preferred stock of a series. In the event that we determine to do so, we will issue receipts for depositary shares, each of which will represent a fraction (to be set forth in the prospectus supplement relating to a particular series of preferred stock) of a share of a particular series of preferred stock as more fully described below.

The shares of any series of preferred stock represented by depositary shares will be deposited under one or more deposit agreements among us, a depositary to be named in the applicable prospectus supplement, and the holders from time to time of depositary receipts issued thereunder. Subject to the terms of the applicable deposit agreement, each holder of a depositary share will be entitled, in proportion to the applicable fraction of a share of preferred stock represented by the depositary share, to all the rights and preferences of the preferred stock represented thereby (including, as applicable, dividend, voting, redemption, subscription and liquidation rights).

The depositary shares will be evidenced by depositary receipts issued pursuant to the deposit agreement. Depositary receipts will be distributed to those persons purchasing the fractional shares of the related series of preferred stock.

The following description sets forth certain general terms and provisions of the depositary shares to which any prospectus supplement may relate. The particular terms of the depositary shares to which any prospectus supplement may relate and the extent, if any, to which such general provisions may apply to the depositary shares so offered will be described in the applicable prospectus supplement. To the extent that any particular terms of the depositary shares or the deposit agreement described in a prospectus supplement differ from any of the terms described below, then the terms described below will be deemed to have been superseded by that prospectus supplement relating to such deposited shares. The forms of deposit agreement and depositary receipt will be filed as exhibits to the documents incorporated or deemed to be incorporated by reference in this prospectus.

The following summary of certain provisions of the depositary shares and deposit agreement does not purport to be complete and is subject to, and is qualified in its entirety by express reference to, all the provisions of the deposit agreement and the applicable prospectus supplement, including the definitions.

Immediately following our issuance of shares of a series of preferred stock that will be offered as fractional shares, we will deposit the shares with the depositary, which will then issue and deliver the depositary receipts to the purchasers thereof. Depositary receipts will only be issued evidencing whole depositary shares. A depositary receipt may evidence any number of whole depositary shares.

Pending the preparation of definitive depositary receipts, the depositary may, upon our written order, issue temporary depositary receipts substantially identical to (and entitling the holders thereof to all the rights pertaining to) the definitive depositary receipts but not in definitive form. Definitive depositary receipts will be prepared thereafter without unreasonable delay, and such temporary depositary receipts will be exchangeable for definitive depositary receipts at our expense.

Dividends and Other Distributions

The depositary will distribute all cash dividends or other cash distributions received in respect of the related series of preferred stock to the record holders of depositary shares relating to the series of preferred stock in proportion to the number of the depositary shares owned by the holders.

In the event of a distribution other than in cash, the depositary will distribute property received by it to the record holders of depositary shares entitled thereto in proportion to the number of depositary shares owned by the

holders, unless the depositary determines that the distribution cannot be made proportionately among the holders or that it is not feasible to make the distributions, in which case the depositary may, with our approval, adopt any method as it deems equitable and practicable for the purpose of effecting the distribution, including the sale (at public or private sale) of the securities or property thus received, or any part thereof, at the place or places and upon those terms as it may deem proper.

The amount distributed in any of the foregoing cases will be reduced by any amounts required to be withheld by us or the depositary on account of taxes or other governmental charges.

Redemption of Depositary Shares

If any series of the preferred stock underlying the depositary shares is subject to redemption, the depositary shares will be redeemed from the proceeds received by the depositary resulting from any redemption, in whole or in part, of the series of the preferred stock held by the depositary. The redemption price per depositary share will be equal to the applicable fraction of the redemption price per share payable with respect to the series of the preferred stock. If we redeem shares of a series of preferred stock held by the depositary, the depositary will redeem as of the same redemption date the number of depositary shares representing the shares of preferred stock so redeemed. If less than all the depositary shares are to be redeemed, the depositary shares to be redeemed will be selected by lot or substantially equivalent method determined by the depositary.

After the date fixed for redemption, the depositary shares so called for redemption will no longer be deemed to be outstanding and all rights of the holders of the depositary shares will cease, except the right to receive the monies payable upon redemption and any money or other property to which the holders of the depositary shares were entitled upon such redemption, upon surrender to the depositary of the depositary receipts evidencing the depositary shares. Any funds deposited by us with the depositary for any depositary shares that the holders thereof fail to redeem will be returned to us after a period of two years from the date the funds are so deposited.

Voting the Underlying Preferred Stock

Upon receipt of notice of any meeting at which the holders of any series of the preferred stock are entitled to vote, the depositary will mail the information contained in the notice of meeting to the record holders of the depositary shares relating to the series of preferred stock. Each record holder of the depositary shares on the record date (which will be the same date as the record date for the related series of preferred stock) will be entitled to instruct the depositary as to the exercise of the voting rights pertaining to the number of shares of the series of preferred stock represented by that holder’s depositary shares. The depositary will endeavor, insofar as practicable, to vote or cause to be voted the number of shares of preferred stock represented by the depositary shares in accordance with the instructions, provided the depositary receives the instructions sufficiently in advance of the meeting to enable it to so vote or cause to be voted the shares of preferred stock, and we will agree to take all reasonable action that may be deemed necessary by the depositary in order to enable the depositary to do so. The depositary will abstain from voting shares of the preferred stock to the extent it does not receive specific instructions from the holders of depositary shares representing the preferred stock.

Withdrawal of Stock

Upon surrender of the depositary receipts at the corporate trust office of the depositary and upon payment of the taxes, charges and fees provided for in the deposit agreement and subject to the terms thereof, the holder of the depositary shares evidenced thereby will be entitled to delivery at such office, to or upon his or her order, of the number of whole shares of the related series of preferred stock and any money or other property, if any, represented by the depositary shares. Holders of depositary shares will be entitled to receive whole shares of the related series of preferred stock, but holders of the whole shares of preferred stock will not thereafter be entitled to deposit the shares of preferred stock with the depositary or to receive depositary shares therefor. If the depositary receipts delivered by the holder evidence a number of depositary shares in excess of the number of

depositary shares representing the number of whole shares of the related series of preferred stock to be withdrawn, the depositary will deliver to the holder or upon his or her order at the same time a new depositary receipt evidencing the excess number of depositary shares.

Amendment and Termination of a Deposit Agreement

The form of depositary receipt evidencing the depositary shares of any series and any provision of the applicable deposit agreement may at any time and from time to time be amended by agreement between us and the depositary. However, any amendment that materially adversely alters the rights of the holders of depositary shares of any series will not be effective unless the amendment has been approved by the holders of at least a majority of the depositary shares of the series then outstanding. Every holder of a depositary receipt at the time the amendment becomes effective will be deemed, by continuing to hold the depositary receipt, to be bound by the deposit agreement as so amended. Notwithstanding the foregoing, in no event may any amendment impair the right of any holder of any depositary shares, upon surrender of the depositary receipts evidencing the depositary shares and subject to any conditions specified in the deposit agreement, to receive shares of the related series of preferred stock and any money or other property represented thereby, except in order to comply with mandatory provisions of applicable law. The deposit agreement may be terminated by us at any time upon not less than 60 days prior written notice to the depositary, in which case, on a date that is not later than 30 days after the date of the notice, the depositary shall deliver or make available for delivery to holders of depositary shares, upon surrender of the depositary receipts evidencing the depositary shares, the number of whole or fractional shares of the related series of preferred stock as are represented by the depositary shares. The deposit agreement shall automatically terminate after all outstanding depositary shares have been redeemed or there has been a final distribution in respect of the related series of preferred stock in connection with any liquidation, dissolution or winding up of us and the distribution has been distributed to the holders of depositary shares.

Charges of Depositary

We will pay all transfer and other taxes and the governmental charges arising solely from the existence of the depositary arrangements. We will pay the charges of the depositary, including charges in connection with the initial deposit of the related series of preferred stock and the initial issuance of the depositary shares and all withdrawals of shares of the related series of preferred stock, except that holders of depositary shares will pay transfer and other taxes and governmental charges and any other charges as are expressly provided in the deposit agreement to be for their accounts.

Resignation and Removal of Depositary

The depositary may resign at any time by delivering to us written notice of its election to do so, and we may at any time remove the depositary. Any resignation or removal will take effect upon the appointment of a successor depositary, which successor depositary must be appointed within 60 days after delivery of the notice of resignation or removal and must be a bank or trust company having its principal office in the United States and having a combined capital and surplus of at least $50,000,000.

Miscellaneous

The depositary will forward to the holders of depositary shares all reports and communications from us that are delivered to the depositary and which we are required to furnish to the holders of the related preferred stock.

The depositary’s corporate trust office will be identified in the applicable prospectus supplement. Unless otherwise set forth in the applicable prospectus supplement, the depositary will act as transfer agent and registrar for depositary receipts and if shares of a series of preferred stock are redeemable, the depositary will also act as redemption agent for the corresponding depositary receipts.

DESCRIPTION OF THE WARRANTS

The following description of the terms of the warrants sets forth certain general terms and provisions of the warrants to which any prospectus supplement may relate. We may issue warrants for the purchase of common stock, preferred stock, debt securities or depositary shares. Warrants may be issued independently or together with common stock, preferred stock, debt securities or depositary shares offered by any prospectus supplement and may be attached to or separate from any such offered securities. Each series of warrants will be issued under a separate warrant agreement to be entered into between us and a bank or trust company, as warrant agent. The warrant agent will act solely as our agent in connection with the warrants and will not assume any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants. The following summary of certain provisions of the warrants does not purport to be complete and is subject to, and qualified in its entirety by reference to, the provisions of the warrant agreement that will be filed with the SEC in connection with the offering of such warrants.

Debt Warrants

The prospectus supplement relating to a particular issue of debt warrants will describe the terms of such debt warrants, including the following:

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the title of such debt warrants;

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the offering price for such debt warrants, if any;

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the aggregate number of such debt warrants;

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the designation and terms of the debt securities purchasable upon exercise of such debt warrants;

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if applicable, the designation and terms of the debt securities with which such debt warrants are issued and the number of such debt warrants issued with each such debt security;

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if applicable, the date from and after which such debt warrants and any debt securities issued therewith will be separately transferable;

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the principal amount of debt securities purchasable upon exercise of a debt warrant and the price at which such principal amount of debt securities may be purchased upon exercise (which price may be payable in cash, securities or other property);

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the date on which the right to exercise such debt warrants shall commence and the date on which such right shall expire;

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if applicable, the minimum or maximum amount of such debt warrants that may be exercised at any one time;

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whether the debt warrants represented by the debt warrant certificates or debt securities that may be issued upon exercise of the debt warrants will be issued in registered or bearer form;

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information with respect to book-entry procedures, if any;

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the currency or currency units in which the offering price, if any, and the exercise price are payable;

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if applicable, a discussion of material United States federal income tax considerations;

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the antidilution or adjustment provisions of such debt warrants, if any;

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the redemption or call provisions, if any, applicable to such debt warrants; and

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any additional terms of such debt warrants, including terms, procedures, and limitations relating to the exchange and exercise of such debt warrants.

Stock Warrants

The prospectus supplement relating to any particular issue of common stock warrants, preferred stock warrants or depositary share warrants will describe the terms of such warrants, including the following:

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the title of such warrants;

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the offering price for such warrants, if any;

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the aggregate number of such warrants;

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the designation and terms of the offered securities purchasable upon exercise of such warrants;

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if applicable, the designation and terms of the offered securities with which such warrants are issued and the number of such warrants issued with each such offered security;

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if applicable, the date from and after which such warrants and any offered securities issued therewith will be separately transferable;

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the number of shares of common stock, preferred stock or depositary shares purchasable upon exercise of a warrant and the price at which such shares may be purchased upon exercise;

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the date on which the right to exercise such warrants shall commence and the date on which such right shall expire;

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if applicable, the minimum or maximum amount of such warrants that may be exercised at any one time;

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the currency or currency units in which the offering price, if any, and the exercise price are payable;

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if applicable, a discussion of material United States federal income tax considerations;

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the antidilution provisions of such warrants, if any;

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the redemption or call provisions, if any, applicable to such warrants; and

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any additional terms of such warrants, including terms, procedures and limitations relating to the exchange and exercise of such warrants.

DESCRIPTION OF THE RIGHTS

We may issue rights to purchase our common stock. The rights may or may not be transferable by the persons purchasing or receiving the rights. In connection with any rights offering, we may enter into a standby underwriting or other arrangement with one or more underwriters or other persons pursuant to which such underwriters or other persons would purchase any offered securities remaining unsubscribed for after such rights offering. Each series of rights will be issued under a separate rights agreement to be entered into between us and one or more banks, trust companies or other financial institutions, as rights agent, that we will name in the applicable prospectus supplement. The rights agent will act solely as our agent in connection with the rights and will not assume any obligation or relationship of agency or trust for or with any holders of rights certificates or beneficial owners of rights.

The prospectus supplement relating to any rights that we offer will include specific terms relating to the offering, including, among other matters:

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the date of determining the security holders entitled to the rights distribution;

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the aggregate number of rights issued and the aggregate number of shares of common stock purchasable upon exercise of the rights;

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the exercise price;

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the conditions to completion of the rights offering;

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the date on which the right to exercise the rights will commence and the date on which the rights will expire; and

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if applicable, a discussion of material United States federal income tax considerations.

Each right would entitle the holder of the rights to purchase for cash the principal amount of shares of common stock at the exercise price set forth in the applicable prospectus supplement. Rights may be exercised at any time up to the close of business on the expiration date for the rights provided in the applicable prospectus supplement. After the close of business on the expiration date, all unexercised rights will become void.

If less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to persons other than our security holders, to or through agents, underwriters or dealers or through a combination of such methods, including pursuant to standby arrangements, as described in the applicable prospectus supplement.

DESCRIPTION OF THE PURCHASE CONTRACTS

We may issue, from time to time, purchase contracts, including contracts obligating holders to purchase from us and us to sell to the holders, a specified principal amount of senior debt securities, subordinated debt securities, shares of common stock or preferred stock, depositary shares, government securities, or any of the other securities that we may sell under this prospectus at a future date or dates. The consideration payable upon settlement of the purchase contracts may be fixed at the time the purchase contracts are issued or may be determined by a specific reference to a formula set forth in the purchase contracts. The purchase contracts may be issued separately or as part of units consisting of a purchase contract and other securities or obligations issued by us or third parties, including United States treasury securities, securing the holders’ obligations to purchase the relevant securities under the purchase contracts. The purchase contracts may require us to make periodic payments to the holders of the purchase contracts or units or vice versa, and the payments may be unsecured or prefunded on some basis. The purchase contracts may require holders to secure their obligations under the purchase contracts.

The prospectus supplement related to any particular purchase contracts will describe, among other things, the material terms of the purchase contracts and of the securities being sold pursuant to such purchase contracts, a discussion, if appropriate, of any special United States federal income tax considerations applicable to the purchase contracts and any material provisions governing the purchase contracts that differ from those described above. The description in the prospectus supplement will not necessarily be complete and will be qualified in its entirety by reference to the purchase contracts, and, if applicable, collateral arrangements and depositary arrangements, relating to the purchase contracts.

DESCRIPTION OF THE UNITS

We may, from time to time, issue units comprised of one or more of the other securities that may be offered under this prospectus, in any combination. Each unit may also include debt obligations of third parties, such as U.S. Treasury securities. Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately at any time, or at any time before a specified date.

Any prospectus supplement related to any particular units will describe, among other things:

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the material terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;

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any material provisions relating to the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units;

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if appropriate, any special United States federal income tax considerations applicable to the units; and

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any material provisions of the governing unit agreement that differ from those described above.

PLAN OF DISTRIBUTION

We or the selling stockholders may offer and sell the securities in any one or more of the following ways:

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to or through underwriters, brokers or dealers;

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directly to one or more other purchasers;

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upon the exercise of rights distributed or issued to our security holders;

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through a block trade in which the broker or dealer engaged to handle the block trade will attempt to sell the securities as agent, but may position and resell a portion of the block as principal to facilitate the transaction;

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through agents on a best-efforts basis; or

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otherwise through a combination of any of the above methods of sale.

In addition, we or the selling stockholders may enter into option, share lending or other types of transactions that require us or such selling stockholders, as applicable, to deliver shares of common stock to an underwriter, broker or dealer, who will then resell or transfer the shares of common stock under this prospectus. We or the selling stockholders may also enter into hedging transactions with respect to our securities or the securities of such selling stockholders, as applicable. For example, we or the selling stockholders may:

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enter into transactions involving short sales of the shares of common stock by underwriters, brokers or dealers;

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sell shares of common stock short and deliver the shares to close out short positions;

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enter into option or other types of transactions that require us or the selling stockholders, as applicable, to deliver shares of common stock to an underwriter, broker or dealer, who will then resell or transfer the shares of common stock under this prospectus; or

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loan or pledge the shares of common stock to an underwriter, broker or dealer, who may sell the loaned shares or, in the event of default, sell the pledged shares.

Any selling stockholder will act independently of us in making decisions with respect to the timing, manner and size of each sale of shares of common stock covered by this prospectus.

We or the selling stockholders may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by us or such selling stockholders, as applicable, or borrowed from us, such selling stockholders or others to settle those sales or to close out any related open borrowings of stock, and may use securities received from us or selling stockholders in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and, if not identified in this prospectus, will be identified in the applicable prospectus supplement (or a post-effective amendment). In addition, we or the selling stockholders may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell the securities short using this prospectus. Such financial institution or other third party may transfer its economic short position to investors in our securities or the securities of such selling stockholders, as applicable, or in connection with a concurrent offering of other securities.

Shares of common stock may also be exchanged for satisfaction of the selling stockholders’ obligations or other liabilities to their creditors. Such transactions may or may not involve brokers or dealers.

Each time we or the selling stockholders sell securities, we will provide a prospectus supplement that will name any underwriter, dealer or agent involved in the offer and sale of the securities. The prospectus supplement will also set forth the terms of the offering, including:

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the purchase price of the securities and the proceeds we and/or such selling stockholders, as applicable, will receive from the sale of the securities;

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any underwriting discounts and other items constituting underwriters’ compensation;

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any public offering or purchase price and any discounts or commissions allowed or re-allowed or paid to dealers;

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any commissions allowed or paid to agents;

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any other offering expenses;

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any securities exchanges on which the securities may be listed;

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the method of distribution of the securities;

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the terms of any agreement, arrangement or understanding entered into with the underwriters, brokers or dealers; and

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any other information we think is important.

If underwriters or dealers are used in the sale, the securities will be acquired by the underwriters or dealers for their own account. The securities may be sold from time to time by us or the selling stockholders in one or more transactions:

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at a fixed price or prices, which may be changed;

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at market prices prevailing at the time of sale;

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at prices related to such prevailing market prices;

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at varying prices determined at the time of sale; or

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at negotiated prices.

Such sales may be effected:

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in transactions on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;

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in transactions in the over-the-counter market;

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in block transactions in which the broker or dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction, or in crosses, in which the same broker acts as an agent on both sides of the trade;

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through the writing of options; or

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through other types of transactions.

The securities may be offered to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more of such firms. Unless otherwise set forth in the prospectus supplement, the obligations of underwriters or dealers to purchase the securities offered will be subject to certain conditions precedent and the underwriters or dealers will be obligated to purchase all the offered securities if any are purchased. Any public offering price and any discount or concession allowed or reallowed or paid by underwriters or dealers to other dealers may be changed from time to time.

The selling stockholders might not sell any shares of common stock under this prospectus. In addition, any shares of common stock covered by this prospectus that qualify for sale pursuant to Rule 144 under the Securities Act of 1933 may be sold under Rule 144 rather than pursuant to this prospectus.

The securities may be sold directly by us or the selling stockholders or through agents designated by us or such selling stockholders, as applicable, from time to time. Any agent involved in the offer or sale of the securities in respect of which this prospectus is delivered will be named, and any commissions payable by us or such selling stockholders, as applicable, to such agent will be set forth in, the prospectus supplement. Unless otherwise indicated in the prospectus supplement, any such agent will be acting on a best efforts basis for the period of its appointment.

Offers to purchase the securities offered by this prospectus may be solicited, and sales of the securities may be made by us or by selling stockholders directly to institutional investors or others, who may be deemed to be underwriters within the meaning of the Securities Act of 1933 with respect to any resale of the securities. The terms of any offer made in this manner will be included in the prospectus supplement relating to the offer.

If indicated in the applicable prospectus supplement, underwriters, dealers or agents will be authorized to solicit offers by certain institutional investors to purchase securities from us pursuant to contracts providing for payment and delivery at a future date. Institutional investors with which these contracts may be made include, among others:

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commercial and savings banks;

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insurance companies;

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pension funds;

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investment companies; and

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educational and charitable institutions.

In all cases, these purchasers must be approved by us or the selling stockholders, as applicable. Unless otherwise set forth in the applicable prospectus supplement, the obligations of any purchaser under any of these contracts will not be subject to any conditions except that (a) the purchase of the securities must not at the time of delivery be prohibited under the laws of any jurisdiction to which that purchaser is subject, and (b) if the securities are also being sold to underwriters, we or the selling stockholders, as applicable, must have sold to these underwriters the securities not subject to delayed delivery. Underwriters and other agents will not have any responsibility in respect of the validity or performance of these contracts.

Some of the underwriters, dealers or agents used by us or the selling stockholders in any offering of securities under this prospectus may be customers of, engage in transactions with, and perform services for us and/or such selling stockholders, as applicable, or affiliates of ours and/or theirs, as applicable, in the ordinary course of business. Underwriters, dealers, agents and other persons may be entitled under agreements which may be entered into with us and/or the selling stockholders to indemnification against and contribution toward certain civil liabilities, including liabilities under the Securities Act of 1933, and to be reimbursed by us and/or such selling stockholders for certain expenses.

Subject to any restrictions relating to debt securities in bearer form, any securities initially sold outside the United States may be resold in the United States through underwriters, dealers or otherwise.

Any underwriters to which offered securities are sold by us or the selling stockholders for public offering and sale may make a market in such securities, but those underwriters will not be obligated to do so and may discontinue any market making at any time.

The anticipated date of delivery of the securities offered by this prospectus will be described in the applicable prospectus supplement relating to the offering.

If more than 10 percent of the net proceeds of any offering of securities made under this prospectus will be received by members of the Financial Industry Regulatory Authority, or FINRA, participating in the offering or by affiliates or associated persons of such FINRA members, the offering will be conducted in accordance with NASD Conduct Rule 2710(h). The maximum compensation we will pay to underwriters in connection with any offering of the securities will not exceed 8% of the maximum proceeds of such offering.

To comply with the securities laws of some states, if applicable, the securities may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the securities may not be sold unless they have been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.

LEGAL MATTERS

Unless otherwise indicated in the applicable prospectus supplement, certain legal matters will be passed upon for us by Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, New York. If legal matters in connection with offerings made pursuant to this prospectus are passed upon by counsel for underwriters, dealers or agents, if any, such counsel will be named in the prospectus supplement relating to such offering.

EXPERTS

The consolidated financial statements of ExlService Holdings, Inc. appearing in ExlService Holdings, Inc.’s Annual Report (Form 10-K) for the year ended December 31, 2008, and the effectiveness of ExlService Holdings, Inc. internal control over financial reporting as of December 31, 2008 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

As required by the Securities Act of 1933, as amended, ExlService filed a registration statement relating to the securities offered by this prospectus with the SEC. This prospectus is a part of that registration statement, which includes additional information.

The Company files annual, quarterly and current reports, proxy statements and other information with the SEC under the Securities Exchange Act of 1934, as amended. These filings are available to the public on the SEC’s website at www.sec.gov. You may also read and copy any document the Company files at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. ExlService maintains a website at www.exlservice.com where the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports are available without charge, as soon as reasonably practicable after those reports are filed with or furnished to the SEC.

As permitted by SEC rules, this prospectus does not contain all of the information we have included in the registration statement and the accompanying exhibits and schedules we file with the SEC. You may refer to the registration statement, exhibits and schedules for more information about us and the securities. The registration statement, exhibits and schedules are available through the SEC’s website or at its public reference room.

INCORPORATION BY REFERENCE

The SEC allows us to “incorporate by reference” the information we file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus. Information that we file later with the SEC will automatically update information in this prospectus. In all cases, you should rely on the later information over different information included in this prospectus or the prospectus supplement. We incorporate by reference the following documents which have been filed with the SEC:

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Our Annual Report on Form 10-K for the year ended December 31, 2008, including portions of our Proxy Statement for the 2009 Annual Meeting of Stockholders (filed on April 30, 2009) to the extent specifically incorporated by reference therein;

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Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009, June 30, 2009 and September 30, 2009;

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Our Current Reports on Form 8-K filed on January 30, 2009, March 11, 2009 (with regard to Item 5.02 thereof only) and April 7, 2009; and

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The description of the Company’s common stock set forth in the Company’s Registration Statement on Form 8-A filed on October 17, 2006.

All documents and reports that we file with the SEC (other than any portion of such filings that are furnished under applicable SEC rules rather than filed) pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended after the date of this prospectus and before the later of (1) the completion of the offering of the securities described in this prospectus and (2) the date we stop offering securities pursuant to this prospectus, shall be incorporated by reference in this prospectus from the date of filing of such documents. The information contained on our website (www.exlservice.com) is not incorporated into this prospectus.

You should not assume that the information in this prospectus, the prospectus supplement, any applicable pricing supplement or any documents incorporated by reference is accurate as of any date other than the date of the applicable document. Any statement contained in a document incorporated or deemed to be incorporated by reference into this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or any other subsequently filed document that is deemed to be incorporated by reference into this prospectus modifies or supersedes the statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

LOGO

Common Stock

Preferred Stock

Debt Securities

Depositary Shares

Warrants

Rights

Purchase Contracts

Units

P R O S P E C T U S

, 2009

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14.

Other Expenses of Issuance and Distribution.

The following table sets forth the expenses to be borne by ExlService Holdings, Inc. in connection with the issuance and distribution of the securities being registered, excluding underwriting fees and expenses. All the amounts shown are estimates except the registration fee paid to the Securities and Exchange Commission.


SEC registration fee		$16,023
Printing and duplicating expenses		$35,000
Legal fees and expenses		$50,000
Accounting fees and expenses		$50,000
Trustee fees and expenses		$10,000
Miscellaneous expenses		$13,977

Total		$175,000

Item 15.

Indemnification of Directors and Officers.

Section 145 of the Delaware General Corporation Law, or the DGCL, provides, among other things, that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the corporation’s request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with the action, suit or proceeding. The power to indemnify applies (i) if such person is successful on the merits or otherwise in defense of any action, suit or proceeding or (ii) if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The power to indemnify applies to actions brought by or in the right of the corporation as well, but only to the extent of defense expenses (including attorneys’ fees but excluding amounts paid in settlement), actually and reasonably incurred and not to any satisfaction of judgment or settlement of the claim itself, and with the further limitation that in such actions no indemnification shall be made in the event of any adjudication of negligence or misconduct in the performance of his duties to the corporation, unless a court believes that in light of all the circumstances indemnification should apply.

Our amended and restated certificate of incorporation provides that we shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, which we refer to as a proceeding, by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was at any time from and after the effective date of our plan of reorganization, a director or officer of the corporation or, while a director or officer of the corporation, is or was at any time from and after the effective date of our plan of reorganization, serving at the written request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such person; provided, however, that we shall be required to indemnify a person in connection with a proceeding (or part thereof) initiated by such person only if the commencement of such proceeding (or part thereof) was authorized by our board of directors.

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Section 102 of the DGCL permits the limitation of directors’ personal liability to the corporation or its stockholders for monetary damages for breach of fiduciary duties as a director except for (i) any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, (iii) breaches under section 174 of the DGCL, which relates to unlawful payments of dividends or unlawful stock repurchase or redemptions, and (iv) any transaction from which the director derived an improper personal benefit.

Our amended and restated certificate of incorporation limits the personal liability of our directors to the fullest extent permitted by section 102 of the DGCL.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is therefore unenforceable.

We maintain directors’ and officers’ liability insurance for our officers and directors.

Item 16.

Exhibits.

A list of exhibits filed with this registration statement is contained in the exhibits index, which is incorporated by reference.

Item 17.

Undertakings.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

provided, however, that paragraphs (i), (ii) and (iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

(i) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

(ii) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.

(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, in a primary offering of securities of the registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the registrant or used or referred to by the registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the registrant or its securities provided by or on behalf of the registrant; and

(iv) Any other communication that is an offer in the offering made by the registrant to the purchaser.

(6) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 15 or otherwise, the registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore,

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unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, ExlService Holdings, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on November 20, 2009.


EXLSERVICE HOLDINGS, INC.

By:		/S/ ROHIT KAPOOR
Name:		Rohit Kapoor
Title:		President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed below by the following persons in the capacities indicated on November 20, 2009.


Signature		Title/Position

/S/ ROHIT KAPOOR Rohit Kapoor		Chief Executive Officer, President and Director (Principal Executive Officer)

/S/ VISHAL CHHIBBAR Vishal Chhibbar		Chief Financial Officer (Principal Financial and Accounting Officer)

/S/ VIKRAM TALWAR Vikram Talwar		Executive Chairman

* Steven B. Gruber		Director

* Edward V. Dardani		Director

* Kiran Karnik		Director

* David B. Kelso		Director

* Clyde W. Ostler		Director

* Mohanbir Sawhney		Director

* Garen K. Staglin		Director

*By:

/S/ ROHIT KAPOOR

Attorney-in-Fact

II-5

EXHIBIT INDEX


Exhibit Number		Description of Document

1.1*		Form of Underwriting Agreement for Debt Securities.

1.2*		Form of Underwriting Agreement for Equity Securities.

1.3*		Form of Underwriting Agreement for Depositary Shares.

1.4*		Form of Underwriting Agreement for Purchase Contracts.

1.5*		Form of Underwriting Agreement for Units.

1.6*		Form of Underwriting Agreement for Warrants.

3.1		Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on October 25, 2006).

3.2		Second Amended and Restated By-laws (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on April 30, 2008).

4.1		Specimen Stock Certificate (incorporated by reference to Exhibit 4.1 of Amendment 6 to the Registration Statement on Form S-1 (No. 333-121001)).

4.2		Registration Rights Agreement (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on October 25, 2006).

4.3**		Form of Indenture to be entered into by ExlService Holdings, Inc. and U.S. Bank National Association, as trustee (the “Senior Indenture”).

4.4**		Form of Indenture to be entered into by ExlService Holdings, Inc. and U.S. Bank National Association, as trustee (the “Subordinated Indenture”).

4.5*		Form of Deposit Agreement.

4.6*		Form of Depositary Receipt.

4.7*		Form of Warrant Agreement.

4.8*		Form of Warrant.

4.9*		Form of Rights Agreement.

4.10*		Form of Purchase Contract.

4.11*		Form of Unit Agreement.

5.1		Opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP.

12.1		Computation of ratio of earnings to fixed charges of ExlService Holdings, Inc.

23.1		Consent of Ernst & Young LLP.

23.2		Consent of Paul, Weiss, Rifkind, Wharton & Garrison LLP (contained in Exhibit 5.1).

24.1**		Power of Attorney.

25.1**		Statement of Eligibility and Qualification on Form T-1 of U.S. Bank National Association with respect to ExlService Holdings, Inc. under the Senior Indenture.

25.2**		Statement of Eligibility and Qualification on Form T-1 of U.S. Bank National Association with respect to ExlService Holdings, Inc. under the Subordinated Indenture.

*	To be filed, if necessary, by a post-effective amendment to the registration statement or as an exhibit to a document incorporated by reference herein.

**	Previously filed.

Opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP

Exhibit 5.1

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, New York 10019-6064

November 20, 2009

ExlService Holdings, Inc.

350 Park Avenue

New York, New York 10022

Registration Statement on Form S-3 (File No. 333-162335)

Ladies and Gentlemen:

We have acted as special counsel to ExlService Holdings, Inc., a Delaware corporation (the “Company”), in connection with the Registration Statement on Form S-3, as amended (the “Registration Statement”), of the Company filed today with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the “Act”), and the rules and regulations thereunder (the “Rules”), you have asked us to furnish our opinion as to the legality of the securities being registered under the Registration Statement. The Registration Statement relates to the registration under the Act of the following securities of the Company (together, the “Securities”):

senior debt securities (the “Company Senior Debt Securities”) and subordinated debt securities (the “Company Subordinated Debt Securities” and, together with the Company Senior Debt Securities, the “Company Debt Securities”);

shares of preferred stock (including shares issued upon conversion of the Company Debt Securities or upon the exercise of warrants or purchase contracts) of the Company, par value $0.001 per share (the “Company Preferred Stock”);

shares of common stock (including shares issuable upon conversion or exchange of the Company Debt Securities or Company Preferred Stock or upon the exercise of warrants, rights or purchase contracts) of the Company, par value $0.001 per share (the “Company Common Stock”);

6,000,000 shares of common stock of the Company, par value $0.001 per share, that may be offered by certain stockholders of the Company (the “Selling Stockholder Common Stock”);

depositary shares representing a fractional share or multiple shares of Company Preferred Stock evidenced by depositary receipts (the “Company Depositary Shares”);

warrants to purchase Company Debt Securities, Company Preferred Stock, Company Common Stock, Company Depositary Shares or any combination of them (the “Company Warrants”);

rights to purchase Company Common Stock (the “Company Rights”);

purchase contracts representing the Company’s obligation to sell Company Debt Securities, Company Preferred Stock, Company Common Stock, Depositary Shares, Company Warrants or government securities (the “Company Purchase Contracts”); and

units consisting of any combination of two or more of Company Debt Securities, Company Preferred Stock, Company Common Stock, Company Depositary Shares, Company Warrants, Company Purchase Contracts or debt obligations of third parties, including government securities (the “Company Units”).

The Securities are being registered for offering and sale from time to time as provided by Rule 415 under the Act.

The Company Senior Debt Securities are to be issued under an indenture to be entered into by and among the Company and U.S. Bank National Association, as trustee (the “Company Senior Debt Indenture”). The Company Subordinated Debt Securities are to be issued under an indenture to be entered into by and among the Company and U.S. Bank National Association, as trustee (the “Company Subordinated Debt Indenture” and, together with the Company Senior Debt Indenture, the “Company Indentures”).

The Company Depositary Shares are to be issued under deposit agreements, each between the Company and a depositary to be identified in the applicable agreement (each, a “Depositary Agreement”). The Company Warrants are to be issued under warrant agreements, each between the Company and a warrant agent to be identified in the applicable agreement (each, a “Warrant Agreement”). The Company Rights are to be issued under rights agreements, each between the Company and a rights agent to be identified in the applicable agreement (each, a “Rights Agreement”). The Company Purchase Contracts will be issued under purchase contract agreements, each between the Company and a purchase contract agent to be identified in the applicable agreement (each, a “Purchase Contract Agreement”). The Company Units are to be issued under unit agreements, each between the Company and a unit agent to be identified in the applicable agreement (each, a “Unit Agreement”).

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

1. the Registration Statement; and

2. the forms of Company Senior Debt Indenture and Company Subordinate Debt Indenture (including the form of Securities included therein) attached as Exhibits 4.1 and 4.2, respectively, to the Registration Statement.

In addition, we have examined (i) such corporate records of the Company as we have considered appropriate, including a copy of the certificate of incorporation, as amended, and by-laws, as amended, of the Company, and copies of resolutions of the board of directors of the Company and (ii) such other certificates, agreements and documents as we deemed relevant and necessary as a basis for the opinions expressed below. We have also relied upon the factual matters contained in the representations and warranties of the Company made in the documents reviewed by us and upon certificates of public officials and the officers of the Company.

In our examination of the documents referred to above, we have assumed, without independent investigation, the genuineness of all signatures, the legal capacity of all individuals who have executed any of the documents reviewed by us, the authenticity of all documents submitted to us as originals, the conformity to the originals of all documents submitted to us as certified, photostatic, reproduced or conformed copies of valid existing agreements or other documents, the authenticity of all such latter documents and that the statements regarding matters of fact in the certificates, records, agreements, instruments and documents that we have examined are accurate and complete.

We have also assumed, without independent investigation, that (i) the Company Indentures will be duly authorized, executed and delivered by the parties to them in substantially the forms filed as exhibits to the Registration Statement, (ii) each of the Depositary Agreements, the Warrant Agreements, the Rights Agreements, the Purchase Contract Agreements, the Unit Agreements and any other agreement entered into, or officer’s certificates or board resolutions delivered, in connection with the issuance of the Securities will be duly authorized, executed and delivered by the parties to such agreements (such agreements and documents, together with the Company Indentures, are referred to collectively as the “Operative Agreements”), (iii) each Operative Agreement, when so authorized, executed and delivered, will be a valid and legally binding obligation of the parties thereto (other than the Company), (iv) the Company Depositary Shares, the Company Warrants, the Company Rights, the Company Purchase Contracts, the Company Units and any related Operative Agreements will be governed by the laws of the State of New York and (v) in the case of Company Purchase Contracts or Company Units consisting at least in part of debt obligations of third parties, such debt obligations at all relevant times constitute the valid and legally binding obligations of the issuers thereof enforceable against the issuers thereof in accordance with their terms.

With respect to the Securities of a particular series or issuance, other than the Selling Stockholder Common Stock, we have assumed that (i) the issuance, sale, number or amount, as the case may be, and terms of the Securities to be offered from time to time will be duly authorized and established, in accordance with the organizational documents of the Company, the laws of the State of New York and its jurisdiction of incorporation, and any applicable Operative Agreement, (ii) prior to the issuance of a series of Company Preferred Stock, an appropriate certificate of designation or board resolution relating to such series of Company Preferred Stock will have been duly authorized by the Company and filed with the Secretary of State of Delaware, (iii) the Securities will be duly authorized, executed, issued and delivered by the Company, and, in the case of Company Debt Securities, Company Depositary Shares, Company Warrants, Company Rights, Company Purchase Contracts and Company Units, duly authenticated or delivered by the applicable trustee or agent, in each case, against payment by the purchaser at the agreed-upon consideration, and (iv) the Securities will be issued and delivered as contemplated by the Registration Statement and the applicable prospectus supplement.

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

1. When the specific terms of a particular issuance of Company Debt Securities (including any Company Debt Securities duly issued upon exercise, exchange or conversion of any Security in accordance with its terms) have been duly authorized by the Company and such Company Debt Securities have been duly executed, authenticated, issued and delivered, and, if applicable, upon exercise, exchange or conversion of any Security in accordance with its terms, such Company Debt Securities will be valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms.

2. Upon due authorization by the Company of the issuance and sale of shares of a series of Company Preferred Stock, and, if applicable, upon exercise, exchange or conversion of any Security in accordance with its terms, such shares of Company Preferred Stock will be validly issued, fully paid and non-assessable.

3. Upon due authorization by the Company of the issuance and sale of shares of Company Common Stock, and, if applicable, upon exercise, exchange or conversion of any Security in accordance with its terms, such shares of Company Common Stock will be validly issued, fully paid and non-assessable.

4. The shares of Selling Stockholder Common Stock have been duly authorized by all necessary corporate action on the part of the Company and are validly issued, fully paid and non-assessable.

5. When any Company Depositary Shares evidenced by depositary receipts are issued and delivered in accordance with the terms of a Depositary Agreement against the deposit of duly authorized, validly issued, fully paid and non-assessable shares of Company Preferred Stock, such Company Depositary Shares will be valid and legally binding obligations of the Company and will entitle the holders thereof to the rights specified in the Depositary Agreement.

6. When the specific terms of a particular issuance of Company Warrants have been duly authorized by the Company and such Company Warrants have been duly executed, authenticated, issued and delivered, such Company Warrants will be valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms.

7. When the specific terms of a particular issuance of Company Rights have been duly authorized by the Company and such Company Rights have been duly executed, authenticated, issued and delivered, such Company Rights will be valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms.

8. When any Company Purchase Contracts have been duly authorized, executed and delivered by Company, such Company Purchase Contracts will be valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms.

9. When any Company Units have been duly authorized, issued and delivered by the Company, such Company Units will be valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms.

The opinions expressed above as to enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally, (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law) and (iii) requirements that a claim with respect to any Securities in denominations other than in United States dollars (or a judgment denominated other than into United States dollars in respect of the claim) be converted into United States dollars at a rate of exchange prevailing on a date determined by applicable law.

The opinions expressed above are limited to the laws of the State of New York and the Delaware General Corporation Law.

We hereby consent to use of this opinion as an exhibit to the Registration Statement and to the use of our name under the heading “Legal Matters” contained in the prospectus included in the Registration Statement. In giving this consent, we do not hereby admit that we come within the category of persons whose consent is required by the Act or the Rules.

Very truly yours,

/s/ PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP

PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP

Computation of ratio of earnings to fixed charges of ExlService Holdings, Inc.

Exhibit 12.1

ExlService Holdings, Inc

Unaudited Computation of Ratio of Earnings to Fixed Charges and Preferred Dividends


	Nine Months Ended				Year Ended
	September 30, 2009		September 30, 2008		December 31, 2008		December 31, 2007		December 31, 2006		December 31, 2005			December 31, 2004
	(All figures in thousands except ratios)
Income (loss) from continuing operations before income taxes and minority interests	$	8,099	$	6,703	$	9,797	$	16,601	$	6,356	$	(1,650	)	$	2,271
	$	8,099	$	6,703	$	9,797	$	16,601	$	6,356	$	(1,650	)	$	2,271

Fixed charges:
Interest and other financial charges (a)		0		0		0		0		350		675			869
One-third of rental expense(b)		1,416		1,291		1,795		1,110		635		619			449

Total fixed charges		1,416		1,291		1,795		1,110		985		1,294			1,318

Adjusted earnings from continuing operations before income taxes and minority interests	$	9,515	$	7,994	$	11,591	$	17,711	$	7,342	$	(356	)	$	3,589

Ratio of earnings to fixed charges		6.7		6.2		6.5		16.0		7.5		N/A	(c)		2.7

Preferred stock dividend requirements	$	—	$	—	$	—	$	—	$	617	$	249		$	—
Ratio of earnings before provision for income taxes to earnings from continuing operations (d)		1.0		0.9		0.9		0.9		0.9		1.0			0.8
Preferred stock dividend factor on pre-tax basis		—		—		—		—		584		249			—
Fixed charges		1,416		1,291		1,795		1,110		985		1,294			1,318

Total fixed charges and preferred stock dividend requirements	$	1,416	$	1,291	$	1,795	$	1,110	$	1,569	$	1,543		$	1,318

Ratio of earnings to combined fixed charges and preferred stock dividend (d)		6.7		6.2		6.5		16.0		4.7		N/A	(e)		2.7

(a)	Represents interest on senior long-term debt, interest on preferred stock and amortization of deferred financing and issuance costs.

(b)	Represents approximately one-third of rent expense deemed for this purpose to represent the interest component of rental payments.

(c)	Earnings were insufficient to cover fixed charges by $1,650 for the year ended December 31, 2005.

(d)	Exl reported pre-tax losses for the year ended December 31, 2005; accordingly, the preferred dividend factor equal the preferred dividend requirements.

(e)	Earnings were insufficient to cover fixed charges and preferred dividends by $1,899 for the year ended December 31, 2005.

Consent of Ernst & Young LLP

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption “Experts” in this Amendment No. 1 to Registration Statement (Form S-3 No. 333-162335) and related Prospectus of ExlService Holdings, Inc. for the registration of common stock, preferred stock, debt securities, depository shares, warrants, rights, purchase contracts and units and to the incorporation by reference therein of our reports dated March 16, 2009, with respect to the consolidated financial statements of ExlService Holdings, Inc., and the effectiveness of internal control over financial reporting of ExlService Holdings, Inc., included in its Annual Report (Form 10-K) for the year ended December 31, 2008, filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

New York, New York

November 20, 2009

SEC response letter

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, New York 10019-6064

November 20, 2009

Via EDGAR

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549

ExlService Holdings, Inc.

Amendment No. 1 to

Registration Statement on Form S-3 (File No. 333-162335)

(the “Registration Statement”)

Ladies and Gentlemen:

On behalf of ExlService Holdings, Inc., a Delaware corporation (the “Company”), we submit in electronic form for filing the accompanying Amendment No. 1 to the Registration Statement on Form S-3 (“Amendment No. 1”) of the Company, together with Exhibits, marked to indicate changes from the Registration Statement as filed with the Securities and Exchange Commission (the “Commission”) on October 5, 2009.

Amendment No. 1 reflects the responses of the Company to comments received from the Staff of the Commission (the “Staff”) in a letter from H. Christopher Owings, dated October 21, 2009 (the “Comment Letter”). The discussion below is presented in the order of the numbered comments in the Comment Letter. Certain capitalized terms set forth in this letter are used as defined in Amendment No. 1.

The Company has asked us to convey the following as its responses to the Staff:

Form S-3

Prospectus Cover Page

Please disclose that the company is offering up to an aggregate amount of $200,000,000 in securities, and that the selling shareholders are offering for resale up to 6,000,000 shares of common stock. See Item 501(b)(2) of Regulation S-K.

Response to Comment 1

The Company has revised the cover of the prospectus to address the Staff’s comment.

Selling Stockholders, page 4

Please expand your discussion to describe the terms of the initial transaction(s) relating to the resale shares, including the dates, the names of the purchasers, and the number of shares purchased in each transaction. Since the transaction(s) must be completed before you file a registration statement to resell those securities, please include in your description when the transaction(s) closed. See Rule 430B(b)(2) of Regulation C. Also briefly describe the material terms of any agreement(s) relating to these transactions, and file the related agreement(s) as an exhibit to your next amendment.

Response to Comment 2

In response to the Staff’s comment and in accordance with the requirements of Rule 430B(b)(2) of Regulation C, the Company has revised its disclosure to provide a more detailed description of the initial transactions relating to the resale shares. Specifically, the Company has disclosed that the resale shares consist of shares of common stock that were acquired in transactions completed in connection with the acquisition of the Company’s business from Conseco in 2002, shares of common stock that were issued in connection with a share split of our common stock completed prior to the completion of our initial public offering in 2006, shares of common stock acquired pursuant to our equity compensation plans to the extent such shares were received prior to October 5, 2009, the date of the initial filing of the Registration Statement with the SEC, and shares of common stock held by certain trusts affiliated with certain of our pre-IPO stockholders to the extent such trusts acquired such shares prior to October 5, 2009. See page 4 of the prospectus included in Amendment No. 1.

Based on the language of Rule 430B(b) of Regulation C and General Instruction II.G of Form S-3 (“Instruction II.G”), the Company believes that it is not required to include the names of the purchasers in its disclosure. Both Rule 430B(b)(2)(iii) of Regulation C and Instruction II.G state that the Company is permitted to refer “to any unnamed selling security holders in a generic manner by identifying the initial offering transaction in which the securities were sold.” Furthermore, both Rule 430B of Regulation C (specifically subsections (d) and (h)) and Instruction II.G state that

if the registrant chooses to omit disclosures regarding the identities of the selling stockholders and the amounts to be sold pursuant to Rule 430B(b) and Instruction II.G, respectively, then the registrant must disclose the omitted information in a prospectus filed pursuant to Rule 424(b)(7) of Regulation C, a post-effective amendment to registration statement or a Securities Exchange Act of 1934 (the “Exchange Act”) report incorporated by reference into the prospectus that is part of the registration statement, which Exchange Report is identified in a prospectus filed pursuant to Rule 424(b)(7) of Regulation C.

In addition, based on the language of Rule 430B of Regulation C, Instruction II.G and Item 601(a) and (b) of Regulation S-K, the Company believes that it is not required to file the agreements related to the acquisition of the resale shares as an exhibit to the Registration Statement. The Company also notes that, based on Item 601 of Regulation S-K, such agreements are no longer required to be filed as exhibits to the Company’s Annual Report on Form 10-K.

Description of Debt Securities, page 9

We note the references on pages 9 and 15 that the debt may be guaranteed. Please clarify whether you intend to register the guarantees or delete these references.

Response to Comment 3

The Company has revised the prospectus to delete the references noted in the Staff’s comment. See pages 9 and 15 of the prospectus included in Amendment No. 1.

Incorporation bv Reference, page 30

Please revise to include the Form 8-Ks filed on January 30, 2009 and on March 11, 2009. See Item 12(a)(3) of Form S-3. Also specifically incorporate by reference any other applicable Exchange Act report filed after the date of the initial registration statement, but prior to effectiveness. See Compliance and Disclosure Interpretations - Securities Act Forms (Question 123.05), available in the Corporation Finance section of our website.

Response to Comment 4

The Company has revised the prospectus to address the Staff’s comment. See page 30 of the prospectus included in Amendment No. 1.

Exhibit 5.1 - Opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP

Please clarify in the first paragraph that Paul, Weiss, Rifkind, Wharton & Garrison LLP has acted as counsel to the company.

Response to Comment 5

The opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP has been revised to address the Staff’s comment. A revised version of the opinion has been filed as Exhibit 5.1 to Amendment No. 1.

Page 4 of the opinion, in the paragraph numbered 4, states in part “such Company Depositary Shares will entitle the holders thereof to the rights specified in the Depositary Agreement.” Please revise to also state that the Company Depositary Shares will be valid and legally binding obligations of the company.

Response to Comment 6

The opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP has been revised to address the Staff’s comment. A revised version of the opinion has been filed as Exhibit 5.1 to Amendment No. 1.

The reference to the Delaware General Corporation Law in the second to last paragraph should also include all applicable Delaware statutory provisions of law and the reported judicial decisions interpreting these laws. Please revise or have counsel confirm this supplementally and file this correspondence on EDGAR, as it will be a part of the Commission’s official file regarding this registration statement.

Response to Comment 7

Paul, Weiss, Rifkind, Wharton & Garrison LLP hereby confirms that the reference to Delaware General Corporation Law in the second to last paragraph of the opinion includes all applicable Delaware statutory provisions of law and the reported judicial decisions interpreting these laws.

We note the language in the second to last paragraph, “Our opinion is rendered only with respect to the laws, and the rules, regulations and orders under those laws, that are currently in effect.” Please be advised that in order for you to become effective, it will be necessary for counsel to file an opinion dated as of the effective date. Alternatively, counsel should remove the limitations from the opinion.

Response to Comment 8

To address the Staff’s comment, the opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP has been revised to remove the limitations from the opinion. A revised version of the opinion has been filed as Exhibit 5.1 to Amendment No. 1.

The opinion does not cover the shares being offered by selling shareholders. Please revise or advise.

Response to Comment 9

The opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP has been revised to include the shares offered by selling shareholders to address the Staff’s comment. A revised version of the opinion has been filed as Exhibit 5.1 to Amendment No. 1.

10.

Please confirm your understanding that an updated unqualified opinion of counsel should be filed with respect to the legality of the securities being offered by the company for each sale of the securities registered in this filing. See Compliance and Disclosure Interpretations - Securities Act Rules (Question 212.05), available in the Corporation Finance section of our website.

Response to Comment 10

The Company confirms that an updated unqualified opinion of counsel will be filed with respect to the legality of the securities offered by the Company for each sale of the securities registered in this filing.

Form 10-K for Fiscal Year Ended December 31, 2008

11.

You should comply with the following comments in all future filings, as applicable. Please confirm in writing that you will do so, and also explain to us in detail sufficient for an understanding of your disclosure how you intend to comply by providing us with your proposed revisions.

Response to Comment 11

Please see the Company’s responses to the Staff’s comments below.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 36

Results of Operations, page 46

12.

Please describe the causes for the change in gross profit as a percentage of revenues for each year presented. See Item 303(a) of Regulation S-K and Financial Reporting Codification 501.04.

Response to Comment 12

The Company will comply with the Staff’s comment in future filings as applicable. The Company has also included the following language in its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009, which was filed on EDGAR on November 9, 2009, to address the Staff’s comment:

“Gross profit as a percentage of revenues increased from 37.0% for the nine months ended September 30, 2008 to 40.0% for the nine months ended September 30, 2009, primarily due to an improvement of 270 basis points as a result of a reduction in our salaries and personnel expenses…”

Controls and Procedures, page 56

13.

We note in the last sentence of the first paragraph that your CEO and CFO have concluded that your disclosure controls and procedures were effective at a reasonable assurance level. However, you state in the first sentence of the same paragraph that you maintain disclosure controls and procedures that arc designed in accordance with the definition contained in Exchange Act Rules 13 a-15(e) and 15d-15(e). Please tell us why you have added the reasonable assurance language in the last sentence and repeated the definition contained in Exchange Act Rules 13a-15(e) and 15d-15(e). Alternatively, in future filings you may simply conclude that your disclosure controls and procedures are effective or ineffective, whichever the case may be.

Response to Comment 13

The Company will comply with the Staff’s comment in future filings as applicable to conclude that its disclosure controls and procedures are effective or ineffective, whichever the case may be, without including the “reasonable assurance” language. The Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009, which report was filed on EDGAR on November 9, 2009, contains the following disclosure to address the Staff’s comment:

“In connection with the preparation of this Quarterly Report on Form 10-Q, the Company’s management carried out an evaluation, under the supervision and with the participation of the CEO and CFO, of the effectiveness and operation of our disclosure controls and procedures as of September 30, 2009. Based upon that evaluation, the CEO and CFO have concluded that, as of September 30, 2009, our disclosure controls and procedures were effective.”

Management’s Annual Report on Internal Control over Financial Reporting, page 56

14.

We note that your Chief Executive Officer and Chief Financial Officer expressed their belief as to the effectiveness of your internal control over financial reporting. Please confirm, if true, that your Chief Executive Officer and Chief Financial Officer concluded that your internal control over financial reporting is effective.

Response to Comment 14

The Company will comply with the Staff’s comment in future filings as applicable. The Company confirms that its Chief Executive Officer and Chief Financial Officer concluded that the Company’s internal control over financial reporting was effective as of December 31, 2008.

Consolidated Financial Statements

Consolidated Balance Sheets, page 70

15.

We note that you disclose shares held in treasury as outstanding shares. Please revise or advise.

Response to Comment 15

Treasury stock represents shares of the Company’s stock acquired for purposes other than retirement or when ultimate disposition has not yet been decided. As per ASC 505-30-45-1, the Company has disclosed the shares of treasury stock shown on its balance sheet as a reduction from the Company’s aggregate outstanding shares of capital stock. The Company has included in its previous filings, and will include in its future filings, as applicable, in the note to its consolidated financial statements titled “Capital Structure” a discussion of events during the applicable period that have resulted in increases or decreases in the number of shares of the Company’s stock held in treasury.

Notes to Consolidated Financial Statements, page 74

Note 2. Summary of Significant Accounting Policies, page 74

Cash and Cash Equivalents and Restricted Cash, page 75

16.

It appears that investments classified as cash equivalents may exceed 40% of consolidated assets. Please explain to us whether you are an investment company under Section 3(a)(1)(C) of the Investment Company Act of 1940 and how you made the determination. Please tell us the value of “investment securities” as defined in Section 3(a)(2) of the Investment Company Act and the amounts of total assets for each entity included in your consolidated financial statements on an unconsolidated basis as of December 31, 2008. If you are an investment company under Section 3(a)(1)(C), please explain to us how you are in compliance with the Investment Company Act. For example,

please explain in detail whether you can rely on Rule 3a-1 of the Investment Company Act.

Response to Comment 16

Overview

The Company is not, and has not been, an investment company under the Investment Company Act of 1940 (the “Investment Company Act”). Since its founding, the Company has never held itself out as being in the business of investing, reinvesting, owning, holding or trading in securities. The Company is a leading provider of outsourcing and transformation services, servicing predominantly U.S.-based and U.K.-based clients from its service centers and facilities in India, the Philippines, the United Kingdom, the United States and the Czech Republic. As of December 31, 2008, the Company had approximately 9,500 employees worldwide. As of November 6, 2009, the Company had a market capitalization of approximately $491 million.

Section 3(a)(1)(C) of the Investment Company Act

Section 3(a)(1)(C) of the Investment Company Act provides that an issuer that “is engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire investment securities having a value exceeding 40% of the value of such issuer’s total assets (exclusive of Government securities and cash items) on an unconsolidated basis” is considered an investment company for purposes of the Investment Company Act.

Cash and Cash Equivalents Owned by the Company

As noted in the Staff’s review, the Company’s consolidated cash and cash equivalents and total assets on a consolidated basis as of December 31, 2008 were $112,174,054 and $211,968,692, respectively. Of that cash and cash equivalents amount, $17,872,017 is cash held in checking or other similar demand accounts, $78,911,151 is held in the form of shares of one or more registered investment companies that hold themselves out as money market funds and that seek to maintain a stable net asset value of $1.00 per share and $15,390,886 is held in the form of mutual fund investments.

Although the term “cash items” is not defined in the Investment Company Act, cash in the form of bank deposits is generally considered a cash item. See Certain Prima Facie Investment Companies, IC-10937, n. 29 (November 13, 1979) and SEC v. National Presto Indus., Inc., 486 F.3d 305, 317 (7th Cir. 2007). In addition, the Staff has stated that it does not object to an issuer excluding from its calculations pursuant to Section 3(a)(1)(C) of the Investment Company Act shares of a registered investment company that holds itself out as a money market fund and seeks to maintain a stable net asset value of $1.00 per share provided that the issuer is not primarily engaged in the business of investing, reinvesting or trading in securities. See Willkie Farr & Gallagher, SEC No-Action Letter [2000-2001 Transfer Binder] Fed. Sec. L. Rep. (CCH) ¶ 78011

(September 27, 2000); see also Tamar Frankel and Ann Taylor Schwing, The Regulation of Money Managers: Mutual Funds and Advisors, Second Edition, §5.03[C], n. 207. Based on this guidance and the discussion below regarding the business in which the Company is primarily engaged, the Company believes that of the $112,174,054 in cash and cash equivalents held by the Company on a consolidated basis as of December 31, 2008, only the $15,390,886 that is held in mutual fund investments would be counted as investment securities for purposes of Section 3(a)(1)(C) of the Investment Company Act.

Corporate Structure

The Company’s entire $15,390,886 mutual fund portfolio is held by its indirect wholly-owned subsidiary exlService.com (India) Private Limited, an Indian entity (“Exl India”). Exl India is directly and wholly owned by ExlService.com, Inc., a Delaware corporation (“Exl Inc.”), which is directly and wholly owned by ExlService Holdings, Inc.

Other than the mutual fund portfolio held by Exl India, none of the direct or indirect subsidiaries of ExlService Holdings, Inc. holds any investment securities as defined in Section 3(a)(2) of the Investment Company Act.

Analysis of exlService.com (India) Private Limited

The Company believes that Exl India is not an investment company pursuant to Section 3(a)(1)(C) of the Investment Company Act. On a book basis, Exl India had $15,390,886 in mutual fund investments, $3,059,466 in cash and $61,417,300 in total assets as of December 31, 2008 on an unconsolidated basis. Exl India is the Company’s primary operating subsidiary, employs approximately 93% of the Company’s employees and owns or leases the Company’s operations centers in India. Exl India’s assets consist primarily of property and equipment, client contracts, real estate, leases, computer and telecommunications equipment, office equipment, furniture, cash and investments, inter-company balances generated in the ordinary course of the Company’s business, deposits held by the Indian government in respect of ongoing tax audits of Exl India (such audits are discussed on pages 24 and 29 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2008) and other current and non-current assets. The Company believes that none of Exl India’s assets other than the $15,390,886 in mutual fund investments are investment securities.

The Company believes that the fair value of the assets of Exl India (excluding investment securities and cash) is significantly in excess of $43 million. Being conservative and assuming that the book value of Exl India’s assets is their fair value, the value of Exl India’s investment securities equals approximately 26.37% of the entity’s total assets (excluding cash items) on an unconsolidated basis. As a result, Exl India is not an investment company pursuant to Section 3(a)(1)(C) of the Investment Company Act.

Analysis of ExlService.com, Inc. and ExlService Holdings, Inc.

The Company believes that neither Exl Inc. nor the Company is an investment company pursuant to Section 3(a)(1)(C) of the Investment Company Act.

Exl Inc. is a holding company whose assets consist primarily of investments in wholly-owned subsidiaries, employment agreements with the Company’s U.S. employees, cash and cash equivalents, inter-company balances generated in the ordinary course of the Company’s business, deposits held by the Indian government in respect of ongoing tax audits of Exl Inc. (such audits are discussed on pages 24 and 29 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2008) and other current and non-current assets.

ExlService Holdings, Inc. is a holding company whose assets consist primarily of cash and cash equivalents, investments in wholly-owned subsidiaries, client contracts, intellectual property, inter-company balances generated in the ordinary course of the Company’s business and other current and non-current assets.

As noted above, the Company believes that all of the cash equivalents held by Exl Inc. and ExlService Holdings, Inc. are cash items for purposes of Section 3(a)(1)(C) of the Investment Company Act and that neither Exl Inc. nor ExlService Holdings, Inc. own any assets that are investments securities. As a result, the Company believes that neither Exl Inc. nor ExlService Holdings, Inc. is an investment company pursuant to Section 3(a)(1)(C) of the Investment Company Act.

The Company’s Primary Business

The Company is primarily engaged in a business other than investing, reinvesting or trading in securities. With regard to the Investment Company Act, the determination of an issuer’s primary engagement is based on a review of five factors: the issuer’s historical development, its public representations of policy, the activities of its officers and directors, the nature of its present assets and the sources of its present income. See In the Matter of the Tonopah Mining Company of Nevada, 26 S.E.C. 426 (July 22, 1947), SEC v. Fifth Avenue Coach Lines, Inc., 289 F. Supp. 3 (S.D.N.Y. 1968), affirmed, 435 F.2d 510 (2nd Cir. 1970) and SEC v. National Presto Industries, Inc., 486 F.3d 305 (7th Cir. 2007).

As stated above, the Company, a Delaware corporation, is a leading provider of outsourcing and transformation services. The Company’s predecessor, ExlService.com, Inc., was founded in 1999 and was acquired in August 2001 by Conseco Inc. and operated as Conseco Inc.’s wholly-owned subsidiary and in-house business processing service provider. In November 2002, the Company was formed by a group of the Company’s senior executives, including Vikram Talwar, the Company’s current Executive Chairman, and Rohit Kapoor, the Company’s current President and Chief Executive Officer, and investment funds affiliated with Oak Hill Capital Partners and FTVentures. On November 14, 2002, the Company acquired ExlService.com, Inc. from

Conseco Inc. As a result of the acquisition, ExlService.com, Inc. and its subsidiaries became wholly-owned subsidiaries of the Company.

Since the formation of its predecessor, the Company has continuously operated as a provider of offshore business process outsourcing and transformation services and at no time has the Company held itself out as being in the business of investing, reinvesting, owning, holding or trading in securities. The Company’s transformation service offerings were significantly enhanced after its July 1, 2006 acquisition of Inductis Inc., a leading provider of transformation services, and its subsidiaries. Transformation services include decision analytics, risk and financial management and operations and process excellence services. The Company’s transformation services help clients improve their operating environments through cost reduction, enhanced efficiency and productivity initiatives, and improve the risk and control environments within the clients’ operations, whether or not they are outsourced to the Company. In October 2006, the Company completed its initial public offering of its common stock and initiated the ongoing listing of its common stock on the Nasdaq Global Select Market. At all times during the Company’s existence the Company has presented itself to the public and to investors (including on its web site, in its periodic and current reports filed with the SEC, in its annual reports to stockholders and in its press releases and other public statements and announcements) as an operating company.

With regard to the activities of the Company’s directors and officers that relate to the Company, the Company estimates that almost 100% of such persons’ time is spent managing the Company’s outsourcing and transformation services.

With regard to the nature of the Company’s assets, as discussed above, based on the historical guidance of the Staff, as of December 31, 2008 and September 30, 2009, investment securities constituted approximately 13.36% and 8.05%, respectively, of the Company’s total assets on a consolidated basis (excluding cash items). The remaining assets of the Company consist of operating assets used in connection with the Company’s business. The Staff noted that the Company retains a significant amount of cash and cash equivalents. The Company uses its cash for two different purposes. First, the Company’s strategy includes completing acquisitions and expanding its operations through significant capital expenditures. Cash and cash equivalents are used or will be used to fund such acquisitions and capital expenditures. These include the Company’s acquisition of Schneider Logistics Europe S.R.O. on July 3, 2009 and the Company’s recently announced proposed acquisition of the operations of the American Express Global Travel Service Center, a business unit of American Express located in Gurgaon, India, that provides the travel-related business process outsourcing services of American Express. Second, the Company believes that in the current economic environment, its cash balance is especially critical to growing its business and attracting new clients. When the Company attracts a new client, the Company is often required to incur significant upfront costs to provide facilities, staffing and equipment to provide services to the client prior to receiving significant payment for such services. As a result, the Company emphasizes its strong cash position as a significant selling point to its potential clients to show that it can adequately meet the client’s needs under an engagement.

With regard to the sources of the Company’s present income, during the year ended December 31, 2008, the Company generated total revenues from its operating business and net income of approximately $181.7 million and $14.4 million, whereas during the same period it received interest and other income of approximately $3.5 million, which amount includes approximately $2.8 million of income from the Company’s demand deposit and money market fund holdings, which holdings the Company believes are cash items for purposes of the Investment Company Act. Similarly, during the nine month period ended September 30, 2009, the Company generated total revenues and net income of approximately $131.6 million and $4.0 million, respectively, whereas during the same period it received interest and dividend income of approximately $0.9 million, which amount includes approximately $0.7 million of income from the Company’s demand deposit and money market fund holdings, which holdings the Company believes are cash items for purposes of the Investment Company Act.

Conclusion

Based on the above analysis, the Company believes it is not an investment company under the Investment Company Act. In addition, in response to the Staff’s comment, the Company believes that it would satisfy the conditions for the exemption provided under Rule 3a-1 under the Investment Company Act.

Revenue Recognition, page 78

17.

Please disclose the amount of unbilled accrued revenues at each balance sheet date. Refer to Rule 5-02(3)(c)(2) of Regulation S-X.

Response to Comment 17

The Company will comply with the Staff’s comment in future filings as applicable. In accordance with Rule 5-02(3)(c)(2) of Regulation S-X, the Company will, where applicable in its future filings, disclose the amount of unbilled accrued revenues at each applicable balance sheet date in Note 2 on “Summary of Significant Accounting Policies—Revenue Recognition” (or a substantially similar note) to its consolidated financial statements. The amount of unbilled accrued revenues as of December 31, 2008 was $1,292,138.

Earnings Per Share, page 81

18.

Please tell us how you treat vested restricted stock and restricted stock unit awards in basic earnings per share computations. Refer to paragraph 10 of SFAS 128. In addition, we note your disclosure in Note 11 regarding dividend rights of restricted stock. Please include a discussion of the applicability of the two class method for financial statements issued after the effective date of FSP EITF 03-6-1. Finally, please revise your disclosure in Note 11 to clearly describe the dividend rights of vested and unvested restricted stock and restricted

stock unit awards.

Response to Comment 18

The shares of common stock underlying the Company’s shares of restricted stock are not issued until the applicable restriction lapses and such shares of restricted stock are subject to forfeiture if such restrictions do not lapse. As a result, the Company does not include shares of common stock underlying any shares of restricted stock in the statements of stockholders’ equity until the applicable restrictions have lapsed, which is when the restricted stock vests. On vesting, the shares of common stock underlying the applicable shares of restricted stock are issued to the holders and are included in the outstanding common stock, which is also used to compute the basic earnings per share in accordance with paragraph 10 of SFAS 128.

The Company has historically granted restricted stock units (“RSUs”) to its independent directors. Under the terms of such RSU grants, one hundred percent of the RSU credited to the recipient director’s account vest and become non-forfeitable on the earlier of (A) the first anniversary of the date of grant, (B) the date on which the recipient’s term as a member of the Company’s board of directors expires if the recipient is not subsequently elected to a new term on the Company’s board of directors and (C) a change in control of the Company. Accordingly, the Company’s RSUs issued to date contain non-forfeitable rights to dividends or dividend equivalents upon vesting and are therefore after vesting considered participating securities for purposes of earnings per share calculations pursuant to the two-class method.

The Company will include disclosure substantially similar to the above in its future filings, as applicable. Application of this treatment had an insignificant effect on the Company’s historical earnings per share calculations as the number of vested RSUs was 40,000 and 48,000 as of December 31, 2008 and September 30, 2009, respectively.

Note 10. Income Taxes, page 91

19.

We understand that the deferred tax benefit line item in the income tax reconciliation table on page 94 represents the net unrecognized deferred income tax expense for each year related to temporary differences that are expected to reverse during tax holiday periods. Please confirm whether or not our understanding is correct. If our understanding is not correct, please tell us what the line item represents. Also, please explain to us why there is no reconciling amount for the current fiscal year. In addition, explain to us why the reversal of bad debt reserve is a reconciling item.

Response to Comment 19

The deferred tax benefit line in the income tax reconciliation table represents the aggregate of (i) changes in the valuation allowance for unrecognized deferred income tax expense for each year related to temporary differences that are expected to reverse during the tax holiday period and (ii) changes in tax credit carry

forwards. Tax credit carry forwards represent minimum alternate tax payments pursuant to the Indian Income Tax Act and are recognized as a deferred tax asset.

With regard to the fourth sentence of the Staff’s comment, a reconciling amount of $193,810 related to the “deferred tax benefit” line item for the year ended December 31, 2008 is included in the “Impact of tax holiday” line item. The Company believes that the tax credit carry forward is recognized since certain units of the Company’s Indian subsidiaries qualified for exemption from taxable income and the tax credit carry forward for such units should be included in the “Impact of tax holiday” line item. To address the Staff’s comment, the Company’s disclosures regarding the year ended December 31, 2008 will be revised in its future filings, as applicable, to clarify these line items.

The reversal of bad debts reserve is considered as a reconciling item as this relates to the bad debts reserve in the books of Inductis Inc., prior to its acquisition by ExlService Holdings, Inc. When this reserve is reversed, it results in a permanent difference and hence is part of the reconciliation.

20.

Please provide us with a reconciliation of deferred income tax benefits relating to continuing operations disclosed in the table on page 92 to the amounts disclosed in the consolidated statements of cash flow for each year presented.

Response to Comment 20

To address the Staff’s comment, set forth below is a reconciliation of deferred income tax benefits relating to continuing operations disclosed in the table in Note 10 on “Income Taxes” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 to the amounts disclosed in the consolidated statements of cash flow for each year presented.


	Year Ended December 31,
	2008			2007			2006
	Amounts in USD
Deferred income tax benefits as per statements of cash flow	$	(627,052	)	$	(2,836,801	)	$	(2,140,183	)
Less: Adjustments related to discontinued operations and included in “Net cash provided by operating activities – discontinued operations” in the consolidated statements of cash flow(a)		(1,437,445	)		(926,405	)		—

Deferred income tax benefits as per Note 10	$	(2,064,497	)	$	(3,763,206	)	$	(2,140,183	)

(a)	On August 11, 2008, the Company completed the sale of all of its shares of Noida Customer Operations Private Limited (“NCOP”), which was classified as discontinued operations for all periods presented.

To address the Staff’s comment, the Company’s disclosures in the consolidated statements of cash flow for the years ended December 31, 2008 and 2007 will be revised in its future filings, as applicable, to reconcile these line items. As a result of such revision, net cash provided by operating activities from continuing operations

will decrease by $1,437,445 and $926,405 for the years ended December 31, 2008 and 2007, respectively, and net cash provided by operating activities from discontinued operations will increase by $1,437,445 and $926,405 for the years ended December 31, 2008 and 2007, respectively. However, there is no impact from such revision on the consolidated net cash provided by operating activities for each of the years ended December 31, 2008 and 2007.

Note 11. Stock Based Compensation, page 94

21.

Please disclose the total intrinsic value of stock options exercised and the total fair value of restricted stock and restricted stock units vested for each year for which an income statement is provided. Refer to paragraph A240.C. of SFAS 123(R). Please also disclose the general terms of performance based restricted stock awards. In addition, please tell us why separate disclosure of performance based restricted stock awards are not important to an understanding of your use of stock-based compensation. Refer to paragraphs A240.a. and A240.f. of SFAS 123(R).

Response to Comment 21

To address the Staff’s comment, the Company will revise its disclosure in future filings, as applicable, to include the total intrinsic value of stock options exercised and the total fair value of restricted stock and restricted stock units vested. The aggregate total intrinsic value of stock options exercised during the year ended December 31, 2008 was $381,130 and the aggregate total fair value of restricted stock and restricted stock units vested during the year ended December 31, 2008 was $2,573,126.

The Company did not issue any performance based restricted stock awards during the years ended December 31, 2008 and 2007. The Company had issued performance-based restricted awards with a vesting period of three years in July 2006 in connection with the acquisition of Inductis Inc. Since the grants were substantially vested or forfeited as of December 31, 2008, no separate disclosure was made in Note 11 on “Stock Based Compensation” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008. The number of outstanding performance based grants was 1,616 as of December 31, 2008. The Company will include in its future filings, as applicable, a separate disclosure on any performance based restricted awards granted in the future.

Definitive Proxy Statement filed on Schedule 14A

Compensation Discussion and Analysis, page 12

Cash Incentive Bonus, page 17

22.

Please clarify how you calculated the annual cash incentive bonus amounts for each executive officer. Note that under Item 402(b)(l)(v) of Regulation S-K, a filer must disclose how it determined the amount and formula for each element of compensation.

Response to Comment 22

The Company calculated cash incentive bonuses for its named executive officers in the following manner: As described in the Company’s Definitive Proxy Statement on Schedule 14A filed on EDGAR on April 30, 2009 (the “Proxy Statement”), the annual cash bonuses for the Company’s named executive officers were determined based partly on the financial performance of the Company, and partly on the Company’s Compensation Committee’s evaluation of the named executive officer’s performance against such named executive officer’s personal objectives. In the case of Messrs. Talwar, Kapoor and Shashank, 30% of the annual cash bonus was based on the Company’s performance against the revenue target (which portion was earned at 78% of target based on 2008 performance) and 30% of the annual cash bonus was based on the Company’s performance against the Adjusted EBIT target (which portion was earned at 0% of target based on 2008 performance). The remainder of the annual cash bonus was based on the Compensation Committee’s evaluation of the named executive officer’s performance against the named executive officer’s individual performance measures taken as a whole as described in the Proxy Statement. As a result, the total bonus for Messrs. Talwar, Kapoor and Shashank was 75%, 77.5% and 75.4%, respectively, of such named executive officer’s target annual bonus.

In the case of Mr. Nacha, 20% of the annual cash bonus was based on the Company’s performance against the revenue target (earned at 78% of target as described above), 20% of the annual cash bonus was based on the Company’s performance against the Adjusted EBIT target (earned at 0% of target as described above), and the remainder of the annual cash bonus was based on the Compensation Committee’s evaluation of his performance against his individual performance measures taken as a whole as described in the Proxy Statement). As a result, the total annual bonus for Mr. Nacha was 93.6% of his target annual bonus.

In the case of Mr. de Villa, 15% of the annual cash bonus was based on the Company’s performance against the revenue target (earned at 78% of target as described above), 15% of the annual cash bonus was based on the Company’s performance against the Adjusted EBIT target (earned at 0% of target as described above), 7.5% was based on revenue achievement at our research and analytics business (which portion was earned at 85% of target based on 2008 performance), 7.5% was based on gross margin percentage achievement at our research and analytics business (which portion was earned at 115% of target based on 2008 performance), 7.5% was based on

gross margin percentage achievement at our risk advisory services business (which portion was earned at 70% of target based on 2008 performance), 7.5% was based on revenue achievement at our risk advisory services business (which portion was earned at 178% of target based on 2008 performance) and the remainder of the annual cash bonus was based on the Compensation Committee’s evaluation of his performance against his personal objectives (based on the factors described in the Proxy Statement). As a result, the total bonus for Mr. de Villa was 111.5% of his target bonus for 2008, which total bonus amount was then prorated to reflect the portion of 2008 during which Mr. de Villa was employed by the Company.

The Company paid Mr. Appel 100% of his target bonus of $175,000, based on the Compensation Committee’s determination that he had achieved his personal performance goals, which included Mr. Appel’s contributions toward achieving the Company’s cost reduction plan, leadership in managing the currency risks facing the Company and enhancing the capabilities of the Company’s finance organization, in addition to his assistance in the timely filing of the Company’s 2008 Annual Report on Form 10-K.

In future filings, as applicable, the Company will revise its disclosure of the calculations of its annual cash bonuses to be substantially consistent with the foregoing.

* * *

If you have any questions concerning the above responses, please do not hesitate to contact either the undersigned at (212) 373-3025 or Aun A. Singapore at (212) 373-3431.

Very truly yours,

/S/ JOHN C. KENNEDY

John C. Kennedy

cc:	Amit Shashank, Esq.

ExlService Holdings, Inc.

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