Document:

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                                                                     EXHIBIT 4.3

                AMENDMENT NO. 1 TO THE INVESTORS' RIGHT AGREEMENT

         THIS AMENDMENT NO. 1 TO THE INVESTORS' RIGHT AGREEMENT (the
"Amendment") is dated March 19, 2002 by and among iPAYMENT HOLDINGS, INC., a
Tennessee corporation (the "Company"), those persons identified on Exhibit A
attached hereto (collectively, the "Initial Investors" and each individually an
"Initial Investor"); and those persons identified on Exhibit B attached hereto
(collectively, the "New Investors" and each individually a "New Investor") (the
Initial Investors and the New Investors shall collectively be referred to herein
as the "Investors" and each individually an "Investor").

                                    RECITALS

         WHEREAS, the Company and the Initial Investors entered into a
Investors' Rights Agreement, dated as of April 12, 2001 (the "Agreement");

         WHEREAS, Petra Mezzanine Fund, L.P. was a party to the Agreement, but
no longer has any rights under the Agreement pursuant to the Acknowledgement and
Amendment to Loan Documents, dated as of July 31, 2001;

         WHEREAS, the Company has entered into an Agreement and Plan of Merger,
dated as of the date hereof, by and between the Company, iPayment Acquisition
Sub, Inc., and E-Commerce Exchange, Inc. (the "Merger Agreement"), whereby the
New Investors shall receive an aggregate principal amount of subordinated
convertible notes in the amount of $15,000,000 (the "Notes");

         WHEREAS, as a condition to the Merger Agreement, the Company agreed to
cause this Amendment to be executed and delivered; and

         WHEREAS, the Company and the Investors desire to amend the Agreement as
set forth in this Amendment.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing, for other good and
valuable consideration and the respective representations, warranties,
covenants, agreements and conditions contained herein, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

1. The term "Investors" as defined in the Agreement and the corresponding list
of persons identified on Exhibit A to the Agreement is hereby amended and
restated to include all of the persons identified on Exhibits A and B attached
to this Amendment only for Sections 1, 2, 3, 4 and 6 of the Agreement. The term
"Initial Investors" shall mean the persons identified on Exhibit A attached to
this Amendment and the term "New Investors" shall mean the persons identified on
Exhibit B attached to this Amendment. The New Investors shall be a party to the
Agreement only for purposes of Sections 1, 2, 3, 4 and 6 of the Agreement.

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2.       Section 1.1 of the Agreement shall be amended to include the following:

         1.1 Definitions. "Notes" shall mean the subordinated convertible notes
         in an aggregate principle amount of $15,000,000 issued to the New
         Investors in consideration of the Company's acquisition of E-Commerce
         Exchange, Inc. on March 19, 2002.

3.       Section 3.6 of the Agreement shall be amended and restated as follows:

         3.6 Termination of Covenants. All covenants of the Company contained in
         Section 3 of this Agreement shall expire and terminate upon the closing
         of the Initial Offering; provided that the covenants of the Company
         contained in Section 3 of this Agreement shall terminate with regards
         to the New Investors on the earlier to occur of (i) an Initial
         Offering, (ii) the payment of the Notes in full (if not converted in
         whole or in part) and (iii) the New Investors and their affiliates
         ceasing to hold at least 60% of the iPayment Underlying Common Stock
         (as defined in the Merger Agreement).

4.       Section 4.1.1 of the Agreement shall be amended and restated as
         follows:

         4.1.1 Subsequent Offerings. Each Investor shall have a right of first
         refusal to purchase its pro rata share of all Equity Securities, as
         defined below, that the Company may, from time to time, propose to sell
         and issue after the date of this Agreement, other than the Equity
         Securities excluded by Section 4.4 hereof. Each Investor's pro rata
         share is equal to the ratio of (A) the number of shares of the
         Company's Common Stock of which such Investor is deemed to be a holder
         immediately prior to the issuance of such Equity Securities, assuming
         full conversion of the Preferred Stock and the Notes and exercise of
         the Warrants held by such Investor to (B) the total number of shares of
         the Company's outstanding Common Stock immediately prior to the
         issuance of the Equity Securities. The term "Equity Securities" shall
         mean (i) any Common Stock, Preferred Stock or other security of the
         Company, (ii) any security convertible, with or without consideration,
         into any Common Stock, Preferred Stock or other security (including any
         option to purchase such a convertible security), (iii) any security
         carrying any warrant or right to subscribe to or purchase any Common
         Stock, Preferred Stock or other security or (iv) any such warrant or
         right.

5.       Section 4.2 of the Agreement shall be amended and restated as follows:

         4.2 Termination of Rights of First Refusal. The rights of first refusal
         established by this Section 4 shall not apply to, and shall terminate
         upon the closing of, an Initial Offering; provided that the rights of
         first refusal established by this Section 4 of this Agreement shall
         terminate on the earlier to occur of, (i) with regard to a New Investor
         on an individual basis, the second occasion on which such New Investor
         is offered the opportunity to exercise its rights under Section 4.1 of
         the Agreement and such New Investor elects not to exercise such right,
         (ii) with regard to the New Investors taken as a whole, an Initial
         Offering, (iii) with regard to the New Investors taken as a whole, the
         payment of the Notes in full (if not converted in whole or in part) and
         (iv) with regard to the New Investors taken as a whole, the New
         Investors and their affiliates ceasing to hold at least 60% of the
         iPayment Underlying Common Stock.

                                       2
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6.       Section 4.4(a) of the Agreement shall be amended and restated as
         follows:

         4.4 Excluded Securities. The rights of first refusal established by
this Section 4 shall have no application to the issuance of any of the following
Equity Securities:

                  (a) shares of Common Stock (and/or options, warrants or other
         Common Stock purchase rights issued pursuant to such options, warrants
         or other rights) issued or to be issued to employees, officers or
         directors of, or consultants or advisors to the Company or any
         subsidiary, pursuant to stock purchase or stock option plans or other
         arrangements that are approved by the Board of Directors;

                  (b) shares of Common Stock issued pursuant to any rights or
         agreements outstanding as of the date of this Agreement, and shares of
         Common Stock issued pursuant to any such rights or agreements granted
         after the date of this Agreement; provided that the rights of first
         refusal established by this Section 4 applied with respect to the
         initial sale or grant by the Company of such rights or agreements;

                  (c) any Equity Securities issued for consideration other than
         cash pursuant to a merger, consolidation, acquisition or similar
         business combination approved by the Board of Directors and the Initial
         Investors to the extent such approval of the Initial Investors is
         required under the Loan and Security Agreement, the Warrants of even
         date herewith and the Articles of Amendment to the Charter of the
         Company as filed on the date hereof;

                  (d) shares of Common Stock issued in connection with any stock
         split, stock dividend or recapitalization by the Company;

                  (e) shares of preferred stock of the Company or warrants to
         purchase Common Stock of the Company, and the Common Stock issued upon
         conversion or exercise of such preferred stock or warrants, issued
         pursuant to the Stock Purchase Agreement or the Loan and Security
         Agreement;

                  (f) shares of Common Stock issued upon an Initial Offering;

                  (g) shares of Common Stock issued in connection with any
         anti-dilution rights granted to any of the Investors;

                  (h) shares of Common Stock issued pursuant to the offering of
         shares of Common Stock to the shareholders of iPayment Technologies,
         Inc. ("iPayment") in exchange for shares of Common Stock of iPayment,
         on the same terms as described in the Common Stock Exchange Agreement
         of even date herewith, and any shares of Common stock issued pursuant
         to the Company's planned minority stock exchange with the remaining
         shareholders of iPayment;

                  (i) shares of Common Stock issued to 1st National Processing,
         Inc. in connection with its or its subsidiary's acquisition by the
         Company;

                  (j) the Notes issued to the New Investors; or

                  (k) shares of Common Stock issued upon the conversion of the
         Notes.

                                       3
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7. Except as expressly set forth in this Amendment, the terms and conditions of
the Agreement shall remain in place and shall not be altered, amended or changed
in any manner whatsoever, except by any further amendment to the Agreement made
in accordance with the terms of the Agreement, and such terms and conditions
shall be incorporated herein by this reference.

8. The term "Agreement" as defined in the Agreement is amended to include this
Amendment.

9. This Amendment may be executed in any number of counterparts and by different
parties to this Amendment in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same Amendment.

10. Except as modified and amended hereby, the Agreement shall remain in full
force and effect.

                                       4
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         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
signed by an individual thereto duly authorized, all on the date first written
above.

                             COMPANY:

                             iPAYMENT HOLDINGS, INC.

                             By:   /s/ Gregory S. Daily
                                   -----------------------------
                             Name:      Gregory S. Daily
                                   -----------------------------
                             Title:
                                   -----------------------------

                             INITIAL INVESTORS:

                             FIRST AVENUE PARTNERS, L.P.

                             By:      Front Street, LLC, GP, its General Partner

                             By:   /s/ David Wilds
                                   -----------------------------
                             Name:      David Wilds
                                   -----------------------------
                             Title:   Chief Manager
                                   -----------------------------

                             HARBINGER MEZZANINE PARTNERS, L.P.

                             By:      Harbinger Mezzanine GP, LLC,
                                      its General Partner

                                      By:     Harbinger Mezzanine Manager, Inc.,
                                              its Manager

                             By:   /s/ John Harrison
                                   ----------------------------
                             Name:      John Harrison
                                   ----------------------------
                             Title:   Director
                                    ---------------------------

                             CAYMAS, LLC

                             By:   /s/ Carl Grimstad
                                   ----------------------------
                             Name:      Carl Grimstad
                                   ----------------------------
                             Title:
                                   ----------------------------

                                       5
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                                /s/ Gregory S. Daily
                              ---------------------------------
                              Gregory S. Daily

                                /s/ Carl Grimstad
                              ---------------------------------
                              Carl Grimstad

                              STREAM FAMILY LIMITED PARTNERSHIP

                              By:   /s/ Bruce N. Kirkpatrick
                                  -----------------------------
                              Name:      Bruce N. Kirkpatrick
                                    ---------------------------
                              Title:   Secretary - Treasurer
                                    ---------------------------------
                                     Matilda Stream Management, Inc.,
                                     Managing General Partner

                              NEW INVESTORS:

                              SUMMIT VENTURES V, L.P.

                              By:      Summit Partners V, L.P.,
                                       its General Partner

                              By:      Summit Partners, LLC,
                                       its General Partner

                              By:        /s/ Peter Chung
                                       ------------------------
                              Name:      Peter Chung
                                       ------------------------
                              Title:   Member

                              SUMMIT VENTURES V COMPANION FUND, L.P.

                              By:      Summit Partners V, L.P.,
                                       its General Partner

                              By:      Summit Partners, LLC,
                                       its General Partner

                              By:        /s/ Peter Chung
                                       ------------------------
                              Name:      Peter Chung
                                       ------------------------
                              Title:   Member

                              SUMMIT V ADVISORS FUND, L.P.

                                       6
<PAGE>

                              By:      Summit Partners V, L.P.,
                                       its General Partner

                              By:      Summit Partners, LLC,
                                       its General Partner

                              By:        /s/ Peter Chung
                                       ------------------------
                              Name:      Peter Chung
                                       ------------------------
                              Title:   Member

                              SUMMIT V ADVISORS (QP) FUND, L.P.

                              By:      Summit Partners V, L.P.,
                                       its General Partner

                              By:      Summit Partners, LLC,
                                       its General Partner

                              By:        /s/ Peter Chung
                                       ------------------------
                              Name:      Peter Chung
                                       ------------------------
                              Title:   Member

                              SUMMIT INVESTORS III, L.P.

                              By:        /s/ Peter Chung
                                       ------------------------
                              Name:      Peter Chung
                                       ------------------------
                              Title:   Authorized Signatory

                              RANDOLPH STREET PARTNERS

                              By:        /s/ Ted H. Zook
                                       ------------------------
                              Name:      Ted H. Zook
                                       ------------------------
                              Title:     Authorized Signatory
                                       ------------------------

                              RANDOLPH STREET PARTNERS 1998 DIF, LLC

                              By:        /s/ Ted H. Zook
                                       ------------------------
                              Name:      Ted H. Zook
                                       ------------------------

                                       7
<PAGE>

                              Title:     Authorized Signatory
                                       ------------------------

                              SYCR INVESTMENT FUND I, LLC

                              By:        /s/ Stephen T. Freeman
                                       -------------------------
                              Name:      Stephen T. Freeman
                                       -------------------------
                              Title:     Manager
                                       -------------------------

                              By:        /s/ Lawrence B. Cohn
                                       -------------------------
                              Name:      Lawrence B. Cohn
                                       -------------------------
                              Title:     Manager
                                       -------------------------

                                       8<PAGE>

                                                                     EXHIBIT 4.4

                             iPAYMENT HOLDINGS, INC.

                           PIGGY-BACK RIGHTS AGREEMENT

         This PIGGY-BACK RIGHTS AGREEMENT (the "Agreement") is entered into as
of the 9th day of August 2002, by and among iPAYMENT HOLDINGS, INC., a Tennessee
corporation (the "Company") and those persons identified on Exhibit A attached
hereto (collectively, the "Investors" and each individually an "Investor").

                                    RECITALS

         WHEREAS, the Company has entered into an Agreement and Plan of Merger
(the "Merger Agreement"), dated as of the date hereof, by and between the
Company, ODC Acquisition Sub, Inc., and OnLine Data Corp. ("ODC"), whereby the
shareholders of ODC received (i) a total of 1,825,000 shares of the
Corporation's common stock, par value $.01, (ii) Two Million and No/100 Dollars
($2,000,000.00) and (iii) Subordinated Promissory Notes, which, in the
aggregate, total Five Million and No/100 Dollars ($5,000,000.00);

         WHEREAS, it is a condition to closing pursuant to the Merger Agreement,
that the Investors enter into this Agreement; and

         WHEREAS, each of the parties hereto shall receive a substantial benefit
from the closings of the transactions pursuant to the Merger Agreement.

         NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, the parties mutually agree as follows:

1.       General.

         1.1. Definitions. As used in this Agreement the following terms shall
have the following respective meanings:

                  "Common Stock" means the common stock, no par value, of the
Company.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar, successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.

                  "Initial Offering" means the closing of a firm commitment
underwritten public offering of the Common Stock pursuant to an effective
registration statement under the Securities Act (as defined below) at a price
per share of not less than $8.00 (as adjusted for any stock dividends,
combinations or splits with respect to such shares effected after the date of
this Agreement) and proceeds to the Company of not less than $20,000,000 (after
deduction of Selling Expenses (as hereinafter defined)).

                  "Preferred Stock" means the preferred stock, no par value, of
the Company.

<PAGE>

                  "Register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement or document.

                  "Registrable Securities" means (i) Common Stock of the Company
held by the Investors; and (ii) any Common Stock of the Company issued as (or
issuable upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, such above-described securities.
Notwithstanding the foregoing, Registrable Securities shall not include any
securities sold by a person to the public either pursuant to a registration
statement or Rule 144 or sold in a private transaction in which the transferor's
rights under Section 2 of this Agreement are not assigned.

                  "Registrable Securities then outstanding" shall be the number
of shares determined by calculating the total number of shares of the Common
Stock that are Registrable Securities and either (l) are then issued and
outstanding or (2) are issuable pursuant to then exercisable warrants or
convertible securities.

                  "Registration Expenses" shall mean all expenses incurred by
the Company in complying with Section 2.2, including, without limitation, all
registration and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, reasonable fees and disbursements of a
single special counsel for the Investors, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company which shall
be paid in any event by the Company).

                  "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar, successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.

                  "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale.

                  "SEC" or "Commission" means the Securities and Exchange
Commission.

2.       Registration; Restrictions on Transfer.

         2.1.     Restrictions on Transfer.

                  (a) Each Investor agrees not to make any disposition of all or
any portion of the Registrable Securities held by him unless and until:

                           (i) There is then in effect a registration statement
under the Securities Act covering such proposed disposition and such disposition
is made in accordance with such registration statement; or

                           (ii) Such Investor shall have notified the Company of
the proposed disposition, and, if reasonably requested by the Company, such
Investor shall have furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company, that such disposition will not require registration
of such shares under the

                                       2

<PAGE>

Securities Act. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.

                  (b) Notwithstanding the provisions of paragraphs a(i) and
a(ii) above, no such registration statement or opinion of counsel shall be
necessary for a transfer that would not commence a new holding period under Rule
144(d) where such transfer is made by an Investor which is (i) a partnership (A)
to its partners or former partners in accordance with partnership interests or
(B) to its affiliate (as defined in Rule 405 promulgated under the Securities
Act), (ii) a corporation either (A) to its shareholders in accordance with their
interest in the corporation or (B) to its affiliate (as defined in Rule 405
promulgated under the Securities Act), (iii) a limited liability company (A) to
its members or former members in accordance with their interest in the limited
liability company or (B) to its affiliate (as defined in Rule 405 promulgated
under the Securities Act), or (iv) to the Investor's family member or trust for
the benefit of an individual Investor, provided the transferee will be subject
to the terms of this Section 2.1 to the same extent as if he were an original
Investor hereunder.

                  (c) Each certificate representing the Registrable Securities
shall (unless otherwise permitted by the provisions of this Agreement) be
stamped or otherwise imprinted with a legend substantially similar to the
following (in addition to any legend required by the Company's Bylaws under
applicable state securities laws or as provided elsewhere in this Agreement):

                  THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
                  UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE
                  OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR
                  HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR
                  UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
                  SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
                  REGISTRATION IS NOT REQUIRED.

                  (d) The Company shall be obligated to reissue promptly
unlegended certificates at the request of any holder thereof if the holder shall
have obtained an opinion of counsel (which counsel may be counsel to the
Company) reasonably acceptable to the Company to the effect that the securities
proposed to be disposed of may lawfully be so disposed of without registration,
qualification or legend.

                  (e) Any legend endorsed on an instrument pursuant to
applicable state securities laws and the stop-transfer instructions with respect
to such securities shall be removed upon receipt by the Company of an order of
the appropriate blue sky authority authorizing such removal.

         2.2. Piggyback Registrations. The Company shall notify all Investors in
writing at least thirty (30) days prior to the filing of any registration
statement under the Securities Act for purposes of any follow-on public offering
of securities of the Company (excluding registration statements relating to the
Company's initial public offering, employee benefit plans or with respect to
corporate reorganizations or other transactions

                                       3

<PAGE>

under Rule 145 of the Securities Act), and will afford each such Investors an
opportunity to include in such registration statement all or part of such
Registrable Securities held by such Investor. Each Investor desiring to include
in any such registration statement all or any part of the Registrable Securities
held by it shall, within fifteen (15) days after the above-described notice from
the Company, so notify the Company in writing. If an Investor decides not to
include all of its Registrable Securities in any registration statement
thereafter filed by the Company, such Investor shall nevertheless continue to
have the right to include any Registrable Securities in any subsequent
registration statement or registration statements as may be filed by the Company
with respect to follow-up offerings of its securities, all upon the terms and
conditions set forth herein.

                  (a) Underwriting. If the registration statement under which
the Company gives notice under this Section 2.2 is for an underwritten offering,
the Company shall so advise the Investors. In such event, the right of any such
Investor to be included in a registration pursuant to this Section 2.2 shall be
conditioned upon such Investor's participation in such underwriting and the
inclusion of such Investor's Registrable Securities in the underwriting to the
extent provided herein. All Investors proposing to distribute their Registrable
Securities through such underwriting shall enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this
Agreement, if the underwriter determines in good faith that marketing factors
require a limitation of the number of shares to be underwritten, the number of
shares that may be included in the underwriting shall be reduced pro rata among
the Investors and those persons other than the Company who are parties to that
certain Investors Rights Agreement dated, April 12, 2001, as amended by
Amendment No. 1 to the Investor Rights Agreement, dated, March 19, 2002
(collectively, the "Prior Investors"), requesting inclusion in the underwritten
offering based upon the number of shares so requested to be registered;
provided, however, that such number of shares shall not be reduced until all
shares to be included in such underwriting for the account of any person other
than the Company, the Prior Investors or the Investors have been removed from
such underwriting.

                  (b) Right to Terminate Registration. The Company shall have
the right to terminate or withdraw any registration initiated by it under this
Section 2.2 prior to the effectiveness of such registration whether or not any
Investor has elected to include securities in such registration. The
Registration Expenses of such withdrawn registration shall be borne by the
Company in accordance with Section 2.3 hereof.

         2.3. Expenses of Registration. Except as specifically provided herein,
all Registration Expenses incurred in connection with any registration under
Sections 2.2 herein shall be borne by the Company. All Selling Expenses incurred
in connection with any registrations hereunder, shall be borne by the holders of
the securities so registered pro rata on the basis of the number of shares so
registered. If the Investors are required to pay the Registration Expenses, such
expenses shall be borne by the holders of securities (including Registrable
Securities) requesting such registration in proportion to the number of shares
for which registration was requested.

         2.4. Obligations of the Company. Whenever the Company has received
notice of an Investor's exercise of his rights under Section 2.2 hereof, the
Company shall, as expeditiously as reasonably possible:

                                       4
<PAGE>

                  (a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use all reasonable efforts to
cause such registration statement to become effective.

                  (b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.

                  (c) Furnish to the Investors such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.

                  (d) Use all reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as shall be reasonably requested by the
Investors, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.

                  (e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each Investor
holding Registrable Securities participating in such underwriting shall also
enter into and perform its obligations under such an agreement.

                  (f) Notify each Investor covered by such registration
statement at any time when a prospectus relating thereto is required to be
delivered under the Securities Act of the happening of any event as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing and, at the
request of any Investor, prepare and furnish to such Investor a reasonable
number of copies of a supplement to, or an amendment of, such prospectus as may
be necessary so that, as thereafter delivered to the purchasers of such shares,
such prospectus shall not include an untrue statement of material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.

         2.5. Termination of Registration Rights. All registration rights
granted to an Investor under this Section 2 shall terminate and be of no further
force and effect upon such date as all shares of Registrable Securities held or
entitled to be held upon conversion by such Investor may immediately be sold
under Rule 144(k) during any ninety (90) day period.

                                       5
<PAGE>

         2.6.     Delay of Registration; Furnishing Information.

                  (a) No Investor shall have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of this Section 2.

                  (b) It shall be a condition precedent to the obligations of
the Company to take any action pursuant to Section 2.2 that the selling
Investors shall furnish to the Company such information regarding themselves,
the Registrable Securities held by them and the intended method of disposition
of such securities as shall be required to effect the registration of their
Registrable Securities.

         2.7.     Indemnification. In the event any Registrable Securities are
included in a registration statement under Section 2.2:

                  (a) To the extent permitted by law, the Company will indemnify
and hold harmless each Investor, the partners, officers, directors and legal
counsel of each Investor, any underwriter (as defined in the Securities Act) for
such Investor and each person, if any, who controls such Investor or underwriter
within the meaning of the Securities Act or the Exchange Act, against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Securities Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation") by the Company (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law in
connection with the offering covered by such registration statement; and the
Company will reimburse each such Investor, partner, officer or director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided however, that the indemnity
agreement contained in this Section 2.7(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld, nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Investor, partner, officer, director, underwriter
or controlling person of such Investor.

                  (b) To the extent permitted by law, each Investor will, if
Registrable Securities held by such Investor are included in the securities as
to which such registration qualifications or compliance is being effected,
indemnify and hold harmless the Company, each of its directors, its officers,
and legal counsel and each person, if any, who controls the Company within the
meaning of the Securities Act, any underwriter and any other

                                       6
<PAGE>

Investor selling securities under such registration statement or any of such
other Investor's partners, directors or officers or any person who controls such
Investor, against any losses, claims, damages or liabilities (joint or several)
to which the Company or any such director, officer, controlling person,
underwriter or other such Investor, or partner, director, officer or controlling
person of such other Investor may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are based
upon any Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with written
information furnished by such Investor under an instrument duly executed by such
Investor and stated to be specifically for use in connection with such
registration; and each such Investor will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person, underwriter or other Investor, or partner, officer, director or
controlling person of such other Investor in connection with investigating or
defending any such loss, claim, damage, liability or action if it is judicially
determined that there was such a Violation; provided, however, that the
indemnity agreement contained in this Section 2.7(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Investor, which consent shall
not be unreasonable withheld.

                  (c) Promptly after receipt by an indemnified party under this
Section 2.7 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.7, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 2.7, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 2.7.

                  (d) If the indemnification provided for in this Section 2.7 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any losses, claims, damages or liabilities referred to
herein, the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s) that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law by

                                       7
<PAGE>

reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission; provided, that in no event
shall any contribution by an Investor hereunder exceed the proceeds from the
offering received by such Investor.

                  (e) The obligations of the Company and Investor under this
Section 2.7 shall survive completion of any offering of Registrable Securities
in a registration statement. No indemnifying party, in the defense of any such
claim or litigation, shall, except with the consent of each indemnified party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect to such
claim or litigation.

         2.8. "Market Stand-Off" Agreement. If requested by the Company or the
representative of the underwriters of Common Stock (or other securities) of the
Company, each Investor shall not sell or otherwise transfer or dispose of any
Common Stock (or other securities) of the Company held by such Investor (other
than those included in the registration) for a period specified by the
representative of the underwriters. The obligations described in this Section
2.8 shall not apply to a registration relating solely to employee benefit plans
on Form S-1 or Form S-8 or similar forms that may be promulgated in the future,
or a registration relating solely to a Commission Rule 145 transaction on Form
S-4 or similar forms that may be promulgated in the future. The Company may
impose stop-transfer instructions with respect to the shares of Common Stock (or
other securities) subject to the foregoing restriction until the end of said
restricted period.

         3.       Miscellaneous.

         3.1.     Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Tennessee.

         3.2. Survival. The representations, warranties, covenants, and
agreements made herein shall survive any investigation made by any Investor and
the closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or other instrument delivered by or
on behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.

         3.3. Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of Registrable Securities from time to time;
provided, however, that prior to the receipt by the Company of adequate written
notice of the transfer of any Registrable Securities specifying the full name
and address of the transferee, the Company may deem and treat the person listed
as the holder of such shares in its records as the absolute owner and holder of
such shares for all purposes, including the payment of dividends or any
redemption price.

                                       8
<PAGE>

         3.4. Severability. In case any provision of this Agreement shall be
invalid, illegal, or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.

         3.5. Amendment and Waiver. Except as otherwise expressly provided, this
Agreement may be amended or modified, and the obligations of the Company and the
rights of the Investors under this Agreement may be waived, only upon the
written consent of the Company and the Investors holding at least seventy-five
percent (75%) of the Registrable Securities then outstanding; provided, however,
that no amendment shall be made to any provision of this Agreement that has an
adverse effect on any party's rights under this Agreement without the written
consent of such adversely-effected party.

         3.6. Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Investor, upon any breach,
default or noncompliance of the Company under this Agreement shall impair any
such right, power, or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character on
any Investor's part of any breach, default or noncompliance under this Agreement
or any waiver on such Investor's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, by law, or otherwise afforded to Investors, shall be cumulative and
not alternative.

         3.7. Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent to the
party to be notified at the address as set forth on the signature pages hereof
or Exhibit A hereto or at such other address as such party may designate by ten
(10) days advance written notice to the other parties hereto.

         3.8. Attorneys' Fees. In the event that any dispute among the parties
to this Agreement should result in litigation, the prevailing party in such
dispute shall be entitled to recover from the losing party all fees, costs and
expenses of enforcing any right of such prevailing party under or with respect
to this Agreement, including without limitation, such reasonable fees and
expenses of attorneys and accountants, which shall include, without limitation,
all fees, costs and expenses of appeals.

         3.9. Titles and Subtitles. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.

         3.10. Pronouns. All pronouns contained herein and any variations
thereof shall be deemed to refer to the masculine, feminine or neuter, singular
or plural, as the identity of the parties hereto may require.

                                       9
<PAGE>

         3.11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

         3.12. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto with respect to the matters set forth herein, and it
supersedes all prior oral or written agreements, commitments or understandings
with respect to the matters provided for herein.

                      (SIGNATURES BEGIN ON FOLLOWING PAGE)

                                       10
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.

                                       COMPANY:

                                       iPAYMENT HOLDINGS, INC.

                                       By:   /s/ Greg Daily
                                          --------------------------------------
                                       Title:
                                             -----------------------------------

                                       INVESTORS:

                                       SEE NEXT PAGE

<PAGE>

                                         /s/ Allen Caviles
                                       -----------------------------------------

                                       Allen Caviles

                                         /s/ Kristen Gramigna
                                       -----------------------------------------

                                       Kristen Gramigna

                                         /s/ Bob Hurley
                                       -----------------------------------------

                                       Bob Hurley

                                         /s/ Cindy Joyce
                                       -----------------------------------------

                                       Cindy Joyce

                                         /s/ Karen Koziol
                                       -----------------------------------------

                                       Karen Koziol

                                         /s/ Nicole Mondia
                                       -----------------------------------------

                                       Nicole Mondia

                                         /s/ John Rante
                                       -----------------------------------------

                                       John Rante

                                         /s/ Bill Schlunz
                                       -----------------------------------------

                                       Bill Schlunz

                                         /s/ Nicole Smith
                                       -----------------------------------------

                                       Nicole Smith

<PAGE>

                           ACKNOWLEDGEMENT AND CONSENT

         IN WITNESS WHEREOF, the parties below hereby acknowledge and consent to
the execution and delivery of this Agreement by iPayment Holdings, Inc. as of
the date set forth in the first paragraph hereof.

                                    FIRST AVENUE PARTNERS, L.P.

                                    By:  Front Street, LLC, GP, its General
                                         Partner

                                    By:   /s/  David M. Wilds
                                          --------------------------------------
                                    Name:      David M. Wilds
                                          --------------------------------------
                                    Title:
                                          --------------------------------------

                                    HARBINGER MEZZANINE PARTNERS, L.P.

                                    By:  Harbinger Mezzanine GP, LLC,
                                         its General Partner

                                         By:  Harbinger Mezzanine Manager, Inc.,
                                              its Manager

                                    By:   /s/ John C. Harrison
                                          --------------------------------------
                                    Name:      John C. Harrison
                                          --------------------------------------
                                    Title:   Director
                                          --------------------------------------

                                    CAYMAS, LLC

                                    By:   /s/ Greg Daily
                                          --------------------------------------
                                    Name:      Greg Daily
                                          --------------------------------------
                                    Title:
                                          --------------------------------------

<PAGE>

                                      /s/ Gregory S. Daily
                                    --------------------------------------------
                                    Gregory S. Daily

                                      /s/ Carl Grimstad
                                    --------------------------------------------
                                    Carl Grimstad

                                    STREAM FAMILY LIMITED PARTNERSHIP

                                    By:   /s/ Bruce N. Kirkpatrick
                                          --------------------------------------
                                    Name:     Bruce N. Kirkpatrick
                                          --------------------------------------
                                    Title:   Secretary & Treasurer
                                          --------------------------------------
                                          Matilda Stream Management, Inc.
                                          Managing General Partner

                                    SUMMIT VENTURES V, L.P.

                                    By:    Summit Partners V, L.P.,
                                           its General Partner

                                    By:    Summit Partners, LLC,
                                           its General Partner

                                    By:      /s/ Peter Y. Chung
                                           -------------------------------------
                                    Name:  Peter Y. Chung
                                    Title: Member

                                    SUMMIT VENTURES V COMPANION FUND, L.P.

                                    By:    Summit Partners V, L.P.,
                                           its General Partner

                                    By:    Summit Partners, LLC,
                                           its General Partner

                                    By:      /s/ Peter Y. Chung
                                           -------------------------------------
                                    Name:  Peter Y. Chung
                                    Title: Member

<PAGE>

                                    SUMMIT V ADVISORS FUND, L.P.

                                    By:      Summit Partners V, L.P.,
                                             its General Partner

                                    By:      Summit Partners, LLC,
                                             its General Partner

                                    By:        /s/ Peter Y. Chung
                                             -----------------------------------
                                    Name:    Peter Y. Chung
                                    Title:   Member

                                    SUMMIT V ADVISORS (QP) FUND, L.P.

                                    By:      Summit Partners V, L.P.,
                                             its General Partner

                                    By:      Summit Partners, LLC,
                                             its General Partner

                                    By:        /s/ Peter Y. Chung
                                             -----------------------------------
                                    Name:    Peter Y. Chung
                                    Title:   Member

                                    SUMMIT INVESTORS III, L.P.

                                    By:        /s/ Peter Y. Chung
                                             -----------------------------------
                                    Name:    Peter Y. Chung
                                    Title:   Authorized Signatory

                                    RANDOLPH STREET PARTNERS

                                    By:        /s/ Ted H. Zook
                                             -----------------------------------
                                    Name:      Ted H. Zook
                                             -----------------------------------
                                    Title:     Authorized Signatory
                                             -----------------------------------

                                    RANDOLPH STREET PARTNERS 1998 DIF, LLC

                                    By:        /s/ Ted H. Zook
                                             -----------------------------------
                                    Name:      Ted H. Zook
                                             -----------------------------------
                                    Title:     Authorized Signatory
                                             -----------------------------------
<PAGE>

                                    SYCR INVESTMENT FUND I, LLC

                                    By:        /s/ Lawrence B. Cohn
                                             -----------------------------------
                                    Name:      Lawrence B. Cohn, Esq.
                                             -----------------------------------
                                    Title:     Member
                                             -----------------------------------

                                    By:        /s/ Stephen T. Freeman
                                             -----------------------------------
                                    Name:      Stephen T. Freeman, Esq.
                                             -----------------------------------
                                    Title:     Member
                                             -----------------------------------

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