exv4w3






Exhibit 4.3




EXECUTION VERSION




iPAYMENT HOLDINGS, INC.




15.00%/15.00% SENIOR NOTES DUE 2018



 





Indenture



Dated as of May 6, 2011



 





Wilmington Trust FSB



as Trustee



 





 









 





CROSS-REFERENCE TABLE*




	 	 	 	 	 
	 	 	Indenture	 
	Trust Indenture Act Section	 	Section	 
	310(a)(1)
	 	 	7.10	 
	(a)(2)
	 	 	7.10	 
	(a)(3)
	 	 	N.A.	 
	(a)(4)
	 	 	N.A.	 
	(a)(5)
	 	 	7.10	 
	(b)
	 	 	7.10	 
	(c)
	 	 	N.A.	 
	311(a)
	 	 	7.11	 
	(b)
	 	 	7.11	 
	(c)
	 	 	N.A.	 
	312(a)
	 	 	2.06	 
	(b)
	 	 	13.03	 
	(c)
	 	 	13.03	 
	313(a)
	 	 	7.06, 13.03	 
	(b)(1)
	 	 	N.A.	 
	(b)(2)
	 	 	7.06, 7.07	 
	(c)
	 	 	7.06, 13.02	 
	(d)
	 	 	7.06	 
	314(a)
	 	 	7.06, 13.05	 
	(b)
	 	 	N.A.	 
	(c)(1)
	 	 	N.A.	 
	(c)(2)
	 	 	N.A.	 
	(c)(3)
	 	 	N.A.	 
	(d)
	 	 	N.A.	 
	(e)
	 	 	13.05	 
	(f)
	 	 	N.A.	 
	315(a)
	 	 	N.A.	 
	(b)
	 	 	N.A.	 
	(c)
	 	 	N.A.	 
	(d)
	 	 	N.A.	 
	(e)
	 	 	N.A.	 
	316(a) (last sentence)
	 	 	N.A.	 
	(a)(1)(A)
	 	 	N.A.	 
	(a)(1)(B)
	 	 	N.A.	 
	(a)(2)
	 	 	N.A.	 
	(b)
	 	 	N.A.	 
	(c)
	 	 	13.13	 
	317(a)(1)
	 	 	N.A.	 
	(a)(2)
	 	 	N.A.	 






i









 






	 	 	 	 	 
	 	 	Indenture	 
	Trust Indenture Act Section	 	Section	 
	(b)
	 	 	N.A.	 
	318(a)
	 	 	N.A.	 
	(b)
	 	 	N.A.	 
	(c)
	 	 	3.01	 








 




			
	 	 	N.A. means not applicable.
	 
	*	 	This Cross-Reference Table is not part of the Indenture.




ii









 










TABLE
OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	Cross-Reference Table
	 	 	i	 
	 
	ARTICLE 1
	Definitions and Incorporation by Reference
	 
	Section 1.01. Definitions
	 	 	1	 
	Section 1.02. Other Definitions
	 	 	36	 
	Section 1.03. Incorporation by Reference to the Trust Indenture Act
	 	 	37	 
	Section 1.04. Rules of Construction
	 	 	37	 
	 
	ARTICLE 2
	The Notes
	 
	Section 2.01. Form and Dating
	 	 	38	 
	Section 2.02. Execution and Authentication
	 	 	39	 
	Section 2.03. Methods of Receiving Payments on the Notes
	 	 	40	 
	Section 2.04. Registrar and Paying Agent
	 	 	41	 
	Section 2.05. Paying Agent To Hold Money in Trust
	 	 	41	 
	Section 2.06. Holder Lists
	 	 	41	 
	Section 2.07. Transfer and Exchange
	 	 	42	 
	Section 2.08. Replacement Notes
	 	 	60	 
	Section 2.09. Outstanding Notes
	 	 	60	 
	Section 2.10. Treasury Notes
	 	 	61	 
	Section 2.11. Temporary Notes
	 	 	61	 
	Section 2.12. Cancellation
	 	 	61	 
	Section 2.13. Defaulted Interest
	 	 	62	 
	Section 2.14. CUSIP Numbers
	 	 	62	 
	 
	ARTICLE 3
	Redemption and Prepayment
	 
	Section 3.01. Notices to Trustee
	 	 	62	 
	Section 3.02. Selection of Notes To Be Redeemed
	 	 	62	 
	Section 3.03. Notice of Redemption
	 	 	63	 
	Section 3.04. Effect of Notice of Redemption
	 	 	64	 
	Section 3.05. Deposit of Redemption Price
	 	 	64	 
	Section 3.06. Notes Redeemed in Part
	 	 	65	 
	Section 3.07. Optional Redemption
	 	 	65	 
	Section 3.08. Special Mandatory Redemption
	 	 	66	 
	Section 3.09. Mandatory Redemption
	 	 	67	 






iii









 






	 	 	 	 	 
	 	 	Page	 
	ARTICLE 4
	Covenants
	 
	Section 4.01. Payment of Notes
	 	 	67	 
	Section 4.02. Maintenance of Office or Agency
	 	 	67	 
	Section 4.03. Reports
	 	 	68	 
	Section 4.04. Compliance Certificate
	 	 	69	 
	Section 4.05. [Reserved]
	 	 	70	 
	Section 4.06. Stay, Extension and Usury Laws
	 	 	70	 
	Section 4.07. Liens
	 	 	70	 
	Section 4.08. Offer To Repurchase upon a Change of Control
	 	 	70	 
	Section 4.09. Offer To Repurchase upon an Asset Sale
	 	 	74	 
	Section 4.10. Restricted Payments
	 	 	77	 
	Section 4.11. Incurrence of Indebtedness
	 	 	83	 
	Section 4.12. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries 
	 	 	88	 
	Section 4.13. Transactions with Affiliates
	 	 	90	 
	Section 4.14. Designation of Restricted and Unrestricted Subsidiaries
	 	 	93	 
	Section 4.15. Business Activities
	 	 	95	 
	Section 4.16. Payments for Consent
	 	 	95	 
	Section 4.17. Future Guarantees
	 	 	96	 
	Section 4.18. Suspension of Covenants
	 	 	96	 
	 
	ARTICLE 5
	Successors
	 
	Section 5.01. Merger, Consolidation or Sale of Assets
	 	 	97	 
	 
	ARTICLE 6
	Defaults and Remedies
	 
	Section 6.01. Events of Default
	 	 	99	 
	Section 6.02. Acceleration
	 	 	101	 
	Section 6.03. Other Remedies
	 	 	101	 
	Section 6.04. Waiver of Past Defaults
	 	 	101	 
	Section 6.05. Control by Majority
	 	 	102	 
	Section 6.06. Limitation on Suits
	 	 	102	 
	Section 6.07. Rights of Holders of Notes To Receive Payment
	 	 	102	 
	Section 6.08. Collection Suit by Trustee
	 	 	102	 
	Section 6.09. Trustee May File Proofs of Claim
	 	 	103	 
	Section 6.10. Priorities
	 	 	103	 
	Section 6.11. Undertaking for Costs
	 	 	104	 






iv









 






	 	 	 	 	 
	 	 	Page	 
	ARTICLE 7
	Trustee
	 
	Section 7.01. Duties of Trustee
	 	 	104	 
	Section 7.02. Certain Rights of Trustee
	 	 	105	 
	Section 7.03. Individual Rights of Trustee
	 	 	107	 
	Section 7.04. Trustee’s Disclaimer
	 	 	107	 
	Section 7.05. Notice of Defaults
	 	 	107	 
	Section 7.06. Reports by Trustee to Holders of the Notes
	 	 	107	 
	Section 7.07. Compensation and Indemnity
	 	 	108	 
	Section 7.08. Replacement of Trustee
	 	 	109	 
	Section 7.09. Successor Trustee by Merger, Etc
	 	 	110	 
	Section 7.10. Eligibility; Disqualification
	 	 	110	 
	Section 7.11. Preferential Collection of Claims Against the Company
	 	 	110	 
	 
	ARTICLE 8
	Defeasance and Covenant Defeasance
	 
	Section 8.01. Option To Effect Legal Defeasance or Covenant Defeasance
	 	 	111	 
	Section 8.02. Legal Defeasance and Discharge
	 	 	111	 
	Section 8.03. Covenant Defeasance
	 	 	112	 
	Section 8.04. Conditions to Legal or Covenant Defeasance
	 	 	112	 
	Section 8.05. Deposited Money and Government Securities To Be Held in Trust; Other Miscellaneous Provisions 
	 	 	114	 
	Section 8.06. Repayment to the Company
	 	 	114	 
	Section 8.07. Reinstatement
	 	 	115	 
	 
	ARTICLE 9
	Amendment, Supplement and Waiver
	 
	Section 9.01. Without Consent of Holders of Notes
	 	 	115	 
	Section 9.02. With Consent of Holders of Notes
	 	 	116	 
	Section 9.03. Compliance with Trust Indenture Act
	 	 	118	 
	Section 9.04. Revocation and Effect of Consents
	 	 	118	 
	Section 9.05. Notation on or Exchange of Notes
	 	 	118	 
	Section 9.06. Trustee to Sign Amendments, Etc
	 	 	119	 
	 
	ARTICLE 10
	[Reserved]
	 
	ARTICLE 11
	Note Guarantees
	 
	Section 11.01. Guarantee
	 	 	119	 






v









 






	 	 	 	 	 
	 	 	Page	 
	Section 11.02. Limitation on Guarantor Liability
	 	 	120	 
	Section 11.03. Execution and Delivery of Note Guarantee
	 	 	121	 
	Section 11.04. Releases
	 	 	121	 
	Section 11.05. No Initial Guarantors
	 	 	122	 
	 
	ARTICLE 12
	Satisfaction and Discharge
	 
	Section 12.01. Satisfaction and Discharge
	 	 	122	 
	Section 12.02. Deposited Money and Government
Securities To Be Held in Trust; Other
Miscellaneous Provisions
	 	 	123	 
	Section 12.03. Repayment to the Company
	 	 	123	 
	 
	ARTICLE 13
	Miscellaneous
	 
	Section 13.01. Trust Indenture Act Controls
	 	 	124	 
	Section 13.02. Notices
	 	 	124	 
	Section 13.03. Communication by Holders of Notes with Other Holders of Notes
	 	 	126	 
	Section 13.04. Certificate and Opinion as to Conditions Precedent
	 	 	126	 
	Section 13.05. Statements Required in Certificate or Opinion
	 	 	126	 
	Section 13.06. Rules by Trustee and Agents
	 	 	126	 
	Section 13.07. No Personal Liability of Directors, Officers, Employees and Stockholders
	 	 	127	 
	Section 13.08. Governing Law
	 	 	127	 
	Section 13.09. Consent to Jurisdiction
	 	 	127	 
	Section 13.10. No Adverse Interpretation of Other Agreements
	 	 	127	 
	Section 13.11. Successors
	 	 	127	 
	Section 13.12. Severability
	 	 	128	 
	Section 13.13. Counterpart Originals
	 	 	128	 
	Section 13.14. Acts of Holders
	 	 	128	 
	Section 13.15. Benefit of Indenture
	 	 	129	 
	Section 13.16. Table of Contents, Headings, Etc
	 	 	129	 
	Section 13.17. Waiver of Jury Trial
	 	 	129	 






EXHIBITS




	 	 	 

	Exhibit A

	 	FORM OF NOTE
	 
	 	 
	Exhibit B

	 	FORM OF CERTIFICATE OF TRANSFER
	 
	 	 
	Exhibit C

	 	FORM OF CERTIFICATE OF EXCHANGE






vi









 






	 	 	 

	Exhibit D

	 	FORM OF INSTITUTIONAL ACCREDITED INVESTOR CERTIFICATE
	 
	 	 
	Exhibit E

	 	FORM OF SUPPLEMENTAL INDENTURE TO
BE DELIVERED BY SUBSEQUENT
GUARANTORS







vii











 





     INDENTURE dated as of May 6, 2011 between iPayment Holdings, Inc., a Delaware corporation
(the “Company”) and Wilmington Trust FSB, as trustee.



     The Company and the Trustee (as defined below) agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders (as defined below) of the 15.00%/15.00% Senior
Notes due 2018:



ARTICLE 1

Definitions and Incorporation by Reference




     Section 1.01. Definitions.



     “144A Global Note” means a global note substantially in the form of Exhibit A attached hereto
bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of,
and registered in the name of, the Depositary or its nominee that shall be issued in a denomination
equal to the outstanding principal amount at maturity of the Notes sold in reliance on Rule 144A.



     “Additional Interest” means all additional interest, if any, owing on the Notes pursuant to
the Registration Rights Agreement or pursuant to an Interest Step-Up.



     “Additional Notes” means an unlimited maximum aggregate principal amount of Notes (other than
(x) the Initial Notes, (y) any Exchange Notes and (z) any Note issued pursuant to Sections 2.07(a),
(c), (e) or (f), Section 2.08 or Section 2.11 hereof) issued under this Indenture in accordance
with Section 2.02 and Article 4 hereof as part of the same Series as the Initial Notes, provided
that if the Additional Notes are not fungible with the Notes for United States federal income tax
purposes, the Additional Notes will have a separate CUSIP number, provided, further, that in
connection with the payment of PIK Interest, the Company may without the consent of Holders (and
without regard to any restrictions set forth in Section 4.11), increase the outstanding principal
amount of the Notes or issue additional Notes under the Indenture on the same terms and conditions
as the Notes offered hereby (in each case, a “PIK Payment”).



     “Affiliate” of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For
purposes of this definition, “control,” as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities, by agreement or
otherwise; provided that beneficial ownership of 10% or more of the Voting Stock of such Person
shall be deemed to be control. For purposes of this definition, the



 









 





terms “controlling,” “controlled by” and “under common control with” shall have correlative meanings.




     “Agent” means any Registrar, Paying Agent or co-registrar.



     “Applicable Premium” means, with respect to a Note at any date of redemption, the greater of
(x) 1.0% of the principal amount of such Note and (y) the excess of (i) the present value at such
date of redemption of (A) the redemption price of such Note at May 15, 2015 (such redemption price
being described in Section 3.07(e) hereof) plus (B) all remaining required interest payments due on
such Note through May 15, 2015 (excluding accrued but unpaid interest to the date of redemption),
computed using a discount rate equal to the Treasury Rate plus 50 basis points, over (ii) the
principal amount of such Note, as calculated by the Company or on behalf of the Company by such
Person as the Company shall designate; provided that such calculation shall not be a duty or
obligation of the Trustee.



     “Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial
interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream
that apply to such transfer or exchange.



     “Asset Sale” means:



     (a) the sale, lease (other than an operating lease entered into in the ordinary course of
business), conveyance or other disposition of any assets (other than as provided in subclause (b)
hereof); and



     (b) the issuance of Equity Interests by any of the Company’s Restricted Subsidiaries or the
sale by the Company or any Restricted Subsidiary thereof of Equity Interests in any of its
Subsidiaries (other than directors’ qualifying shares and shares issued or sold to foreign
nationals to the extent required by applicable law).



Notwithstanding the preceding, the following items shall be deemed not to be Asset Sales:




     (a) any single transaction or series of related transactions that involves assets or Equity
Interests having a Fair Market Value of less than $2,000,000;



     (b) a transaction governed by the provisions of this Indenture pursuant to Section 4.08 or
5.01 hereof;



     (c) any sale, lease, conveyance, disposition or issuance to the Company or to another
Restricted Subsidiary;



2









 





     (d) the sale, lease, conveyance or other disposition of equipment, inventory, accounts
receivable or other assets in the ordinary course of business;



     (e) the sale, conveyance or other disposition of Cash Equivalents;



     (f) any sale, conveyance or other disposition of accounts or notes receivable in connection
with the compromise, settlement or collection thereof in the ordinary course of business or in
bankruptcy or similar proceedings;



     (g) a Restricted Payment that is permitted pursuant to Section 4.10 hereof, any Permitted
Investment and any Permitted Payment;



     (h) any sale, conveyance or other disposition of any property, equipment or other assets that
is surplus, damaged, worn out or obsolete;



     (i) the creation of a Lien not prohibited by this Indenture;



     (j) the sale or discount (with or without recourse, and on customary or commercially
reasonable terms) of accounts receivable arising in the ordinary course of business;



     (k) any sale, conveyance or other disposition arising from foreclosure, condemnation or
similar action with respect to any property or other assets, or the exercise of termination rights
under any lease, license, concession or other agreement in the ordinary course of business;



     (l) the issuance of Equity Interests by any of the Company’s Restricted Subsidiaries to the
Company or to a Restricted Subsidiary;



     (m) the issuance by a Restricted Subsidiary of Preferred Stock that is permitted by Section
4.11;



     (n) any licensing or sub-licensing of intellectual property in the ordinary course of business
or consistent with past practice;



     (o) any sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted
Subsidiary; and



     (p) dispositions of Receivables and related assets to a Receivables Entity in connection with
a Financing Disposition.



     “Assumed Tax Rate” means, for or in respect of any Tax Period and any item of income, the
maximum combined United States Federal, New York State and New York City tax rate applicable during
such Tax Period to such item of income if included as New York source income by a corporation doing
business



3









 





in New York City. In computing the Assumed Tax Rate, effect shall be given to the
deductibility for Federal income tax purposes of state and local income taxes.




     “Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law for the relief
of debtors.



     “Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under
the Exchange Act. The terms “Beneficially Owns” and “Beneficially Owned” shall have a
corresponding meaning.



     “Board of Directors” means:



     (a) with respect to a corporation, the board of directors of the corporation or, except in the
context of the definitions of “Change of Control” and “Continuing Directors,” a duly authorized
committee thereof;



     (b) with respect to a partnership, the Board of Directors of the general partner of the
partnership; and



     (c) with respect to any other Person, the board or committee of such Person serving a similar
function.



     “Board Resolution” means a resolution certified by the Secretary or an Assistant Secretary of
the Company to have been duly adopted by the Board of Directors of the Company and to be in full
force and effect on the date of such certification.



     “Business Day” means any day other than a Legal Holiday.



     “Capital Lease Obligation” means, at the time any determination thereof is to be made, the
amount of the liability in respect of a capital lease that would at that time be required to be
capitalized on a balance sheet in accordance with GAAP.



     “Capital Stock” means:



     (a) in the case of a corporation, corporate stock;



     (b) in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate stock;



     (c) in the case of a partnership or limited liability company, partnership or membership
interests (whether general or limited); and



4









 





     (d) any other interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, the issuing Person.



     “Cash Equivalents” means:



     (a) cash;



     (b) obligations issued or fully guaranteed or insured by the United States government or any
agency or instrumentality thereof (provided that the full faith and credit of the United States is
pledged in support thereof), maturing, unless such securities are deposited to defease any
Indebtedness, not more than five years from the date of acquisition;



     (c) certificates of deposit and eurodollar time deposits with maturities of one year or less
from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and
overnight bank deposits, in each case, with (i) any lender under the Credit Agreement, (ii) any
domestic commercial bank having capital and surplus in excess of $500,000,000 or (iii) any bank
with a commercial paper rating at the time of acquisition thereof of P-1 or better from Moody’s or
A-1 or better from S&P;



     (d) repurchase obligations with a term of not more than seven days for underlying securities
of the types described in clauses (b) and (c) above entered into with any financial institution
meeting the qualifications specified in clause (c) above;



     (e) commercial paper having a rating of P-1 or better from Moody’s or A-1 or better from S&P
and in each case maturing within nine months after the date of acquisition;



     (f) securities issued or fully guaranteed by any state, commonwealth or territory of the
United States of America, or by any political subdivision or taxing authority thereof, rated at
least “A” by Moody’s or S&P and having maturities of not more than five years from the date of
acquisition;



     (g) investments in funds at least 95% of the assets of which constitute Cash Equivalents of
the kinds described in clauses (a) through (f) of this definition;



     (h) investments in money market funds subject to the risk limiting conditions of Rule 2a-7 (or
any successor rule) of the Commission under the Investment Company Act of 1940, as amended; and



5









 





     (i) investments similar to any of the foregoing, and of comparable credit quality and tenor,
denominated in foreign currencies, as reasonably required in connection with any business conducted
by a Foreign Subsidiary in the jurisdiction where such foreign currency is legal tender, and
approved by the Board of Directors.



     “Change of Control” means the occurrence of any of the following:



     (a) the direct or indirect sale, transfer, conveyance or other disposition (other than by way
of merger or consolidation), in one or a series of related transactions, of all or substantially
all of the properties or assets of the Company
and its Restricted Subsidiaries, taken as a whole, to any Person (other than the Permitted
Holders) and any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than
the Permitted Holders or a Parent, becomes the Beneficial Owner of (i) 35% or more of the voting
power of the Voting Stock of such transferee Person and (ii) more of the voting power of the Voting
Stock of such transferee Person than the voting power of the Voting Stock of such transferee Person
Beneficially Owned, directly or indirectly, by the Permitted Holders; provided that, (x) so long as
such transferee Person is a Wholly Owned Subsidiary of any Parent, no such “person” (as so defined)
shall be deemed to become a Beneficial Owner of 35% or more of the voting power of the Voting Stock
of such transferee Person unless such “person” shall be or become a Beneficial Owner of 35% or more
of the voting power of the Voting Stock of such Parent (and more of the voting power of the Voting
Stock of such Parent than the voting power of such Voting Stock Beneficially Owned, directly or
indirectly, by the Permitted Holders) and (y) any Voting Stock of which any Permitted Holder is the
Beneficial Owner shall not be included in any Voting Stock of which such “person” (as so defined)
is the Beneficial Owner, unless such “person” is not an Affiliate of any Permitted Holder and has
the sole voting power with respect to that Voting Stock;



     (b) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), other than one or more of the Permitted Holders or a Parent, becomes the Beneficial
Owner, directly or indirectly, of (i) 35% or more of the voting power of the Voting Stock of the
Company and (ii) more of the voting power of the Voting Stock of the Company than the voting power
of the Voting Stock of the Company Beneficially Owned, directly or indirectly, by the Permitted
Holders; provided that, (x) so long as the Company is a Wholly Owned Subsidiary of any Parent, no
such “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act)
shall be deemed to become a Beneficial Owner of 35% or more of the voting power of the Voting Stock
of the Company unless such “person” or “group” shall be or become a Beneficial Owner of 35% or more
of the voting power of the Voting Stock of such Parent (and more of the voting power of the Voting
Stock of such Parent than the voting power of



6









 





such Voting Stock Beneficially Owned, directly or
indirectly, by the Permitted Holders) and (y) any Voting Stock of which any Permitted Holder is the
Beneficial Owner shall not be included in any Voting Stock of which such “person” (as so defined)
is the Beneficial Owner, unless such “person” is not an Affiliate of any Permitted Holder and has
the sole voting power with respect to that Voting Stock;




     (c) the first day on which a majority of the members of the Board of Directors of the Company
are not Continuing Directors; or



     (d) the Company consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into, the Company, in any such event pursuant to a transaction
in which any of the outstanding Voting Stock
of the Company or such other Person is converted into or exchanged for cash, securities or
other property, other than any such transaction where immediately after giving effect to such
transaction, no “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), other than the Permitted Holders or a Parent, becomes, directly or indirectly, the
Beneficial Owner of (i) 35% or more of the voting power of the Voting Stock of the surviving Person
and (ii) more of the voting power of the Voting Stock of such surviving Person than the voting
power of the Voting Stock of such surviving Person Beneficially Owned, directly or indirectly, by
the Permitted Holders; provided that, (x) so long as such surviving Person is a Wholly Owned
Subsidiary of any Parent, no such “person” or “group” (as so defined) shall be deemed to become a
Beneficial Owner of 35% or more of the voting power of the Voting Stock of such surviving Person
unless such “person” or “group” shall be or become a Beneficial Owner of 35% or more of the voting
power of the Voting Stock of such Parent (and more of the voting power of the Voting Stock of such
Parent than the voting power of such Voting Stock Beneficially Owned, directly or indirectly, by
the Permitted Holders) and (y) any Voting Stock of which any Permitted Holder is the Beneficial
Owner shall not be included in any Voting Stock of which such “person” (as so defined) is the
Beneficial Owner, unless such “person” is not an Affiliate of any Permitted Holder and has the sole
voting power with respect to that Voting Stock.



     The transactions contemplated by the Redemption Agreement shall not constitute or give rise to
a Change of Control.



     “Clearstream” means Clearstream Banking, a société anonyme organized under the laws of
Luxembourg.



     “Consolidated Cash Flow” means, with respect to any specified Person for any period, the
Consolidated Net Income of such Person for such period plus:



7









 





     (a) provision for taxes based on income or profits of such Person and its Restricted
Subsidiaries for such period, including such taxes paid by such Person and its Restricted
Subsidiaries with respect to minority interest income or expense for such period, to the extent
that such provision for taxes was deducted in computing such Consolidated Net Income; plus



     (b) Fixed Charges of such Person and its Restricted Subsidiaries for such period, to the
extent that any such Fixed Charges were deducted in computing such Consolidated Net Income; plus



     (c) depreciation, amortization (including amortization of intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses
(excluding any such non-cash expense to the extent that it represents an accrual of or reserve for
cash expenses in any future period or amortization of a prepaid cash expense that was paid in a
prior period) of such Person and its Restricted Subsidiaries for such period to the extent that
such depreciation, amortization and other non-cash expenses were deducted in computing such
Consolidated Net Income; plus



     (d) the amount of any extraordinary, unusual or non-recurring losses, charges or expenses of
such Person and its Restricted Subsidiaries to the extent that any such losses, charges or expenses
were deducted in computing such Consolidated Net Income; plus



     (e) the minority interest expense consisting of subsidiary income attributable to minority
equity interests of third parties in any non-Wholly Owned Restricted Subsidiary to the extent such
expense was deducted in computing Consolidated Net Income; minus



     (f) (i) non-cash items (other than the accrual of revenue), and extraordinary, unusual or
non-recurring gains and (ii) the minority interest income consisting of subsidiary losses
attributable to the minority equity interests of third parties in any non-Wholly Owned Restricted
Subsidiary, in each case to the extent increasing such Consolidated Net Income for such period; in
each case, on a consolidated basis and determined (in each case to the extent applicable) in
accordance with GAAP.



     Notwithstanding the preceding, the provision for taxes based on the income or profits of, the
depreciation and amortization and other non-cash expenses of, a Restricted Subsidiary of the
Specified Entity shall be added to Consolidated Net Income to compute Consolidated Cash Flow of
such Specified Entity in the same proportion that the Net Income of such Restricted Subsidiary was
added to compute such Consolidated Net Income of the Specified Entity.



8









 





     “Consolidated Net Income” means, with respect to any specified Person for any period, the
aggregate of the Net Income of such Person and its Subsidiaries for such period, on a consolidated
basis, determined in accordance with GAAP; provided that, to the extent otherwise included:



     (a) the Net Income or loss of any Person that is not a Restricted Subsidiary or that is
accounted for by the equity method of accounting shall be included (i) solely for the purpose of
determining the amount available for Restricted Payments under Section 4.10(a)(C) hereof only to
the extent of the amount of dividends or distributions paid to the specified Person or a Restricted
Subsidiary thereof and (ii) solely for the purpose of determining Consolidated Cash Flow only to
the extent of the amount of dividends or distributions paid in cash (or converted to cash) to the
specified Person or a Restricted Subsidiary thereof;



     (b) the Net Income of any Restricted Subsidiary shall be excluded to the extent that the
declaration and payment of dividends and similar distributions, and the making of loans and
advances, by that Restricted Subsidiary of that Net Income is not at the date of determination
permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly, by operation of
the terms of its charter or any judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its equityholders;



     (c) the Net Income of any Person acquired (in a pooling of interests or similar transactions)
during the specified period for any period prior to the date of such acquisition shall be excluded;



     (d) the cumulative effect of a change in accounting principles shall be excluded;



     (e) any non-cash compensation expense recorded from grants of restricted stock, stock options
or other rights to officers, directors and employees of such Person or any of its Restricted
Subsidiaries shall be excluded;



     (f) any unrealized gains or losses in respect of currency Hedging Obligations shall be
excluded;



     (g) any unrealized foreign currency transaction gains or losses in respect of Indebtedness of
any Person denominated in a currency other than the functional currency of such Person shall be
excluded;




9









 




     (h) any unrealized foreign currency translation or transaction gains or losses in respect of
Indebtedness or other obligations owing between or among any of the Company and its Restricted
Subsidiaries shall be excluded; and



     (i) any non-cash charge, expense or other impact attributable to application of the purchase
method of accounting (including the total amount of depreciation and amortization, cost of sales or
other non-cash expense resulting from the write-up of assets to the extent resulting from such
purchase accounting adjustments) shall be excluded.



     For purposes of determining the amount available for Restricted Payments under Section
4.10(a)(C) hereof, Consolidated Net Income may (at the Company’s option) be reduced as contemplated
by Section 4.10(a)(C)(3) hereof.



     “Consolidated Total Indebtedness” means, as at any date of determination, an amount equal to
the sum without duplication of (1) the aggregate amount of all outstanding Indebtedness of the
Company and its Restricted Subsidiaries on a consolidated basis consisting of Indebtedness for
borrowed money, obligations in respect of Capital Lease Obligations and debt obligations evidenced
by promissory notes and similar instruments (and including, for the avoidance of doubt, all
Indebtedness of a Receivables Subsidiary) and (2) the aggregate amount of all outstanding
Disqualified Stock of the Company and all Disqualified Stock and Preferred Stock of its Restricted
Subsidiaries on a consolidated basis, with the amount of such Disqualified Stock and Preferred
Stock equal to the greater of their respective voluntary or involuntary liquidation
preferences and maximum fixed repurchase prices, in each case determined on a consolidated basis in
accordance with GAAP (the “Reference Period”). For purposes hereof, the “maximum fixed repurchase
price” of any Disqualified Stock or Preferred Stock that does not have a fixed repurchase price
shall be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock as
if such Disqualified Stock or Preferred Stock were purchased on any date on which Consolidated
Total Indebtedness shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the fair market value of such Disqualified Stock or Preferred Stock,
such fair market value shall be determined reasonably and in good faith by the Company.



     “Contingent Liabilities” means, at any time, any obligations for taxes, costs,
indemnifications, reimbursements, breakage and other damages and other liabilities in respect of
which no claim or demand for payment has been made at such time.



     “Continuing Directors” means, as of any date of determination, any member of the Board of
Directors of the Company who:




10









 




     (a) was a member of such Board of Directors on the Issue Date; or



     (b) was nominated for election or elected to such Board of Directors with the approval of a
majority of the Continuing Directors or one or more Permitted Holders who were members of such
Board of Directors at the time of such nomination or election.




     “Corporate Trust Office of the Trustee” shall be at the address of the Trustee specified in
Section 13.02 hereof or such other address as to which the Trustee may give notice to the Company.



     “Credit Agreement” means that certain Credit Agreement, dated as of the Issue Date, by and
among iPayment, Inc., the Company, the guarantor parties thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent and the other lenders named therein, including any related notes, Guarantees,
collateral documents, instruments and agreements executed in connection therewith, and in each case
as amended, restated, modified, renewed, refunded, replaced or refinanced, in whole or in part,
from time to time, regardless of whether such amendment, restatement, modification, renewal,
refunding, replacement or refinancing is with the original banks, lenders or institutions or other
banks, lenders or institutions or otherwise and whether provided under the original Credit
Agreement or one or more other credit agreements, financing agreements or other Credit Facilities
or otherwise. Without limiting the generality of the foregoing, the term “Credit Agreement” shall
include any agreement (i) changing the maturity of any Indebtedness Incurred thereunder or
contemplated thereby, (ii) adding Subsidiaries as additional borrowers or guarantors thereunder,
(iii) increasing the amount of Indebtedness Incurred thereunder or available to be borrowed
thereunder or (iv) otherwise altering the terms and conditions thereof.



     “Credit Facilities” means one or more debt facilities (including, without limitation, the
Credit Agreement), commercial paper facilities or other financing arrangements, in each case with
one or more banks or other lenders or institutions, providing for revolving credit loans, term
loans, receivables financing (including through the sale of receivables to any of such banks,
lenders or institutions to special purpose entities formed to borrow from any of such banks,
lenders or institutions against such receivables), letters of credit, bankers’ acceptances or other
Indebtedness, (including, without limitation, Indebtedness under any indenture or similar financing
agreement and any bonds or notes issued thereunder), in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced, in whole or in part, from time to time, regardless of
whether such amendment, restatement, modification, renewal, refunding, replacement or refinancing
is with the original banks, lenders or institutions or other banks, lenders or institutions or
otherwise and whether provided under the original credit agreement governing any such debt facility
or one or more other



11









 





credit agreements, indentures, financing agreements or other Credit Facilities
or otherwise. Without limiting the generality of the foregoing, the term “Credit Facility” shall
include any agreement (i) changing the maturity of any Indebtedness Incurred thereunder or
contemplated thereby, (ii) adding Subsidiaries as additional borrowers or guarantors thereunder,
(iii) increasing the amount of Indebtedness Incurred thereunder or available to be borrowed
thereunder or (iv) otherwise altering the terms and conditions thereof.




     “Custodian” means the Trustee, as custodian for the Depositary or its nominee with respect to
the Notes in global form, or any successor entity thereto.



     “Default” means any event that is, or with the passage of time or the giving of notice or both
would be, an Event of Default.



     “Definitive Note” means a certificated Note registered in the name of the Holder thereof and
issued in accordance with Section 2.07 hereof, substantially in the form of Exhibit A attached
hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule
of Exchanges of Interests in the Global Note” attached thereto.



     “Depositary” means, with respect to the Notes issuable or issued in whole or in part in global
form, the Person specified in Section 2.04 hereof as the Depositary with respect to the Notes, and
any and all successors thereto appointed as depositary hereunder and having become such pursuant to
the applicable provision of this Indenture.



     “Designated Non-cash Consideration” means the Fair Market Value of non-cash consideration
received by the Company or a Restricted Subsidiary of the Company in connection with an Asset Sale
that is so designated as Designated
Non-cash Consideration pursuant to an Officers’ Certificate, setting forth the basis of such
valuation, less the amount of cash or Cash Equivalents received in connection with a subsequent
sale, redemption or payment of, on or with respect to, such Designated Non-cash Consideration.



     “Disinterested Directors” means, with respect to any Affiliate Transaction, each member of the
Board of Directors of the Company who is not an employee of the Company or its Affiliates and has
no direct or indirect material financial interest in or with respect to such Affiliate Transaction
other than as a result of an Equity Interest in the Company or any Parent.



     “Disqualified Stock” means any Capital Stock (other than Management Stock) that, by its terms
(or by the terms of any security into which it is convertible, or for which it is exchangeable, in
each case at the option of the holder thereof), or upon the happening of any event, matures or is
mandatorily



12









 





redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the
option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after
the date on which the Notes mature. Notwithstanding the preceding or following sentence, any
Capital Stock, options, warrants or rights that would constitute Disqualified Stock solely because
the holders thereof have the right to require the Company to repurchase such Capital Stock,
options, warrants or rights upon the occurrence of a change of control or an asset sale (as either
such phrase is defined thereunder) shall not constitute Disqualified Stock if the terms of such
Capital Stock, options, warrants or rights provide that the Company may not repurchase or redeem
any such Capital Stock, options, warrants or rights pursuant to such provisions unless such
repurchase or redemption complies with Section 4.10 hereof. The term “Disqualified Stock” shall
also include any options, warrants or other rights to acquire Capital Stock (other than in respect
of Management Stock) that are convertible into Disqualified Stock or that are redeemable at the
option of the holder, or required to be redeemed, prior to the date that is 91 days after the date
on which the Notes mature.




     “Domestic Subsidiary” means any Restricted Subsidiary of the Company other than a Foreign
Subsidiary.



     “Equity Interests” means Capital Stock and all warrants, options or other rights to acquire
Capital Stock (but excluding any debt security that is convertible into, or exchangeable for,
Capital Stock).



     “Equity Offering” means a sale of Capital Stock (x) that is a sale of Capital Stock (other
than Disqualified Stock) of the Company (other than pursuant to a registration statement on Form
S-8 or otherwise relating to equity securities issuable under any employee benefit plan of the
Company) or (y) that is a sale of Capital Stock of a Parent the proceeds of which in an amount
equal to or exceeding the Redemption Amount are contributed to the equity capital of the Company
(and may then be contributed by the Company to any of its Restricted Subsidiaries).



     “Equity Redemption” means the redemption of the Equity Interests of Gregory S. Daily in
iPayment Investors, L.P. and iPayment GP, LLC.



     “Escrow Account” has the meaning set forth in the Escrow Agreement.



     “Escrow Agreement” means the Escrow and Security Agreement, dated as of May 6, 2011, among the
Company, the Trustee and Wilmington Trust FSB, as escrow agent, as such agreement may be amended,
modified or supplemented from time to time.



     “Escrow Property” has the meaning set forth in the Escrow Agreement.




13









 




     “Euroclear” means Euroclear Bank S.A./N.V., as operator of the Euroclear System.



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



     “Exchange Notes” means the Notes issued in the Exchange Offer in accordance with Section
2.07(f) hereof.



     “Exchange Offer” has the meaning set forth in the Registration Rights Agreement.



     “Exchange Offer Registration Statement” has the meaning set forth in the Registration Rights
Agreement.



     “Existing Indebtedness” means (i) the aggregate amount of Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the Credit Agreement and the related
Guarantees or under the Notes in existence on the Issue Date after giving effect to the application
of the proceeds of (x) the Notes, (y) the Opco Notes and (z) any borrowings made under the Credit
Agreement on the Issue Date, until such amounts are repaid, (ii) the Opco Notes and the related
Guarantees and (iii) Indebtedness arising from agreements existing on the Issue Date providing for
earn outs or similar obligations Incurred in connection with the acquisition of a business, assets,
Merchant Portfolio or a Restricted Subsidiary.



     “Fair Market Value” means the price that would be paid in an arm’s-length transaction between
an informed and willing seller under no compulsion to sell and an informed and willing buyer under
no compulsion to buy, as determined in good faith by the Company and, if the Fair Market Value
exceeds $7,500,000, by the Board of Directors of the Company, whose determination, unless otherwise
specified below, shall be conclusive if evidenced by a Board Resolution attached to an Officers’
Certificate delivered to the Trustee. Notwithstanding the foregoing, with respect to the
determinations made under Section 4.10(a)(C)(2) and (3) hereof and the first sentence of Section
4.10(c) hereof, the Board of Directors’ determination of Fair Market Value shall be based upon an
opinion or appraisal issued by an accounting, appraisal or investment banking firm of national
standing if the Fair Market Value exceeds $15,000,000.



     “Financing Disposition” means any sale, transfer, conveyance or other disposition of property
or assets by the Company or any Subsidiary thereof to any Receivables Entity, or by any Receivables
Subsidiary, in each case in connection with the Incurrence by a Receivables Entity of Indebtedness,
or obligations to



14









 




make payments to the obligor on Indebtedness, which may be secured by a Lien in
respect of such property or assets.



     “Fixed Charge Coverage Ratio” means with respect to any specified Person for any period, the
ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such
Person for such period. In the event that the specified Person or any of its Restricted
Subsidiaries Incurs, repays, repurchases, redeems, defeases, discharges or otherwise acquires or
retires any Indebtedness or issues, repurchases, redeems or otherwise acquires or retires Preferred
Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated and on or prior to the date on which the event occurs for which the calculation of
the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage
Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase,
redemption, defeasance, discharge or other acquisition or retirement of Indebtedness, or such
issuance, repurchase, redemption or other acquisition or retirement of Preferred Stock, and the use
of the proceeds therefrom as if the same had occurred at the beginning of such period.




     In addition, for purposes of calculating the Fixed Charge Coverage Ratio:



     (a) acquisitions and dispositions of Merchant Portfolios, business entities or property and
assets constituting a division, operating unit of a business or line of business of any Person that
have been made by the specified Person or any of its Restricted Subsidiaries, including through
mergers or consolidations, during the four-quarter reference period or subsequent to such reference
period and on or prior to the Calculation Date shall be given pro forma effect as if they had
occurred on the first day of the four-quarter reference period and Consolidated Cash Flow for such
reference period shall be calculated on a pro forma basis in respect thereof (including without
limitation in respect of reasonably anticipated cost savings or synergies relating to any such
acquisition or disposition) as determined in good faith by the Chief Financial Officer or an
authorized Officer of the Specified Entity, but without giving effect to clause (c) of the proviso
set forth in the definition of Consolidated Net Income; provided that with respect to cost savings
or synergies relating to any such acquisition or disposition, the related actions are expected by
the Specified Entity to be taken, and the cost savings or synergies realized, no later than 12
months after the date of determination; and



     (b) consolidated interest expense attributable to interest on any Indebtedness (whether
existing or being Incurred) computed on a pro forma basis and bearing a floating interest rate
shall be computed as if the rate in effect on the Calculation Date (taking into account any
interest rate option, swap, cap or similar agreement applicable to such Indebtedness if such
agreement has a remaining



15









 




term in excess of 12 months or, if shorter, at least equal to the
remaining term of such Indebtedness) had been the applicable rate for the entire period.



     “Fixed Charges” means, with respect to any specified Person for any period, the sum, without
duplication, of:



     (a) the consolidated interest expense of such Person and its Restricted Subsidiaries for such
period, whether paid or accrued, including, without limitation, amortization of debt issuance costs
and original issue discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges incurred in respect of letter of
credit or bankers’ acceptance financings, and net of the effect of all payments made or received
pursuant to Hedging Obligations, and net of interest income, whether received or accrued, of such
Person and its Restricted Subsidiaries for such period; plus




     (b) the consolidated interest of such Person and its Restricted Subsidiaries that was
capitalized during such period; plus



     (c) any interest expense on Indebtedness of another Person (other than such Person or one of
its Restricted Subsidiaries) that is Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries,
whether or not such Guarantee or Lien is called upon; plus



     (d) all dividends, whether paid or accrued and whether or not in cash, on any series of
Disqualified Stock of such Person or Disqualified Stock or Preferred Stock of any of its Restricted
Subsidiaries, other than (x) dividends on Equity Interests payable solely in Equity Interests
(other than Disqualified Stock) of the Company or to the Company or a Restricted Subsidiary of the
Company and (y) Permitted Tax Distributions, and unless such dividends are paid or accrued on
Preferred Stock of any Restricted Subsidiary that is a joint venture or similar entity and not a
Wholly Owned Restricted Subsidiary owned by the minority investor in such Restricted Subsidiary,
times a fraction, the numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.



     “Foreign Subsidiary” means any Restricted Subsidiary of the Company that is (x) not formed
under the laws of the United States of America or any state
thereof or the District of Columbia, or (y) a Subsidiary of any Foreign Subsidiary or (z) a
Foreign Subsidiary Holding Company.



16









 




     “Foreign Subsidiary Holding Company” means any Restricted Subsidiary that has no material
assets other than securities of one or more Foreign Subsidiaries and other assets relating to the
ownership interest in any such securities.



     “GAAP” means generally accepted accounting principles in the United States, including those
set forth in the opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants, the opinions and pronouncements of the Public Company
Accounting Oversight Board and in the statements and pronouncements
of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a
significant segment of the accounting profession, which are in effect on the Issue Date (for
purposes of the definitions of the terms “Consolidated Cash Flow,” “Consolidated Net Income,”
“Fixed Charges,” “Fixed Charge Coverage Ratio,” “Net Income,” and “Total Assets,” all defined terms
in this Indenture to the extent used in or relating to any of the foregoing definitions, and all
ratios and computations based on any of the foregoing definitions) and as in effect from time to
time (for all other purposes of this Indenture).




     “Global Note Legend” means the legend set forth in Section 2.07(g)(ii) hereof, which is
required to be placed on all Global Notes issued under this Indenture.



     “Global Notes” means, individually and collectively, each of the Restricted Global Notes and
the Unrestricted Global Notes deposited with or on behalf of and registered in the name of the
Depository or its nominee, substantially in the form of Exhibit A hereto and that bears the Global
Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached
thereto, issued in accordance with Section 2.01, 2.07(b)(iv), 2.07(d)(ii) or 2.07(f) hereof.



     “Government Securities” means securities that are direct obligations of the United States of
America for the payment of which its full faith and credit is pledged.



     “Guarantee” means, as to any Person, a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or indirect, in any manner
including, without limitation, by way of a pledge of assets or through letters of credit or
reimbursement agreements in respect thereof, of all or any part of any Indebtedness of another
Person.



     “Guarantor” means any Subsidiary of the Company that enters into a Note Guarantee in
accordance with the provisions of this Indenture and its




17









 





successors and assigns until released from its
 obligations under its Note Guarantee and this
Indenture in accordance with the terms of this Indenture.


     “Hedging Obligations” means, with respect to any specified Person, the obligations of such
Person under:



     (a) interest rate swap agreements, interest rate cap agreements, interest rate collar
agreements and other similar agreements or arrangements with respect to interest rates;



     (b) commodity swap agreements, commodity option agreements, commodity forward contracts and
other similar agreements or arrangements with respect to commodity prices; and



     (c) foreign exchange contracts, currency swap agreements and other similar agreements or
arrangements with respect to foreign currency exchange rates.



     “Holder” means a Person in whose name a Note is registered.



     “IAI Global Note” means a Global Note resold to Institutional Accredited Investors bearing the
Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and
registered in the name of the Depositary or its nominee in a denomination equal to the outstanding
principal amount of Notes resold to Institutional Accredited Investors.



     “Incur” means, with respect to any Indebtedness, to incur, create, issue, assume, enter into
any Guarantee of, or otherwise become directly or indirectly liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such Indebtedness (and
“Incurrence” and “Incurred” shall have meanings correlative to the foregoing); provided that (x)
any Indebtedness of a Person existing at the time such Person becomes a Restricted Subsidiary of
the Company shall be deemed to be Incurred by such Restricted Subsidiary at the time it becomes a
Restricted Subsidiary of the Company and (y) neither the accrual of interest nor the accretion of
original issue discount nor the payment of interest in the form of additional Indebtedness with
substantially the same terms and the payment of dividends on Disqualified Stock or Preferred Stock
in the form of additional shares of the same class of Disqualified Stock or Preferred Stock shall
be considered an Incurrence of Indebtedness; provided that in each case the amount thereof is for
all other purposes included in the Fixed Charges and Indebtedness of the Company or any of its
Restricted Subsidiaries as accrued or paid.




18









 




     “Indebtedness” means, with respect to any specified Person, any indebtedness of such Person,
whether or not contingent:



     (a) in respect of borrowed money;



     (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof);



     (c) in respect of banker’s acceptances;



     (d) in respect of Capital Lease Obligations;



     (e) in respect of the balance deferred and unpaid of the purchase price of any property or
services, except any such balance that constitutes an accrued expense or trade payable;



     (f) representing Hedging Obligations;



     (g) representing Disqualified Stock valued at its involuntary maximum fixed repurchase price
excluding accrued dividends; or



     (h) in the case of a Subsidiary of such Person, representing Preferred Stock valued at its
involuntary maximum fixed repurchase price excluding accrued dividends;



if and to the extent any of the preceding items (other than letters of credit, Hedging Obligations,
Disqualified Stock and Preferred Stock) would appear as a liability on the balance sheet of the
specified Person prepared in accordance with GAAP. The term “Indebtedness” includes (x) all
Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such
Indebtedness is assumed by the specified Person), provided that the amount of such Indebtedness
shall be the lesser of (A) the Fair Market Value of such asset at such date of determination and
(B) the amount of such Indebtedness, and (y) to the extent not otherwise included, the Guarantee by
the specified Person of any Indebtedness of any other Person, to the extent so guaranteed by the
specified Person. For purposes hereof, the “maximum fixed repurchase price” of any Disqualified
Stock or Preferred Stock which does not have a fixed repurchase price shall be calculated in
accordance with the terms of such Disqualified Stock or Preferred Stock, as applicable, as if such
Disqualified Stock or Preferred Stock were repurchased on any date on which Indebtedness shall be
required to be determined pursuant to this Indenture, and, if such price is based upon or measured
by the fair market value of such Capital Stock, such fair market value shall be as determined in
good faith by the Board of Directors of the Company or the issuer of such Capital Stock.





19









 




     The amount of any Indebtedness outstanding as of any date (except as expressly provided above
and in the definition of Capital Lease Obligation) shall be:



     (a) the accreted value thereof, in the case of any Indebtedness issued with original issue
discount;



     (b) the principal amount (or, in the case of letters of credit, the face amount) thereof, in
the case of any other Indebtedness; and



     (c) in the case of Hedging Obligations, the termination value of the agreement or arrangement
giving rise to such Hedging Obligation that would be payable at the time of determination.



     “Indenture” means this Indenture, as amended or supplemented from time to time.



     “Indirect Participant” means a Person who holds a beneficial interest in a Global Note through
a Participant.



     “Initial Notes” means (i) the first $125,000,000 aggregate principal amount of Notes issued
under this Indenture on the date hereof and (ii) any Exchange Notes.



     “Institutional Accredited Investor” means an institutional “accredited investor” (as defined)
in Rule 501(a), (2), (3) or (7) under the Securities Act.



     “Institutional Accredited Investor Certificate” means a certificate substantially in the form
of Exhibit D hereto.



     “Interest Step-Up” has the meaning set forth in Exhibit A hereto.



     “Investment Grade Rating” means a rating of Baa3 or better by Moody’s and BBB- or better by
S&P (or, in either case, the equivalent of such rating by such organization), or an equivalent
rating by any other Rating Agency.



     “Investments” means, with respect to any Person, all direct or indirect investments by such
Person in other Persons (including Affiliates) in the form of loans or other extensions of credit
(including Guarantees), advances, capital contributions (by means of any transfer of cash or other
property to others or any payment for property or services for the account or use of others),
purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as investments by such Person
in other Persons on a balance sheet of such Person prepared in accordance with GAAP.




20









 




     If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after
giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of
the Company, the Company shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the Fair Market Value of the Investment in such Subsidiary not sold or
disposed of. The acquisition by the Company or any Restricted Subsidiary of the Company of a
Person that holds an Investment in a third Person shall be deemed to
be an Investment by the Company or such Restricted Subsidiary in such third Person in an amount equal to the Fair Market Value of the Investment held by the
acquired Person in such third Person.




     The amount of any Investment at any time of determination shall be the original cost of such
Investment, reduced (at the Company’s option) by the amount of any dividend, distribution, interest
payment, return of capital, repayment or other amount or value received in respect of or upon the
disposition of such Investment, which amount, in the case of any non-cash dividend, distribution,
interest payment, return of capital or repayment received in respect of such Investment, shall be
equal to the Fair Market Value of such dividend, distribution, interest payment, return of capital
or repayment; provided, that to the extent that the amount of Restricted Payments outstanding at
any time is so reduced by any portion of any such amount or value that would otherwise be included
in the calculation of Net Income, such portion of such amount or value shall not be so included for
purposes of calculating the amount of Restricted Payments that may be made pursuant to Section
4.10(a)(C) hereof.



     “Investors Recapitalization” means (i) the Equity Redemption and (ii) the refinancing of the
PIK toggle notes existing on the Issue Date of iPayment Investors, L.P.



     “Issue Date” means the date of original issuance of the Initial Notes under this Indenture.



     “Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in The City
of New York or at a place of payment are authorized or required by law, regulation or executive
order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be
made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue on such payment for the intervening period.



     “Letter of Transmittal” means the letter of transmittal to be prepared by the Company and sent
to all Holders of the Notes for use by such Holders in connection with the Exchange Offer.




21









 




     “Leverage Ratio” means, on the date of determination, the ratio of (i) Consolidated Total
Indebtedness of the Company and its Restricted Subsidiaries on a consolidated basis to (ii)
Consolidated Cash Flow of the Company and its Restricted Subsidiaries for the most recently ended
four fiscal quarters, in each case with such pro forma adjustments to such Consolidated Total
Indebtedness and Consolidated Cash Flow as are appropriate and consistent with the pro forma
adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio; provided,
however, that for purposes of calculating the Leverage Ratio only, pursuant to clause (a) of the
definition of Fixed Charge Coverage Ratio, pro forma adjustments shall only be permitted if
permitted pursuant to Regulation S-X under the Securities Act.




     “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise
perfected under applicable law, including any conditional sale or other title retention agreement.



     “Management Investors” means the officers, directors, employees and other members of the
management of any Parent, the Company, or any of their respective Subsidiaries, or any sales
agents, sales representatives or independent sales groups providing marketing and related services
to any Parent, the Company or any of their respective Subsidiaries, or family members or relatives
thereof, or trusts, partnerships or limited liability companies for the benefit of any of the
foregoing, or any of their heirs, executors, successors and legal representatives, who at any date
beneficially own or have the right to acquire, directly or indirectly, Capital Stock of the Company
or any Parent; provided, however, that for the purposes of the definition of Permitted Holders,
Management Investors shall not include sales agents, sales representatives or independent sales
groups that are not officers, directors, employees and other members of the management of any
Parent, the Company, or any of their respective Subsidiaries, or family members or relatives
thereof, or trusts, partnerships or limited liability companies for the benefit of any of the
foregoing, or any of their heirs, executors, successors and legal representatives.



     “Management Stock” means Capital Stock of the Company or any Parent (or any options, warrants
or other rights in respect thereof) held by any of the Management Investors.



     “Merchant Portfolio” means a portfolio of merchant contracts.



     “Moody’s” means Moody’s Investors Service, Inc., and its successors.



     “Net Income” means, with respect to any specified Person, the net income (loss) of such
Person, determined in accordance with GAAP and after any



22









 




reduction in respect of dividends paid on
Preferred Stock of any such Person that is a Restricted Subsidiary or on Disqualified Stock of any
such Person that is the Company or a Restricted Subsidiary (in each case to the extent such
dividends constitute Fixed Charges and were paid pursuant to Section 4.10(b)(viii) hereof),
excluding, however:



     (a) any gain or loss, together with any related provision for taxes on such gain or loss,
realized in connection with: (i) any sale of assets outside the ordinary course of business of such
Person; or (ii) the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries; and




     (b) any extraordinary gain or loss, together with any related provision for taxes on such
extraordinary gain or loss.



     “Net Proceeds” means the aggregate cash proceeds, including payments in respect of deferred
payment obligations (to the extent corresponding to the principal, but not the interest component,
thereof) received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of (a) the costs relating to such Asset
Sale, including, without limitation, legal, accounting, investment banking and brokerage fees, and
sales commissions, and any relocation expenses incurred as a result thereof, (b) taxes paid or
payable as a result thereof, in each case, after taking into account any available tax credits or
deductions and any tax sharing arrangements, (c) amounts required to be applied to the payment of
Indebtedness or other liabilities secured by a Lien on the asset or assets that were the subject of
such Asset Sale or required to be paid as a result of such Asset Sale, (d) any reserve for
adjustment in respect of the sale price of such asset or assets established in accordance with
GAAP, (e) in the case of any Asset Sale by a Restricted Subsidiary of the Company, payments to
holders of Equity Interests in such Restricted Subsidiary in such capacity (other than such Equity
Interests held by the Company or any Restricted Subsidiary thereof) to the extent that such payment
is required to permit the Asset Sale or the distribution of such proceeds in respect of the Equity
Interests in such Restricted Subsidiary held by the Company or any Restricted Subsidiary thereof
and (f) appropriate amounts to be provided by the Company or its Restricted Subsidiaries as a
reserve against liabilities associated with such Asset Sale, including, without limitation, pension
and other post-employment benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset Sale, all as
determined in accordance with GAAP; provided that (i) excess amounts set aside for payment of taxes
pursuant to clause (b) above remaining after such taxes have been paid in full or the statute of
limitations therefor has expired and (ii) amounts initially held in reserve pursuant to clause (f)
no longer




23









 






so held, shall, in the case of each of subclause (i) and (ii), at that time become Net
Proceeds.



     “Non-U.S. Person” means a Person who is not a U.S. Person.



     “Note Guarantee” means a Guarantee of the Notes pursuant to this Indenture.



     “Notes” means the 15.00%/15.00% Senior Notes due 2018 of the Company issued under this
Indenture. The Initial Notes, the PIK Notes and the Additional Notes, if any, shall be treated as
a single class for all purposes under this Indenture and all references to the Notes shall include
the Initial Notes, the PIK Notes and any Additional Notes.




     “Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary, any
Assistant Secretary or any Vice-President of such Person.



     “Officers’ Certificate” means a certificate signed on behalf of the Company by at least two
Officers of the Company, that meets the requirements of this Indenture.



     “Opco Notes” means the $400,000,000 aggregate principal amount of 10.25% Senior Notes due 2018
to be issued by iPayment, Inc. on the Issue Date.



     “Opco Recapitalization” means the refinancing of the existing credit agreement and the
existing senior subordinated notes of iPayment, Inc.



     “Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the
Trustee and, as applicable, the Company (who may be counsel to or an employee of the Company) that
meets the requirements of this Indenture, which may contain qualifications, assumptions, exceptions
and limitations as are customary or appropriate for similar opinions..



     “Parent” means any Person of which the Company at any time is or becomes a Subsidiary on or
after the Issue Date.



     “Parent Expenses” means, without duplication, (a) costs (including all professional fees and
expenses) incurred by any Parent in connection with its reporting obligations under, or in
connection and in compliance with, applicable laws, applicable rules or regulations of any
governmental, regulatory or self-regulatory body or stock exchange, this Indenture or any other
agreement or instrument relating to Indebtedness of the Company or any Restricted Subsidiary,
including any reports filed with respect to the Securities Act, the Exchange Act or



24









 





the respective
rules and regulations promulgated thereunder, (b) indemnification obligations of any Parent owing
to directors, officers, employees or other Persons under its charter or by-laws or pursuant to
written agreements with any such Person, or obligations in respect of director and officer
insurance (including premiums therefor), (c) operational expenses of any Parent incurred in the
ordinary course of business in an amount not to exceed $2,000,000 in any fiscal year, (d) expenses
incurred by any Parent in connection with any offering of Capital Stock or Indebtedness (x) where
the net proceeds of such offering are intended to be received by, contributed or loaned to the
Company or a Restricted Subsidiary, or (y) in a prorated amount of such expenses in proportion to
the amount of such net proceeds intended to be so received, contributed or loaned, or (z) otherwise
on an interim basis prior to completion of such offering so long as any Parent shall cause the
amount of such expenses to be repaid to the Company or the relevant Restricted Subsidiary out of
the proceeds of such offering promptly if completed and (e) Related Taxes.




     “Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who
has an account with the Depositary, Euroclear or
Clearstream, respectively (and with respect to DTC, shall include Euroclear and Clearstream).



     “Participating Broker-Dealer” has the meaning set forth in the Registration Rights Agreement.



     “Permitted Business” means any business conducted or proposed to be conducted by the Company
and its Restricted Subsidiaries on the Issue Date and other businesses reasonably related or
ancillary thereto.



     “Permitted Holder” means any of (i) Carl A. Grimstad and his Affiliates and Related Parties,
(ii) other Management Investors and any of their Affiliates (but only with respect to their
Beneficial Ownership of up to 25% in the aggregate of the voting power of the Voting Stock of the
Company or any Parent, as the case may be), and (iii) any Person acting in the capacity of an
underwriter in connection with a public or private offering of Capital Stock of any Parent or the
Company. In addition, any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) whose status as a Beneficial Owner constitutes or results in a Change of Control in
respect of which a Change of Control Offer is made in accordance with the requirements of this
Indenture, together with its Affiliates, shall thereafter constitute Permitted Holders.



     “Permitted Investments” means:



     (a) any Investment in the Company or in a Restricted Subsidiary of the Company;





25












 




     (b) any Investment in Cash Equivalents;



     (c) any Investment by the Company or any Restricted Subsidiary of the Company in a Person, if
as a result of such Investment:



     (i) such Person becomes a Restricted Subsidiary of the Company; or



     (ii) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary
of the Company;



     (d) any Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with Section 4.09 hereof or from a sale,
conveyance or other disposition of property or assets that does not constitute an Asset Sale;



     (e) Hedging Obligations that are Incurred for the purpose of fixing, hedging or swapping
interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any
such agreements previously made for such purposes) and not for speculative purposes;



     (f) stock, obligations or securities received in settlement of debts or claims, or upon
foreclosure, perfection or enforcement of any Lien, or in satisfaction of judgments or in
connection with bankruptcy or insolvency of other Persons;



     (g) loans, advances, prepaid residual expense or other extensions of credit (including
Guarantees) to or in respect of sales agents, sales representatives, independent sales groups,
customers or suppliers, in the ordinary course of business receivables created or acquired or
pledges or deposits made in the ordinary course of business; and endorsements for collection or
deposit arising in the ordinary course of business;



     (h) commission, payroll, travel and similar advances to officers and employees of the Company
or any of its Restricted Subsidiaries that are expected at the time of such advance ultimately to
be recorded as an expense in conformity with GAAP;



     (i) loans or advances to equityholders of any Person acquired by the Company or any of its
Subsidiaries to fund taxes and expenses payable by such equityholders in connection with such
acquisition not to exceed $5,000,000 in the aggregate outstanding at any one time;



     (j) loans or advances to officers and employees not to exceed $5,000,000 in the aggregate
outstanding at any one time;



26









 





     (k) Investments existing, or made pursuant to legally binding commitments existing, on the
Issue Date;



     (l) loans or advances to any current or former employee, officer, or director of the Company
or any of its Restricted Subsidiaries or any other Management Investor in connection with such
Person’s purchase of Equity Interest of the Company or any Parent in an aggregate amount at any
time outstanding not to exceed the amount of Permitted Payments permitted pursuant to Section
4.10(b)(vii) hereof;



     (m) (i) Investments in any Receivables Subsidiary that are necessary or desirable in
connection with a Financing Disposition by or to any Receivables Entity, including Investments of
funds held in accounts permitted or required by
the arrangements governing such Financing Disposition or any related Indebtedness, or (ii) any
promissory note issued by the Company, iPayment, Inc. or any Parent to any Receivables Entity that
are necessary or desirable in connection with a Receivables Financing, provided that, if such
Parent receives cash from the relevant Receivables Entity in exchange for such note, an equal cash
amount is contributed by any Parent to the Company; and



     (n) other Investments, together with all other Investments made pursuant to this clause (n)
since the Issue Date and all Designated Non-cash Consideration received pursuant to Section
4.09(a)(ii)(C) hereof and that is at that time outstanding, not to exceed the greater of (x)
$35,000,000 and (y) 8% of Total Assets.



     If any Investment pursuant to clause (n) above is made in any Person that is not a Restricted
Subsidiary and such Person thereafter becomes a Restricted Subsidiary, such Investment (at the
Company’s option) shall thereafter be deemed to have been made pursuant to clause (a) or (c) above
and not clause (n) above for so long as such Person is a Restricted Subsidiary of the Company.



     “Permitted Liens” means:



     (a) Liens securing obligations with respect to the Credit Agreement Incurred under Section
4.11(b)(i) hereof;



     (b) Liens in favor of the Company or any Restricted Subsidiary (other than Liens granted by
the Company in favor of any Restricted Subsidiary);



     (c) Liens on property or shares of stock of a Person existing at the time such Person is
merged with or into or consolidated with the Company or any Restricted Subsidiary of the Company;
provided that such Liens were not created in connection with, or in contemplation of, such merger
or consolidation and do



27









 




not extend to any assets other than those of the Person merged into or
consolidated with the Company or such Restricted Subsidiary (plus improvements, accessions,
proceeds or dividends or distributions in respect thereof);



     (d) Liens on property existing at the time of acquisition thereof by the Company or any
Restricted Subsidiary of the Company, provided that such Liens were not created in connection with,
or in contemplation of, such acquisition and do not extend to any property other than the property
so acquired by the Company or the Restricted Subsidiary (plus improvements, accessions, proceeds or
dividends or distributions in respect thereof);



     (e) Liens securing the Notes and pursuant to the Escrow Agreement;



     (f) Liens existing on, or provided for under written arrangements existing on, the Issue Date;



     (g) Liens securing Permitted Refinancing Indebtedness Incurred pursuant to Section 4.11(b)(v)
hereof; provided that such Liens do not extend to any property or assets other than the property or
assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof)
that secure (or under such written arrangements with respect to the Indebtedness being refinanced
could secure) the Indebtedness being refinanced;



     (h) Liens on property or assets used to defease or to satisfy and discharge Indebtedness;
provided that such defeasance or satisfaction and discharge is not prohibited by this Indenture;



     (i) Liens securing Indebtedness or other obligations of any Receivables Entity;



     (j) Liens securing obligations (which together with any Liens securing Permitted Refinancing
Indebtedness or obligations originally secured pursuant to this clause (j)) that do not exceed
$10,000,000 at any one time outstanding; and



     (k) Liens on assets of non-Guarantor Subsidiaries.



     “Permitted Refinancing Indebtedness” means any Indebtedness of the Company or any of its
Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund (any of the foregoing, “refinance”) other Indebtedness
of the Company or any of its Restricted Subsidiaries; provided that:



     (a) the amount of such Permitted Refinancing Indebtedness does not exceed the amount of the
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued and
unpaid interest thereon and



28









 




the amount of any reasonably determined premium necessary to accomplish
such refinancing and such reasonable expenses incurred in connection therewith (in each case as
determined by the Company in good faith));



     (b) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is
expressly subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness
has a final maturity date later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and



     (c) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is
expressly subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness is
subordinated in right of payment to the Notes, on terms at least as favorable, taken as a whole, to
the Holders of Notes as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.



     “Permitted Tax Distributions” means, for or in respect of any fiscal year or other tax period
(each a “Tax Period”) of the Company, an amount equal to the product of (x) the Taxable Income for
such Tax Period multiplied by (y) the Assumed Tax Rate with respect to each amount included
therein. Permitted Tax Distributions shall be calculated and made in advance of the dates on which
estimated tax payments relating to the pertinent Tax Period are due, and shall be made without
regard to the actual tax status of any direct or indirect holders of Equity Interests in the
Company.



     “Person” means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, limited liability company or government or
other entity.



     “PIK Interest” has the meaning set forth in Exhibit A hereto.



     “PIK Notes” means all Notes issued pursuant to a PIK Payment.



     “Preferred Stock” means, with respect to any Person, any Capital Stock of such Person that has
preferential rights to any other Capital Stock of such Person with respect to dividends or
redemptions upon liquidation.



     “Private Placement Legend” means the legend set forth in Section 2.07(g)(i) hereof to be
placed on all Notes issued under this Indenture except where otherwise permitted by the provisions
of this Indenture.



     “QIB” means a “qualified institutional buyer” as defined in Rule 144A.




29









 




     “Rating Agency” means Moody’s or S&P or, if Moody’s or S&P or both shall not make a rating on
the Notes publicly available, a nationally recognized statistical rating agency or agencies, as the
case may be, selected by the Company which shall be substituted for Moody’s or S&P or both, as the
case may be.



     “Recapitalization” means the Investors Recapitalization and the Opco Recapitalization.



     “Receivable” means a right to receive payment arising from a sale or lease of goods or
services by a Person pursuant to an arrangement with another Person pursuant to which such other
Person is obligated to pay for goods or services under terms that permit the purchase of such goods
and services on credit, as determined in accordance with GAAP.




     “Receivables Entity” means (x) any Receivables Subsidiary or (y) any other Person other than a
Subsidiary that is engaged in the business of acquiring, selling, collecting, financing or
refinancing Receivables, accounts (as defined in the Uniform Commercial Code as in effect in any
jurisdiction from time to time), other accounts and/or other receivables, and/or related assets.



     “Receivables Financing” means any financing of Receivables of the Company or any Restricted
Subsidiary that have been transferred to a Receivables Entity in a Financing Disposition.



     “Receivables Subsidiary” means a Subsidiary of the Company that (a) is engaged solely in the
business of acquiring, selling, collecting, financing or refinancing Receivables, accounts (as
defined in the Uniform Commercial Code as in effect in any jurisdiction from time to time) and
other accounts and receivables (including any thereof constituting or evidenced by chattel paper,
instruments or general intangibles), all proceeds thereof and all rights (contractual and other),
collateral and other assets relating thereto, and any business or activities incidental or related
to such business, and (b) is designated as a Receivables Subsidiary by the Board of Directors of
the Company and no portion of the Indebtedness or any other obligation (contingent or otherwise) of
which (x) is at any time guaranteed by the Company or any of its Restricted Subsidiaries (other
than any Receivables Subsidiary), excluding guarantees of obligations (other than any guarantee of
Indebtedness) pursuant to representations, warranties, covenants and indemnities which are
customary in an accounts receivable securitization transaction (as determined in good faith by the
Company), (y) is at any time recourse to or obligates the Company or any of its Restricted
Subsidiaries (other than any Receivables Subsidiary) in any way, other than pursuant to
representations, warranties, covenants and indemnities which are customary in an accounts
receivable securitization transaction (as determined in good faith by the Company), or (z) subjects
any asset of the Company or its



30









 




Restricted Subsidiaries (other than any Receivables Subsidiary),
directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant
to representations, warranties, covenants and indemnities which are customary in an accounts
receivable securitization transaction (as determined in good faith by the Company).



     “Redemption Agreement” means the Redemption Agreement, dated as of April 12, 2011, among
iPayment GP, LLC, iPayment Investors, L.P., each person listed in Exhibit A thereto, Gregory S.
Daily and Randal S. Mashburn, solely as trustee, as the same may be amended, supplemented or
modified from time to time.



     “Registration Rights Agreement” means (a) with respect to the Notes issued on the Issue Date,
the Registration Rights Agreement, to be dated the Issue Date, between the Company and J.P. Morgan
Securities LLC and (b) with respect to any Additional Notes, any registration rights agreement
between the Company and the other parties thereto relating to the registration by the Company of
such Additional Notes, and any Notes issued in exchange therefor, under the Securities Act.



     “Regulation S” means Regulation S promulgated under the Securities Act.



     “Regulation S Global Note” means a permanent Global Note in the form of Exhibit A attached
hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on
behalf of and registered in the name of the Depositary or its nominee, in a denomination equal to
the outstanding principal amount of Notes resold to Non-U.S. Persons pursuant to Regulation S and
held in the form of a Global Note.



     “Related Parties” means Carl A. Grimstad’s family members or relatives, or trusts,
partnerships or limited liability companies for the benefit of Carl A. Grimstad or any such family
members or relatives, or any of Carl A. Grimstad’s heirs, executors, successors or legal
representatives.



     “Related Taxes” means any taxes, charges or assessments (other than taxes measured by income)
required to be paid by any Parent by virtue of being organized or existing or having Capital Stock
outstanding, or being a holding company parent of, or receiving dividends, distributions or other
payment from the Company, any Restricted Subsidiary thereof or any Parent, or having guaranteed or
given any security interest in respect of any obligations of the Company or any Restricted
Subsidiary thereof, or having made any payment in respect of any Parent Expenses.




31









 




     “Replacement Assets” means (a) non-current assets that shall be used or useful in a Permitted
Business, (b) Merchant Portfolios and/or any related assets, or (c) substantially all the assets of
a Permitted Business or at least a majority of the Voting Stock of any Person engaged in a
Permitted Business that shall become on the date of acquisition thereof a Restricted Subsidiary.



     “Responsible Officer,” when used with respect to the Trustee, means any officer within the
Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other
officer of the Trustee customarily performing functions similar to those performed by any of the
above designated officers, who at that time shall be an officer that shall have direct
responsibility for the administration of this Indenture, and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.



     “Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.



     “Restricted Global Note” means a Global Note bearing the Private Placement Legend.



     “Restricted Investment” means an Investment other than a Permitted Investment.



     “Restricted Period” means the 40-day restricted period as defined in Regulation S.



     “Restricted Subsidiary” of a Person means any Subsidiary of such Person that is not an
Unrestricted Subsidiary.



     “Rule 144” means Rule 144 promulgated under the Securities Act.



     “Rule 144A” means Rule 144A promulgated under the Securities Act.



     “Rule 903” means Rule 903 promulgated under the Securities Act.



     “Rule 904” means Rule 904 promulgated under the Securities Act.



     “S&P” means Standard & Poor’s Ratings Group, a division of The McGraw Hill Companies, Inc.,
and its successors.



     “SEC” or “Commission” means the United States Securities and Exchange Commission.




32









 




     “Secured Debt” means any Indebtedness secured by a Lien upon property of the Company or any of
its Restricted Subsidiaries.



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



     “Separation Date” means the earliest of (i) 180 days after the Issue Date, (ii) the date on
which a registration statement with respect to a registered exchange offer for the Notes is
declared effective under the Securities Act, (iii) such date as J.P. Morgan Securities LLC in its
sole discretion shall establish on at least one Business Days’ notice to the Company and (iv) in
the event of the occurrence of a Change of Control, the date on which the requisite notice is
mailed to the holders of Notes; provided that the Separation Date shall not be prior to the Equity
Redemption.



     “Shelf Registration Statement” means the Shelf Registration Statement as defined in the
Registration Rights Agreement.



     “Significant Subsidiary” means any Subsidiary that would constitute a “significant subsidiary”
within the meaning of Article 1 of Regulation S-X of the Securities Act.



     “Specified Entity” means the Company or iPayment, Inc., as the case may be.



     “Stated Maturity” means, with respect to any installment of interest or principal on any
series of Indebtedness, the date on which such payment of interest or principal was scheduled to be
paid in the original documentation governing such Indebtedness, and shall not include any
contingent obligations to repay, redeem or repurchase any such interest or principal prior to the
date originally scheduled for the payment thereof.



     “Subordinated Debt” means any Indebtedness that is expressly subordinated in right of payment
to the Notes or any Note Guarantees.



     “Subsidiary” means, with respect to any specified Person:



     (a) any corporation, association or other business entity of which more than 50% of the total
voting power of shares of Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and



33









 




     (b) any partnership (i) the sole general partner or the managing general partner of which is
such Person or a Subsidiary of such Person or (ii) the only general partners of which are such
Person or one or more Subsidiaries of such Person (or any combination thereof).



     “Taxable Income” means, for or in respect of any Tax Period, the taxable income of the Company
determined for Federal income tax purposes as if the Company were an individual and directly or
indirectly wholly owned Subsidiaries of the Company were disregarded entities for Federal income
tax purposes.



     “TIA” means the Trust Indenture Act of 1939, as amended.



     “Total Assets” means the total consolidated assets of the Company and its Restricted
Subsidiaries, as shown on the balance sheet of the Company as at the end of the most recent fiscal
period for which consolidated financial statements are available, prepared in conformity with GAAP.



     “Treasury Rate” means, with respect to any date of redemption, the yield to maturity at the
time of computation of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519) which has become
publicly available at least two Business Days prior to the date fixed for prepayment (or, if such
Statistical Release is no longer published, any publicly available source for similar market data))
most nearly equal to the period from such date of redemption to May 15, 2015; provided, however,
that if the period from such date of redemption to May 15, 2015 is not equal to the constant
maturity of a United States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for which such yields are
given, except that if the then remaining term of the Notes to May 15, 2015 is less than one year,
the weekly average yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year shall be used.




     “Trustee” means Wilmington Trust FSB, until a successor replaces it in accordance with the
applicable provisions of this Indenture and thereafter means the successor serving hereunder.



     “Unrestricted Definitive Note” means one or more Definitive Notes that do not bear and are not
required to bear the Private Placement Legend.



     “Unrestricted Global Note” means a permanent Global Note substantially in the form of Exhibit
A attached hereto that bears the Global Note Legend and that has the “Schedule of Exchanges of
Interests in the Global Note” attached thereto and that is deposited with or on behalf of and
registered in the




34









 




name of the Depositary, representing a series of Notes that do not bear the
Private Placement Legend.

     “Unrestricted Subsidiary” means any Subsidiary of the Company that is designated by the Board
of Directors of the Company as an Unrestricted Subsidiary pursuant to a Board Resolution in
compliance with Section 4.14 hereof and any Subsidiary of such Subsidiary.



     “U.S. Person” means a U.S. person as defined in Rule 902(k) of Regulation S under the
Securities Act.



     “Voting Stock” of any Person as of any date means the Capital Stock of such Person that is
ordinarily entitled to vote in the election of the Board of Directors of such Person.



     “Warrants” means the warrants issued pursuant to the Warrant Agreement.



     “Warrant Agreement” means the Warrant Agreement, dated as of May 6, 2011, among the Company
and Wilmington Trust FSB, as warrant agent, as such agreement may be amended, modified or
supplemented from time to time.



     “Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the
number of years obtained by dividing:



     (a) the sum of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the
nearest one-twelfth) that shall elapse between such date and the making of such payment; by



     (b) the then outstanding principal amount of such Indebtedness.



     “Wholly Owned Restricted Subsidiary” of any specified Person means a Restricted Subsidiary of
such Person all of the outstanding Capital Stock or other ownership interests of which (other than
directors’ qualifying shares or
Investments by foreign nationals mandated by applicable law) will at the time be owned by such
Person or by one or more Wholly Owned Restricted Subsidiaries of such Person.



     “Wholly Owned Subsidiary” of any specified Person means a Subsidiary of such Person all of the
outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying
shares or Investments by foreign nationals mandated by applicable law) will at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person.




35









 




     Section 1.02. Other Definitions.



	 	 	 
	Term	 	Defined in Section
	“Act”
	 	13.14
	“Affiliate Transaction”
	 	4.13
	“Asset Sale Offer”
	 	4.09
	“Authentication Order”
	 	2.02
	“Beneficially Owned”
	 	1.01 (“Beneficial Owner”)
	“Beneficially Owns”
	 	1.01 (“Beneficial Owner”)
	“Calculation Date”
	 	1.01 (“Fixed Charge Coverage Ratio”)
	“Change of Control Offer”
	 	4.08
	“Change of Control Payment”
	 	4.08
	“Change of Control Payment Date”
	 	4.08
	“Company”
	 	Preamble
	“Covenant Defeasance”
	 	8.03
	“DTC”
	 	2.04
	“Excess Proceeds”
	 	4.09
	“Excess Proceeds Trigger Date”
	 	4.09
	“Event of Default”
	 	6.01
	“Incurred”
	 	1.01 (“Incur”)
	“Incurrence”
	 	1.01 (“Incur”)
	“Initial Lien”
	 	4.07
	“Legal Defeasance”
	 	8.02
	“Net Proceeds Amount”
	 	4.09
	“Offer Amount”
	 	4.08
	“Offer Period”
	 	4.08
	“Paying Agent”
	 	2.04
	“Permitted Debt”
	 	4.11
	“Permitted Payment”
	 	4.10
	“PIK Payment”
	 	1.01 (“Additional Notes”)
	“Purchase Date”
	 	4.08
	“Redemption Amount”
	 	3.07
	“Reference Period”
	 	1.01 (“Consolidated Total






36









 





	 	 	 
	Term	 	Defined in Section
	“refinance”
	 	 Indebtedness”) 1.01 (“Permitted Refinancing Indebtedness”)
	“Registrar”
	 	2.04
	“Repurchase Offer”
	 	4.08
	“Restricted Payments”
	 	4.10
	“Specified Courts”
	 	13.09
	“Successor”
	 	5.01
	“Tax Period”
	 	1.01 (“Permitted Tax Distribution”)
	“Trustee”
	 	8.05
	“Unit Legend”
	 	2.07






     Section 1.03. Incorporation by Reference to the Trust Indenture Act. Whenever this Indenture
refers to a provision of the TIA, the provision is incorporated by reference in and made a part of
this Indenture.



     The following TIA terms used in this Indenture have the following meanings:



     “indenture securities” means the Notes;



     “indenture security Holder” means a Holder of a Note;



     “indenture to be qualified” means this Indenture;



     “indenture trustee” or “institutional trustee” means the Trustee; and



     “obligor” on the Notes and the Guarantees means the Company and the Guarantors and any
successor obligor upon the Notes and the Guarantees, respectively.



     All other terms used in this Indenture that are defined by the TIA, defined by the TIA
reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to
them.



     Section 1.04. Rules of Construction. Unless the context otherwise requires:



     (a) a term has the meaning assigned to it;




37









 




     (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with
GAAP;



     (c) “or” is not exclusive;



     (d) words in the singular include the plural, and in the plural include the singular;



     (e) provisions apply to successive events and transactions; and



     (f) references to sections of or rules under the Securities Act shall be deemed to include
substitute, replacement or successor sections or rules adopted by the SEC from time to time.



ARTICLE 2

The Notes




     Section 2.01. Form and Dating. (a) General. The Notes and the Trustee’s certificate of
authentication shall be substantially in the form of Exhibit A attached hereto. The Notes may have
such appropriate insertions, omissions, substitutions, notations, legends, endorsements,
identifications and other variations as are required or permitted by law, stock exchange rule or
depositary rule or usage, agreements to which the Company is subject, if any, or other customary
usage, or as may consistently herewith be determined by the Officer or Officers of the Company
executing such Notes, as evidenced by such execution (provided always that any such notation,
legend, endorsement, identification or variation is in a form acceptable to the Company). Each
Note shall be dated the date of its authentication. The Notes shall be (i) issued in registered
form without interest coupons and (ii) only in minimum denominations of $2,000 and integral
multiples of $1,000 in excess thereof, or if PIK Interest is paid, in denominations of $1.00 and
higher integral multiples of $1.00.



     The terms and provisions contained in the Notes shall constitute, and are hereby expressly
made, a part of this Indenture and the Company, any future Guarantors and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and provisions and to be
bound thereby. However, to the extent any provision of any Note conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall (to the fullest extent
permitted by applicable law) govern and be controlling.



     (b) Global Notes. Notes issued in global form shall be substantially in the form of Exhibit A
attached hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of
Interests in the Global Note” attached thereto).



38









 




Notes issued in definitive form shall be
substantially in the form of Exhibit A attached hereto (but without the Global Note Legend thereon
and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each
Global Note shall represent such of the outstanding Notes as shall be specified therein and each
shall provide that it represents the aggregate principal amount of outstanding Notes from time to
time endorsed thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, by adjustments made thereon
and/or in the records of the Custodian to reflect exchanges and redemptions as hereinafter
provided. Any endorsement of a Global Note to reflect the amount of any increase or decrease in
the aggregate principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee in accordance with instructions given by
the Holder thereof as required by Section 2.07 hereof.



     (c) Regulation S Notes. Any Notes issued or resold pursuant to Regulation S will only be
represented in the form of Definitive Notes until the later of (i) the Separation Date and (ii) the
end of the Restricted Period and the removal of the Private Placement Legend in accordance with the
requirements of this Indenture which shall include certification of beneficial ownership of the
Notes by a non-U.S. person.



     Section 2.02. Execution and Authentication. (a) At least one Officer of the Company shall
sign the Notes for the Company by manual or facsimile signature.



     (b) If an Officer whose signature is on a Note no longer holds that office at the time a Note
is authenticated, the Note shall nevertheless be valid.



     (c) A Note shall not be valid until authenticated by the manual signature of the Trustee.
Such signature shall be conclusive evidence that the Note has been authenticated under this
Indenture.



     (d) The aggregate principal amount of Notes which may be authenticated and delivered under
this Indenture is unlimited.



     (e) The Trustee shall, upon a written order of the Company signed by an Officer of the Company
(an “Authentication Order”), authenticate Notes for original issue with an unlimited maximum
aggregate principal amount, of which $125,000,000 shall be issued on the date of this Indenture.



     (f) The Trustee may appoint an authenticating agent reasonably acceptable to the Company to
authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this




39









 




Indenture to authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the
Company..



     Section 2.03. Methods of Receiving Payments on the Notes. For so long as the Notes are held
in one or more Global Notes, the Company through the Paying Agent shall pay all principal, interest
and premium and Additional Interest, if any, (other than PIK Interest) in respect of the Notes
represented by Global Notes by wire transfer of immediately available funds to the account
specified by the Holder of the relevant Global Note (so long as such wire transfer may be so made).
Otherwise, if a Holder has given wire transfer instructions to the Company or Paying Agent at
least 30 days prior to the applicable payment date, the Company through the Paying Agent shall pay
all principal, interest and premium and Additional Interest, if any, (other than PIK Interest) on
that Holder’s Notes in accordance with those instructions (so long as such wire transfer may be so
made). All other payments on Notes (other than PIK Interest) shall be
made at the office or agency
of the Paying Agent and Registrar unless the Company elects to make interest payments through the
Paying Agent by check mailed to the Holders at their addresses set forth in the register of
Holders.




     The Trustee shall upon receipt of an Authentication Order authenticate any PIK Notes issued in
payment of PIK Interest. PIK Interest on the Notes will be payable (x) with respect to Notes
represented by one or more Global Notes registered in the name of, or held by, DTC or its nominee
on the relevant record date, by increasing the principal amount of the outstanding Global Note by
an amount equal to the amount of PIK Interest for the applicable interest period (rounded up to the
nearest whole dollar) and (y) with respect to Notes represented by certificated notes, by issuing
PIK Notes in certificated form in an aggregate principal amount equal to the amount of PIK Interest
for the applicable period (rounded up to the nearest whole dollar), and the Trustee will, at the
request of the Company, authenticate and deliver such PIK Notes in certificated form for original
issuance to the Holders on the relevant record date, as shown by the records of the register of
Holders. Following an increase in the principal amount of the outstanding Global Notes as a result
of a PIK Payment, the Global Notes will bear interest on such increased principal amount from and
after the date of such PIK Payment. Any PIK Notes issued in certificated form will be dated as of
the applicable interest payment date and will bear interest from and after such date. All Notes
issued pursuant to a PIK Payment will mature on November 15, 2018 and will be governed by, and
subject to the terms, provisions and conditions of, this Indenture and shall have the same rights
and benefits as the Notes issued on the Issue Date. Additionally, for all purposes under the
Indenture, references to “principal amount” of Notes shall include any increase in the principal
amount of Notes (including PIK Notes) as a result of a PIK Payment. Any certificated PIK Notes will
be issued with the description “PIK” on the face of such PIK Note.




40












 




     Section 2.04. Registrar and Paying Agent. (a) The Company shall maintain an office or agency
where Notes may be presented for registration of transfer or for exchange (the “Registrar”) and an
office or agency where Notes may be presented for payment (the “Paying Agent”). The Registrar
shall keep a register of the Notes and of their transfer and exchange. The Company may appoint one
or more co-registrars and one or more additional paying agents. The term “Registrar” includes any
co-registrar and the term “Paying Agent” includes any additional paying agent. The Company may
change any Paying Agent or Registrar without prior notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the
Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall
act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar.




     (b) The Company initially appoints The Depository Trust Company (“DTC”) to act as
Depositary with respect to the Global Notes.



     (c) The Trustee shall initially act as the Paying Agent and the Registrar and shall act as
Custodian with respect to the Global Notes.



     Section 2.05. Paying Agent To Hold Money in Trust. The Company shall require each Paying
Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal,
premium, Additional Interest, if any, or interest on the Notes, and shall notify the Trustee in
writing of any default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The
Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or one of its
Subsidiaries) shall have no further liability for the money. If the Company or one of its
Subsidiaries acts as Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for the Notes.



     Section 2.06. Holder Lists. The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and addresses of all
Holders and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, the
Company shall furnish to the Trustee at least seven Business Days before each interest payment date
and at such other times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and
the Company shall otherwise comply with TIA § 312(a).




41









 




     Section 2.07. Transfer and Exchange. (a) Transfer and Exchange of Global Notes. A Global
Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by
a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the
Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.
All Global Notes shall be exchanged by the Company for Definitive Notes if (i) the Depositary
notifies the Company that it is unwilling or unable to continue to act as Depositary or that it is
no longer a clearing agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 120 days after the date of such notice from the
Depositary; (ii) the Company in its sole discretion determines that the Global Notes (in whole but
not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect
to the Trustee; or (iii) there shall have occurred and be continuing a Default or Event of Default
with respect to the  Notes, and the Depositary requests such certification. Upon the occurrence of
any of the preceding events in (i), (ii) or (iii) above, Definitive Notes shall be issued in
such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged
or replaced, in whole or in part, as provided in Sections 2.08 and 2.11 hereof. Except as
otherwise provided above in this Section 2.07(a), every Note authenticated and delivered in
exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.07 or
Section 2.08 or 2.11 hereof, shall be authenticated and delivered in the form of, and shall be, a
Global Note. A Global Note may not be exchanged for another Note other than as provided in this
Section 2.07(a); however, beneficial interests in a Global Note may be transferred and exchanged as
provided in Section 2.07(b), (c) or (f) hereof.



     (b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and
exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in
accordance with the provisions of this Indenture and the Applicable Procedures. Neither the
Company nor any agent of the Company nor the Trustee shall have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial ownership interests
of a Global Note, or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests. Beneficial interests in the Restricted Global Notes shall be
subject to restrictions on transfer comparable to those set forth herein to the extent required by
the Securities Act, or for complying with or ensuring compliance with any Applicable Procedures.
Transfers of beneficial interests in the Global Notes also shall require compliance with either
subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following
subparagraphs, as applicable:




     (i) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests
in any Restricted Global Note may be transferred to Persons who take delivery thereof in
the form of a beneficial interest in the



42









 





same Restricted Global Note in accordance with
the transfer restrictions set forth in the Private Placement Legend. Beneficial interests
in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note. Except as required
pursuant to the Private Placement Legend, no written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers described in this
Section 2.07(b)(i).




     (ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In
connection with all transfers and exchanges of beneficial interests that are not subject
to Section 2.07(b)(i) above, the transferor of such beneficial interest must deliver to
the Registrar (in each case in form and substance satisfactory to the Trustee and the
Company) either (A) (1) a written order from a Participant
or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in another Global Note
in an amount equal to the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures containing information
regarding the Participant’s account to be credited with such increase or (B) (1) a
written order from a Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to cause to be issued a
Definitive Note in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note shall be registered to
effect the transfer or exchange referred to in (1) above. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in Global Notes contained in
this Indenture and the Notes or otherwise applicable under the Securities Act, the
Trustee, as the case may be, shall adjust the principal amount at maturity of the relevant
Global Notes pursuant to Section 2.07(h) hereof.




     (iii) Transfer of Beneficial Interests to Another Restricted Global Note. A
beneficial interest in any Restricted Global Note may be transferred to a Person who takes
delivery thereof in the form of a beneficial interest in another Restricted Global Note if
the transfer complies with the requirements of Section 2.07(b)(ii) above and the Registrar
receives the following:




     (A) if the transferee shall take delivery in the form of a beneficial
interest in the 144A Global Note or a beneficial interest in the IAI Global
Note, then the transferor must deliver a certificate in the form of Exhibit B
(including the certifications in


43









 




item (1) thereof) or Exhibit D attached hereto,
respectively, and if the Company shall so request in the case of delivery in the
form of a beneficial interest in the IAI Global Note, an Opinion of Counsel; and




     (B) if the transferee shall take delivery in the form of a beneficial
interest in the Regulation S Global Note, then the transferor must deliver a
certificate in the form of Exhibit B attached hereto, including the
certifications in item (2) thereof;




     (iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for
Beneficial Interests in the Unrestricted Global Note. A beneficial interest in any
Restricted Global Note may be exchanged by any Holder thereof for a beneficial interest in
an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer
complies with the requirements of Section 2.07(b)(ii) above and:




     (A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the Holder of the
beneficial interest to be
transferred, in the case of an exchange, or the transferee, in the case of
a transfer, provides the certifications required by the applicable Letter of
Transmittal and Exchange Offer Registration Statement;




     (B) such transfer is effected pursuant to the Shelf Registration Statement
in accordance with the Registration Rights Agreement and applicable law;




     (C) such transfer is effected by a Participating Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement and applicable law; or




     (D) the Registrar receives the following:




     (1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
beneficial interest in an Unrestricted Global Note, a certificate from
such Holder in the form of Exhibit C attached hereto, including the
certifications in item (1)(a) thereof, or



44









 




     (2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form of a beneficial interest
in an Unrestricted Global Note, a certificate from such holder in the
form of Exhibit B attached hereto, including the certifications in
item (4) thereof;




and, in each such case set forth in this subparagraph (D), if the
Company so requests or if the Applicable Procedures so require, an
Opinion of Counsel to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are  no
longer required in order to maintain compliance with the Securities
Act.




     If any such transfer is effected pursuant to subparagraph (B) and (D) above at a time when an
Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or
more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) and (D) above.



     Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to
Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global
Note.



     (c) Transfer or Exchange of Beneficial Interests for Definitive Notes.




     (i) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes.
If any holder of a beneficial interest in a Restricted Global Note proposes to exchange
such beneficial interest for a Restricted Definitive Note as permitted by this Indenture
or to transfer such beneficial interest to a Person who takes delivery thereof in the form
of a Restricted Definitive Note, then, upon receipt by the Registrar of the following
documentation:




     (A) if the Holder of such beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for a Restricted Definitive Note,
a certificate from such Holder in the form of Exhibit C (including the
certifications in item (2)(a) thereof) or Exhibit D attached hereto,
respectively, and,




45









 





if the Company shall so request if such exchange involves an Institutional Accredited Investor, an
Opinion of Counsel;


     
(B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the
effect set forth in Exhibit B attached hereto, including the
certifications in item (1) thereof;

     
(C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or
Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit B attached hereto, including the certifications in item
(2) thereof;





     (D) if such beneficial interest is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in accordance
with Rule 144 under the Securities Act, a certificate to the effect set forth in
Exhibit B attached hereto, including the certifications and opinion in item
(3)(a) thereof;




     (E) if such beneficial interest is being transferred to the Company or any
of its Subsidiaries, a certificate to the effect set forth in Exhibit B attached
hereto, including the certifications in item (3)(b) thereof;




     (F) if such beneficial interest is being transferred to an Institutional
Accredited Investor, a certificate to the effect set forth in Exhibit D attached
hereto, and, if the Company shall so request, an Opinion of Counsel;




     (G) if such beneficial interest is being transferred pursuant to an
effective registration statement under the Securities Act, a certificate to the
effect set forth in Exhibit B attached hereto, including the certification in
item 3(c) thereof,




the Trustee shall cause the aggregate principal amount of the applicable Global Note to be
reduced accordingly pursuant to Section 2.07(h) hereof, and the Company shall execute and
the Trustee shall authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive Note issued in
exchange for a beneficial interest in a Restricted Global Note pursuant to this Section
2.07(c)(i) shall be registered in such name or names and in such authorized denomination
or denominations as the holder of such beneficial interest shall instruct the Registrar
through instructions from the



46









 




Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are
so registered. Any Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.07(c)(i) shall bear the Private
Placement Legend and shall be subject to all restrictions on transfer contained therein.




     (ii) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive
Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such
beneficial interest for an Unrestricted Definitive Note as permitted by this Indenture or
may transfer such beneficial interest to a Person who takes delivery thereof in the form
of an Unrestricted Definitive Note as permitted by this Indenture only if:






     (A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and applicable law and the
holder of such beneficial interest, in the case of an exchange, or the
transferee, in the case of a transfer, provides the certifications required by
the applicable Letter of Transmittal and the Exchange Offer Registration
Statement;




     (B) such transfer is effected pursuant to the Shelf Registration Statement
in accordance with the Registration Rights Agreement and applicable law;




     (C) such transfer is effected by a Participating Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement and applicable law; or




     (D) the Registrar receives the following:




     (1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Definitive Note that does not bear the Private Placement Legend, a
certificate from such holder in the form of Exhibit C attached hereto,
including the certifications in item (1)(b) thereof; or




     (2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form of a Definitive Note that
does not bear



47









 




the Private Placement Legend, a certificate from such
holder in the form of Exhibit B attached hereto, including the
certifications in item (4) thereof;




and, in each such case set forth in this subparagraph (D), if the
Company so requests or if the Applicable Procedures so require, an
Opinion of Counsel to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.




     (iii) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive
Notes. If any Holder of a beneficial interest in an  Unrestricted Global Note proposes to
exchange such beneficial interest for an Unrestricted Definitive Note as permitted by this
Indenture or to transfer such beneficial interest to a Person who takes delivery thereof
in the form of an Unrestricted Definitive Note, then, upon satisfaction of the conditions
set forth in Section 2.07(b)(ii) hereof, the Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.07(h)
hereof, and the Company shall execute and the Trustee shall authenticate and deliver to
the Person designated in the instructions an Unrestricted Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.07(c)(iii) shall be registered in such name or names
and in such authorized denomination or denominations as the Holder of such beneficial
interest shall instruct the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to
the Persons in whose names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.07(c)(iii) shall not bear
the Private Placement Legend.



     (d) Transfer and Exchange of Definitive Notes for Beneficial Interests.




     (i) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes.
If any Holder of a Restricted Definitive Note proposes to exchange such Note for a
beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive
Notes to a Person who takes delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by the Registrar of the following
documentation:




48









 





     (A) if the Holder of such Restricted Definitive Note proposes to exchange
such Note for a beneficial interest in a Restricted Global Note or an IAI Global
Note, a certificate from such Holder in the form of Exhibit C (including the
certifications in item (2)(b) thereof) or Exhibit D attached hereto,
respectively, and if the Company shall so request in the case of an exchange for
an interest in an IAI Global Note, an Opinion of Counsel;




     (B) if such Restricted Definitive Note is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to the effect
set forth in Exhibit B attached hereto, including the certifications in item (1)
thereof;




     (C) if such Restricted Definitive Note is being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 903 or Rule 904 under
the Securities Act, a  certificate to the effect set forth in Exhibit B attached
hereto, including the certifications in item (2) thereof;




     (D) if such Restricted Definitive Note is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in accordance
with Rule 144 under the Securities Act, a certificate to the effect set forth in
Exhibit B attached hereto, including the certifications and opinion in item
(3)(a) thereof;




     (E) if such Restricted Definitive Note is being transferred to the Company
or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B
attached hereto, including the certifications in item (3)(b) thereof;




     (F) if such Restricted Definitive Note is being transferred to an
Institutional Accredited Investor, a certificate to the effect set forth in
Exhibit D attached hereto, and, if the Company shall so request, an Opinion of
Counsel; or




     (G) if such Restricted Definitive Note is being transferred pursuant to an
effective registration statement under
the Securities Act, a certificate to the effect set forth in Exhibit B
attached hereto, including the certifications in item (3)(c) thereof,




the Trustee shall cancel the Restricted Definitive Note, increase or cause to be increased
the aggregate principal amount of, in the case of clause (A) above, the appropriate
Restricted Global Note, in the case of clause (B) 


 49









 





above, the 144A Global Note, in the case
of clause (C) above, the Regulation S Global Note, in the case of clause (F) above, the
IAI Global Note and in all other cases the 144A Global Note.




     (ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global
Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial
interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a
Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note only if:




     (A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and applicable law and the
Holder, in the case of an exchange, or the transferee, in the case of a
transfer, provides the certifications required by the applicable Letter of
Transmittal and the Exchange Offer Registration Statement;





     (B) such transfer is effected pursuant to the Shelf Registration Statement
in accordance with the Registration Rights Agreement and applicable law;




     (C) such transfer is effected by a Participating Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement and applicable law; or




     (D) the Registrar receives the following:




     (1) if the Holder of such Definitive Notes proposes to exchange
such Notes for a beneficial interest in the Unrestricted Global Note,
a certificate from such Holder in the form of Exhibit C attached
hereto, including the certifications in item (1)(c) thereof; or




     (2) if the Holder of such Definitive Notes proposes to transfer
such Notes to a Person who shall take delivery thereof in the form of
a beneficial interest in the Unrestricted Global Note, a certificate
from such Holder in the form of Exhibit B attached hereto, including
the certifications in item (4) thereof;




and, in each such case set forth in this subparagraph (D), if the Company so requests or
if the Applicable Procedures so require, an Opinion of 


50











 




Counsel to the effect that such
exchange or transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.




     Upon satisfaction of the conditions of any of the subparagraphs in this Section
2.07(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause to be
increased the aggregate principal amount of the Unrestricted Global Note.




     (iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global
Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a
beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a
Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note at any time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to
be increased the aggregate principal amount of one of the Unrestricted Global Notes.




     If any such exchange or transfer from a Definitive Note to a beneficial interest
is effected pursuant to subparagraph (ii)(B), (ii)(D) or (iii) above at a time when an
Unrestricted Global Note has not yet been issued, the Company shall issue and, upon
receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee
shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount
equal to the principal amount of Definitive Notes so transferred.



     (e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder
of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.07(e), the
Registrar shall register the transfer or exchange of Definitive Notes for Definitive Notes. Prior
to such registration of transfer or exchange, the requesting Holder shall present or surrender to
the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar and the Company duly executed by such Holder or by
its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any
additional certifications, documents and information, as applicable, required pursuant to the
following provisions of this Section 2.07(e).




     (i) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted
Definitive Note may be transferred to and registered in the

51









 




name of Persons who take
delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the
following:




     (A) if the transfer shall be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the form of
Exhibit B attached hereto, including the certifications in item (1) thereof;




     (B) if the transfer shall be made pursuant to Rule 903 or Rule 904, then
the transferor must deliver a certificate in the form of Exhibit B attached
hereto, including the certifications in item (2) thereof;




     (C) if the transfer shall be made to an Institutional Accredited Investor,
then the transferor must deliver a certificate in the form of Exhibit D attached
hereto, and if the Company shall so request, an Opinion of Counsel; and




     (D) if the transfer shall be made pursuant to any other exemption from the
registration requirements of the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit




     B attached hereto, including the
certifications, certificates and Opinion of Counsel required by item (3)
thereof, if applicable.




     (ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted
Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note
or transferred to a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if:




     (A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and applicable law and the
Holder, in the case of an exchange, or the transferee, in the case of a
transfer, provides the certifications required by the applicable Letter of
Transmittal and the Exchange Offer Registration Statement;




     (B) any such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement and applicable
law;




     (C) any such transfer is effected by a Participating Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement and applicable law; or





52









 




     (D) the Registrar receives the following:




     (1) if the Holder of such Restricted Definitive Notes proposes to
exchange such Notes for an Unrestricted Definitive Note, a certificate
from such Holder in the form of Exhibit C attached hereto, including
the certifications in item (1)(d) thereof; or




     (2) if the Holder of such Restricted Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in the
form of an Unrestricted Definitive Note, a certificate from such
Holder in the form of Exhibit B attached hereto, including the
certifications in item (4) thereof;




and, in each such case set forth in this subparagraph (D), if the
Company so requests, an Opinion of Counsel to the effect that such
exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private
Placement Legend are
no longer required in order to maintain
compliance with the Securities Act.




     (iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of
Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery
thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to
register such a transfer, the
Registrar shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.



     (f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance with the
Registration Rights Agreement, the Company shall issue and, upon receipt of an Authentication Order
in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes and/or Unrestricted Definitive Notes in an aggregate principal amount equal to the
aggregate principal amount of the beneficial interests in the Restricted Global Notes, or the
Restricted Definitive Notes, as the case may be, accepted for exchange in the Exchange Offer in
accordance with the Registration Rights Agreement and applicable law. Concurrently with the
issuance of such Notes, the Trustee, the Custodian or the Depositary or its nominee, as the case
may be, shall cause the aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly. Any Notes that remain outstanding after the consummation of the Exchange
Offer, and Exchange Notes issued in connection


53









 





with the Exchange Offer, shall be treated as a
single class of securities under this Indenture.



     (g) Legends. The following legends shall appear on the face of all Global Notes and
Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable
provisions of this Indenture.




     (i) Private Placement Legend. Except as permitted below, each Global Note and each
Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall
bear the legend in substantially the following form:




THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.



THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON
BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION PERIOD”) THAT
IS [IN THE CASE OF RULE 144A NOTES: ONE YEAR (OR SUCH SHORTER PERIOD THEN REQUIRED UNDER
RULE 144 OR ITS SUCCESSOR RULE)] [IN THE CASE OF
REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR
ITS OWN ACCOUNT   OR FOR THE ACCOUNT



54









 







OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES TO NON-U.S. PERSONS IN OFFSHORE TRANSACTIONS WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH THE LAWS APPLICABLE TO SUCH PURCHASER IN
THE JURISDICTION IN WHICH SUCH PURCHASE IS MADE, (E) TO AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 OF
REGULATION D UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF
$250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF A DULY COMPLETED AND
SIGNED
CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) AND PURSUANT TO CLAUSES
(E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
THE HOLDER AFTER THE RESALE RESTRICTION PERIOD.




Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to
subparagraph (b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii),
(e)(iii) or (f) to this Section 2.07 (and all Notes issued in exchange therefor or
substitution thereof) shall not bear the Private Placement Legend.




     (ii) Global Note Legend. Each Global Note shall bear a legend in substantially the
following form:




THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS
NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS
NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT
(I) THE

55









 





TRUSTEE MAY
MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE,
(II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
2.07(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY WITH THE
PRIOR WRITTEN CONSENT OF THE COMPANY.




     (iii) Unit Legend. For each Note issued prior to the Separation Date, the unit will
bear the following legend (the “Unit Legend”) on the face thereof:




     THE NOTES AND WARRANTS EVIDENCED BY THIS CERTIFICATE ARE INITIALLY ISSUED AS PART OF
AN ISSUANCE OF UNITS (THE “UNITS”), EACH OF WHICH CONSISTS OF $1,000 PRINCIPAL AMOUNT AT
MATURITY OF THE 15.00%/15.00% SENIOR NOTES DUE 2018 (THE “NOTES”) OF IPAYMENT HOLDINGS,
INC. AND ONE WARRANT (THE “WARRANTS”) INITIALLY ENTITLING THE HOLDER THEREOF TO PURCHASE
ONE SHARE, PAR VALUE $0.01 PER SHARE, OF COMMON STOCK OF IPAYMENT HOLDINGS, INC.




     PRIOR TO THE EARLIEST TO OCCUR OF (I) 180 DAYS AFTER THE CLOSING OF THE OFFERING OF
THE UNITS, (II) THE DATE ON WHICH A REGISTRATION STATEMENT WITH RESPECT TO A REGISTERED
EXCHANGE OFFER FOR THE NOTES IS DECLARED EFFECTIVE UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), (III) SUCH DATE AS J.P. MORGAN SECURITIES LLC
IN ITS SOLE DISCRETION SHALL ESTABLISH ON AT LEAST ONE BUSINESS DAYS’ NOTICE TO THE
COMPANY AND (IV) IN THE EVENT OF A CHANGE OF CONTROL (AS DEFINED IN THE INDENTURE
GOVERNING THE NOTES), THE DATE ON WHICH
THE REQUISITE NOTICE IS MAILED TO HOLDERS OF THE NOTES, THE WARRANTS EVIDENCED BY
THIS CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT 


56









 





MAY BE
TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE ATTACHED NOTE, AND THE NOTES EVIDENCED BY
THIS CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT MAY BE
TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE ATTACHED WARRANT.




     PRIOR TO THE EQUITY REDEMPTION AS DEFINED IN THE INDENTURE GOVERNING THE NOTES, THE
WARRANTS EVIDENCED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY
FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE ATTACHED NOTE, AND THE
NOTES EVIDENCED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM,
BUT MAY BE TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE ATTACHED WARRANT.




     NEITHER THIS UNIT, NOR THE UNDERLYING NOTE AND WARRANT OF WHICH IT IS CONSTITUTED,
HAS BEEN REGISTERED UNDER THE SECURITIES ACT. SEE THE TRANSFER RESTRICTION LEGENDS SET
FORTH ON THE FACE OF NOTE AND FACE OF WARRANT FOR IMPORTANT INFORMATION.




     (iv) Original Issue Discount Legend. Each Note will bear a legend in substantially
the following form:




     FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, THIS NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT AND
THE ISSUE DATE OF THIS
NOTE IS MAY 6, 2011. WRITTEN REQUESTS FOR INFORMATION RELATED TO THE NOTE, INCLUDING THE
AMOUNT OF QUALIFIED STATED INTEREST, THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT AND THE YIELD TO MATURITY MAY BE DIRECTED TO IPAYMENT HOLDINGS, INC., 40 BURTON
HILLS BOULEVARD, SUITE 415, NASHVILLE, TENNESSEE 37215, ATTENTION: CHIEF FINANCIAL OFFICER



     (h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests
in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note
has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be
returned to or
retained and canceled by the Trustee in accordance with Section 2.12 hereof. At any time
prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or
transferred to a Person who shall take delivery thereof in the form of a beneficial interest in
another Global Note or for Definitive Notes, the 


57









 





principal amount of Notes represented by such
Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by
the Trustee, or by the Custodian or the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred to a Person who
shall take delivery thereof in the form of a beneficial interest in another Global Note, such other
Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by
the Trustee, or by the Custodian or the Depositary at the direction of the Trustee to reflect such
increase.



     (i) General Provisions Relating to Transfers and Exchanges.




     (i) To permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an
Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.




     (ii) No service charge shall be made to a Holder of a beneficial interest in a Global
Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but
the Company may require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant to Sections 2.11,
3.06, and 9.05 hereof).




     (iii) The Registrar shall not be required to register the transfer of or exchange any
Note selected for redemption in whole or in part, except the unredeemed portion of any
Note being redeemed in part.


     (iv) All Global Notes and Definitive Notes issued upon any registration of transfer
or exchange of Global Notes or Definitive Notes shall be the valid and legally binding
obligations of the Company, evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Global Notes or Definitive Notes surrendered upon such
registration of transfer or exchange.




     (v) Neither the Registrar nor the Company shall be required (A) to issue, to register
the transfer of or to exchange any Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for redemption under Section
3.02 hereof and ending at the close of business on the day of selection, (B) to register
the transfer of or to exchange any Note so selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part or (C)


58









 





to register the transfer of or to exchange a Note between a record date and the next
succeeding interest payment date.




     (vi) Prior to due presentment for the registration of a transfer of any Note, the
Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is
registered as the absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and none of the
Trustee, any Agent or the Company shall be affected by notice to the contrary.




     (vii) The Trustee shall authenticate Global Notes and Definitive Notes in accordance
with the provisions of Section 2.02 hereof.




     (viii) All certifications, certificates and Opinions of Counsel required to be
submitted to the Trustee and/or the Company pursuant to this Section 2.07 to effect a
registration of transfer or exchange may be submitted by facsimile with the original to
follow by first class mail.




     (ix) The Trustee shall retain copies of all letters, notices and other written
communications received pursuant to this Section 2.07 (including all Notes received for
transfer pursuant to Section 2.07). The Company shall have the right to require the
Trustee to deliver to the Company, at the Company’s expense, copies of all such letters,
notices or other written communications at any reasonable time upon the giving of
reasonable written notice to the Trustee.




     (x) In connection with any transfer of any Note, the Trustee and the Company shall be
entitled to receive, shall be under no duty to inquire into, may conclusively presume the
correctness of, and shall be fully protected in relying upon the certificates, opinions
and other information referred to herein (or in the forms provided
herein, attached hereto
or to the Notes, or otherwise) received from any Holder and any transferee of any Note
regarding the validity, legality and due authorization of any such transfer, the
eligibility of the transferee to receive such Note and any other facts and circumstances
related to such transfer.



     (j) Separation.




     (i) Prior to the Separation Date, when a Warrant issued under the Warrant Agreement
is transferred, the Note associated with such Warrant shall be automatically transferred
to the same party and during such period each time a notation of a transfer of a Warrant
is made on the 


59









 





register for the Warrants maintained under the Warrant Agreement, a
corresponding notation shall be made in the register of Holders.




     (ii) The Company shall provide notice to the Trustee upon the occurrence of the
Separation Date. The Trustee shall not be deemed to
have any knowledge of the occurrence of such Separation Date until it receives such
notice from the Company. On the Separation Date, the Unit Legend shall be deemed removed
from the Note, or face of unit, and, whether or not such Unit Legend is actually removed,
each Note shall be deemed automatically separated from the associated Warrant and may be
transferred separately from such Warrant.




     (iii) Notwithstanding Section 2.07(j)(i) and (j)(ii), the Separation Date shall in
the case of any Global Note be subject to timing requirements imposed by the Applicable
Procedures in effecting a separation pursuant to clause (iii) of the definition of
Separation Date.




     (iv) The Company shall use reasonable efforts to comply with the Applicable
Procedures in order to effect a separation of the Global Notes and Global Warrants on the
Separation Date or as shortly thereafter as is practicable.



     Section 2.08. Replacement Notes. (a) If any mutilated Note is surrendered to the Trustee or
the Company and the Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon receipt of an Authentication Order,
shall authenticate a replacement Note if the Trustee’s and the Company’s requirements are met. If
required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of (i) the Trustee to protect the Trustee and (ii) the Company to
protect the Company, the Trustee, any Agent and any authenticating agent, from any loss that any of
them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a
Note.


     (b) Every replacement Note is an additional obligation of the Company and shall be entitled to
all of the benefits of this Indenture equally and proportionately with all other Notes duly issued
hereunder.



     Section 2.09. Outstanding Notes. The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section 2.09 as not outstanding.
Except as set forth in Section 2.10 hereof, a Note does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Note.




60












 




     (a) If a Note is replaced pursuant to Section 2.08 hereof, it ceases to be outstanding unless
the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide
purchaser.



     (b) If the principal amount of any Note is considered paid under Section 4.01 hereof, it
ceases to be outstanding and interest on it ceases to accrue.



     (c) If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any of the
foregoing) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on
that date, then on and after that date such Notes shall be deemed to be no longer outstanding and
shall cease to accrue interest.



     Section 2.10. Treasury Notes. In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company,
Affiliate of the Company, shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any such direction,
waiver or consent, only Notes that a Responsible Officer of the Trustee knows are so owned shall be
so disregarded.



     Section 2.11. Temporary Notes. (a) Until certificates representing Notes are ready for
delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form of Definitive
Notes but may have variations that the Company considers appropriate for temporary Notes. Without
unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Notes
in exchange for temporary Notes.



     (b) Holders of temporary Notes shall be entitled to all of the benefits of this Indenture.




     Section 2.12. Cancellation. The Company at any time may deliver Notes to the Trustee
for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else
shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall dispose of canceled Notes in accordance with its procedures for the
disposition of canceled securities in effect as of the date of such disposition (subject to the
record retention requirement of the Exchange Act and the Trustee). Certification of the
cancellation of all canceled Notes shall be delivered to the Company upon written request. The
Company may not issue new Notes to replace Notes that it has paid or that have been delivered to
the Trustee for cancellation.




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     Section 2.13. Defaulted Interest. If the Company defaults in a payment of interest on the
Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special
record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The
Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid
on each Note and the date of the proposed payment. The Company shall fix or cause to be fixed each
such special record date and payment date, provided that no such special record date shall be less
than 10 days prior to the related payment date for such defaulted interest. At least 15 days
before the special record date, the Company (or, upon the written request of the Company, the
Trustee in the name and at the expense of the Company) shall mail or cause to be mailed to Holders
a notice that states the special record date, the related payment date and the amount of such
interest to be paid.



     Section 2.14. CUSIP Numbers. The Company in issuing the Notes may use “CUSIP” numbers (if
then generally in use), and, if so, the Trustee shall use such “CUSIP” and “ISIN” numbers in
notices of redemption as a convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of a redemption, and any such redemption shall not be affected by any
defect in or omission of such numbers. The Company shall promptly notify the Trustee in writing of
any change in the “CUSIP” or “ISIN” numbers.



ARTICLE 3

Redemption and Prepayment




     Section 3.01. Notices to Trustee. If the Company elects to redeem Notes pursuant to the
optional redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 30
days (unless a shorter notice shall be satisfactory to the Trustee) but not more than 60 days
before a redemption date, an Officers’ Certificate setting forth (i) the clause of this Indenture
pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount
of Notes to be redeemed and (iv) the redemption price.




     Section 3.02. Selection of Notes To Be Redeemed. (a) If less than all of the outstanding
Notes are to be redeemed at any time, the Trustee shall select the Notes to be redeemed among the
Holders of the Notes in compliance with the requirements of the principal national securities
exchange, if any, on which the Notes are listed (if such listing is known to the Trustee) or, if
the Notes are not so listed (or if such listing is not known to the Trustee), on a pro rata basis,
by lot or by such other method as the Trustee will deem fair and appropriate. In the event of
partial redemption by lot, the particular Notes to be redeemed shall be selected, 


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unless otherwise
provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee
from the outstanding Notes not previously called for redemption.



     (b) The Trustee shall promptly notify the Company in writing of the Notes selected for
redemption and, in the case of any Note selected for partial redemption, the principal amount at
maturity thereof to be redeemed. No Notes in amounts of $2,000 or less shall be redeemed in part
or if PIK Interest is paid, no Notes of $1.00 or less will be redeemed in part. Notes and portions
of Notes selected shall be in amounts of $2,000 or integral multiples of $1,000 in excess thereof
or if PIK Interest is paid, Notes and portions of Notes selected shall be in amounts of $1.00 or
integral multiples of $1.00 in excess thereof; except that if all of the Notes of a Holder are to
be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of
$2,000 or integral multiple of $1,000 in excess thereof, or if PIK Interest is paid even if not a
multiple of $1.00 or integral multiple of $1.00 in excess thereof, shall be redeemed. Except as
provided in the preceding sentence, provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption.



     Section 3.03. Notice of Redemption. (a) At least 30 days but not more than 60 days before a
redemption date, the Company shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed, at its registered address. The notice
shall identify the Notes to be redeemed and shall state:




     (i) the redemption date;




     (ii) the redemption price;




     (iii) if any Note is being redeemed in part, the portion of the principal amount of
such Note to be redeemed and that, after the redemption date and upon surrender of such
Note, a new Note or Notes in principal amount equal to the unredeemed portion of the
original Note shall be issued in the name of the Holder thereof upon cancellation of the
original Note;




     (iv) the name and address of the Paying Agent;




     (v) that Notes called for redemption must be surrendered to the Paying Agent to
collect the redemption price and become due on the date fixed for redemption;




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     (vi) that, unless the Company fails to deposit the redemption amount, interest and
Additional Interest, if any, on Notes called for redemption ceases to accrue on and after
the redemption date;




     (vii) the paragraph of the Notes and/or Section of this Indenture pursuant to which
the Notes called for redemption are being redeemed; and




     (viii) that no representation is made as to the correctness or accuracy of the CUSIP
or ISIN number, if any, listed in such notice or printed on the Notes.



     (b) At the Company’s request, the Trustee shall give the notice of redemption in the Company’s
name and at its expense; provided, however, that the Company shall have delivered to the Trustee,
at least 45 days (unless a shorter notice shall be satisfactory to the Trustee) prior to the
redemption date, an Officers’ Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in Section 3.03(a) hereof. The
notice, if mailed in the manner provided herein, shall be presumed to have been given, whether or
not the Holder receives such notice.



     (c) The notice if mailed in the manner herein provided shall be conclusively presumed to have
been given, whether or not the Holder receives such notice. In any case, failure to give such
notice by mail or any defect in the notice to the Holder of any Note designated for redemption as a
whole or in part shall not affect the validity of the proceedings for the redemption of any other
Note.



     Section 3.04. Effect of Notice of Redemption. Once notice of redemption is mailed in
accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable
on the redemption date at the redemption price. The Company may provide in any redemption notice
that payment of such redemption price and performance of the Company’s obligations with respect to
such redemption may be performed by another Person. Any such redemption or notice may, at the
Company’s discretion, be subject to the satisfaction of one or
more conditions precedent, including
but not limited to the occurrence of a Change of Control.




     Section 3.05. Deposit of Redemption Price. (a) By 11:00 a.m. Eastern Time on the redemption
date, the Company shall deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption price of and accrued interest and Additional Interest, if any, on all Notes to be
redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess 


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of the amounts
necessary to pay the redemption price of, and accrued interest on, all Notes to be redeemed.



     (b) If the Company complies with Section 3.05(a) hereof, on and after the redemption date,
interest and Additional Interest, if any, shall cease to accrue on the Notes or the portions of
Notes called for redemption. If a Note is redeemed on or after an interest record date but on or
prior to the related interest payment date, then any accrued and unpaid interest shall be paid to
the Person in whose name such Note was registered at the close of business on such record date. If
any Note called for redemption shall not be so paid upon surrender for redemption on the redemption
date because of the failure of the Company to comply with Section 3.05(a) hereof, interest and
Additional Interest, if any, shall continue to accrue on the unpaid principal of such Note or the
portions thereof called for redemption from the redemption date until such principal is paid.



     Section 3.06. Notes Redeemed in Part. Upon surrender of a Note that is redeemed in part, the
Company shall issue and the Trustee shall authenticate for the Holder at the expense of the Company
a new Note equal in principal amount to the unredeemed portion of the Note surrendered. No Notes
in denominations of $2,000 or less shall be redeemed in part or if PIK Interest is paid, no Notes
of $1.00 or less will be redeemed in part.



     Section 3.07. Optional Redemption. (a) At any time and from time to time prior to May 15,
2014, the Company may, at its option, redeem up to 35% of the aggregate principal amount of Notes
issued under this Indenture (including any Additional Notes) at a redemption price of 115.00% of
the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any,
thereon to the date of redemption, with net cash proceeds of one or more Equity Offerings (or an
amount of funds equal thereto) at least equal to the principal amount of Notes so redeemed (the
“Redemption Amount”); provided that:




     (i) at least 65% of the aggregate principal amount of Notes issued under this
Indenture (including any Additional Notes) remains outstanding immediately after the
occurrence of such redemption; and


     (ii) the redemption must occur within 90 days of the date of the closing of such
Equity Offering.



     (b) On any one occasion prior to August 14, 2011, the Company may redeem the entire principal
amount of the Initial Notes, upon not less than 10 nor more than 30 days prior notice, at a
redemption price equal to the sum of (i) the principal amount of the Notes to be redeemed and (ii)
accrued interest on the Notes to be redeemed to, but not including, the redemption date, using the
funds held in the Escrow Account, if the Company decides to terminate the escrow 


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arrangements for
any reason. Upon the satisfaction of the conditions to the release of the Escrow Property to the
Company in connection with the consummation of
the Equity Redemption, this Section 3.07(b) will cease to apply and will have no further force
or effect.



     (c) At any time and from time to time prior to May 15, 2015, the Company may, at its option,
redeem all or part of the Notes at a redemption price equal to the sum of (i) 100% of the principal
amount thereof, plus (ii) the Applicable Premium as of the date of redemption, plus (iii) accrued
and unpaid interest and Additional Interest, if any, thereon to the date of redemption.



     (d) Except pursuant to Sections 3.07(a), (b) and (c) hereof, the Notes shall not be redeemable
at the Company’s option prior to May 15, 2015.



     (e) On or after May 15, 2015, the Company may redeem all or a part of the Notes at the
redemption prices (expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Additional Interest, if any, thereon, to the applicable redemption date, if
redeemed during each twelve-month period beginning on May 15 of the years indicated below:



	 	 	 	 	 
	Year	 	Percentage	 
	2015
	 	 	107.500	%
	2016
	 	 	103.750	%
	2017 and thereafter
	 	 	100.000	%






     (f) Any redemption pursuant to this Section 3.07 shall be subject to the rights of Holders of
the Notes on the relevant record date to receive interest and Additional Interest, if any, due on
the relevant interest payment date.



     (g) Except as otherwise stated herein, any redemption pursuant to this Section 3.07 shall be
made pursuant to the provisions of Sections 3.01 through 3.06 hereof.



     Section 3.08. Special Mandatory Redemption. (a) If the conditions to the release of the
Escrow Property to the Company in connection with the consummation of the Equity Redemption, which
are set forth in Section 1.4 of the
Escrow Agreement, have not been satisfied by August 4, 2011,
then the Company shall redeem the entire principal amount of the Initial Notes, upon not less than
10 nor more than 30 days prior notice, at a redemption price equal to the sum of (i) 100% of their
principal amount and (ii) accrued interest to, but not including, the redemption date.





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     (b) Other than as specifically provided in this Section 3.08, any redemption pursuant to this
Section 3.08 will be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.



     (c) Upon the release of the Escrow Property to the Company in connection with the consummation
of the Equity Redemption, this Section 3.08 will cease to apply and will have no further force or
effect.



     (d) For the avoidance of doubt this Section 3.08 shall not apply if the Company has already
issued an irrevocable notice of redemption with respect to the Initial Notes pursuant to Section
3.07(b).



     Section 3.09. Mandatory Redemption. The Company shall not be required to make mandatory
redemption or sinking fund payments with respect to the Notes, except as set forth in Section 3.08.



ARTICLE 4

Covenants




     Section 4.01. Payment of Notes. (a) The Company shall pay or cause to be paid the principal
of, premium, if any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest (other than PIK Interest) shall be considered paid
on the date due if the Paying Agent, if other than the Company or one of its Subsidiaries, holds as
of 11:00 a.m. Eastern Time on the due date money deposited by the Company in immediately available
funds and designated for and sufficient to pay all principal, premium, if any, and interest then
due. The Company shall pay all Additional Interest, if any, in the same manner on the dates and in
the amounts set forth in the Registration Rights Agreement.



     (b) The Company shall pay interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue principal at the rate equal to the then applicable interest rate on
the Notes to the extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest, and Additional Interest
(without regard to any applicable grace period), at the same rate to the extent lawful.



     Section 4.02. Maintenance of Office or Agency. (a) The Company shall maintain one or more
offices or agencies designated by it (which may be an office of the Trustee or an agent of the
Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or
for exchange and where notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company shall give prompt written notice to the Trustee of 


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any such
designation or rescission of any such designation, and the location, and any change in the
location, of such office or agency (other than the designation and location specified in Section
4.02(b) hereof). If at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.



     (b) The Company hereby designates the Corporate Trust Office of the Trustee as one such office
or agency of the Company in accordance with Section 2.04 hereof.



     Section 4.03. Reports. (a) Whether or not the Company is subject to the reporting
requirements of Section 13(a) or 15(d) of the Exchange Act, the Company must provide the Trustee
and Holders within 15 days of the time period specified in those sections with (i) all quarterly
and annual reports that would be required to be filed with the Commission on Forms 10-Q and 10-K if
the Company were required to file such reports, including a “Management’s discussion and analysis
of financial condition and results of operations” and, with respect to annual information only, a
report thereon by the Company’s certified public accountants, and (ii) all current reports that
would be required to be filed with the Commission on Form 8-K if the Company were required to file
such reports.



     (b) In addition to the requirements set forth in Section 4.03(a), whether or not required by
the Commission, the Company will, after the effectiveness of the Exchange Offer Registration
Statement or Shelf Registration Statement if the Commission will accept the filing, file a copy of
all of the information and reports referred to in Section 4.03(a) hereof with the Commission for
public availability within the time periods specified in the Commission’s rules and regulations. In
addition, the Company will make the information and reports available to securities analysts and
prospective investors upon request.



     (c) Notwithstanding Sections 4.03(a) and (b) hereof, such information and reports may, prior
to the filing of the Exchange Offer Registration Statement or Shelf Registration Statement, be with
respect to iPayment, Inc. so long as the Company’s assets (other than the capital stock of
iPayment, Inc.) do not exceed the greater of (x) $70.0 million and (y) 10% of Total Assets, and it
has no material liabilities other than the Notes and its Guarantee of the Credit Agreement.


     (d) If the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries, then
the quarterly and annual financial information required by this Section 4.03 shall include a
reasonably detailed presentation (as determined in good faith by the Company) in “Management’s
discussion and analysis of financial condition and results of operations” or other comparable


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section, of the financial condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of the Unrestricted
Subsidiaries of the Company.



     (e) In addition, for so long as any Notes are outstanding and remain restricted under Rule
144, the Company will make available upon request to any prospective purchaser of Notes or
beneficial owner of Notes in connection with any sale thereof the information required by Rule
144A(d)(4) under the Securities Act.



     (f) Notwithstanding anything herein to the contrary, the Company will not be deemed to have
failed to comply with any of its obligations hereunder for purposes of Section 6.01(d) until 60
days after the date any report hereunder is due.



     (g) To the extent any information is not provided within the time periods specified in this
Section 4.03 and such information is subsequently provided, the Company will be deemed to have
satisfied its obligations with respect thereto at such time and any Default with respect to shall
be deemed to have been cured; provided that such cure shall not otherwise affect the rights of the
Holders under Article 6 if Holders of at least 25% in principal amount of the then total
outstanding Notes have declared the principal, premium, if any, interest, including Additional
Interest, if any, and any other monetary obligations on all the then outstanding Notes to be due
and payable immediately and such declaration shall not have been rescinded or canceled prior to
such cure.



     Section 4.04. Compliance Certificate. (a) The Company shall deliver to the Trustee, within
90 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year has been made under
the supervision of the signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and further stating, as to
each such Officer signing such certificate, that to the best of his or her knowledge, the Company
has kept, observed, performed and fulfilled its obligations under this Indenture and is not in
default in the performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults
or Events of Default of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of
which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a description of the
event and what action the Company is taking or proposes to take with respect thereto.






69











 




     (b) The Company shall, so long as any of the Notes are outstanding, deliver to the Trustee,
forthwith upon any Officer becoming aware of any Default or Event of Default, an Officers’
Certificate specifying such Default or Event of Default and what action the Company is taking or
proposes to take with respect thereto.



     Section 4.05. [Reserved].



     Section 4.06. Stay, Extension and Usury Laws. The Company and any Guarantors covenant (to
the extent that they may lawfully do so) that they shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Company and any Guarantor (to the extent that they may
lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenant that
they shall not, by resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer
and permit the execution of every such power as though no such law has been enacted.



     Section 4.07. Liens. The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or become effective
any Lien of any kind securing Indebtedness of the Company or any Guarantor (other than Permitted
Liens) upon any of their property or assets, now owned or hereafter acquired (the “Initial Lien”),
unless all payments due under this Indenture and the Notes or, in respect of Liens on any
Restricted Subsidiary’s property or assets, any Note Guarantee of such Restricted Subsidiary, are
secured on an equal and ratable basis with the obligations so secured (or, in the case of
Subordinated Indebtedness, prior or senior thereto). Any such Lien thereby created in favor of the
Notes or any Note Guarantee shall be automatically and unconditionally released and discharged (a)
upon the release and discharge of the Initial Lien to which it relates, (b) in the case of any such
Lien in favor of any Note Guarantee, upon the termination and discharge of such Note Guarantee
pursuant to Section 11.04 hereof or (c) with respect to the property or assets sold, exchanged or
transferred, upon any sale, exchange or transfer to any Person not an Affiliate of the Company of
the property or assets secured by such Initial Lien or of all of the Capital Stock held by the
Company or any Restricted Subsidiary in, any Restricted Subsidiary creating such Initial Lien, in
each case in accordance with the provisions of this Indenture.



     Section 4.08. Offer To Repurchase upon a Change of Control. (a) If a Change of Control
occurs, each Holder of Notes shall have the right to require the Company to repurchase all or any
part (equal to $2,000 or an integral multiple of $1,000 in excess thereof or if PIK Interest is
paid, equal to $1.00 or an integral 


70









 





multiple of $1.00 in excess thereof) of that Holder’s Notes
pursuant to an offer (a “Change of Control Offer”) on the terms set forth in this Indenture;
provided that the Company shall not be obligated to repurchase Notes in the event that it has
exercised its right to redeem all of the Notes pursuant to Section 3.07 hereof. In the Change of
Control Offer, the Company shall offer payment (a “Change of Control Payment”) in cash equal to not
less than 101% of the aggregate principal amount of Notes repurchased plus accrued and unpaid
interest and Additional Interest, if any, thereon, to the date of repurchase (the “Change of
Control Payment Date,” which date shall be no earlier than the date of such Change of Control). No
later than 30 days following any Change of Control, the Company shall mail a notice to each Holder
describing the transaction or transactions that constitute the Change of Control and offering to
repurchase Notes on the Change of Control Payment Date specified in such notice, which date shall
be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant
to the procedures required by this Indenture and described in such notice. If such notice is
mailed prior to the occurrence of such Change of Control, such notice shall state that such offer
is conditioned on such occurrence.



     (b) On the Change of Control Payment Date, the Company shall, to the extent lawful:




     (i) accept for payment all Notes or portions thereof properly tendered pursuant to
the Change of Control Offer; provided that no Note will be repurchased in part if less
than $2,000 in principal amount of such Note would be left outstanding (or if PIK Interest
is paid if less than $1.00 in principal amount of such Note would be left outstanding);
provided further that if all the Notes of a Holder are to be repurchased, the entire
outstanding amount of the Notes held by such Holder, even if not a multiple of $1,000,
shall be repurchased;




     (ii) deposit with the Paying Agent an amount equal to the Change of Control Payment
in respect of all Notes or portions thereof so tendered; and




     (iii) deliver or cause to be delivered to the Trustee the Notes so accepted together
with an Officers’ Certificate stating the aggregate principal amount of Notes or portions
thereof being purchased by the Company.



     (c) The Paying Agent shall promptly mail or wire transfer to each Holder of Notes so tendered
the Change of Control Payment for such Notes, and
the Trustee shall promptly authenticate and mail (or cause to be transferred by book-entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each such 


71









 




new Note shall be in a principal amount of $2,000 or
an integral multiple of $1,000 in excess thereof, or if PIK Interest is paid, equal to $1.00 or an
integral multiple of $1.00 in excess thereof.




     (d) Notwithstanding anything to the contrary in this Section 4.08, the Company shall not be
required to make a Change of Control Offer upon a Change of Control if a third party makes the
Change of Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 4.08 and all other provisions of this Indenture applicable
to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.



     (e) In the event that, pursuant to this Section 4.08 or Section 4.09 hereof, the Company shall
be required to commence an offer to all Holders to purchase their respective Notes (a “Repurchase
Offer”), it shall follow the procedures specified below.



     The Repurchase Offer shall remain open for a period of 30 Business Days following its
commencement and no longer, except to the extent that a longer period is required by applicable law
(the “Offer Period”). No later than five Business Days after the termination of the Offer Period
(the “Purchase Date”), the Company shall purchase the principal amount of Notes required to be
purchased pursuant to this Section 4.08 or Section 4.09 hereof, as applicable, (the “Offer Amount”)
or, if less than the Offer Amount has been tendered, all Notes tendered in response to the
Repurchase Offer. Payment for any Notes so purchased shall be made in the same manner as interest
payments are made.



     If the Purchase Date is on or after an interest record date and on or before the related
interest payment date, any accrued and unpaid interest shall be paid to the Person in whose name a
Note is registered at the close of business on such record date, and no Additional Interest shall
be payable to Holders who tender Notes pursuant to the Repurchase Offer.



     Upon the commencement of a Repurchase Offer, the Company shall send, by first class mail, a
notice to the Trustee and to each of the Holders, with a copy to the Trustee. The notice shall
contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to
the Repurchase Offer.



     The Repurchase Offer shall be made to all Holders. The notice, which shall govern the terms
of the Repurchase Offer, shall state:



     (i) that the Repurchase Offer is being made pursuant to this Section 4.08 or Section
4.09, as applicable, and the length of time the Repurchase Offer shall remain open;




72









 




     (ii) the Offer Amount, the purchase price and the Purchase Date;




     (iii) that any Note not tendered or accepted for payment shall continue to accrete or
accrue interest and Additional Interest, if any;




     (iv) that, unless the Company defaults in making such payment, any Note (or portion
thereof) accepted for payment pursuant to the Repurchase Offer shall cease to accrete or
accrue interest and Additional Interest, if any, on and after the Purchase Date;




     (v) that Holders electing to have a Note purchased pursuant to a Repurchase Offer may
elect to have Notes purchased in a minimum amount of $2,000 and integral multiples of
$1,000 in excess thereof only, or if PIK Interest is paid, equal to $1.00 or an integral
multiple of $1.00 in excess thereof; provided that if all the Notes of a Holder are to be
repurchased, the entire outstanding amount of the Notes held by such Holder, even if not a
multiple of $1,000, may be repurchased;




     (vi) that Holders electing to have a Note purchased pursuant to any Repurchase Offer
shall be required to surrender the Note, with the form entitled “Option of Holder to Elect
Purchase” on the reverse of the Note completed, or transfer by book-entry transfer, to the
Company, a depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;




     (vii) that Holders shall be entitled to withdraw their election if the Company, the
Depositary or the Paying Agent, as the case may be, receives, not later than the
expiration of the Offer Period, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is withdrawing his election to
have such Note purchased;




     (viii) that, if the aggregate amount of Notes surrendered by Holders exceeds the
Offer Amount, the Trustee shall select the Notes to be purchased in accordance with the
terms of this Section 4.08(e), as applicable to this Section 4.08 or Section 4.09 (with
such adjustments as may be deemed appropriate by the Trustee so that only Notes in
denominations of $2,000, or an integral multiple of $1,000 in excess thereof or if PIK
Interest is paid, equal to $1.00 or an integral multiple of
$1.00 in excess thereof, shall be purchased, subject to the proviso in clause (v) above); and





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     (ix) that Holders whose Notes were purchased only in part shall be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer).



     On the Purchase Date, the Company shall, to the extent lawful, accept for payment on a pro
rata basis to the extent necessary, the Offer Amount of Notes (or portions thereof) tendered
pursuant to the Repurchase Offer, or if less than the Offer Amount has been tendered, all Notes
tendered, and shall deliver to the Trustee an Officers’ Certificate stating that such Notes (or
portions thereof) were accepted for payment by the Company in accordance with the terms of this
Section 4.08 or Section 4.09, as applicable. If less than all of the outstanding Notes are to be
repurchased, the Trustee shall select the Notes to be repurchased among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange (if such listing is
known to the Trustee), if any, on which the Notes are listed or, if the Notes are not so listed, on
a pro rata basis, by lot or in accordance with any other method the Trustee considers fair and
appropriate. The Company, the Depositary or the Paying Agent, as the case may be, shall promptly
(but in any case not later than five days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of Notes tendered by such Holder, as the
case may be, and accepted by the Company for purchase, and the Company shall promptly issue a new
Note. The Trustee, upon written request from the Company, shall authenticate and mail or deliver
such new Note to such Holder, in a principal amount at maturity equal to any unpurchased portion of
the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the
Company to the respective Holder thereof. The Company shall publicly announce the results of the
Repurchase Offer on the Purchase Date. The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act, and any other securities laws and regulations thereunder to the extent such
laws or regulations are applicable in connection with the repurchase of the Notes pursuant to a
Repurchase Offer. To the extent that the provisions of any securities laws or regulations conflict
with the provisions of this Section 4.08 or Section 4.09, as applicable, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.08 or Section 4.09, as applicable, by virtue of such compliance.



     Section 4.09. Offer To Repurchase upon an Asset Sale. (a) The Company shall not, and shall
not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:




     (i) the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to
the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of; and




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     (ii) at least 75% of the consideration therefor received by the Company or such
Restricted Subsidiary is in the form of cash, Cash
Equivalents or Replacement Assets or a combination thereof. For purposes of this
provision, each of the following shall be deemed to be cash:




     (A) any liabilities (as shown on the Company’s or such Restricted
Subsidiary’s most recent balance sheet) of the Company or any Restricted
Subsidiary (other than Contingent Liabilities, Indebtedness that is by its
express terms subordinated in right of payment to the Notes and liabilities to
the extent owed to the Company or any Restricted Subsidiary of the Company) (i)
that are assumed by the transferee of any such assets or Equity Interests
pursuant to a written agreement that releases the Company or such Restricted
Subsidiary from further liability therefor or (ii) in respect of which the
Company or such Restricted Subsidiary has no obligation following such Asset
Sale;




     (B) any securities, notes or other obligations received by the Company or
any such Restricted Subsidiary from such transferee that are converted by the
Company or such Restricted Subsidiary into cash (to the extent of the cash
received in that conversion) within 90 days following the closing of such Asset
Sale; and




     (C) any Designated Non-cash Consideration received by the Company or any
such Restricted Subsidiary in such Asset Sale having an aggregate Fair Market
Value, taken together with all other Designated Non-cash Consideration received
pursuant to this clause (C) that is at that time outstanding and any then
outstanding Investments made pursuant to clause (n) of the definition of
Permitted Investments, not to exceed the greater of (x) $35,000,000 and (y) 8%
of Total Assets at the time of the receipt of such Designated Non-cash
Consideration, with the Fair Market Value of each item of Designated Non-cash
Consideration being measured at the time received and without giving effect to
subsequent changes in value.



     (b) Within 365 days after the receipt of any Net Proceeds from an Asset Sale, the Company or
its Restricted Subsidiaries may apply an amount equal to all or part of the amount of such Net
Proceeds at its option:





     (i) to repay Secured Debt of the Company or any Indebtedness of a Restricted
Subsidiary (with a corresponding commitment reduction, in 


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the case of revolving credit
Indebtedness), in each case owing to a Person other than Company or any Restricted
Subsidiary; or




     (ii) to (A) make capital expenditures or (B) purchase Replacement Assets (or enter
into a binding agreement to purchase any
such Replacement Assets; provided that (x) such purchase is consummated within 60
days after the date of such binding agreement and (y) if such purchase is not consummated
within the period set forth in subclause (x), the Net Proceeds not so applied shall be
deemed to be Excess Proceeds (as defined below)).



     (c) Pending the final application of an amount equal to the amount of any such Net Proceeds
(such equal amount, the “Net Proceeds Amount”), the Company may temporarily reduce revolving credit
borrowings or otherwise invest or apply such Net Proceeds in any manner that is not prohibited by
this Indenture.



     (d) On the 366th day after the receipt of any Net Proceeds from an Asset Sale (or, in the
event that a binding agreement has been entered into pursuant to Section 4.09(b)(ii) hereof, the
later date of expiration of the 60-day period set forth in Section 4.09(b)(ii) hereof) or such
earlier date, if any, as the Company determines not to apply any portion of the Net Proceeds Amount
relating to such Asset Sale as set forth in Section 4.09(b) hereof (each such date being referred
as an “Excess Proceeds Trigger Date”), such aggregate Net Proceeds Amount that has not been applied
on or before the Excess Proceeds Trigger Date as permitted in Section 4.09(b) hereof (“Excess
Proceeds”) shall be applied by the Company or a Restricted Subsidiary to make an offer (an “Asset
Sale Offer”) to all Holders of Notes and (to the extent the Company elects) all holders of other
Indebtedness that is pari passu with the Notes, to purchase the maximum principal amount of Notes
and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds. The offer
price in any Asset Sale Offer shall be equal to 100% of the principal amount of the Notes and such
other pari passu Indebtedness plus accrued and unpaid interest and Additional Interest, if any, to
the date of purchase, and shall be payable in cash.



     (e) The Company may defer the Asset Sale Offer until there are aggregate unutilized Excess
Proceeds equal to or in excess of $10,000,000 resulting from one or more Asset Sales, at which time
the entire unutilized amount of Excess Proceeds (not only the amount in excess of $10,000,000)
shall be applied as provided in Section 4.09(d) hereof. If any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Company may use such Excess Proceeds for any purpose not
otherwise prohibited by this Indenture. If the aggregate principal amount of Notes and such other
pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds,
the
Notes and such other pari passu Indebtedness shall be purchased on a pro rata 


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basis based on
the principal amount of Notes and such other pari passu Indebtedness tendered provided the
authorized denominations of the Notes are preserved. No Note shall be repurchased in part if less
than $2,000 in principal amount of such Note would be left outstanding or if PIK Interest is paid
if less than $1.00 in principal amount of such Note would be left outstanding. Upon completion of
each Asset Sale Offer, the Excess Proceeds subject to such Asset Sale Offer shall no longer be
deemed to be Excess Proceeds.



     (f) The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and
any other securities laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the
extent that the provisions of any securities laws or regulations conflict with the Asset Sales
provisions of this Indenture, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under the Asset Sale
provisions of this Indenture by virtue of such compliance.



     Section 4.10. Restricted Payments. (a) The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, directly or indirectly:




     (i) declare or pay (without duplication) any dividend or make any other payment or
distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity
Interests (including, without limitation, any payment in connection with any merger or
consolidation involving the Company or any of its Restricted Subsidiaries) or to the
direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity
Interests in their capacity as such (other than dividends, payments or distributions (x)
payable in Equity Interests (other than Disqualified Stock) of the Company or (y) to the
Company or a Restricted Subsidiary of the Company);




     (ii) purchase, redeem or otherwise acquire or retire for value (including, without
limitation, in connection with any merger or consolidation involving the Company or any of
its Restricted Subsidiaries) any Equity Interests of the Company held by Persons other
than the Company or any of its Restricted Subsidiaries;




     (iii) make any principal payment on or with respect to, or purchase, redeem, defease
or otherwise acquire or retire for value any Subordinated Debt of the Company (or issue
any irrevocable notice of redemption with respect thereto) that is held by Persons other
than the Company or any of its Restricted Subsidiaries, except (A) a payment of principal
at the Stated Maturity thereof (including any scheduled sinking
fund payment, scheduled
principal payment or payment at final maturity) or (B) the purchase, redemption,
defeasance or other acquisition or retirement of any such Indebtedness in anticipation of
satisfying a sinking 

77









 







fund obligation, principal installment or final maturity, in each
case due within one year of the date of such purchase, redemption, defeasance or other
acquisition or retirement; or




     (iv) make any Restricted Investment (all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as “Restricted Payments”),


unless, at the time of and after giving effect to such Restricted Payment:





     (A) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof;




     (B) the Company would have been permitted to Incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.11(a) hereof; and




     (C) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted Subsidiaries
after the Issue Date (excluding Restricted Payments permitted by clauses (ii)
through (vi), (viii) through (x) and (xi) (which shall be included therein only
to the extent of one half of the amounts paid pursuant to such clause (xi) and
only to the extent Consolidated Net Income is not reduced by such amounts) of
Section 4.10(b) hereof), is less than the sum, without duplication, of:




     (1) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the beginning of the
first fiscal quarter commencing after the Issue Date to the end of the
Company’s most recently ended fiscal quarter for which consolidated
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus




     (2) 100% of the aggregate net cash proceeds and the Fair Market
Value of assets (other than cash) received by the Company since the
Issue Date as a

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contribution to its common equity capital or from the issue or sale of Equity Interests (other than Disqualified Stock) of
the Company or from the Incurrence of Indebtedness of the Company that
has been converted into or exchanged for such Equity Interests (other
than Equity Interests sold to, or Indebtedness held by, a Subsidiary
of the Company), plus




     (3) with respect to Restricted Investments made by the Company
and its Restricted Subsidiaries after the Issue Date, an amount equal
to the net reduction in such Restricted Investments in any Person
resulting (x) from repayments of loans or advances, or other transfers
of assets or returns of capital, in each case to the
Company or any Restricted Subsidiary or from the net cash
proceeds and Fair Market Value of assets (other than cash) received
from the sale or other disposition of any such Restricted Investment
(except, in each case, to the extent any such payment or proceeds are
(at the Company’s option) included in the calculation of Consolidated
Net Income for the purposes of clause (C)(1) above or applied to
reduce the amount of Investments made pursuant to Section 4.10(b)(xiv)
hereof pursuant to the last paragraph of the definition of Investments
in Article 1 hereof), (y) from the release of any Guarantee (except to
the extent any amounts are paid under such Guarantee) or (z) from
redesignations of Unrestricted Subsidiaries as Restricted
Subsidiaries, not to exceed, in each case, the amount of Restricted
Investments previously made by the Company or any Restricted
Subsidiary in such Person after the Issue Date.



     (b) The preceding provisions shall not prohibit, so long as, in the case of clauses (vii) and
(xiv) below, no Default has occurred and is continuing or would be caused thereby, any of the
following (each, a “Permitted Payment”):




     (i) the payment of any dividend within 60 days after the date of declaration thereof,
if at said date of declaration such payment would have complied with the provisions of
this Indenture and/or any purchase, redemption, defeasance or other acquisition of
Subordinated Debt within 60 days after giving irrevocable notice thereof, if at said date
of giving notice such purchase, redemption, defeasance or other acquisition would have
complied with the provisions of this Indenture;




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     (ii) the payment of any dividend or making of any other payment or distribution by a
Restricted Subsidiary of the Company to
holders of any series of its Equity Interests on a
pro rata basis (or, in the case of holders other than the Company and its Restricted
Subsidiaries, on no more than a pro rata basis, and in the case of the Company and its
Restricted Subsidiaries, on at least a pro rata basis), measured by value;




     (iii) the purchase, redemption, defeasance or other acquisition or retirement of any
subordinated Indebtedness of the Company or of any Equity Interests of the Company or any
Restricted Subsidiary in exchange for, or out of the net cash proceeds of a contribution
to the common equity of the Company or a substantially concurrent sale (other than to a
Subsidiary of the Company) of, Equity Interests (other than Disqualified Stock) of the
Company; provided that the amount of any such net cash proceeds that are utilized for any
such purchase, redemption, defeasance or other acquisition or retirement shall be excluded
from Section 4.10(a)(C)(2) hereof;




     (iv) the purchase, redemption, defeasance or other acquisition or retirement of
Indebtedness subordinated to the Notes with the net cash proceeds from an Incurrence of
Permitted Refinancing Indebtedness;




     (v) Investments acquired as a capital contribution to the Company, or in exchange
for, or out of the net cash proceeds of a substantially concurrent sale (other than to a
Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified
Stock) or any Parent; provided that the amount of any such net cash proceeds that are
utilized for any such acquisition or exchange shall be excluded from Section 4.10(a)(C)(2)
hereof;




     (vi) the purchase of Equity Interests deemed to occur upon the exercise of options or
warrants to the extent that such Equity Interests represent all or a portion of the
exercise price thereof or taxes due in connection with such exercise;




     (vii) the purchase, redemption or other acquisition or retirement for value of any
Equity Interests of the Company or any Parent held by any current or former employee,
officer or director of the Company or any of its Subsidiaries or any other Management
Investor, including pursuant to the terms of any employment agreement, employee equity
subscription agreement, stock option agreement or similar agreement or otherwise, and any
loan, advance, dividend or distribution by the Company or any Restricted Subsidiary to any
Parent to permit any Parent to make any such purchase, redemption or other acquisition or
retirement for value; provided 





80









 





that the aggregate price paid for all such purchased,
redeemed, acquired or retired Equity Interests in any calendar year shall not exceed
$5,000,000 in any calendar year, with unused amounts in any calendar year being carried
over for up to one calendar year (which amount shall be increased by the amount of any
cash proceeds received by the Company after the Issue Date to the extent not already
applied in any prior calendar year to make repurchases pursuant to this clause (vii) from,
or as a contribution to its capital from, (x) sales of Equity Interests (other than
Disqualified Stock of the Company) to Management Investors to the extent the cash proceeds
have not otherwise been applied to the payment of Restricted Payments by virtue of Section
4.10(a)(C)(2) hereof and (y) any “key man” life insurance policies);




     (viii) dividends on Preferred Stock of a Restricted Subsidiary of the Company or on
Disqualified Stock of the Company or its Restricted Subsidiaries issued in accordance with
Section 4.11 hereof to the extent such dividends are included in the definition of Fixed
Charges;




     (ix) any Restricted Payment in an aggregate amount not to exceed the net proceeds of
the units offering plus $142,426,000, to be distributed to the Company from iPayment, Inc.
from a portion of the
proceeds of the Opco Notes, made at any time within 90 days after the Issue Date in
order to fund or pay expenses related to the Investors Recapitalization;



     (x) the payment of dividends or making of other payments or distributions by the
Company to holders of its Equity Interests for so long as the Company is a member of a
consolidated, combined or unitary income tax group of which it is not the common parent,
in amounts required to pay Federal, state, local and foreign income tax obligations
imposed to the extent such income taxes are attributable to the income of the Company and
its Subsidiaries; provided, however, in each case the amount of such payments in respect
of any Tax Period does not exceed the amount that the Company and its Subsidiaries would
have been required to pay in respect of Federal, state, local and foreign income taxes in
respect of such Tax Period determined using the Assumed Tax Rate as if the Company and its
Subsidiaries filed separate income tax returns on a separate company basis;




     (xi) without duplication as to amounts dividended or distributed pursuant to Section
4.10(b)(x) hereof, loans, advances, dividends or distributions to any Parent or other
payments by the Company or any of its Restricted Subsidiaries to pay or permit any Parent
to pay Parent Expenses, but not to pay or fund expenses related to the Recapitalization;




81









 





     (xii) any principal payment on or with respect to any Indebtedness of the Company
that is expressly subordinated in right of payment to the Notes (x) made from Net Proceeds
to the extent permitted by Section 4.09 hereof and (y) following the occurrence of a
Change of Control (or other similar event described therein as a “change of control”), but
only if the Company shall have complied with Section 4.08 hereof and, if required,
purchased all Notes tendered pursuant to the offer to repurchase all the Notes required
thereby, prior to repaying any such Indebtedness;




     (xiii) Restricted Payments by the Company to any direct or indirect parent entity to
finance any Investment permitted to be made pursuant to this Section 4.10; provided that
(i) such Restricted Payment shall be made concurrently with the closing of such Investment
(and no earlier than one (1) Business Day prior to the closing of such Investment), (ii)
such direct or indirect parent entity shall, immediately following the closing thereof,
cause (a) all property acquired (whether assets or Capital Stock) to be contributed to the
Company or a Restricted Subsidiary or (b) the merger, amalgamation, consolidation or sale
of all or substantially all assets (to the extent permitted pursuant to Section 5.01
hereof) of the Person formed or acquired into the Company or a Restricted Subsidiary in
order to consummate such acquisition or Investment and (iii) such Investment is treated as
a Permitted Investment, if such Investment so
qualifies pursuant to the definition thereof, or otherwise as a Restricted
Investment; or




     (xiv) other Restricted Payments in an aggregate amount (net of amounts reducing the
amount of any Investment made pursuant to this Section 4.10(b)(xiv) in accordance with the
last paragraph of the definition of Investments in Article 1 hereof) not to exceed
$3,000,000.



     (c) The amount of all Restricted Payments (other than cash) shall be the Fair Market Value on
the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or
issued to or by the Company or such Subsidiary, as the case may be, pursuant to the Restricted
Payment. Not later than 30 days after the date of making any Restricted Payment (other than a
Permitted Payment), which alone or combined with all other Restricted Payments with respect to
which the Company has not previously delivered a certification pursuant to this Section 4.10(c)
have an aggregate Fair Market Value in excess of $7,500,000, the Company shall deliver to the
Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting
forth the basis upon which the calculations required by this Section 4.10 were made, together with
a copy of any opinion or appraisal required by this Indenture.









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     Section 4.11. Incurrence of Indebtedness. (a) The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness; provided,
however, that the Company or any Restricted Subsidiary may Incur Indebtedness, if (x) the Fixed
Charge Coverage Ratio of the Company and its Restricted Subsidiaries for the Company’s most
recently ended four full fiscal quarters for which consolidated financial statements are available
immediately preceding the date on which such Indebtedness is Incurred would have been at least 2.0
to 1, determined on a pro forma basis (including a pro forma application of the net proceeds
therefrom), as if the Indebtedness had been Incurred at the beginning of such four-quarter period
or (y) if the Incurrence of Indebtedness is by iPayment, Inc. or any of its Restricted
Subsidiaries, if the Fixed Charge Coverage Ratio of iPayment, Inc. and its Restricted Subsidiaries
for iPayment, Inc.’s most recently ended four full fiscal quarters for which consolidated financial
statements are available immediately preceding the date on which such Indebtedness is Incurred
would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the Indebtedness had been Incurred at the
beginning of such four-quarter period.



     (b) Section 4.11(a) hereof shall not prohibit the Incurrence of any of the following items of
Indebtedness (collectively, “Permitted Debt”):




     (i) Indebtedness of the Company or any of its Restricted Subsidiaries under Credit
Facilities (including, without limitation, the Incurrence of Guarantees thereof) in an
aggregate principal amount (or face amount in the case of letters of credit) at any one
time outstanding
pursuant to this Section 4.11(b)(i) not to exceed $450,000,000 (on and after the
Issue Date) plus an incremental facility of up to $25,000,000 which may be incurred under
the Credit Agreement at any time thereafter, less the aggregate principal amount of
Indebtedness Incurred and outstanding pursuant to this Section 4.11(b)(i) that has been
permanently repaid (with a corresponding commitment reduction, in the case of revolving
credit Indebtedness) out of the Net Proceeds of Asset Sales by the Company or any
Restricted Subsidiary thereof pursuant to Section 4.09 hereof;




     (ii) Existing Indebtedness;




     (iii) Indebtedness represented by the Notes (other than any Additional Notes but
including any PIK Notes issued from time to time to pay PIK Interest on the Notes);



     (iv) Indebtedness represented by Capital Lease Obligations, mortgage financings or
purchase money obligations, in each case, Incurred







83









 




for the purpose of financing or
refinancing all or any part of the purchase price or cost of construction or improvement
of property, plant, equipment or other assets used or to be used in the business of the
Company or any Restricted Subsidiary, in an aggregate principal amount, including all
Permitted Refinancing Indebtedness Incurred pursuant to Section 4.11(b)(v) hereof to refund, refinance or replace any Indebtedness Incurred pursuant to this Section
4.11(b)(iv), not to exceed $25,000,000 at any time outstanding;




     (v) Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which
are used to refund, refinance or replace Indebtedness that was permitted by this Indenture
to be Incurred under Section 4.11(a) or (b)(ii), (b)(iii), (b)(iv), (b)(v), (b)(xiv) or
(b)(xv) hereof;




     (vi) Indebtedness of the Company or any of its Restricted Subsidiaries owing to and
held by the Company or any of its Restricted Subsidiaries; provided, however, that:




     (A) if the Company is the obligor on such Indebtedness (and such
Indebtedness is held by a Restricted Subsidiary that is not a Guarantor), such
Indebtedness must be expressly subordinated in right of payment to the prior
payment in full of all obligations with respect to the Notes; and




     (B) (x) any subsequent issuance or transfer of Equity Interests that
results in any such Indebtedness being held by a Person other than the Company
or a Restricted Subsidiary thereof and (y) any sale or other transfer of any
such Indebtedness to a Person that is not either the Company or a Restricted
Subsidiary thereof, shall be deemed, in each case, to constitute an Incurrence of such
Indebtedness by the Company or such Restricted Subsidiary, as the case may be,
that was not permitted by this Section 4.11(b)(vi);




     (vii) the Guarantee by the Company or a Restricted Subsidiary of Indebtedness of the
Company or a Restricted Subsidiary that was permitted to be Incurred by another provision
of this Section 4.11;




     (viii) Hedging Obligations that are Incurred for the purpose of fixing, hedging or
swapping interest rate, commodity price or foreign currency exchange rate risk (or to
reverse or amend any such agreements previously made for such purposes), and not for
speculative purposes;



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     (ix) Indebtedness arising from agreements providing for indemnification, adjustment
of purchase price or similar obligations, or Guarantees or letters of credit, surety bonds
or performance bonds securing any obligations of the Company or any of its Restricted
Subsidiaries pursuant to such agreements, in any case Incurred in connection with the
disposition of any business, assets or Restricted Subsidiary (other than Guarantees of
Indebtedness Incurred by any Person
acquiring all or any portion of such business, assets
or Restricted Subsidiary for the purpose of financing such acquisition), so long as the
amount does not exceed the gross proceeds actually received by the Company or any
Restricted Subsidiary thereof in connection with such disposition;




     (x) Indebtedness arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument drawn against insufficient funds in the ordinary
course of business; provided, however, that such Indebtedness is extinguished within five
Business Days of its Incurrence;




     (xi) Indebtedness constituting reimbursement obligations with respect to letters of
credit provided or issued in the ordinary course of business; provided that, upon the
drawing of such letters of credit in an aggregate face amount equal to or exceeding
$10,000,000, such obligations are reimbursed within 30 days following such drawing or
Incurrence;




     (xii) Indebtedness (x) in respect of performance, surety, appeal or other similar
bonds, bankers’ acceptances, or other similar instruments or obligations provided or
issued, or relating to liabilities or obligations (other than to support an obligation for
borrowed money) incurred, in the ordinary course of business or (y) in respect of the
financing of insurance premiums in the ordinary course of business;




     (xiii) Indebtedness to the extent that the net proceeds thereof are promptly
deposited to defease or to satisfy and discharge the Notes;




     (xiv) Indebtedness of Persons that are acquired by the Company or any Restricted
Subsidiary of the Company or consolidated or merged with or into the Company or a
Restricted Subsidiary of the Company in accordance with the terms of this Indenture;
provided that such Indebtedness is not Incurred in contemplation of such acquisition,
consolidation or merger; and provided further that after giving effect to such
acquisition, consolidation or merger (x) the Company would be permitted to Incur or, in
the case of an acquisition, consolidation or merger



85









 







with or into iPayment, Inc. or a
Restricted Subsidiary of iPayment, Inc., iPayment, Inc. would be permitted to Incur, at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test
set forth in Section 4.11(a) hereof or (y) the Company’s Fixed Charge Coverage Ratio or,
in the case of an acquisition, consolidation or merger with or into iPayment, Inc. or a
Restricted Subsidiary of iPayment, Inc., iPayment, Inc.’s Fixed Charge Coverage Ratio, is
greater than immediately prior to such acquisition, consolidation or merger;



     (xv) Indebtedness (x) issued by the Company or any of its Restricted Subsidiaries to
a seller or any Affiliate thereof as part of the consideration for an acquisition of
assets, Merchant Portfolios, a business or a Subsidiary by the Company or any Restricted
Subsidiary or (y) consisting of or arising from agreements providing for earn outs or
similar obligations Incurred in connection with the acquisition of any business, assets,
Merchant Portfolio or Person, in an aggregate principal amount including all Permitted
Refinancing Indebtedness Incurred pursuant to Section 4.11(b)(v) hereof to refund,
refinance or replace Indebtedness Incurred pursuant to this Section 4.11(b)(xv), not to
exceed $25,000,000 at any time outstanding;




     (xvi) Indebtedness (x) of a Receivables Subsidiary secured by a Lien on all or part
of the assets disposed of in, or otherwise Incurred in connection with, a Financing
Disposition or (y) otherwise Incurred as part of a Receivables Financing; and




     (xvii) Indebtedness in an aggregate principal amount at any time outstanding not to
exceed $50,000,000.



     (c) For purposes of determining compliance with this Section 4.11, and the outstanding
principal amount of any particular Indebtedness Incurred pursuant to and in compliance with this
Section 4.11, (i) any other obligation of the obligor on such Indebtedness (or of any other Person
who could have Incurred such Indebtedness pursuant to this Section 4.11) arising under any
Guarantee, Lien or letter of credit, bankers’ acceptance or other similar instrument or obligation
supporting such Indebtedness shall be disregarded to the extent that such Guarantee, Lien or
letter of credit, bankers’ acceptance or other similar instrument or obligation secures the
principal amount of such Indebtedness; and (ii) in the event that any proposed Indebtedness meets
the criteria of more than one of the categories of Permitted Debt described in clauses (i) through
(xvii) of Section 4.11(b) hereof, or is entitled to be Incurred pursuant to Section 4.11(a) hereof,
the Company shall be permitted to classify such item of Indebtedness as of the time of its
Incurrence in any manner that complies with this Section 4.11 (and may include the amount and type
of such Indebtedness in one or more of such clauses,



86









 










including in part under one such clause and in
part under another such clause). In addition, any Indebtedness originally classified as Incurred
pursuant to clauses (i) through (xvii) of Section 4.11(b) hereof may later be reclassified by the
Company such that it shall be deemed as having been Incurred pursuant to another of such clauses to
the extent that such reclassified Indebtedness could be incurred pursuant to such new clause at the
time of such reclassification. Notwithstanding the foregoing, Indebtedness under the Credit
Agreement outstanding on the Issue Date shall be deemed to have been Incurred on such date in
reliance on the exception provided by clause (i) of the definition of Permitted Debt.



     (d) For purposes of determining compliance with any dollar-denominated restriction on the
Incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal
amount of such Indebtedness Incurred pursuant thereto shall be calculated based on the relevant
currency exchange rate in effect on the date that such Indebtedness was Incurred, in the case of
term Indebtedness, or first committed, in the case of revolving credit Indebtedness, provided that
if such Indebtedness is Incurred to refund, refinance or replace other Indebtedness denominated in
a foreign currency (or in a different currency from such Indebtedness so being Incurred), and such
refinancing would cause the applicable dollar-denominated restriction to be exceeded if calculated
at the relevant currency exchange rate in effect on the date of such refinancing, such
dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal
amount of such new Indebtedness does not exceed (i) the outstanding or committed principal amount
(whichever is higher) of such Indebtedness being refunded, refinanced or replaced plus (ii) the
aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in
connection with such refinancing. The principal amount of any Indebtedness Incurred to refund,
refinance or replace other Indebtedness, if Incurred in a different currency from the Indebtedness
being refunded, refinanced or replaced, shall otherwise be calculated based on the currency
exchange rate applicable to the currencies in which such respective Indebtedness is denominated
that is in effect on the date of such refunding, refinancing or replacement.



     (e) Notwithstanding any other provision of this Section 4.11, the maximum amount of
Indebtedness that may be Incurred pursuant to this Section 4.11 shall not be deemed to be exceeded
with respect to any outstanding Indebtedness due solely to the result of fluctuations in the
exchange rates of currencies.



     (f) The Company shall not Incur any Indebtedness that is expressly subordinated in right of
payment to any Debt of the Company unless it is subordinated in right of payment to the Notes. For
purposes of the foregoing, no Indebtedness shall be deemed to be subordinated in right of payment
to any other Indebtedness of the Company, solely by reason of any Liens or Guarantees arising
 

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or
created in respect of such other Indebtedness of the Company, or by reason of any priority of any
Lien over any other Lien, or by virtue of the fact that the holders of any secured Indebtedness
have entered into intercreditor agreements giving one or more of such holders priority over the
other holders in the collateral held by them.



     Section 4.12. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries. (a)
The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, create or permit to exist or
become effective any consensual encumbrance or restriction
on the ability of any Restricted Subsidiary to:




     (i) pay dividends or make any other distributions on its Capital Stock (or with
respect to any other interest or participation in, or measured by, its profits) to the
Company or any of its Restricted Subsidiaries or pay any liabilities owed to the Company
or any of its Restricted Subsidiaries;




     (ii) make loans or advances to the Company or any of its Restricted Subsidiaries; or




     (iii) transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries,




provided that dividend or liquidation priority between classes of Capital Stock, or
subordination of any obligation (including application of any remedy bar thereto) to any
other obligation, shall not be deemed to constitute such an encumbrance or restriction.



     (b) However, the restrictions set forth in Section 4.12(a) hereof shall not apply to
encumbrances or restrictions:




     (i) existing under, by reason of or with respect to the Credit Agreement, Existing
Indebtedness or any other agreements in effect on the Issue Date;




     (ii) set forth in the Notes, the Opco Notes, the related indentures, and any related
documentation in effect or entered into in connection therewith;




     (iii) existing under, by reason of or with respect to applicable law, rule,
regulation or order, or required by any regulatory authority having jurisdiction over the
Company or any Restricted Subsidiary or any of their businesses;




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     (iv) with respect to any Person or the property or assets of a Person acquired by the
Company or any of its Restricted Subsidiaries existing at the time of such acquisition and
not Incurred in connection with or in contemplation of such acquisition, which encumbrance
or restriction is not applicable to any Person or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, so acquired and any
amendments, modifications, restatements, renewals, extensions, supplements, refundings,
replacements or refinancings thereof; provided that for purposes of this Section
4.12(b)(iv), if a Person other than the Company is the Successor in a transaction pursuant
to Section 5.01 hereof,
any Subsidiary of such Person or property or assets of any such
Subsidiary shall be deemed acquired by the Company or a Restricted Subsidiary, as the case
may be, when such Person becomes such Successor;




     (v) (A) that restrict in a customary manner the subletting, assignment or transfer of
any property or asset that is or is subject to a lease, license, conveyance or contract or
similar property or asset,




     (B) existing by virtue of any transfer of, agreement to transfer, option or
right with respect to, or Lien on or easement relating to, any property or
assets of the Company or any Restricted Subsidiary thereof not otherwise
prohibited by this Indenture; or




     (C) arising or agreed to in the ordinary course of business, not relating
to any Indebtedness, and that do not, individually or in the aggregate, detract
from the value of property or assets of the Company or any Restricted Subsidiary
thereof in any manner material to the Company or any Restricted Subsidiary
thereof;




     (vi) existing under, by reason of or with respect to any agreement for the sale or
other disposition of all or substantially all of the Capital Stock of, or property and
assets of, a Restricted Subsidiary that restrict distributions by that Restricted
Subsidiary pending such sale or other disposition;




     (vii) with respect to cash or other deposits or net worth imposed or required by
customers, suppliers, sponsoring banks, processors or vendors or by insurance, surety or
bonding companies, in each case, under agreements entered into in the ordinary course of
business;



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     (viii) pursuant to (x) purchase money obligations not otherwise prohibited by this
Indenture that impose encumbrances or restrictions on the property or assets so acquired,
or (y) Hedging Obligations;




     (ix) existing under, by reason of or with respect to any Indebtedness Incurred
subsequent to the Issue Date if (in the good faith determination of the Board of Directors
or senior management of the Company) such encumbrances and restrictions taken as a whole
(A) are not materially less favorable to the Holders of the Notes than the encumbrances
and restrictions in effect on the Issue Date, including, for the avoidance of doubt,
encumbrances and restrictions under the Opco Notes, or (B) are not materially more
disadvantageous to the Holders of the Notes than is customary in comparable financings and
(in the case of
this clause (B)) the relevant encumbrance or restriction shall not
materially affect the Company’s ability to make principal or interest payments on the
Notes;




     (x) existing under, by reason of or with respect to customary provisions contained in
agreements or other documents governing a joint venture, partnership or similar
arrangements entered into in the ordinary course of business;




     (xi) with respect to encumbrances or restrictions upon dividends, distributions,
loans, advances or other transfers by any Receivables Entity pursuant to an agreement or
instrument relating to Indebtedness of or a Financing Disposition to or by any Receivables
Entity; or




     (xii) any amendments, modifications, restatements, renewals, extensions, supplements,
refundings, replacements or refinancings of an agreement referred to in Section
4.12(b)(i), (b)(ii), (b)(iv), (b)(viii) and this Section 4.12(b)(xii), provided that the
encumbrances and restrictions in any such amendments, modifications, restatements,
renewals, extensions, supplements, refundings, replacements or refinancings are (in the
good faith determination of the Board of Directors or senior management of the Company)
not materially more restrictive, taken as a whole, than those contained in the agreements
referred to in Section 4.12(b)(i), (b)(ii), (b)(iv), (b)(viii) and this Section
4.12(b)(xii), as in effect on the Issue Date or the date such Restricted Subsidiary became
a Restricted Subsidiary or was merged into a Restricted Subsidiary, whichever is
applicable.



     Section 4.13. Transactions with Affiliates. (a) The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, make any payment to, or



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sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or assets from, or enter
into, make, amend, renew or extend any transaction, contract, agreement, understanding, loan,
advance or Guarantee with, or primarily for the benefit of, any Affiliate of the Company (each, an
“Affiliate Transaction”), unless:




     (i) such Affiliate Transaction is on terms that are no less favorable to the Company
or the relevant Restricted Subsidiary than those that would have been obtained in a
comparable arm’s-length transaction by the Company or such Restricted Subsidiary with a
Person that is not an Affiliate of the Company or any of its Restricted Subsidiaries; and




     (ii) the Company delivers to the Trustee:





     (A) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$5,000,000, a Board Resolution set forth in an Officers’ Certificate certifying
that such Affiliate Transaction or series of related Affiliate Transactions
complies with this Section 4.13 and that such Affiliate Transaction or series of
related Affiliate Transactions has been approved by a majority of the
Disinterested Directors of the Board of Directors of the Company; provided that
at any time during which no Disinterested Director is serving on such Board of
Directors, no such Board Resolution or approval shall be required if the Company
delivers to the Trustee a fairness opinion meeting the requirements of Section
4.13(a)(ii)(B) hereof with respect to such Affiliate Transaction; and




     (B) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$15,000,000, an opinion as to the fairness to the Company or such Restricted
Subsidiary of such Affiliate Transaction or series of related Affiliate
Transactions from a financial point of view issued by an independent accounting,
appraisal or investment banking firm of national standing.



     (b) The following items shall not be deemed to be Affiliate Transactions and shall not be
subject to the provisions of Section 4.13(a) hereof:




     (i) transactions between or among the Company and/or its Restricted Subsidiaries
and/or any Receivables Entity;




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     (ii) payment of reasonable and customary fees to, and reasonable and customary
indemnification and similar payments on behalf of, directors of the Company or any
Restricted Subsidiary (as determined in good faith by the Company’s Board of Directors);




     (iii) Restricted Payments that are permitted by the provisions of this Indenture
described under Section 4.10 hereof and Permitted Payments and transactions excluded from
the definition of Restricted Payments;




     (iv) any offering, issuance, sale or transfer of Equity Interests (other than
Disqualified Stock) of the Company or capital contribution to the Company;




     (v) transactions pursuant to agreements or arrangements in effect on the Issue Date
or any amendment, modification or supplement
thereto or replacement thereof, as long as
such agreement or arrangement, as so amended, modified, supplemented or replaced, taken as
a whole, is not more disadvantageous to the Company and its Restricted Subsidiaries than
the original agreement or arrangement in existence on the Issue Date;




     (vi) any employment, consulting, service or termination agreement, or reasonable and
customary indemnification arrangements, entered into by the Company or any of its
Restricted Subsidiaries with officers and employees of the Company or any of its
Restricted Subsidiaries, and transactions pursuant thereto; and the payment of
compensation to officers and employees of the Company or any of its Restricted
Subsidiaries (including amounts paid pursuant to employee benefit plans, employee stock
option or similar plans), so long as such agreement or payment is in the ordinary course
of business or has been approved by the Board of Directors of the Company;




     (vii) the granting or performance of registration rights under a written registration
rights agreement approved by the Board of Directors of the Company and containing
customary terms, taken as a whole;




     (viii) transactions with Persons solely in their capacity as holders of Indebtedness
or Capital Stock of the Company or any of its Restricted Subsidiaries, where such Persons
are treated no more favorably than holders of Indebtedness or Capital Stock of the Company
or such Restricted Subsidiary generally;




     (ix) any transaction in the ordinary course of business with customers, suppliers,
joint ventures, joint venture partners, sales agents,


92









 






sales representatives, independent
sales groups or sellers of goods and services on terms not less favorable to the Company
or the relevant Restricted Subsidiary than those that could be obtained at the time in a
transaction with a Person who is not an Affiliate of the Company;




     (x) execution, delivery and performance of a tax sharing agreement with respect to
any of the Permitted Payments described in Section 4.10(b)(x) hereof or any Related Taxes;




     (xi) the transactions contemplated by the Redemption Agreement, and all transactions
in connection therewith (including, but not limited to, the financing thereof), and all fees and expenses paid or payable in
connection with such transactions;




     (xii) any transaction in the ordinary course of business or approved by a majority of
the Board of Directors of the Company between the Company or any Restricted Subsidiary and
any Affiliate of the
Company that is a joint venture or similar entity controlled by the
Company (and of which no other Affiliate of the Company (other than any Subsidiary
thereof) directly or indirectly holds any Capital Stock);




     (xiii) any agreement between any Person and an Affiliate of such Person existing at
the time such Person is acquired by or merged into the Company or a Restricted Subsidiary;
provided that such agreement was not entered into in contemplation of such acquisition or
merger, or any amendment thereto (so long as any such amendment is not more
disadvantageous to the Company and its Restricted Subsidiaries than the original agreement
or arrangement in existence on the date of such acquisition or merger);




     (xiv) payments to any Parent or any of their respective Affiliates (x) for any Parent
Expenses and (y) of all out-of-pocket expenses incurred in connection with such services
or activities;




     (xv) a merger of iPayment Investors, L.P. with and into the Company where the
partners in iPayment Investors, L.P. receive in consideration only the shares of common
stock of the Company owned by iPayment Investors, L.P. prior to such transaction; and




     (xvi) any agreement to do any of the foregoing.



     Section 4.14. Designation of Restricted and Unrestricted Subsidiaries. (a) The Board of
Directors of the Company may designate any Restricted Subsidiary of the Company (other than
iPayment, Inc. or any co-obligor of the



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Notes created pursuant to Section 5.01 hereof) to be an
Unrestricted Subsidiary; provided that:




     (i) any Guarantee by the Company or any Restricted Subsidiary thereof of any
Indebtedness of the Subsidiary being so designated shall be deemed to be an Incurrence of
Indebtedness by the Company or such Restricted Subsidiary (or both, if applicable) at the
time of such designation, and such Incurrence of Indebtedness would be permitted under
Section 4.11 hereof;




     (ii) (A) the Subsidiary to be so designated has total consolidated assets of $1,000
or less or (B) if the Subsidiary being so designated has consolidated assets greater than
$1,000, then the aggregate Fair Market Value of all outstanding Investments owned by the
Company and its Restricted Subsidiaries in the Subsidiary being so designated (including
any Guarantee by the Company or any Restricted Subsidiary
thereof of any Indebtedness of such Subsidiary) shall be deemed to be a
Restricted
Investment made as of the time of such designation and that such Investment would be
permitted under Section 4.10 hereof;




     (iii) such Subsidiary does not hold any Liens on any property of the Company or any
Restricted Subsidiary thereof at the time of such designation;




     (iv) at the time of such designation the Subsidiary being so designated:




     (A) is not party to any agreement, contract, arrangement or understanding
with the Company or any Restricted Subsidiary of the Company unless the terms of
any such agreement, contract, arrangement or understanding are no less favorable
to the Company or such Restricted Subsidiary than those that might be obtained
at the time from Persons who are not Affiliates of the Company;




     (B) is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect legal obligation (x) to
subscribe for additional Equity Interests or (y) to maintain or preserve such
Person’s financial condition or to cause such Person to achieve any specified
levels of operating results; and




     (C) has not Guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the



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Company or any of its Restricted
Subsidiaries, except to the extent such Guarantee or credit support would be
released upon such designation; and




     (v) no Default or Event of Default would be in existence upon giving effect to such
designation.



     (b) Any designation of a Restricted Subsidiary of the Company as an Unrestricted Subsidiary
shall be evidenced by filing with the Trustee the Board Resolution giving effect to such
designation and an Officers’ Certificate certifying that such designation complied with the
preceding conditions.



     (c) The Board of Directors of the Company may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that:




     (i) such designation shall be deemed to be an Incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such
designation shall only be permitted if such Indebtedness is permitted
under Section 4.11 hereof;




     (ii) all outstanding Investments owned by such Unrestricted Subsidiary shall be
deemed to be made as of the time of such designation and such designation shall only be
permitted if such Investments would be permitted under Section 4.10 hereof;




     (iii) all Liens upon property or assets of such Unrestricted Subsidiary existing at
the time of such designation would be permitted under Section 4.07 hereof; and




     (iv) no Default or Event of Default would be in existence upon giving effect to such
designation.



     Section 4.15. Business Activities. The Company shall not, and shall not permit any
Restricted Subsidiary thereof to, engage in any business other than Permitted Businesses, except to
such extent as would not be material to the Company and its Restricted Subsidiaries taken as a
whole.



     Section 4.16. Payments for Consent. The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or
for the benefit of any Holder of Notes for or as an inducement to any consent, waiver or amendment
of any of the terms or provisions of this Indenture or the Notes unless such consideration is
offered to be paid and is paid to all Holders of the Notes that consent, waive or agree to amend



95









 






on
the same terms and conditions and in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.



     Section 4.17. Future Guarantees. The Company shall cause each of its Restricted Subsidiaries
that Guarantees any Indebtedness of the Company (other than Indebtedness of the Company consisting
of Guarantees of Indebtedness of one or more of the Company’s Restricted Subsidiaries) to execute
and deliver to the Trustee a supplemental indenture in the form of Exhibit E pursuant to
which such Subsidiary will guarantee payment of the Notes on the terms and conditions set forth in
Article 11 hereof.



     Section 4.18. Suspension of Covenants. (a) If on any day following the Issue Date (i) the
Notes have Investment Grade Ratings from both Rating Agencies, and (ii) no Default has occurred and
is continuing under this Indenture (the occurrence of the events described in the foregoing clauses
(i) and (ii) being collectively referred to as a “Covenant Suspension Event”), then, beginning on
that day (the “Suspension Date”), subject to this Section 4.18, the covenants contained in Sections
4.09, 4.10, 4.11, 4.12, 4.13 and Section 5.01(a)(iii) (collectively, the “Suspended Covenants”)
will be suspended.



     (b) During any period that the Suspended Covenants have been suspended, the Board of Directors
of the Company may not designate any of the Company’s Subsidiaries as Unrestricted Subsidiaries.



     (c) If on any subsequent date either of the Rating Agencies downgrade the ratings assigned to
the Notes below an Investment Grade Rating, the Suspended Covenants will be reinstated as of and
from the date of such rating decline (any such date, a “Reversion Date”). The period of time
between the Suspension Date and the Reversion Date is referred to as the “Suspension Period.”



     (d) On the Reversion Date, all Indebtedness incurred during the Suspension Period will be
classified to have been incurred pursuant to Section 4.11(a) or one of the clauses set forth in
Section 4.11(b) (in each case, to the extent such Indebtedness would be permitted to be incurred
thereunder as of the Reversion Date and after giving effect to Indebtedness incurred prior to the
Suspension Period and outstanding on the Reversion Date). To the extent such Indebtedness would not
be so permitted to be incurred pursuant to Section 4.11(a) or (b), such Indebtedness will be deemed
to have been outstanding on the Issue Date, so that it is classified as Existing Indebtedness and
permitted under Section 4.11(b)(ii). Calculations made after the Reinstatement Date of the amount
available to be made as Restricted Payments under Section 4.10 will be made as though the covenants
described under Section 4.10 had been in effect since the Issue Date and throughout the Suspension
Period. Accordingly, Restricted



96









 






Payments made during the Suspension Period will reduce the amount
available to be made as Restricted Payments under Section 4.10(a). On the Reversion Date, the
amount of Excess Proceeds from Net Proceeds shall be set at zero.



     (e) Notwithstanding that the Suspended Covenants may be reinstated, no Default or Event of
Default will be deemed to have occurred as a result of any actions taken by the Company or any
Subsidiary (including for the avoidance of doubt any failure to comply with the Suspended
Covenants) during any Suspension Period.



     (f) The Trustee shall have no independent obligation to determine if a Suspension Period has
commenced or terminated or to notify Holders regarding the same.



ARTICLE 5

Successors



     Section 5.01. Merger, Consolidation or Sale of Assets. (a) The Company shall not, directly
or indirectly: (1) consolidate or merge with or into another Person (whether or not the Company is
the surviving Person) or (2) sell, assign,
transfer, convey, lease or otherwise dispose of all or
substantially all of the properties and assets of the Company and its Restricted Subsidiaries taken
as a whole, in one or more related transactions, to another Person, unless:





     (i) either: (A) the Company is the surviving corporation, limited liability company
or limited partnership; or (B) the Person formed
by or surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, lease, conveyance or other disposition shall have
been made (such Person, as the case may be, the “Successor”) (1) is a corporation, limited
liability company or limited partnership organized or existing under the laws of the
United States, any state thereof or the District of Columbia; and (2) assumes all the
obligations of the Company under the Notes, this Indenture and the Registration Rights
Agreement pursuant to one or more agreements (provided that if the Company or Successor is
not a corporation there must be a co-obligor of the Notes that is a Wholly Owned
Restricted Subsidiary and that is a corporation organized and existing under the laws of
the United States, any state thereof or the District of Columbia);




     (ii) immediately after giving effect to such transaction, no Default or Event of
Default exists;




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     (iii) immediately after giving effect to such transaction on a pro forma basis, (A)
the Company or the Successor shall be permitted to Incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.11(a)
hereof; or (B) the Fixed Charge Coverage Ratio of the Company or the Successor would be
greater than such ratio of the Company immediately prior to such transaction; and




     (iv) the Company delivers to the Trustee an Officers’ Certificate and Opinion of
Counsel, in each case stating that all conditions precedent provided for herein relating
to such consolidation, transfer or disposition have been complied with.



     (b) Upon any consolidation or merger, or any sale, assignment, transfer, conveyance, lease or
other disposition of all or substantially all of the assets of the Company in accordance with this
Section 5.01, the Successor formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, conveyance, lease or other disposition is made
shall succeed to, and be substituted for (so that from and after the date of such consolidation,
merger, sale, assignment, conveyance, lease or other disposition, the provisions of this Indenture
referring to the “Company” shall refer instead to the Successor and not to the Company), and may
exercise every right and power of, the Company under this Indenture with the same effect as if such
Successor had been named as the Company in this Indenture, and thereafter the predecessor Company
shall be
relieved of all obligations and covenants under this Indenture and the Notes, except that
the predecessor Company in the case of a lease of all or substantially all its assets shall not be
released from the obligations under this Indenture or the Notes.




     (c) Section 5.01(a)(iii) hereof shall not apply to (i) any merger, consolidation or sale,
assignment, transfer, conveyance, lease or other disposition of assets of, between or among the
Company and any of its Restricted
Subsidiaries, (ii) any transaction in which the Company consolidates or merges with or into or
transfers all or substantially all its properties and assets to an Affiliate incorporated or
organized for the purpose of reincorporating or reorganizing the Company in another jurisdiction or
changing its legal structure to a corporation or other entity or (iii) any merger of iPayment
Investors, L.P. with and into the Company in a transaction (x) in which the Company is the
surviving Person, (y) the purpose of which is to allow the partners in iPayment Investors, L.P. to
receive the shares of common stock of the Company owned by iPayment Investors, L.P. prior to such
transactions and (z) iPayment Investors, L.P. has no more than a de minimis amount of liabilities
immediately prior to such transaction. Section 5.01(a)(ii) hereof shall not apply to any merger,
consolidation or sale, assignment, transfer, conveyance, lease or other disposition of assets in
which the surviving Person is the Company.



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ARTICLE 6

Defaults and Remedies




     Section 6.01. Events of Default. Each of the following is an Event of Default:



     (a) default for 30 days in the payment when due of interest, or Additional Interest, if any,
on the Notes;



     (b) default in payment when due (whether at maturity, upon acceleration, redemption or
otherwise) of the principal of, or premium, if any, on the Notes;



     (c) failure by the Company or any of its Restricted Subsidiaries to comply with the provisions
described in Section 4.08 or 5.01 hereof;



     (d) failure by the Company or any of its Restricted Subsidiaries for 30 days after written
notice by the Trustee or Holders representing 25% or more of the aggregate principal amount of
Notes outstanding to comply with any of the other agreements in this Indenture or the Escrow
Agreement;



     (e) default under any mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any Indebtedness by the Company or any of its Restricted
Subsidiaries whether such Indebtedness now exists, or is created after the Issue Date, if that
default:




     (i) is caused by a failure to make any payment when due at the final maturity of such
Indebtedness (a “Payment Default”); or




     (ii) results in the acceleration of such Indebtedness prior to its express maturity,


and, in each case, the amount of any such Indebtedness, together with the amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $10,000,000 or more;




     (f) failure by the Company or any of its Significant Subsidiaries (or any Restricted
Subsidiaries that together would constitute a Significant Subsidiary) to pay final judgments (to
the extent such judgments are not paid or covered by insurance provided by a reputable carrier that
has the ability to perform) aggregating in excess of $10,000,000, which judgments are not paid,
discharged or stayed for a period of 60 days;



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     (g) the Company or any Significant Subsidiary of the Company (or any Restricted Subsidiaries
that together would constitute a Significant Subsidiary), pursuant to or within the meaning of
Bankruptcy Law:




     (i) commences a voluntary case, or




     (ii) consents to the entry of an order for relief against it in an involuntary case, or




     (iii) consents to the appointment of a custodian of it or for all or substantially
all of its property, or




     (iv) makes a general assignment for the benefit of its creditors, or




     (v) generally is not paying its debts as they become due;



     (h) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:




     (i) is for relief against the Company or any Significant Subsidiary of the Company
(or any Restricted Subsidiaries that together would constitute a Significant Subsidiary),
in an involuntary case, or




     (ii) appoints a custodian of the Company or any Significant Subsidiary of the Company
(or any Restricted Subsidiaries that together would constitute a Significant Subsidiary),
for all or substantially all of the property of the Company, or




     (iii) orders the liquidation of the Company or any Significant Subsidiary of the
Company (or any Restricted Subsidiaries that together would constitute a Significant
Subsidiary); and the order or decree remains unstayed and in effect for 60 consecutive
days;



     (i) (i) the Escrow Agreement ceases to be in full force and effect (except as permitted by the
terms of this Indenture or the Escrow Agreement) for a period of 30 days after the Company receives
notice thereof or (ii) the Escrow
Agreement ceases to give the Holders a valid, perfected first lien security interest in the
funds deposited into the Escrow Account (except as permitted by the terms of this Indenture or the
Escrow Agreement); or



     (j) iPayment, Inc., and its successors, ceases to be a Wholly Owned Restricted Subsidiary of
the Company.



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     Section 6.02. Acceleration. If any Event of Default (other than an Event of Default
specified in Section 6.01(g) or (h)) occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Notes may declare all principal of and
accrued and unpaid interest and Additional Interest, if any, on the Notes to be due and payable
immediately by notice in writing to the Company specifying the Event of Default. Upon any such
declaration, the Notes shall become due and payable immediately. If any Event of Default specified
in Section 6.01(g) and (h) occurs and is continuing, then the principal, premium, if any, accrued
interest and Additional Interest, if any, on the Notes shall ipso facto become and be immediately
due and payable without any declaration or other action on the part of the Trustee or any Holder.



     Section 6.03. Other Remedies. (a) If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy to collect the payment of principal, premium, if any,
interest, and Additional Interest, if any, with respect to the Notes or to enforce the performance
of any provision of the Notes or this Indenture.



     (b) The Trustee may maintain a proceeding even if it does not possess any of the Notes or does
not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a
Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right
or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.



     Section 6.04. Waiver of Past Defaults. Holders of a majority in aggregate principal amount
of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the
Notes waive an existing Default or Event of Default and its consequences hereunder except a
continuing Default or Event of Default in the payment of interest or Additional Interest, if any,
on, or the principal of, the Notes (provided, however, that the Holders of a majority in principal
amount of the then outstanding Notes may, on behalf of all Holders, rescind an acceleration and its
consequences, including any related payment default that resulted from such acceleration). The
Company shall deliver to the Trustee an Officers’ Certificate stating that the requisite percentage
of Holders have consented to such waiver and attaching copies of such consents. In case of any
such waiver, the Company, the Trustee and the Holders shall be restored to their former positions
and rights hereunder and under the Notes, respectively. This Section 6.04 shall be in lieu of
Section 316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) of the TIA is hereby expressly
excluded from this Indenture
and the Notes, as permitted by the TIA. Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.



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     Section 6.05. Control by Majority. Subject to Section 7.02(f), Holders of a majority in
principal amount of the then outstanding Notes may direct the time, method and place of conducting
any proceeding for exercising any remedy available to the Trustee. However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture, that may involve the Trustee in
personal liability, that the Trustee determines in good faith may be unduly prejudicial to the
rights of Holders of Notes not joining in the giving of such direction, and may take any other
action it deems proper that is not inconsistent with any such direction received from Holders of
Notes.



     Section 6.06. Limitation on Suits. (a) A Holder may pursue a remedy with respect to this
Indenture, or the Notes only if:




     (i) the Holder gives to the Trustee written notice of a continuing Event of Default;




     (ii) the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;




     (iii) such Holder or Holders offer the Trustee indemnity satisfactory to the Trustee
against any costs, liability or expense that might be incurred by it in connection with
the request or direction;




     (iv) the Trustee does not comply with the request within 60 days after receipt of the
request and the offer of indemnity; and




     (v) during such 60-day period, the Holders of a majority in aggregate principal
amount of the then outstanding Notes do not give the Trustee a direction that is
inconsistent with the request.



     (b) A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of
a Note or to obtain a preference or priority over another Holder of a Note.



     Section 6.07. Rights of Holders of Notes To Receive Payment. Notwithstanding any other
provision of this Indenture, the right of any Holder of a Note to receive payment of the principal
or interest on, and Additional Interest, if any, with respect to, the Note, on or after the
respective due dates expressed in the Note, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected without the consent of
such Holder.



     Section 6.08. Collection Suit by Trustee. If an Event of Default specified in Section
6.01(a) or (b) hereof occurs and is continuing, the Trustee is authorized



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to recover judgment in
its own name and as trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, interest, and Additional Interest, if any, remaining unpaid on the
Notes and interest on overdue principal and premium, if any, and, to the extent lawful, interest
and Additional Interest, if any, and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the compensation and reasonable expenses, disbursements and
advances of the Trustee, its agents and counsel.



     Section 6.09. Trustee May File Proofs of Claim. The Trustee is authorized to file such
proofs of claim and other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any
judicial proceedings relative to the Company (or any other obligor upon the Notes), its creditors
or its property and shall be entitled and empowered to collect, receive and distribute any money or
other securities or property payable or deliverable on any such claims and any custodian in any
such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee,
and in the event that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the compensation and reasonable expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts
due the
Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall constitute a claim, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the Holders may be entitled
to receive in such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.




     Section 6.10. Priorities. (a) If the Trustee collects any money or property pursuant to this
Article, it shall pay out the money or property in the following order:



     First: to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof,
including payment of all compensation, expenses and liabilities incurred, and all advances made, by
the Trustee and the costs and expenses of collection;



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     Second: to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if
any, interest and Additional Interest, if any, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal, premium, if any, interest, and
Additional Interest, if any, respectively; and



     Third: to the Company or to such party as a court of competent jurisdiction shall direct.



     (b) The Trustee may fix a record date and payment date for any payment to Holders of Notes
pursuant to this Section 6.10.



     Section 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party litigant. This
Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to
Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then
outstanding Notes.




ARTICLE 7

Trustee




     Section 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in its exercise, as a prudent person would exercise or use under
the circumstances in the conduct of such person’s own affairs.



     (b) Except during the continuance of an Event of Default:




     (i) the duties of the Trustee shall be determined solely by the express provisions of
this Indenture and the Trustee need perform only those duties that are specifically set
forth in this Indenture and no others, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and




     (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to


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the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the form requirements of this Indenture.



     (c) The Trustee may not be relieved from liabilities for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:




     (i) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;




     (ii) the Trustee shall not be liable for any error of judgment made in good faith by
a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining
the pertinent facts; and




     (iii) the Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to Section 6.05
hereof.



     (d) Whether or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.



     (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds
or Incur any liability.



     (f) Money held in trust by the Trustee need not be segregated from other funds except to the
extent required by law.



     Section 7.02. Certain Rights of Trustee. (a) The Trustee may conclusively rely upon any
document believed by it to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the document.



     (b) Before the Trustee acts or refrains from acting, it may (unless other evidence be herein
specifically prescribed) require an Officers’ Certificate, an Opinion of Counsel or both. The
Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on
such Officers’ Certificate or Opinion of Counsel. The Trustee may consult with counsel and the
advice of such counsel or any Opinion of Counsel shall be full and complete authorization and
protection from liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.




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     (c) The Trustee may act through its attorneys and agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.



     (d) The Trustee shall not be liable for any action it takes or omits to take in good faith
that it believes to be authorized or within the rights or powers conferred upon it by this
Indenture.



     (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction
or notice from the Company shall be sufficient if signed by an Officer of the Company.



     (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders unless such Holders shall
have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses
and liabilities that might be Incurred by it in compliance with such request or direction.



     (g) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a
Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of such
event is sent to the Trustee in accordance with Section 13.02 hereof, and such notice references
the Notes.



     (h) The Trustee shall not be liable for any consequential loss (including, without limitation,
loss of business, goodwill, opportunity or profit of any kind) of the Company, any Restricted
Subsidiary or any other Person.



     (i) The permissive right of the Trustee to take the actions permitted by this Indenture shall
not be construed as an obligation or duty to do so.



     (j) The Trustee shall not have any obligation or duty to monitor, determine or inquire as to
compliance, and shall not be responsible or liable for compliance with restrictions on transfer,
exchange, redemption, purchase or repurchase, as applicable, of minimum denominations imposed under
this Indenture or under applicable law or regulation with respect to any transfer, exchange,
redemption, purchase or repurchase, as applicable, of any interest in any Notes.



     (k) The rights, privileges, protections, immunities and benefits given to the Trustee,
including its right to be indemnified and/or secured, are extended to, and shall be enforceable by
Wilmington Trust FSB, and each agent, custodian and other person employed to act hereunder. Absent
willful misconduct or negligence, each Paying Agent and Registrar shall not be liable for acting in
good faith on instructions believed by it to be genuine and from the proper party.



106









 







     (l) The Trustee shall have no duty to inquire as to the performance of the covenants of the
Issuer and/or its Restricted Subsidiaries in Article 4. Delivery of reports, information and
documents to the Trustee under this Indenture is for informational purposes only and the Trustee’s
receipt of the foregoing shall not constitute constructive or actual notice of any information
contained therein or determinable from information contained therein, including the Company’s
compliance with any of their covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers’ Certificates).



     Section 7.03. Individual Rights of Trustee. The Trustee in its individual or any other
capacity may become the owner or pledgee of Notes and may become a creditor of, or otherwise deal
with, the Company or any of its Affiliates with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting interest as described in
the TIA, it must eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee
is also subject to Sections 7.10 and 7.11 hereof.



     Section 7.04. Trustee’s Disclaimer. The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, it shall not be accountable for
the Company’s use of the proceeds from the Notes or any money paid to the Company or upon the
Company’s direction under any provision of this Indenture, it shall not be responsible for the use
or application of
any money received by any Paying Agent other than the Trustee, and it shall not
be responsible for any statement or recital herein or any statement in the Notes or any other
document in connection with the sale of the Notes or pursuant to this Indenture other than its
certificate of authentication.




     Section 7.05. Notice of Defaults. If a Default or Event of Default occurs and is continuing
and if it is known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case of a Default or
Event of Default in payment of principal of, premium and Additional Interest, if any, or interest on, any Note, the Trustee
may withhold the notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the Notes.



     Section 7.06. Reports by Trustee to Holders of the Notes. (a) Within 60 days after each May
1 beginning with the May 1, 2012, and for so long as Notes remain outstanding, the Trustee shall
mail to the Holders of the Notes a brief report dated as of such reporting date that complies with
TIA § 313(a) (but if no event described in TIA § 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also shall comply


107









 





with
TIA § 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA § 313(c).



     (b) A copy of each report at the time of its mailing to the Holders of Notes shall be mailed
to the Company and filed with the SEC and each stock exchange on which the Notes are listed in
accordance with TIA § 313(d) (to the extent such listing is known to the Trustee). The Company
shall promptly notify the Trustee when the Notes are listed on any stock exchange or any delisting
thereof.



     Section 7.07. Compensation and Indemnity. (a) The Company shall pay to the Trustee from time
to time the compensation for its acceptance of this Indenture and services hereunder in accordance
with a written fee letter between the Trustee and the Company. The Trustee’s compensation shall
not be limited by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses
Incurred or made by it in accordance with any provision of this Indenture, except any such
disbursement, advance or expense attributable to its negligence or bad faith. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee’s agents and
counsel.



     (b) The Company shall indemnify the Trustee against any and all losses, liabilities or
expenses Incurred by it arising out of or in connection with the acceptance or administration of
its duties under this Indenture, including the costs and expenses of enforcing this Indenture
against the Company (including this
Section 7.07) and defending itself against any claim (whether
asserted by either of the Company or any Holder or any other person) or liability in connection
with the exercise or performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence or bad faith. The Trustee
shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The
Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may
have separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made without its consent, which
consent shall not be unreasonably withheld.




     (c) The obligations of the Company under this Section 7.07 shall survive the satisfaction and
discharge of this Indenture.



     (d) To secure the Company’s payment obligations in this Section 7.07, the Trustee shall have a
claim and lien prior to the Notes on all money or property held or collected by the Trustee, except
that held in trust to pay principal and


108









 






interest on particular Notes. Such claim shall survive the
satisfaction and discharge of this Indenture.



     (e) When the Trustee incurs expenses or renders services after an Event of Default specified
in Section 6.01(g) or Section 6.01(h) hereof occurs, the expenses and the compensation for the
services (including the fees and expenses of its agents and counsel) are intended to constitute
expenses of administration under any Bankruptcy Law.



     (f) The Trustee shall comply with the provisions of TIA § 313(b)(2) to the extent applicable.



     Section 7.08. Replacement of Trustee. (a) A resignation or removal of the Trustee and
appointment of a successor Trustee shall become effective only upon the successor Trustee’s
acceptance of appointment as provided in this Section 7.08.



     (b) The Trustee may resign in writing at any time and be discharged from the trust hereby
created by so notifying the Company. The Holders of a majority in principal amount of the then
outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing.
The Company may remove the Trustee if:




     (i) the Trustee fails to comply with Section 7.10 hereof;




     (ii) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law;




     (iii) a custodian or public officer takes charge of the Trustee or its property; or




     (iv) the Trustee becomes incapable of acting.



     (c) If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for
any reason, the Company shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a
majority in principal amount of the then outstanding Notes may appoint a successor Trustee to
replace the successor Trustee appointed by the Company.



     (d) If a successor Trustee does not take office within 30 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company, or the Holders of Notes of at least 10%
in principal amount of the then outstanding Notes may petition at the expense of the Company any
court of competent jurisdiction for the appointment of a successor Trustee.




109









 






     (e) If the Trustee, after written request by any Holder who has been a Holder for at least six
months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.



     (f) A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to
Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to
the claim provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company’s obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.



     Section 7.09. Successor Trustee by Merger, Etc. Any business entity into which the Trustee
may be merged or converted or with which it may be consolidated, or any entity resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or any entity succeeding
to all or substantially all of the corporate trust business of the Trustee, shall be the successor
of the Trustee hereunder, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.



     Section 7.10. Eligibility; Disqualification. (a) There shall at all times be a Trustee
hereunder that is a corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise corporate trustee
power, that is subject to supervision or examination by federal or state authorities and that has a
combined capital and surplus of at least $50,000,000 as set forth in its most recent published
annual report of condition.



     (b) This Indenture shall always have a Trustee who satisfies the requirements of TIA §
310(a)(1), (2) and (5). The Trustee is subject to TIA § 310(b).



     Section 7.11. Preferential Collection of Claims Against the Company. The Trustee is subject
to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has
resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.



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ARTICLE 8

Defeasance and Covenant Defeasance




     Section 8.01. Option To Effect Legal Defeasance or Covenant Defeasance. The Company may, at
the option of the Board of Directors evidenced by a resolution set forth in an Officers’
Certificate, at any time, elect to have either Section 8.02 or 8.03 hereof be applied to all
outstanding Notes upon compliance with the conditions set forth below in this Article 8.



     Section 8.02. Legal Defeasance and Discharge. (a) Upon the Company’s exercise under Section
8.01 hereof of the option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged
from its obligations with respect to all outstanding Notes and all obligations of the Guarantors,
if any, shall be deemed to have been discharged with respect to their obligations under their Note
Guarantees on the date the conditions set forth below are satisfied (“Legal Defeasance”). For this
purpose, Legal Defeasance means that the Company and the Guarantors, if any, shall be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding Notes and Note
Guarantees, respectively, which shall thereafter be deemed to be “outstanding” only for the
purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in this clause
(a) and clause (b) below, and to have satisfied all its other obligations under such Notes and this
Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following provisions which shall survive until
otherwise terminated or discharged hereunder:




     (i) the rights of Holders of outstanding Notes to receive payments in respect of the
principal of, or interest or premium and Additional Interest, if any, on such Notes when
such payments are due from the trust referred to in Section 8.05 hereof;




     (ii) the Company’s obligations with respect to Sections 2.07, 2.08, 2.11 and 4.02
hereof;




     (iii) the rights, powers, trusts, duties and immunities of the Trustee hereunder and
the Company’s obligations in connection herewith; and




     (iv) this Section 8.02.



     (b) Subject to compliance with this Article 8, the Company may exercise its option under this
Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.



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     Section 8.03. Covenant Defeasance. Upon the Company’s exercise under Section 8.01 hereof of
the option applicable to this Section 8.03, each of the Company and the Guarantors, if any, shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from
its obligations under the covenants contained in Sections 4.03, 4.04 and 4.07 through 4.17 hereof
and clauses (ii), (iii), and (iv) of Section 5.01(a) hereof with respect to the outstanding Notes
on and after the date the conditions set forth in Section 8.04 are satisfied (hereinafter,
“Covenant Defeasance”), and the Notes shall thereafter be deemed not “outstanding” for the purposes
of any direction, waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all
other purposes hereunder (it being understood that (unless the Company shall otherwise determine)
such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Company may omit to comply with
and shall have no liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other provision herein or in any
other document and such omission to comply shall not constitute a Default or an Event of Default
under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. In addition, upon the Company’s exercise under Section 8.01
hereof of the option applicable to this Section 8.03, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, Sections 6.01(c) through Section 6.01(f) and Section 6.01(i) and
(j) shall not constitute Events of Default.



     Section 8.04. Conditions to Legal or Covenant Defeasance. The following shall be the
conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes:



     (a) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the
Holders of the Notes, cash in U.S. dollars, non-callable Government Securities, or a combination
thereof, in such amounts as shall be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, or interest and premium and Additional
Interest, if any, on the outstanding Notes on the applicable Stated Maturity or on the applicable
redemption date, as the case may be, and the Company must specify whether the Notes are being
defeased to maturity or to a particular redemption date;



     (b) in the case of an election under Section 8.02 hereof, the Company shall have delivered to
the Trustee an Opinion of Counsel confirming that (i) the Company has received from, or there has
been published by, the Internal Revenue



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Service a ruling or (ii) since the Issue Date, there has
been a change in the applicable federal income tax law, in either case to the effect that, and
based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes
shall not recognize income, gain or loss for federal income tax purposes as a result of such Legal
Defeasance and shall be subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Legal Defeasance had not occurred;



     (c) in the case of an election under Section 8.03 hereof, the Company shall have delivered to
the Trustee an Opinion of Counsel confirming that the Holders of the outstanding Notes shall not
recognize income, gain or loss for federal income tax purposes as a result of such Covenant
Defeasance and shall be subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Covenant Defeasance had not occurred;



     (d) no Default or Event of Default shall have occurred and be continuing on the date of such
deposit;



     (e) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of,
or constitute a default under, any other material agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;



     (f) the Company must have delivered to the Trustee an Opinion of Counsel to the effect that
assuming no intervening bankruptcy of the Company between the date of deposit and the
91st day following the deposit and assuming that no Holder is an “insider” of the
Company under applicable bankruptcy law,
after the 91st day following the deposit, the
trust funds shall not be subject to the effect of Section 547 of the United States Bankruptcy Code;



     (g) the Company must deliver to the Trustee an Officers’ Certificate stating that the deposit
was not made by the Company with the actual intent of hindering, delaying or defrauding creditors
of the Company;



     (h) if the Notes are to be redeemed prior to their Stated Maturity, the Company must deliver
to the Trustee irrevocable instructions to redeem all of the Notes on the specified redemption
date; and



     (i) the Company must deliver to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.




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     Section 8.05. Deposited Money and Government Securities To Be Held in Trust; Other
Miscellaneous Provisions. (a) Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant to
Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee
may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of
principal, premium and Additional Interest, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.



     (b) The Company shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to
Section 8.04 hereof or the principal and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.



     (c) Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or
pay to the Company from time to time upon the request of the Company any money or non-callable
Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be a certification of the opinion referred to in
Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.



     Section 8.06. Repayment to the Company. Subject to applicable laws relating to abandoned
property, any money deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of, premium, if any, or interest on, any Note and remaining
unclaimed for two years after such principal, and premium, if any, or interest has become due and
payable shall be paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter look only to the Company
for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such
trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York Times and The Wall
Street Journal (national edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less


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than 30 days from the date of such notification or
publication, any unclaimed balance of such money then remaining shall be repaid to the Company.



     Section 8.07. Reinstatement. If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then the Company’s
obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case
may be; provided, however, that, if the Company makes any payment of principal of, premium, if any,
or interest on any Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment from the money held
by the Trustee or Paying Agent.



ARTICLE 9

Amendment, Supplement and Waiver




     Section 9.01. Without Consent of Holders of Notes. (a) Notwithstanding Section 9.02 hereof,
without the consent of any Holder of Notes, the Company and the Trustee may amend or supplement
this Indenture or the Notes:




     (i) to cure any ambiguity, defect or inconsistency;




     (ii) to provide for uncertificated Notes in addition to or in place of certificated
Notes;




     (iii) to provide for the assumption of the Company’s obligations to Holders of Notes
in the case of a merger or consolidation or sale of all or substantially all of the
Company’s assets;




     (iv) to make any change that would provide any additional rights or benefits to the
Holders of Notes or that does not materially adversely affect the legal rights under this
Indenture of any such Holder;




     (v) to comply with requirements of the Commission in order to effect or maintain the
qualification of this Indenture under the TIA;




     (vi) to comply with the provisions described under Section 4.17 hereof or otherwise
to add Guarantees with respect to the Notes, or to secure the Notes, or to confirm and
evidence the release, termination or

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discharge of any Guarantee or Lien with respect to or
securing the Notes when such release, termination or discharge is provided for under this
Indenture;




     (vii) to evidence and provide for the acceptance of appointment by a successor
Trustee;




     (viii) to conform the text of this Indenture or the Notes to any provision of the
“Description of notes” in the Offering Memorandum dated April 29, 2011 with respect to the
Notes;




     (ix) to provide that any Indebtedness that becomes an obligation of a Successor
pursuant to any merger or consolidation (and that is not expressly subordinated in right
of payment to the Notes) is pari passu in right of payment with the Notes; or




     (x) to provide for the issuance of Additional Notes or PIK Notes in accordance with
this Indenture.



     (b) Upon the request of the Company accompanied by a resolution of its Board of Directors
authorizing the execution of any such amended or supplemental Indenture, and upon receipt by the
Trustee of the documents described in Section 13.04 hereof, the Trustee shall join with the Company
in the execution of any amended or supplemental Indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into such amended or supplemental
Indenture that affects its own rights, duties or immunities under this Indenture or otherwise.



     Section 9.02. With Consent of Holders of Notes. (a) Except as provided below in this Section
9.02, the Company and the Trustee may amend or
supplement this Indenture or the Notes with the
consent of the Holders of at least a majority in principal amount of the Notes (including
Additional Notes, if any) then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, Notes), and, subject to
Sections 6.04 and 6.07 hereof, any existing Default or Event of Default or compliance with any
provision of this Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including Additional Notes, if any)
(including, without limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Notes).




     (b) Upon the request of the Company accompanied by a resolution of its Board of Directors
authorizing the execution of any such amended or


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supplemental indenture, and upon the filing with
the Trustee of evidence of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 13.04 hereof, the Trustee shall join with the
Company in the execution of such amended or supplemental indenture unless such amended or
supplemental indenture directly affects the Trustee’s own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated
to, enter into such amended or supplemental indenture.



     (c) The consent of the applicable Holders is not necessary under this Indenture to approve the
particular form of any proposed amendment or waiver. It is sufficient if such consent approves the
substance of the proposed amendment or waiver.



     (d) After an amendment, supplement or waiver under this Section 9.02 becomes effective, the
Company shall mail to the Holders of Notes affected thereby a notice briefly describing the
amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the then outstanding Notes (including Additional Notes,
if any) may waive compliance in a particular instance by the Company with any provision of this
Indenture, or the Notes. However, without the consent of each Holder affected, an amendment or
waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder):




     (i) reduce the principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver;




     (ii) reduce the principal of or change the fixed maturity of any Note or alter the
provisions, or waive any payment, with respect to the redemption of the Notes;




     (iii) reduce the rate of or change the time for payment of interest on any Note;




     (iv) waive a Default or Event of Default in the payment of principal of, or interest
or premium, or Additional Interest, if any, on, the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate principal
amount of the Notes and a waiver of the payment default that resulted from such
acceleration);




     (v) make any Note payable in money other than U.S. dollars;





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     (vi) make any change in the provisions of this Indenture relating to waivers of past
Defaults or that impairs the rights of Holders of Notes to receive payments of principal
of, or interest or premium or Additional Interest, if any, on the Notes on or after the
due dates therefor;




     (vii) impair the right to institute suit for the enforcement of any payment of
principal of, or interest or Additional Interest, if any, on, the Notes on or after the
due dates therefor;




     (viii) amend, change or modify the obligation of the Company to make and consummate a
Change of Control Offer in the event of a Change of Control in accordance with Section 4.08 hereof after such Change
of Control has occurred, including amending, changing or modifying any definition to the
extent relating thereto; or




     (ix) make any change in the preceding amendment and waiver provisions.



     Section 9.03. Compliance with Trust Indenture Act. Every amendment or supplement to this
Indenture or the Notes shall be set forth in an amended or supplemental Indenture that complies
with the TIA as then in effect.



     Section 9.04. Revocation and Effect of Consents. Until an amendment, supplement or waiver
becomes effective, a consent to it by a Holder of a Note is a continuing consent by the consenting
Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder’s Note, even if a notation of the consent is not made on the Note.
However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its
Note if the Trustee or the Company receives written notice of revocation before the date on which
the Company certifies to such



Trustee that the Holders of the requisite principal amount of Notes
have consented to such amendment or waiver. An amendment, supplement or waiver becomes effective
in accordance with its terms and thereafter binds every Holder. After an amendment, supplement or
waiver under this Indenture becomes effective, the Company shall mail to Holders a notice briefly
describing such amendment or waiver. However, the failure to give such notice to all Holders, or
any defect therein, shall not impair or affect the validity of the amendment or waiver.




     Section 9.05. Notation on or Exchange of Notes. (a) The Trustee may place an appropriate
notation about an amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.




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     (b) Failure to make the appropriate notation or issue a new Note shall not affect the validity
and effect of such amendment, supplement or waiver.



     Section 9.06. Trustee to Sign Amendments, Etc. The Trustee shall sign any amended or
supplemental indenture or Note authorized pursuant to this Article 9 if the amendment or supplement
does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The
Company may not sign an amendment or supplemental Indenture or Note until its Board of Directors
approves it. In executing any amended or supplemental indenture or Note, the Trustee shall be
entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon
an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended or
supplemental indenture is authorized or permitted by this Indenture.



ARTICLE 10

[Reserved]




ARTICLE 11

Note Guarantees




     Section 11.01. Guarantee. (a) Subject to this Article 11, each Guarantor made party to this
Indenture shall, as primary obligor and not merely as surety, jointly and severally,
unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and
to the Trustee and its successors and assigns, irrespective of the validity and enforceability of
this Indenture, the Notes or the obligations of the Company hereunder or thereunder, that: (i) the
principal of and interest on the Notes shall be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the
overdue principal of and
interest on the Notes, if any, if lawful (subject in all cases to any applicable grace period
provided herein), and all other monetary obligations of the Company to the Holders or the Trustee
hereunder or thereunder shall be promptly paid in full or performed, all in accordance with the
terms hereof and thereof; and (ii) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that same shall be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay
the same immediately. Each Guarantor agrees that this is a guarantee of payment and not a
guarantee of collection.





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     (b) The Guarantors hereby agree (to the fullest extent permitted by law) that their
obligations hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or defense of a
Guarantor. Subject to Section 6.06 hereof, each Guarantor hereby waives (to the fullest extent
permitted by law) diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a proceeding first against
the Company, protest, notice and all demands whatsoever and covenant (except as otherwise provided
in Section 11.04 hereof) that the Note Guarantee shall not be discharged except by complete payment
in full of the monetary obligations contained in the Notes and this Indenture.



     (c) If any Holder or the Trustee is required by any court or otherwise to return to the
Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the Guarantors, any amount
paid by either to the Trustee or such Holder, the Note Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.



     (d) Each Guarantor agrees that it shall not be entitled to any right of subrogation in
relation to the Holders in respect of any obligations guaranteed hereby until payment in full of
all obligations guaranteed hereby. Each Guarantor further agrees (to the fullest extent permitted
by law) that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in
Article 6 hereof for the purposes of the Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and
(y) in the event
of any declaration of acceleration of such obligations as provided in Article 6
hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by
the Guarantors for the purpose of the Note Guarantee. The Guarantors shall have the right to seek
contribution from the Company and any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Note Guarantee.




     Section 11.02. Limitation on Guarantor Liability. Each Guarantor, and by its acceptance of
Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar federal or state law to the extent applicable to any Note Guarantee. To effectuate


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the
foregoing intention, the Trustee, the Holders and the Guarantors made party to this Indenture
hereby irrevocably agree that the obligations of such Guarantor under its Note Guarantee shall be
limited to the extent necessary so that they shall not constitute a fraudulent transfer or
conveyance. Each Guarantor acknowledges that it has and will receive direct and indirect benefits
from the financing arrangements contemplated by this Indenture and that its Note Guarantee, and the
waiver set forth in Section 11.01(d), are knowingly made in contemplation of such benefits.



     Section 11.03. Execution and Delivery of Note Guarantee. The delivery of any Note by the
Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Note
Guarantee of each applicable Guarantor set forth in this Indenture and any supplemental indenture
on behalf of such Guarantor. Neither the Company nor any Guarantor shall be required to make a
notation on the Notes to reflect any Note Guarantee.



     Section 11.04. Releases. (a) The Note Guarantee of a Guarantor shall be released, discharged
and terminated:




     (A) upon any direct or indirect sale or other disposition (by
consolidation, merger or otherwise) of any Capital
Stock of or any interest in a Guarantor in compliance with Section 4.09
hereof, following which such Guarantor is no longer a Restricted Subsidiary of
the Company;




     (B) if the Company properly designates any Restricted Subsidiary that is a
Guarantor as an Unrestricted Subsidiary under this Indenture;




     (C) upon the release, discharge or termination of the Guarantee which
resulted in the creation of such Note Guarantee
pursuant to Section 4.17 hereof,
except a discharge, release or termination by or as a result of payment under
such Guarantee; or




     (D) upon legal defeasance of the Notes or satisfaction and discharge of
this Indenture pursuant to Article 8 or 12 hereof, respectively.



     (b) Upon any such occurrence specified in this Section 11.04(b), the Trustee at the Company’s
expense shall execute documents reasonably requested by the Company in order to evidence the
release, discharge and termination in respect of such Note Guarantee. Neither the Company nor any
Guarantor shall be required to make a notation on the Notes to reflect any Note Guarantee or any
such release, discharge and termination in respect of such Note Guarantee.




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     (c) Any Guarantor not released from its obligations under its Note Guarantee shall remain
liable for the full amount of principal of and interest on the Notes and for the other obligations
of any Guarantor under this Indenture as provided in this Article 11.



     Section 11.05. No Initial Guarantors. On the Issue Date there will not be any Guarantors.



ARTICLE 12

Satisfaction and Discharge




     Section 12.01. Satisfaction and Discharge. (a) This Indenture shall be discharged and shall
cease to be of further effect as to all Notes issued thereunder, when:



          (i) either:





     (A) all Notes that have been authenticated (except lost, stolen or
destroyed Notes that have been replaced or paid and Notes for whose payment
money has theretofore been deposited in trust and thereafter repaid to the
Company) have been delivered to the Trustee for cancellation; or




     (B) all Notes that have not been delivered to the Trustee for cancellation
have become due and payable by reason of the mailing of a notice of redemption
or otherwise or shall become due and payable within one year and the Company has
irrevocably deposited or caused to be deposited with the Trustee as trust funds
in trust solely for the benefit of the Holders, cash in U.S. dollars,
non-callable Government Securities, or a
combination thereof, in such amounts as
shall be sufficient without consideration of any reinvestment of interest, to
pay and discharge the entire indebtedness on the Notes not delivered to the
Trustee for cancellation for principal, premium and Additional Interest, if any,
and accrued interest to the date of maturity or redemption;





     (ii) no Default or Event of Default shall have occurred and be continuing on the date
of such deposit or shall occur as a result of such deposit and such deposit shall not
result in a breach or violation of, or constitute a default under, any other material
instrument to which the Company is a party or by which the Company is bound;





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     (iii) the Company has paid or caused to be paid all sums then payable by it under
this Indenture; and




     (iv) the Company has delivered irrevocable instructions to the Trustee under this
Indenture to apply the deposited money toward the payment of the Notes at maturity or the
redemption date, as the case may be.



     (b) The Company must deliver an Officers’ Certificate and an Opinion of Counsel to the Trustee
stating that all conditions precedent to satisfaction and discharge have been satisfied.



     (c) Notwithstanding the above, the Trustee shall pay to the Company from time to time upon its
request any cash or Government Securities held by it as provided in this section which, in the
opinion of a nationally recognized firm of independent public accountants expressed in a written
certification delivered to the Trustee, are in excess of the amount thereof that would then be
required to be deposited to effect a satisfaction and discharge under this Article 12.



     Section 12.02. Deposited Money and Government Securities To Be Held in Trust; Other
Miscellaneous Provisions. Subject to Section 12.03 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 12.02, the “Trustee”) pursuant to Section 12.01
hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and
to become due thereon in respect of principal, premium and Additional Interest, if any, and
interest, but such money shall be segregated from other funds except to the extent required by law.




     Section 12.03. Repayment to the Company. Subject to applicable laws relating to abandoned
property, any money deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of, premium and Additional Interest, if any, or interest on
any Note and remaining unclaimed for two years after such principal, and premium and Additional
Interest, if any, or interest has become due and payable shall be paid to the Company on its
request or (if then held by the Company) shall be discharged from such trust; and the Holder of
such Note shall thereafter look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of



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the Company cause to be
published once, in The New York Times or The Wall Street Journal (national edition), notice that
such money remains unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such notification or publication, any unclaimed balance of such money then
remaining shall be repaid to the Company.



ARTICLE 13

Miscellaneous




     Section 13.01. Trust Indenture Act Controls. If any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by TIA § 318(c), the imposed duties shall control.



     Section 13.02. Notices. (a) Any notice or communication by the Company or any Guarantor, on
the one hand, or the Trustee, on the other hand, to the other is duly given if in writing and
delivered in person or mailed by first class mail (registered or certified, return receipt
requested), telecopier or overnight air courier guaranteeing next day delivery, to the others’
address:



     If to the Company or any Guarantor:


iPayment Holdings, Inc.

40 Burton Hills Boulevard, Suite 415

Nashville, Tennessee 37215

Attention: Mark C. Monaco, Chief Financial Officer

Facsimile No.: 615-665-8434







     With a copy to:


iPayment Holdings, Inc.

40 Burton Hills Boulevard, Suite 415

Nashville, Tennessee 37215

Attention: Afshin Yazdian, General Counsel

Facsimile: 615-665-8434




     With courtesy copies to:


White & Case LLP

1155 Avenue of the Americas

New York, New York 10036

Facsimile: 212-354-8113

Attention: Mark Mandel




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Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Facsimile: 212-521-8813

Attention: William B. Beekman




     If to the Trustee:


Wilmington Trust FSB

246 Goose Lane, Suite 105

Guilford, Connecticut 06437

Facsimile: 203-453-1183

Attention: Joseph O’Donnell




     (b) The Company, the Guarantors or the Trustee, by notice to the others, may designate
additional or different addresses for subsequent notices or communications.



     (c) All notices and communications (other than those sent to Holders) shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied;
and the next Business Day after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.



     (d) Subject to Section 13.02(e), any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any
notice or communication shall
also be so mailed to any Person described in TIA § 313(c), to the
extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.




     (e) Notwithstanding any other provision of this Indenture or any Note, where this Indenture or
any Note provides for notice of any event or any other communication (including any notice of
redemption or repurchase) to a holder of a Global Note (whether by mail or otherwise), such notice
shall be sufficiently given if given to the Depositary (or its designee) pursuant to the standing
instructions from the Depositary or its designee, including by electronic mail in accordance with
accepted practices at the Depositary.



     (f) If a notice or communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it.




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     (g) If the Company mails a notice or communication to Holders, it shall mail a copy to the
Trustee and each Agent at the same time.



     Section 13.03. Communication by Holders of Notes with Other Holders of Notes. Holders may
communicate pursuant to TIA § 312(b) with other Holders with respect to its rights under this
Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA § 312(c).



     Section 13.04. Certificate and Opinion as to Conditions Precedent. Upon any request or
application by the Company to the Trustee to take any action under this Indenture, the Company
shall furnish to the Trustee:



     (a) an Officers’ Certificate in form reasonably satisfactory to the Trustee (which shall
include the statements set forth in Section 13.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to
the proposed action have been satisfied; and



     (b) an Opinion of Counsel in form reasonably satisfactory to the Trustee (which shall include
the statements set forth in Section 13.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.



     Section 13.05. Statements Required in Certificate or Opinion. Each certificate or opinion
with respect to compliance with a condition or covenant provided for in this Indenture (other than
a certificate provided pursuant to TIA § 314(a)(4)) shall comply with the provisions of TIA §
314(e) and shall include:




     (a) a statement that the Person making such certificate or opinion has read such covenant or
condition;



     (b) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based;



     (c) a statement that, in the opinion of such Person, he or she has made such examination or
investigation as is necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been satisfied; and



     (d) a statement as to whether or not, in the opinion of such Person, such condition or
covenant has been satisfied.



     Section 13.06. Rules by Trustee and Agents. The Trustee may make reasonable rules for action
by or at a meeting of Holders. The Registrar or Paying



126









 




Agent may make reasonable rules and set
reasonable requirements for its functions.



     Section 13.07. No Personal Liability of Directors, Officers, Employees and Stockholders. No
director, officer, employee, incorporator, stockholder, member, manager or partner of the Company,
as such, shall have any liability for any obligations of the Company under the Notes, this
Indenture, or for any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes by accepting a Note waives and releases these individuals from this
liability. The waiver and release are part of the consideration for issuance of the Notes.



     Section 13.08. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT SUCH PRINCIPLES ARE NOT MANDATORILY
APPLICABLE BY STATUTE AND THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.



     Section 13.09. Consent to Jurisdiction. Any legal suit, action or proceeding arising out of
or based upon this Indenture or the transactions contemplated hereby may be instituted in the
federal courts of the United States of America located in The City of New York or the courts of the
State of New York in each case located in The City of New York (collectively, the “Specified
Courts”), and each party irrevocably submits to the non-exclusive jurisdiction of such courts in
any such suit, action or proceeding. Service of any process,
summons, notice or document by mail
to such party’s address set forth above shall be effective service of process for any suit, action
or other proceeding brought in any such court. The parties (to the fullest extent permitted by
applicable law) irrevocably and unconditionally waive any objection to the laying of venue of any
suit, action or other proceeding in the Specified Courts and
irrevocably and unconditionally waive and agree not to plead or claim in any such court has
been brought in an inconvenient forum.




     Section 13.10. No Adverse Interpretation of Other Agreements. This Indenture may not be used
to interpret any other indenture, loan or debt agreement of the Company or any of its Subsidiaries
or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.



     Section 13.11. Successors. All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall bind its
successors. All agreements of each Guarantor in

127









 




this Indenture shall bind its successors, except
as otherwise provided in Section 11.04 hereof.



     Section 13.12. Severability. In case any provision in this Indenture or the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not (to the fullest extent permitted by applicable law) in any way be affected or
impaired thereby.



     Section 13.13. Counterpart Originals. The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement.



     Section 13.14. Acts of Holders. (a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken by the Holders may
be embodied in and evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by agents duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or instruments, or
certificates as to the foregoing, are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such
instrument or instruments. Proof of execution of any such instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company if made in the manner provided in this Section 13.14.



     (b) [Reserved]



     (c) Notwithstanding anything to the contrary contained in this Section 13.14, the principal
amount and serial numbers of Notes held by any Holder, and the date of holding the same, shall be
proved by the register of the Notes maintained by the Registrar as provided in Section 2.04 hereof.



     (d) If the Company shall solicit from the Holders of the Notes any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may, at its option, by
or pursuant to a resolution of its Board of
Directors, fix in advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. Notwithstanding TIA § 316(c), such record date shall be the
record date specified in or pursuant to such resolution, which shall be a date not earlier than the
date 30 days prior to the first solicitation of Holders generally in connection therewith or the
date of the most recent list of Holders forwarded to the Trustee prior to such solicitation
pursuant to Section 2.06 hereof and not later than the date such solicitation is



128









 





completed.  If
such a record date is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date, but only the Holders of record
at the close of business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of the then outstanding Notes have
authorized or agreed or consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for that purpose the then outstanding Notes shall be computed as
of such record date; provided that no such authorization, agreement or consent by the Holders on
such record date shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than eleven months after the record date.



     (e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the
Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note
issued upon the registration or transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Note.



     (f) Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder
with regard to any particular Note may do so itself with regard to all or any part of the principal
amount of such Note or by one or more duly appointed agents each of which may do so pursuant to
such appointment with regard to all or any part of such principal amount.



     Section 13.15. Benefit of Indenture. Nothing, in this Indenture or in the Notes, express or
implied, shall give to any Person, other than the parties hereto, any Paying Agent, any Registrar
and its successors hereunder, and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.




     Section 13.16. Table of Contents, Headings, Etc. The Table of Contents, Cross-Reference
Table and Headings of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part of this Indenture and shall in no
way modify or restrict any of the terms or provisions hereof.



     Section 13.17. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS INDENTURE
OR THE NOTES.



129









 





SIGNATURES




	 	 	 	 	 
	 	iPAYMENT HOLDINGS, INC.

 	 
	 	By:  	/s/ Afshin Yazdian
 	 
	 	 	Name:  	Afshin Yazdian 	 
	 	 	Title:  	EVP 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	WILMINGTON TRUST FSB, as Trustee

 	 
	 	By:  	/s/ Joseph P. O’Donnell
 	 
	 	 	Name:  	Joseph P. O’Donnell 	 
	 	 	Title:  	Vice President 	 



 









 






	 	 	 	 	 



EXHIBIT A




[Face of Note]




CUSIP [                 ]





      



			
	No.                                         
	 	**$[          ]**






iPAYMENT HOLDINGS, INC.




15.00%/15.00% Senior Note due 2018


Issue Date: [                 ]




     iPayment Holdings, Inc. (the “Company”, which term includes any successor under the Indenture
hereinafter referred to), for value received, promises to pay to [NAME], or its registered assigns,
the principal sum of [       ] DOLLARS ($[                 ]) on November 15, 2018.



     Interest Payment Dates: November 15 and May 15, commencing [•].



     Record Dates: November 1 and May 1.



     Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.



A-1









 





     IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by
its duly authorized officers.



	 	 	 	 	 
	 	iPAYMENT HOLDINGS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



A-2









 






	 	 	 	 	 




     This is one of the 15.00%/15.00% Senior Notes due 2018 described in the within-mentioned
Indenture.


Dated: [                 ]




	 	 	 	 	 
	 	WILMINGTON TRUST FSB, as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 




A-3











 




[Reverse Side of Note]




iPAYMENT HOLDINGS, INC.




15.00%/15.00% Senior Note due 2018


[Include the Unit Legend on the unit, if applicable, pursuant to the provisions
of the Indenture]



[Insert the Global Note Legend, if applicable, pursuant to the provisions of the Indenture].



[Insert the Private Placement legend, if applicable, pursuant to the provisions of the Indenture].





FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, THIS NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT AND THE ISSUE DATE OF THIS
NOTE IS MAY 6, 2011. WRITTEN REQUESTS FOR INFORMATION RELATED TO THE NOTE, INCLUDING THE
AMOUNT OF QUALIFIED STATED INTEREST, THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT AND THE YIELD TO MATURITY MAY BE DIRECTED TO IPAYMENT HOLDINGS, INC., 40 BURTON
HILLS BOULEVARD, SUITE 415, NASHVILLE, TENNESSEE 37215, ATTENTION: CHIEF FINANCIAL OFFICER



     Capitalized terms used herein shall have the meanings assigned to them in the Indenture
referred to below unless otherwise indicated.



     1. Interest. The Company promises to pay interest on the principal amount of this Note at the
rate and in the form specified below from the date hereof until maturity and shall pay the
Additional Interest, if any, payable pursuant to Section 2(d) of the Registration Rights Agreement
referred to below. The Company shall pay interest and Additional Interest, if any, semi-annually
in arrears on November 15 and May 15 of each year, or if any such day is not a Business Day, on the
next succeeding Business Day (each an “Interest Payment Date”). Interest on the Notes shall accrue
from the most recent date to which interest has been paid or, if no interest has been paid, from
the date of issuance; provided that if there is no existing Default in the payment of interest, and
if this Note is authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment
Date. The first Interest Payment Date shall be [ ]. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on



A-4









 




demand at the rate specified above, to the extent lawful; it
shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Additional Interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the extent lawful.
Interest shall be computed on the basis of a 360-day year of twelve 30-day months.




     For interest on the Notes which the Company elects to pay entirely as Cash Interest (as
defined below), interest will accrue at a rate of 15.00% per annum and be payable in cash. For
interest payments on the Notes through and including May 15, 2015, that the Company elects to pay
50% as Cash Interest and 50% as PIK Interest (as defined below), Cash Interest on the Notes will
accrue at a rate of 15.00% per annum, payable in cash, and PIK Interest on the Notes will accrue at
a rate of 15.00% per annum (subject to increase as set forth in the following paragraph). All Notes
issued pursuant to a PIK Payment will mature on November 15, 2018 and will be governed by, and
subject to the terms, provisions and conditions of, the indenture and shall have the same rights
and benefits as the Notes issued on the Issue Date.



     Notwithstanding the foregoing, if as of the most recent quarter end prior to any interest
payment date, the Company’s Leverage Ratio exceeded 7.25 to 1.00, then, for the interest period
ending on such date the interest rate on the Notes will be retroactively increased for such entire
interest period by a rate of 2.00% per annum (“Interest Step-Up”). Such Additional Interest (x)
will be paid only in the form of PIK Interest (notwithstanding any other provision of the Indenture
or this Note which would require such additional interest to be paid as Cash Interest) and (y) will
be ignored for purposes of any calculation regarding the amount of interest that otherwise must be
paid as Cash Interest for a given interest period. Interest shall continue to be paid at such rate
until the next interest payment date on which the Company’s Leverage Ratio is equal to, or less
than, 7.25 to 1:00 as of the most recent quarter end prior to such subsequent interest payment
date.



     2. Method of Payment.



     For any interest period through and including May 15, 2015, the Company may, at its option,
elect to pay interest on the Notes (1) entirely in cash (“Cash Interest”) or (2) pay interest on
50% of the outstanding principal amount of the Notes in Cash Interest and on 50% of the outstanding
principal amount (x) by increasing the principal amount of the outstanding Notes or (y) by issuing
additional PIK Notes (each of (x) and (y), “PIK Interest”). Notwithstanding the foregoing, the
Company shall elect that all interest payments shall be made as Cash Interest to the extent
iPayment, Inc. would, on the date notice of such election is required to be made, be permitted
pursuant to Section 4.10(a) of the indenture governing the Opco Notes as in existence on the Issue
Date and



A-5









 





pursuant to the terms of its Credit Agreement, to pay a dividend or distribution to the Company in an amount sufficient to pay such Cash Interest on the relevant Interest Payment Date.




     The Company must elect the form of payment of interest with respect to each interest period by
delivering an irrevocable notice to the Trustee not later
than the beginning of each interest period. The Trustee shall promptly deliver a corresponding
notice to Holders. In the absence of such an election for any interest period, interest on the
Notes shall be payable according to the election for the previous interest period. Interest for the
first interest period will be paid 50% as Cash Interest and 50% as PIK Interest. Notwithstanding
anything to the contrary, the payment of accrued interest in connection with any redemption of
Notes as described under Article 3, Section 4.08 and Section 4.09 shall be in cash only.



     After May 15, 2015, the Company will make all interest payments on the Notes entirely in cash;
provided that the Company may elect, for any two interest payments on or after November 15, 2015,
to pay up to 50% of the interest due for such interest periods on the Notes as PIK Interest in the
event that (i) the payment of Cash Interest would cause a default or event of default under the
Credit Facilities or the Opco Notes or (ii) in the Company’s reasonable judgment, payment of a
greater amount of interest for such interest periods as Cash Interest would result in a liquidity
shortage that would reasonably be expected to result in such a default or event of default, or in a
Default or Event of Default under the Notes.



     Notwithstanding the foregoing, incremental interest (at the rate of 2% per annum) for any
interest period for which the Interest Step-Up is in effect will be paid only in the form of PIK
Interest and will be ignored for purposes of any calculation regarding the amount of interest that
otherwise must be paid as Cash Interest for any such interest period, all as provided in the last
paragraph of paragraph 1 above.



     The Company shall pay interest on the Notes (except defaulted interest) and Additional
Interest, if any, to the Persons who are registered Holders of Notes at the close of business on
the November 1 or May 1 next preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as provided in Section
2.13 of the Indenture with respect to defaulted interest.



     For so long as the Notes are held in one or more Global Notes, the Company through the Paying
Agent shall pay all principal, interest and premium and Additional Interest, if any, (other than
PIK Interest) in respect of the Notes represented by Global Notes by wire transfer of immediately
available funds to



A-6









 





the account specified by the Holder of the relevant Global Note (so long as such
wire transfer be so made). Otherwise, if a Holder has given wire transfer instructions to the
Company or Paying Agent at least 30 days prior to the applicable payment date, the Company through
the Paying Agent shall pay all principal, interest and premium and Additional Interest, if any,
(other than PIK Interest) on that Holder’s Notes in accordance with those instructions (so long as
such wire transfer may be so made). All other payments on Notes (other than PIK Interest) shall be
made at the office or agency of the Paying Agent and Registrar
in the United States unless the Company elects to make interest payments through the Paying
Agent by check mailed to the Holders at their addresses set forth in the register of Holders. Such
payment shall be in such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts.




     The Trustee shall upon receipt of an Authentication Order authenticate any PIK Notes issued in
payment of PIK Interest. PIK Interest on the Notes will be payable (x) with respect to Notes
represented by one or more Global Notes registered in the name of, or held by, DTC or its nominee
on the relevant record date, by increasing the principal amount of the outstanding Global Note by
an amount equal to the amount of PIK Interest for the applicable interest period (rounded up to the
nearest whole dollar) and (y) with respect to Notes represented by certificated notes, by issuing
PIK Notes in certificated form in an aggregate principal amount equal to the amount of PIK Interest
for the applicable period (rounded up to the nearest whole dollar), and the Trustee will, at the
request of the Company, authenticate and deliver such PIK Notes in certificated form for original
issuance to the Holders on the relevant record date, as shown by the records of the register of
Holders. Following an increase in the principal amount of the outstanding Global Notes as a result
of a PIK Payment, the Global Notes will bear interest on such increased principal amount from and
after the date of such PIK Payment. Any PIK Notes issued in certificated form will be dated as of
the applicable interest payment date and will bear interest from and after such date. All Notes
issued pursuant to a PIK Payment will mature on November 15, 2018 and will be governed by, and
subject to the terms, provisions and conditions of, this Indenture and shall have the same rights
and benefits as the Notes issued on the Issue Date. Additionally, for all purposes under the
Indenture, references to “principal amount” of Notes shall include any increase in the principal
amount of Notes (including PIK Notes) as a result of a PIK Payment. Any certificated PIK Notes will
be issued with the description “PIK” on the face of such PIK Note.



     3. Paying Agent and Registrar. Initially, Wilmington Trust FSB, the Trustee under the
Indenture, shall act as Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar without prior notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.




A-7









 




     4. Indenture. The Company issued the Notes under an Indenture dated as of May 6, 2011 (the
“Indenture”) between the Company and the Trustee. The
terms of the Notes include those stated in
the Indenture and those made part of the Indenture by reference to the TIA. The Notes are subject
to all such terms, and Holders are referred to the Indenture and such Act for a statement of such
terms. To the extent any provision of this Note conflicts with the express provisions of the
Indenture, the provisions of the Indenture shall (to the fullest extent permitted by law) govern
and be controlling. The Indenture pursuant to which this Note is issued provides that an unlimited
aggregate principal amount of Additional Notes may be issued thereunder.




     5. Optional Redemption.



     (a) At any time and from time to time prior to May 15, 2014, the Company may, at its option,
redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture (including
any Additional Notes) at a redemption price of 115.00% of the principal amount thereof, plus
accrued and unpaid interest and Additional Interest, if any, thereon to the date of redemption,
with net cash proceeds of one or more Equity Offerings (or an amount of funds equal thereto) at
least equal to the principal amount of the Notes so redeemed; provided that:




     (i) at least 65% of the aggregate principal amount of Notes issued under the
Indenture (including any Additional Notes) remains outstanding immediately after the
occurrence of such redemption; and




     (ii) the redemption must occur within 90 days of the date of the closing of such
Equity Offering.



     (b) On any one occasion prior to August 14, 2011, the Company may redeem the entire principal
amount of the Initial Notes, upon not less than 10 nor more than 30 days prior notice, at a
redemption price equal to the sum of (1) the principal amount of the Notes to be redeemed and (2)
accrued interest on the Notes to be redeemed to, but not including, the redemption date, using the
funds held in the Escrow Account, if the Company decides to terminate the escrow arrangements for
any reason.



     (c) At any time and from time to time prior to May 15, 2015, the Company may, at its option,
redeem all or part of the Notes at a redemption price equal to the sum of (i) 100% of the principal
amount thereof, plus (ii) the Applicable Premium as of the date of redemption, plus (iii) accrued
and unpaid interest and Additional Interest, if any, thereon to the date of redemption.



     (d) Except pursuant to clauses (a), (b) and (c) of this paragraph 5, the Notes shall not be
redeemable at the Company’s option prior to May 15, 2015.




A-8









 





     (e) On or after May 15, 2015, the Company may redeem all or a part of the Notes at the
redemption prices (expressed as percentages of principal amount) set
forth below plus accrued and
unpaid interest and Additional Interest, if any, thereon, to the applicable redemption date, if
redeemed during each twelve-month period beginning on May 15 of the years indicated below:




	 	 	 	 	 
	Year	 	Percentage	 
	2015
	 	 	107.500	%
	2016
	 	 	103.750	%
	2017 and thereafter
	 	 	100.000	%






     6. Special Mandatory Redemption. If the conditions to the release of the Escrow Property to
the Company in connection with the consummation of the
Equity Redemption, which are set forth in Section 1.4 of the Escrow Agreement, have not been
satisfied by August 4, 2011, then the Company shall redeem the entire principal amount of the
Initial Notes, upon not less than 10 nor more than 30 days prior notice, at a redemption price
equal to the sum of (1) 100% of their principal amount and (2) accrued interest to, but not
including, the redemption date.



     7. Mandatory Redemption. The Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes, except as set forth in paragraph 6.



     8. Selection and Notice of Redemption. Any redemption pursuant to paragraphs 5 and 6 above
shall be made pursuant to the provisions of Article 3 of the Indenture.



     9. Repurchase at Option of Holder.



     (a) Upon the occurrence of a Change of Control, each Holder of Notes shall have the right to
require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of
$1,000 in excess thereof or if PIK Interest is paid, equal to $1.00 or an integral multiple of
$1.00 in excess thereof) of such Holder’s Notes on the terms set forth in the Indenture at a
purchase price in cash equal to not less than 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Additional Interest thereon, if any, to the date of repurchase;
provided that the Company shall not be obligated to repurchase Notes in the event that it has
exercised its right to redeem all of the Notes described in paragraph 5 above.



     (b) The Company is, subject to certain conditions, obligated to make an offer to repurchase
Notes at 100% of the principal amount thereof plus accrued and unpaid interest and Additional
Interest, if any, to the date of repurchase,



A-9









 





which shall be payable in cash, with certain net cash
proceeds of certain sales or other dispositions of assets in accordance with the terms of the
Indenture, all as more particularly described in the Indenture.

     10. Denominations, Transfer and Exchange. The Notes are in registered form, without coupons,
in denominations of $2,000 and integral multiples of $1,000 in excess thereof or if PIK Interest is
paid, in denominations of $1.00 and higher integral multiples of $1.00. The transfer of Notes may
be registered and Notes may be exchanged as provided in the Indenture. As set forth more fully in
the Indenture, (a) the Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay
any taxes required by law or permitted by the Indenture; (b) the Company need not exchange or
register the transfer of any Note or portion of a Note selected for redemption, except for the
unredeemed portion of any Note being redeemed in part; and (c) the Company need not transfer or
exchange any Note for a period of 15 days prior to a selection of Notes
to be redeemed or during the period between a record date and the corresponding Interest
Payment Date.



     11. Persons Deemed Owners. The registered Holder of a Note shall be treated as its owner for
all purposes.



     12. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture or the
Notes may be amended or supplemented with the consent of the Holders of at least a majority in
principal amount of the Notes then outstanding and Additional Notes, if any, voting as a single
class (including, without limitation, consents obtained in connection with a purchase of, or tender
offer or exchange offer for, the Notes), and any existing Default or compliance with any provision
of the Indenture or the Notes may be waived with the consent of the Holders of a majority in
principal of the Notes then outstanding and Additional Notes, if any, voting as a single class
(including, without limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, the Notes). The Indenture may also be amended without the consent of any
Holders as provided in the Indenture.



     13. Defaults and Remedies. In the case of an Event of Default arising from certain events of
bankruptcy or insolvency with respect to the Company or any Significant Subsidiary of the Company
(or any Restricted Subsidiaries that together would constitute a Significant Subsidiary), all
outstanding Notes shall become due and payable immediately without further action or notice. If
any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be due and payable
immediately by notice in writing to the Company specifying the Event of Default. Holders of the
Notes may not enforce the



A-10









 





Indenture or the Notes except as provided in the Indenture. As more
particularly provided in the Indenture, (a) subject to certain limitations, Holders of a majority
in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any
trust or power; (b) the Trustee may withhold from Holders of the Notes notice of any continuing
Default or Event of Default (except a Default or Event of Default relating to the payment of
principal or interest or Additional Interest, if any) if it determines that withholding notice is
in their interest; and (c) the Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may, on behalf of the Holders of all of the Notes, waive
any existing Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest or Additional Interest, if any,
on, or the principal of, the Notes.




     14. Trustee Dealings with the Company. The Trustee, in its individual or any other capacity,
may make loans to, accept deposits from, and perform services for the Company or its Affiliates,
and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.



     15. No Recourse Against Others. No director, officer, employee, incorporator, stockholder,
member, manager or partner of the Company, as such, shall have any liability for any obligations of
the Company under the Notes, the Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and
releases these individuals from this liability. The waiver and release are part of the
consideration for issuance of the Notes.



     16. Authentication. This Note shall not be valid until authenticated by the manual signature
of the Trustee or an authenticating agent.



     17. Additional Rights of Holders of Restricted Global Notes and Restricted Definitive Notes.
In addition to the rights provided to Holders under the Indenture, Holders of Restricted Global
Notes and Restricted Definitive Notes shall have all the rights set forth in the Registration
Rights Agreement dated as of May 6, 2011, among the Company, the Guarantors and the parties named
on the signature pages thereof or, in the case of Additional Notes, the Holders of Additional Notes
shall have the rights set forth in one or more registration rights agreements, if any, between the
Company, the Guarantors and the other parties thereto, relating to rights given by the Company and
the Guarantors to the purchasers of Additional Notes (the “Registration Rights Agreement”).



     18. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes
and the Trustee may use CUSIP numbers in notices of redemption as a convenience to the Holders. No




A-11









 





representation is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.


     19. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THE INDENTURE, THIS NOTE AND THE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT SUCH PRINCIPLES ARE NOT MANDATORILY APPLICABLE BY STATUTE
AND THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.



     The Company shall furnish to any Holder upon written request and without charge a copy of the
Indenture and/or the Registration Rights Agreement. Requests may be made to:


iPayment Holdings, Inc.

40 Burton Hills Boulevard, Suite 415

Nashville, Tennessee 37215

Attention: Mark C. Monaco, Chief Financial Officer

Facsimile No.: 615-665-8434




     with a copy to:


iPayment Holdings, Inc.

40 Burton Hills Boulevard, Suite 415

Nashville, Tennessee 37215

Attention: Afshin Yazdian, General Counsel

Facsimile: 615-665-8434




A-12









 





Assignment Form





     To assign this Note, fill in the form below:


(I) or (we) assign and transfer this Note to:                                                               
                                      



(Insert assignee’s legal name)



 




(Insert assignee’s soc. sec. or tax I.D. no.)



 




 




 




(Print or type assignee’s name, address and zip code)



and
irrevocably appoint                                                                     
                                                                                




to transfer this Note on the books of the Company. The agent may substitute another to act for
him.



Date:                     



Your

Signature:                                                                                
                                                                                  
     



(Sign exactly as your name appears on the face of this Note)



Signature Guarantee*:                                                             






 




			
	*	 	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor
acceptable to the Trustee).




A-13









 











OPTION OF HOLDER TO ELECT PURCHASE




     If you want to elect to have this Note purchased by the Company pursuant to Section 4.08 or
4.09 of the Indenture, check the appropriate box below:



o Section 4.08            o Section 4.09




     If you want to elect to have only part of the Note purchased by the Company pursuant to
Section 4.08 or 4.09 of the Indenture, state the amount you elect to have purchased:



$                     


Date:                                         



Your Signature:                                                                   
                                                                              
                                    



(Sign exactly as your name appears on the face of this Note)



Tax Identification No.:                                                               
                                                                              
                                        



Signature Guarantee*:                                                                    
                                                    






 




			
	*	 	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor
acceptable to the Trustee).




A-14









 










SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE




     The following exchanges of a part of this Global Note for an interest in another Global Note
or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an
interest in this Global Note, have been made:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Principal Amount at	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Maturity of this	 	 	 	 
	 	 	Amount of Decrease	 	 	Amount of Increase	 	 	Global Note	 	 	Signature of	 
	 	 	in Principal Amount	 	 	in Principal Amount	 	 	Following such	 	 	Authorized Officer	 
	Date of	 	at Maturity of this	 	 	at Maturity of this	 	 	decrease (or	 	 	of Trustee or Note	 
	Exchange	 	Global Note	 	 	Global Note	 	 	increase)	 	 	Custodian	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 





A-15









 





EXHIBIT B




FORM OF CERTIFICATE OF TRANSFER




iPayment Holdings, Inc.

[Address]




     Re: 15.00%/15.00% Senior Notes due 2018



     Reference is hereby made to the Indenture, dated as of May 6, 2011 (the “Indenture”), among
iPayment Holdings, Inc., a Delaware corporation (the “Company”), the Guarantors and Wilmington
Trust FSB, as trustee. Capitalized terms used but not defined herein shall have the meanings given
to them in the Indenture.



     __(the “Transferor”) owns and proposes to transfer the Note[s] or interest in such Note[s]
specified in Annex A hereto, in the principal amount at maturity of $___in such Note[s] or
interests (the “Transfer”), to ___ (the “Transferee”), as further specified in Annex A hereto. In
connection with a transfer to an Accredited Investor, Exhibit D to the Indenture shall be used in
lieu of this Exhibit B. In connection with the Transfer, the Transferor hereby certifies that:



[CHECK ALL THAT APPLY]



     1. o Check if Transferee shall take delivery of a beneficial interest in the 144A Global Note
or a Definitive Note pursuant to Rule 144A. The Transfer is being effected pursuant to and in
accordance with Rule 144A under the United States Securities Act of 1933, as amended (the
“Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Restricted Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or Restricted Definitive
Note for its own account, or for one or more accounts with respect to which such Person exercises
sole investment discretion, and such Person and each such account is a “qualified institutional
buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and
such Transfer is in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Restricted Definitive Note shall be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global
Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.



     2. o Check if Transferee shall take delivery of a beneficial interest in the Regulation S
Global Note or a Definitive Note pursuant to Regulation S. The



B-1









 




Transfer is being effected pursuant
to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the
Transferor hereby further certifies that (i) the Transfer is not being made to a Person in the
United States
and either (x) at the time the buy order was originated, the Transferee was outside the United
States or such Transferor and any Person acting on its behalf reasonably believed and believes that
the Transferee was outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such Transferor nor any
Person acting on its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the requirements of
Rule 903(a) or Rule 904(a) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if
the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer
is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note shall be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S
Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.




     3. o Check and complete if Transferee shall take delivery of a beneficial interest in a
Restricted Global Note or a Restricted Definitive Note pursuant to any provision of the Securities
Act other than Rule 144A or Regulation S. The Transfer is being effected in compliance with the
transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue
sky securities laws of any state of the United States, and accordingly the Transferor hereby
further certifies that (check one):



     (a) o such Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and the requirements of the exemption claimed, which certification is supported by
an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor
has attached to this certification);



or



     (b) o such Transfer is being effected to the Company or a subsidiary thereof;




B-2









 




or



     (c) o such Transfer is being effected pursuant to an effective registration statement under the
Securities Act and in compliance with the prospectus delivery requirements of the Securities Act.




     4. o Check if Transferee shall take delivery of a beneficial interest in an Unrestricted Global
Note or of an Unrestricted Definitive Note.



     (a) o Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effected pursuant
to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky securities laws of any state of
the United States and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note shall no longer be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on
the Restricted Definitive Notes and in the Indenture.



     (b) o Check if Transfer is Pursuant to Regulation S. (i) The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance
with the transfer restrictions contained in the Indenture and any applicable blue sky securities
laws of any state of the United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note shall no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on the Restricted Definitive Notes and in the Indenture.



     (c) o Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected
pursuant to and in compliance with an exemption from the registration requirements of the
Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky securities laws of any State of
the United States and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note shall not be subject to the restrictions on
transfer enumerated in the Private


B-3









 





Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.



     This certificate and the statements contained herein are made for your benefit and the benefit
of the Company.



	 	 	 	 	 
	 	 	 
	 	
 	 
	 	[Insert Name of Transferor] 	 
	 	 	 




	 	 	 	 	 



	 	 	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 


Dated:                                         






B-4









 








ANNEX A TO CERTIFICATE OF TRANSFER



1. The Transferor owns and proposes to transfer the following:




[CHECK ONE OF (A) OR (B)]




     (A) o a beneficial interest in the:



          (i) o 144A Global Note (CUSIP [ ]); or



          (ii) o Regulation S Global Note (CUSIP [ ]); or



          (iii) o IAI Global Note (CUSIP [ ]); or



     (B) o a Restricted Definitive Note.


2. After the Transfer the Transferee will hold:




[CHECK ONE]



     (A) o a beneficial interest in the:



          (i) o 144A Global Note (CUSIP [ ]); or



          (ii) o Regulation S Global Note (CUSIP [ ]); or



          (iii) o Unrestricted Global Note (CUSIP [ ]); or



     (B) o a Restricted Definitive Note; or



     (C) o an Unrestricted Definitive Note,


in accordance with the terms of the Indenture.





B-5











 





EXHIBIT C




FORM OF CERTIFICATE OF EXCHANGE




iPayment Holdings, Inc.

[Address]




     Re: 15.00%/15.00% Senior Notes due 2018



     Reference is hereby made to the Indenture, dated as of May 6, 2011 (the “Indenture”), among
iPayment Holdings, Inc., a Delaware corporation (the “Company”), the Guarantors and Wilmington
Trust FSB, as trustee. Capitalized terms used but not defined herein shall have the meanings given
to them in the Indenture.



     __(the “Owner”) owns and proposes to exchange the Note[s] or interest in such Note[s]
specified herein, in the principal amount at maturity of $___in such Note[s] or interests (the
“Exchange”). In connection with an exchange to an IAI Global Note, Exhibit D to the Indenture
shall be used in lieu of this Exhibit C. In connection with the Exchange, the Owner hereby
certifies that:



     1. o Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global
Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note.



     (a) o Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial
interest in an Unrestricted Global Note. In connection with the Exchange of the Owner’s beneficial
interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an
equal principal amount at maturity, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in
accordance with the United States Securities Act of 1933, as amended (the “Securities Act”), (iii)
the restrictions on transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the beneficial interest
in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.



     (b) o Check if Exchange is from beneficial interest in a Restricted Global Note to an
Unrestricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest
in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the
Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the



C-1









 





Restricted Global
Notes and pursuant to and in accordance with the Securities Act,

(iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in order to maintain
compliance with the
Securities Act and (iv) the Definitive Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.




     (i) o Check if Exchange is from a Restricted Definitive Note to beneficial interest in an
Unrestricted Global Note. In connection with the Owner’s Exchange of a Restricted Definitive Note
for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions
on transfer contained in the Indenture and the Private Placement Legend are not required in order
to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired
in compliance with any applicable blue sky securities laws of any state of the United States.



     (j) o Check if Exchange is from a Restricted Definitive Note to an Unrestricted Definitive
Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired
for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.



     2. o Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes
for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes.



     (A) o Check if Exchange is from beneficial interest in a Restricted Global Note to a Restricted
Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a
Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner
hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account
without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the
Indenture, the Restricted Definitive Note issued shall continue to be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note
and in the Indenture and the Securities Act.



C-2









 





     (B) o Check if Exchange is from a Restricted Definitive Note to beneficial interest in a
Restricted Global Note. In connection with the Exchange of the Owner’s Restricted Definitive Note
for a beneficial interest in the [CHECK ONE] o 144A Global Note, o Regulation S Global Note, with an
equal principal amount, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected
in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant
to and in accordance with the Securities Act, and in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the beneficial interest issued shall be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on the relevant
Restricted Global Note and in the Indenture and the Securities Act.



     This certificate and the statements contained herein are made for your benefit and the benefit
of the Company.



	 	 	 	 	 	 	 	 
	 	 	 	 	[Insert Name of Transferor]

 	 
	 	 	 	 	By:  	 	 
	 	 	 	 	 	Name:  	 	 
	 	   	 	 	 	Title:  	 	 
	 Dated:  	 	 	 	 	  	 	 



C-3









 






	 	 	 	 	 



EXHIBIT D




FORM OF INSTITUTIONAL ACCREDITED INVESTOR

CERTIFICATE




iPayment Holdings, Inc.

40 Burton Hills Boulevard, Suite 415

Nashville, Tennessee 37215

Facsimile No.: 615-665-8434

Attention: Mark C. Monaco, Chief Financial Officer




Wilmington Trust FSB

246 Goose Lane, Suite 105

Guilford, Connecticut 06437

Facsimile: 203-453-1183

Attention: Corporate Trust Administration





	 	Re:	 	 iPayment Holdings, Inc.

15.00%/15.00% Senior Notes due 2018 (the “Notes”)

Issued under the Indenture (the “Indenture”) dated as

as of May 6, 2011 relating to the Notes




Ladies and Gentlemen:




     This Certificate relates to:



     [CHECK A OR B AS APPLICABLE.]




	o A.	 	Our proposed purchase of $____ principal amount of Notes issued under the
Indenture.
	 
	o B.	 	Our proposed exchange of $____ principal amount of Notes issued under the
Indenture for an equal principal amount of Notes to be held by us.





     We hereby confirm that:




	 	1.	 	We are an institutional “accredited investor” within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
“Securities Act”) (an “Institutional Accredited Investor”).
	 
	 	2.	 	Any acquisition of Notes by us will be for our own account or for the
account of one or more other Institutional Accredited Investors as to which we
exercise sole investment discretion.




D-1









 












	 	3.	 	We have such knowledge and experience in financial and business matters
that we are capable of evaluating the merits and risks of an investment in the
Notes and we and any accounts for which we are acting are able to bear the economic
risks of and an entire loss of our or their investment in the Notes.
	 
	 	4.	 	We are not acquiring the Notes with a view to any distribution thereof
in a transaction that would violate the Securities Act or the securities laws of
any State of the United States or any other applicable jurisdiction; provided that
the disposition of our property and the property of any accounts for which we are
acting as fiduciary will remain at all times within our and their control.
	 
	 	5.	 	We acknowledge that the Notes have not been registered under the
Securities Act and that the Notes may not be offered or sold within the United
States or to or for the benefit of U.S. persons except as set forth below.
	 
	 	6.	 	The principal amount of Notes to which this Certificate relates is at
least equal to $250,000.





     We agree for the benefit of the Company, on our own behalf and on behalf of each account for
which we are acting, that such Notes may be offered, sold, pledged or otherwise transferred only in
accordance with the Securities Act and any applicable securities laws of any State of the United
States and only (a) to the Company or any Subsidiary thereof, (b) pursuant to a registration
statement that has been declared effective under the Securities Act, (c) for so long as the Notes
are eligible for resale pursuant to Rule 144A under the Securities Act, to a Person it reasonably
believes is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act that
purchases for its own account or for the account of a qualified institutional buyer to whom notice
is given that the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and sales
to Non-U.S. Persons in offshore transactions within the meaning of Regulation S under the
Securities Act and in accordance with the laws applicable to such purchaser in the jurisdiction in
which such purchase is made, (e) to an Institutional Accredited Investor that is an Institutional
Accredited Investor acquiring the Notes for its own account or for the account of such an
Institutional Accredited Investor, in each case in a minimum principal amount of the Notes of
$250,000, for investment purposes and not with a view to, or for offer or sale in connection with,
any distribution in violation of the Securities Act, or (f) pursuant to another available exemption
from the registration requirements of the Securities Act.



     Prior to the registration of any transfer in accordance with (c) or (d) above, we acknowledge
that a duly completed and signed certificate (the form of which



D-2









 




may be obtained from the Trustee)
must be delivered to the Trustee. Prior to the registration of any transfer in accordance with (e)
or (f) above, we acknowledge
that the Company reserves the right to require the delivery of such legal opinions,
certifications or other evidence as may reasonably be required in order to determine that the
proposed transfer is being made in compliance with the Securities Act and applicable state
securities laws. We acknowledge that no representation is made as to the availability of any Rule
144 exemption from the registration requirements of the Securities Act.




     We understand that the Trustee will not be required to accept for registration of transfer any
Notes acquired by us, except upon presentation of evidence satisfactory to the Company and the
Trustee that the foregoing restrictions on transfer have been complied with. We further understand
that the Notes acquired by us will bear a legend reflecting the substance of the preceding
paragraph. We further agree to provide to any person acquiring any of the Notes from us a notice
advising such person that resales of the Notes are restricted as stated herein and that the Notes
will bear a legend to that effect.



     We agree to notify you promptly in writing if any of our acknowledgments, representations or
agreements herein ceases to be accurate and complete.



     We represent to you that we have full power to make the foregoing acknowledgments,
representations and agreements on our own behalf and on behalf of any account for which we are
acting.



     You and the Company are entitled to rely upon this Certificate and are irrevocably authorized
to produce this Certificate or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.



	 	 	 	 	 
	 	Very truly yours,




[NAME OF PURCHASER (FOR

     TRANSFERS) OR OWNER (FOR

     EXCHANGES)]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:  	 	 




	 	 	 	 	 	 	 	 
	 Dated:  	 	 	 	 	  	 	 




D-3









 










     Upon transfer, the Notes would be registered in the name of the new beneficial owner as
follows:



	 	 	 	 	 
	 	 	 	 
	By:  	 	 
	Date:  	 	 
	Taxpayer ID number:	 	 




D-4









 





EXHIBIT E




FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS




     Supplemental Indenture (this “Supplemental Indenture”), dated as of ___, among __(the
“Guaranteeing Subsidiary”), a subsidiary of iPayment Holdings, Inc. (or its permitted successor), a
Delaware corporation (the “Company”), the Company, the other Guarantors, if any (as defined in the
Indenture referred to herein) and Wilmington Trust FSB, as trustee under the Indenture referred to
below (the “Trustee”).



W I T N E S S E T H




     WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the
“Indenture”), dated as of May 6, 2011 providing for the issuance of $125,000,000 of 15.00%/15.00%
Senior Notes due 2018 (the “Notes”);



     WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary
shall execute and deliver to the Trustee a supplemental indenture pursuant to which the
Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s obligations under the
Notes and the Indenture on the terms and conditions set forth herein (the “Note Guarantee”); and



     WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and
deliver this Supplemental Indenture.



     NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the
Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes
as follows:



     1. Capitalized Terms. Capitalized terms used herein without definition shall have the
meanings assigned to them in the Indenture.



     2. Agreement To Guarantee. The Guaranteeing Subsidiary hereby agrees to provide an
unconditional Guarantee on the terms and subject to the conditions set forth in the Indenture
including but not limited to Article 11 thereof.



     3. No Recourse Against Others. No past, present or future director, officer, employee,
incorporator, stockholder or agent of the Guaranteeing Subsidiary, as such, shall have any
liability for any obligations of the Company or any Guaranteeing Subsidiary under the Notes, any
Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason



E-1









 




of, such obligations or their creation. Each Holder of the Notes by accepting a
Note waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.




     4. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED
TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT SUCH PRINCIPLES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.



     5. Counterparts. The parties may sign any number of copies of this Supplemental Indenture.
Each signed copy shall be an original, but all of them together represent the same agreement.



     6. Effect of Headings. The Section headings herein are for convenience only and shall not
affect the construction hereof.



     7. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly
amended hereby, the Indenture is in all respects ratified and confirmed and all the terms,
conditions and provisions thereof shall remain in full force and effect. This Supplemental
Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore
or hereafter authenticated and delivered shall be bound hereby.



     8. Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect
of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals
contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.



E-2









 





     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed and attested, all as of the date first above written.


Dated:                                          ,                     




	 	 	 	 	 
	 	[GUARANTEEING SUBSIDIARY]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	[EXISTING GUARANTORS — IF ANY]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	iPAYMENT HOLDINGS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	WILMINGTON TRUST FSB

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
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