AMENDED AND RESTATED SENIOR SECURED NOTE DUE JUNE 29, 2011

[FORM OF AMENDED NOTE]

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Original Issue Date: June 29, 2006

As amended and restated as of December 31, 2008

$XXXXXXX

AMENDED AND RESTATED

SENIOR SECURED NOTE

DUE JUNE 29, 2011

THIS NOTE is one of a series of duly authorized and issued Senior Secured Notes of Pipeline Data Inc. , a Delaware corporation, having a principal place of business at 1515 Hancock Street, Suite 301, Quincy, MA 02169 (the “ Company ”), designated as its Senior Secured Notes, due June 29, 2011 (the “ Note(s) ”).

FOR VALUE RECEIVED, the Company promises to pay to XXXXXXXX or its registered assigns (the “ Holder ”), the principal sum of $13,940,500 on the earlier of (i) June 29, 2011 (or June 29, 2012 if so extended by the Company pursuant to Section 2(f) hereunder) or (ii) such earlier date as the Notes are required or permitted to be repaid as provided hereunder (the “ Maturity Date ”), and to pay interest to the Holder on the aggregate outstanding principal amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional provisions:

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

“ Adjusted Net Income ” shall mean with respect to any Person for any period, the sum of (a) Net Income for such period, plus (b) the net after-tax amount of amortization expense (but not depreciation expense) that was deducted in the calculation of such Net Income.

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

“ Capital Expenditures ” means, with respect to any Person for any period, the sum of the aggregate of all expenditures by such Person and its Subsidiaries during such period that in accordance with GAAP are or should be included in “property, plant and equipment” or in a similar fixed asset account on its balance sheet, whether such expenditures are paid in cash or financed and including all Capitalized Lease Obligations paid or payable during such period; provided, however, that Capital Expenditures shall not include the aggregate of all expenditures by such Person and its Subsidiaries during such period to acquire by purchase or otherwise the business or fixed assets of, or the capital stock of, any other Person.

“ Capitalized Lease Obligations ” means as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP and, for the purposes of this Note, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

“ Change of Control Transaction ” means the occurrence after the date hereof, of any of (i) an acquisition after the date hereof (including, without limitation, by reason of any merger or consolidation to which the Company is a party) by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 50% of the voting securities of the Company (or, in the case of any merger or consolidation, the surviving or successor entity of such transaction), (ii) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately prior to such transaction own less than 60% of the aggregate voting power of the acquiring entity immediately after the transaction, (iii) after December 31, 2008, a replacement at one time or within a three year period of more than one-half of the members of the Company’s board of directors which is not approved by a majority of those individuals who are members of the board of directors on the date hereof (or by those individuals who are serving as members of the board of directors on any date whose nomination to the board of directors was approved by a majority of the members of the board of directors who are members on the date hereof), (iv) Peter Kight shall no longer be a director of the Company and Randy McCoy shall no longer be employed by the Company, or (v) the execution by the Company of an agreement (and the satisfaction of all conditions precedent contained in such agreement other than those which are within the Company’s control to satisfy or waive), to which the Company is a party or by which it is bound, providing for any of the events set forth above in (i), (ii), (iii) or (iv). Notwithstanding the foregoing, the issuance by the Company of the Convertible Preferred Stock pursuant to the ComVest Investment Agreement and the conversion by ComVest of the Convertible Preferred Stock into Common Stock shall not be deemed a Change of Control Transaction.

“ Common Stock ” means the common stock, $0.001 par value, of the Company and stock of any other class into which such shares may hereafter have been reclassified or changed.

“ ComVest ” means Pipeline Holdings, LLC, a Delaware limited liability company.

“ ComVest Investment Agreement ” means that certain Stock Purchase Agreement, dated as of February 2, 2009, by and between ComVest and the Company relating to the issuance of the Convertible Preferred Stock by the Company. The ComVest Investment Agreement contemplates an initial issuance of common stock and Series A Convertible Preferred Stock and exchange of such initial issuance with the Convertible Preferred Stock.

“ Convertible Preferred Stock ” shall mean the Company’s $15,000,000.00 of Series B Convertible Preferred Stock.

“ Cumulative Adjusted Net Income ” shall mean the aggregate amount of Adjusted Net Income of the Company for the period beginning on January 1, 2009 through the close of the most recently completed fiscal quarter as of any date of determination. For the avoidance of doubt, to the extent that Adjusted Net Income for any completed fiscal period is a negative number, such negative amount shall offset positive Adjusted Net Income from any prior or future fiscal period.

“ EBITDA ” shall mean, with respect to any period, the combination of (i) the Company’s net income or loss (after giving effect to deduction of or provision for all operating expenses (but not to fees and expenses payable pursuant to the Management Agreement), all taxes and reserves and all other proper deductions), plus (ii) the Company’s interest expense after giving effect to payments made or received under interest rate protection agreements, plus (iii) total federal, state, local and foreign income, value added and similar taxes paid or payable by the Company and its Subsidiaries, plus (iv) the Company’s depreciation and amortization expense, all as determined on a consolidated basis in accordance with GAAP and as set forth on the Company’s consolidated financial statements included in its SEC Reports or internal financial statements (as certified by the Company’s Chief Executive Officer or Chief Financial Officer). As used herein, “EBITDA” shall not reflect the Company’s or any of its Subsidiaries’ receipt of any of the principal amount of the Notes or any other amounts received by the Holders as a result of the consummation of the transactions contemplated by the Transaction Documents, the issuance or conversion of Convertible Preferred Stock, or proceeds of any future issuances of any equity securities or debt instruments, or any non-cash charges resulting from future issuances of any equity securities or debt instruments.

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

“ Excess Cash Flow ” means for any period, (i) EBITDA for such period, less (ii) the sum of (A) all Net Interest Expense of the Company, (B) income, withholding and other similar Federal, state or local taxes paid in cash by the Company for such period, (C) Capital Expenditures made in respect of the Company, (D) the amount of any gains of the Company (net of cash taxes paid thereon) included in amounts actually paid under Section 2(e)(1)(B) below in respect of any transaction(s) consummated during the subject period, and (E) any taxes paid during the subject period relating to a transaction which required a mandatory prepayment under Section 2(e)(1)(B) during a prior fiscal period, so long as such mandatory prepayment in such prior fiscal quarter was actually paid. Excess Cash Flow shall not include amounts attributable to Acquisition Subsidiaries unless such Acquisition Subsidiaries are permitted to pay dividends to the Company under their respective debt agreements and such dividends are actually paid to the Company.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Fundamental Transaction ” shall mean any transaction in which (A) the Company effects any merger or consolidation of the Company with or into another Person (outside of the ordinary course of business), (B) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (C) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (D) the

Company effects any reclassification of the Common Stock (other than forward or reverse stock splits or other reclassifications that do not change the pro rata allocation of economic or voting rights of stockholders) or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property of another Person.

“ Interest Rate ” means (i) 10% per annum until and including June 30, 2010 and (ii) 14% per annum after June 30, 2010.

“ Management Agreement ” means the Management Agreement, dated as of February 2, 2009, by and between the Company and ComVest, as amended, modified or supplemented from time to time in accordance with its terms.

“ Mandatory Prepayment Amount ” means the sum of (i) 100% of the outstanding principal amount of this Note, plus all accrued and unpaid interest hereon, and (ii) all other amounts, costs, expenses and liquidated damages due in respect of this Note.

“ Net Income ” shall mean with respect to any Person for any period, the net income (loss) of such Person and its Subsidiaries for such period, determined on a consolidated basis and in accordance with generally accepted accounting principles.

“ Net Interest Expense ” shall mean for any period, total cash interest expense of the Company and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, relating to the Notes.

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

“ Permitted Indebtedness ” means (a) the indebtedness existing on the Initial Closing Date and set forth on Schedule 3.1(z) to the Purchase Agreement, (b) purchase money indebtedness of the Company incurred in connection with the acquisition of capital assets (including merchant accounts) with respect to newly acquired assets so long as (i) the maturity date of such indebtedness is subsequent to June 29, 2012, (ii) such indebtedness is subordinated to the Notes on terms and conditions reasonably satisfactory to the holders of 75% or more of the then-outstanding principal amount of the Notes (such approval not to be unreasonably withheld, delayed or conditioned), provided that such terms may include (A) permitted payment and receipt of scheduled interest payments provided that no default or Event of Default under the Notes exists on the date of such scheduled interest payment, (B) no permitted principal or amortization payments until the Notes have been repaid in full in cash, and (C) other terms and conditions not inconsistent with the Notes (and such terms described in the foregoing clauses (A), (B) and (C) will in any event be deemed satisfactory to all holders of Notes, although the approval of the holders of 75% or more of the then-outstanding principal amount of the Notes shall still be required as described above), (iii) the last twelve months’ leverage pro forma for debt incurred (and repaid) and EBITDA acquired as a result of the transaction (assuming such transaction occurred on the first day of the period) shall not exceed a ratio of 3.5 times debt to EBITDA, and (iv) the last twelve months’ EBITDA to interest expense pro forma for the debt incurred (and repaid) and EBITDA acquired for the Company and its Subsidiaries (assuming such transaction occurred on the first day of the period) shall not be less than 2.5 times, (c) indebtedness entered into with the consent of the Holders of 75% of the aggregate principal amount of the then

outstanding Notes, provided that such indebtedness is expressly subordinated to the Notes pursuant to a written subordination agreement satisfactory to the Holders, (d) up to $15 million of purchase money indebtedness incurred in connection with the acquisition of capital assets (including merchant accounts) by an Acquisition Subsidiary pursuant to a line of credit provided by ComVest or an Affiliate of ComVest having an annual interest rate no greater than 12%, which may be secured by a first priority lien solely on all of such Acquisition Subsidiary’s assets, (e) indebtedness incurred by an Acquisition Subsidiary so long as such indebtedness is secured solely by the assets of such Acquisition Subsidiary, (f) subordinated indebtedness of the Company described in Section 7(h)(viii) below and (g) Capitalized Lease Obligations within the guidelines set forth in Section 7(g).

“ Permitted Investments ” means (i) marketable direct obligations issued or unconditionally guaranteed by the United States Government, the federal government of Canada or issued by any agency thereof and backed by the full faith and credit of the United States or Canada, in each case, maturing within six months from the date of acquisition thereof; (ii) commercial paper, maturing not more than 270 days after the date of issue rated P-1 by Moody’s or A-I by Standard & Poor’s or such comparable rating agencies in Canada; (iii) certificates of deposit maturing not more than 270 days after the date of issue, issued by commercial banking institutions and money market or demand deposit accounts maintained at commercial banking institutions, each of which is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than $500,000,000; (iv) repurchase agreements having maturities of not more than 90 days from the date of acquisition which are entered into with major money center banks included in the commercial banking institutions described in clause (iii) above and which are secured by readily marketable direct obligations of the United States Government, the federal government of Canada or any agency thereof, (v) money market accounts maintained with mutual funds having assets in excess of $2,500,000,000, and (vi) tax exempt securities rated A or higher by Moody’s or A+ or higher by Standard & Poor’s or such comparable rating agencies.

“ Permitted Lien ” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company) have been established in accordance with GAAP; (b) Liens imposed by law which were incurred in the ordinary course of the Company’s business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Company and its Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien; (c) Liens incurred in connection with Permitted Indebtedness under clause (a) thereunder; (d) Liens incurred in connection with Permitted Indebtedness under clauses (d) and(e) thereunder, provided that such Liens are secured by assets of the Acquisition Subsidiary and not of the Company or its Restricted Subsidiaries; and (e) Liens with the consent of the Holders of a majority of the aggregate principal amount of the then outstanding Notes, provided that such Liens are expressly subordinated to the security interest of the Holders pursuant to a written subordination agreement satisfactory to the Holders.

“ Person ” means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision thereof or a governmental agency.

“ Purchase Agreement ” means the Securities Purchase Agreement, dated as of June 29, 2006, as amended as of December 31, 2008, to which the Company and the original Holders are parties, as amended, modified or supplemented from time to time in accordance with its terms.

“ SEC Reports ” means all reports that the Company is obligated to file pursuant to Sections 13 or 15(d) of the Exchange Act.

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

a)          Payment of Interest; Other Payments . The Company shall pay interest in cash to the Holder on the aggregate outstanding principal amount of this Note at the Interest Rate, payable quarterly in arrears beginning on the first day of the fourth month after the Original Issue Date and on the Maturity Date (except that, if any such date is not a Business Day, then such payment shall be due on the next succeeding Business Day) (each such date, an “ Interest Payment Date ”).

b)          Interest Calculations . Interest shall be calculated on the basis of a 360-day year and shall accrue daily commencing on the Original Issue Date until payment in full of the principal sum, together with all accrued and unpaid interest and other amounts which may become due hereunder, has been made. Interest shall be compounded monthly. Interest hereunder will be paid to the Person in whose name this Note is registered on the records of the Company regarding registration and transfers of Notes (the “ Note Register ”).

c)          Late Fee . All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at the rate of 20% per annum (or such lower maximum amount of interest permitted to be charged under applicable law) (“ Late Fee ”) which will accrue daily, from the date such interest is due hereunder through and including the date of payment.

d)          Optional Repayment . (1) Subject to the provisions of this Section 2, the Company may deliver a notice to the Holder (an “ Optional Repayment Notice ” and the date such notice is deemed delivered hereunder, the “ Optional Repayment Notice Date ”) of its irrevocable election to prepay up to 100% of the outstanding Notes for cash in an amount equal to the principal amount being prepaid plus accrued interest thereon to the date of repayment (the “ Optional Repayment Amount ”) on the 20 ^th Business Day following the Optional Repayment Notice Date (such date, the “ Optional Repayment Date ” and such repayment, the “ Optional Repayment ”). The Optional Repayment Amount is payable in full on the Optional Repayment Date.

(2) The payment of cash pursuant to an Optional Repayment shall be made on the Optional Repayment Date. If any portion of the payment pursuant to an Optional Repayment shall not be paid by the Company by the applicable due date, interest shall accrue thereon until such amount is paid in full at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law. Notwithstanding anything herein contained to the contrary, if any portion of the Optional Repayment Amount remains unpaid after such date, the Holder may elect, by written notice to the Company given at any time thereafter, to invalidate ab initio such repayment, and, with respect to the Company’s failure to honor the Optional Repayment, the Company shall have no further right to exercise such Optional Repayment.

Notwithstanding anything to the contrary in this Section 2, the Company’s determination to redeem in cash shall be applied ratably among the holders of Notes in proportion to respective principal amounts of the Notes.

e)          Mandatory Repayment . (1) The Company shall be required to prepay in cash (A) the aggregate principal amount of the Notes upon the consummation of a Change of Control Transaction or a Fundamental Transaction or (B) upon or within five (5) Business Days after the sale, disposal or similar transaction outside the ordinary course of business involving of any or all of the Collateral, a principal amount of the Notes (ratably as aforesaid) equal to the gross proceeds (as adjusted for the net tax impact to the Company on a consolidated basis, including but not limited to income taxes or capital gain or loss, in respect of such transaction) received by the Company as a result of such transaction.

(2) The Company shall be required to make a mandatory prepayment of the outstanding principal and accrued interest of the Notes (ratably as aforesaid) hereunder within forty-five (45) calendar days after the end of each fiscal quarter in each fiscal year of the Company (commencing with the fiscal quarter ending March 31, 2009) in an amount equal to 50% of all Excess Cash Flow, if any, for such fiscal quarter. In the event that the Company’s independent public accountants find as part of any quarterly review or annual audit or attestation that the financial statement line items used to calculate Excess Cash Flow for any prior fiscal quarter (or with respect to a mandatory prepayment already made for the most recently completed fiscal quarter) were incorrect, the calculation of Excess Cash Flow and the mandatory prepayment with respect to any subsequent fiscal quarters shall reflect any and all corrections and adjustments necessary to correct such prior fiscal periods or previous mandatory prepayments, and upon the request of the Holders of 75% of the then outstanding Notes, the Company’s independent public accountants shall certify the corrected calculations or Excess Cash Flow.

f)          Extension of Maturity Date . At any time prior to May 10, 2011, the Company may extend the Maturity Date to June 29, 2012 by providing 30 days prior written notice to all Holders, so long as (i) no default or Event of Default has occurred and is continuing on the Maturity Date and (ii) no Event of Default has occurred and is continuing on the date of any such notice.

a)          Different Denominations . This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requ