SECURITIES PURCHASE AGREEMENT

Form of

AMENDMENT NO. 1 TO

THIS AMENDMENT NO. 1 TO SECURITIES PURCHASE AGREEMENT (the “ Amendment ”) is made and entered into as of December 31, 2008 to that certain Securities Purchase Agreement, dated as of June 29, 2006 (the “ Agreement ”), by and between Pipeline Data Inc. , a Delaware corporation whose principal place of business is located at 1515 Hancock Street, Suite 301, Quincy, MA 02169 (the “ Company ”), and each of the Purchaser(s) identified on the signature pages thereto (including their successors and assigns, the “ Purchaser(s) ”). The parties to the Amendment are herein referred to as the “Parties” and other capitalized terms used and not defined herein shall have the meanings ascribed to them in the Agreement.

WHEREAS, on June 29, 2006 (the “ Initial Closing Date ”), pursuant to the Agreement, the Company sold, and each of the Purchasers party to the Agreement purchased, Senior Secured Convertible Notes due 2010 in the aggregate principal amount of $37,000,000 (the “ Original Notes ”); and

WHEREAS, pursuant to and in accordance with Section 5.5 of the Agreement, the Purchasers party to the Amendment, who hold at least 75% of the principal amount of the Original Notes, have consented to the amendment of the Agreement, the amendment and restatement of the Original Notes, and the issuance of amended and restated Original Notes in the form attached hereto as Exhibit A (the “ Amended Notes ”).

NOW, THEREFORE, IN CONSIDERATION of the foregoing and the respective representations, warranties, covenants and agreements set forth herein and in the Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and subject to the terms and conditions set forth herein, the Parties hereby agree as follows:

1.           Article I of the Agreement is hereby amended to amend and restate the following defined terms in their entirety:

“ Exempt Issuance ” means the issuance of (a) shares of Common Stock or options to employees, officers, directors or consultants of the Company pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose, or (b) the Convertible Preferred Stock pursuant to the ComVest Investment Agreement and the conversion by ComVest of the Convertible Preferred Stock into Common Stock or (c) issuances of Common Stock or Common Stock Equivalents after the date of the Amendment or (d) issuances of debt securities of the Company in accordance with the Amended Note.

“Required Minimum” means, for historic reference, the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to the Transaction Documents, which shall be none for the purposes of the Amendment.

“Securities” means the Amended Notes.

“Underlying Shares” means, for historic reference, shares of Common Stock issuable upon conversion of the Notes and the Warrant Shares, which shall be none for the purposes of the Amendment.

“ Acquisition Subsidiary ” means a subsidiary formed by the Company after the date of the Amendment and that is formed solely for the purpose of (1) acquiring, merging with and into, or otherwise consolidating with another Person or (2) acquiring the assets of another Person.

“ Amended Notes ” means the Amended and Restated Senior Secured Notes due June 29, 2011 (unless extended in accordance with the terms thereof) issued by the Company to each of the Purchasers as of the Second Closing Date.

“ Amendment ” means Amendment No. 1 to Securities Purchase Agreement made and entered into as of December 31, 2008 to the Agreement.

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

“ ComVest Investment Agreement ” means that certain Stock Purchase Agreement, dated as of the date hereof, 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” means the Company’s $15,000,000.00 liquidation preference of Series B Convertible Preferred Stock.

“ Initial Closing Date ” shall have the meaning set forth in the Amendment.

“ Original Notes ” shall have the meaning set forth in the Amendment.

“Restricted Subsidiary” means a subsidiary of the Company that is not an Acquisition Subsidiary.

“Second Closing” means the closing of the transactions contemplated by the Amendment and Amended Notes pursuant to Section 2.1(b).

“Second Closing Date” means the date of issuance of the Amended Notes by the Company to the Purchasers, to take place on February __, 2009.

“ Transaction Documents ” means the Amendment, the Agreement, the Amended Notes, the Security Agreement, the Subsidiary Guarantee(s) and the ComVest Investment Agreement.

3.           Section 2.1 of Article II of the Agreement is hereby amended and restated in its entirety as follows:

“2.1 Closing .

(a) On the Initial Closing Date, upon the terms and subject to the conditions set forth in the Agreement, concurrent with the execution and delivery of the Agreement by the parties hereto, the Company sold, and each of the Purchasers severally (and not jointly) purchased, the principal amount of the Original Notes set forth as the “Subscription Amount” on such Purchaser’s signature page to the Agreement ($37,000,000 in the aggregate), secured by a first priority lien, more fully described in the Security Agreement, on all assets of the Company, and Warrants to purchase up to, in the aggregate, 11,100,000 shares of Common Stock, issued on a pro rata basis to each Purchaser based on such Purchaser’s Subscription Amount.

Each Purchaser delivered to the Company via wire transfer immediately available funds equal to its Subscription Amount and the Company delivered to each Purchaser its Original Note and Warrants as determined pursuant to Section 2.2(a), and the other items set forth in Section 2.2 issuable at the Closing.

(b) On the Second Closing Date, subject to the terms and conditions set forth in the Amendment, concurrent with the execution and delivery of the Amendment by the parties thereto, the Company shall issue to the Purchasers the Amended Notes to reflect an increase in the aggregate principal to $42,110,000 and the Purchasers shall surrender the cancelled Original Notes and cancelled Warrants and the Registration Rights Agreement shall be terminated.”

4.           The Company hereby agrees to issue the Amended Notes to the Purchasers on the Second Closing Date, and the Purchasers party to the Amendment, representing at least 75% of the principal amount of Original Notes currently outstanding, hereby agree, pursuant to Section 5.5 of the Agreement, to amend the Agreement and amend and restate the Original Notes, subject to the following terms and conditions:

(a) On the Second Closing Date, the Company shall deliver to counsel for the Purchasers with respect to each Purchaser the following:

(i)           an Amended Note, with the principal amount specified next to such Purchaser’s name on Exhibit B hereto, which amount is equal to such Purchaser’s Subscription Amount plus any interest accrued and unpaid thereon as of the date hereof, registered in the name of such Purchaser;

(ii)          evidence, satisfactory to the Purchasers in their discretion, of satisfaction and settlement of the Danzig liability for consideration of $2,000,000, the Charge.com domain name, and the retirement by the Company of the Danzig shares, and upon confirmation by the Purchasers that such satisfactory evidence has been received, CAMOFI Master LDC shall execute and deliver to the Company a release substantially in the form attached as Exhibit C hereto;

(iii)         a legal opinion of Sheila Corvino, Esq., counsel to the Company in form and substance satisfactory to the Purchasers in their discretion;

(iv)        a fully executed copy of the ComVest Investment Agreement and documents executed and delivered in connection therewith; and

(v)         such instruments, agreements and other documents as the Purchasers shall reasonably request in order to ensure that the Amended Notes remain secured by a perfected first

priority lien on all the assets of the Company in accordance with and subject to agreed-to exceptions as set forth in the Transaction Documents.

(b) On the Second Closing Date, each Purchaser shall deliver or cause to be delivered to counsel for the Company the following:

(c) The obligations of the Purchasers hereunder are subject to the following closing conditions being met:

(i)           the satisfaction of all conditions precedent under, and the closing of the transactions contemplated by, the ComVest Investment Agreement; and

(ii)          the delivery by the Company of the items set forth in Section 4(a) of the Amendment.

5.           The Company and the Purchasers hereby acknowledge that the conditions in Article II of the Agreement with respect to the issuance of the Original Notes were satisfied or waived as of the Initial Closing Date.

6.           The Company hereby reaffirms, represents, warrants and covenants to the Purchasers that as of the date hereof, the representations and warranties (except for representations and warranties that speak as of a specific date, which representations and warranties shall be true and correct as of such date) set forth in Section 3.1 of Article III of the Agreement, as amended and restated hereunder, are true and correct in all respects on the date hereof as if made on the date hereof. The Company hereby represents and warrants to the Purchasers that except as set forth in Schedule 6(a) hereto, the Company is not involved in any material litigation. The following paragraphs of Section 3.1 of Article III of the Agreement are hereby amended and restated in their entirety as follows:

“(f) Issuance of the Securities . The Securities are duly authorized, were issued and paid for in accordance with the applicable Transaction Documents, and are duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. From and after the Second Closing, none of the Securities, the Original Notes, the Amended Notes and the Warrants are convertible into any Common Stock of the Company. There is no duty to reserve from the Company’s duly authorized capital stock any shares of Common Stock for issuance of the Underlying Shares. The Company has not, and to the knowledge of the Company, no Affiliate of the Company has sold, offered for sale or solicited offers to buy or otherwise negotiated in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities to the Purchasers, or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market.”

“(ii) Accountants . The Company’s accountants are set forth on Schedule 3.1(ii) of the Disclosure Schedule. To the knowledge of the Company, such accountants, who the Company expects will express their opinion with respect to the financial statements to be

included in the Company’s Annual Report on Form 10-K for the year ending December 31, 2008, are a registered public accounting firm as required by the Securities Act.”

7.           Each of the Purchasers, severally and not jointly, hereby represents and warrants to the Company that as of the date hereof, the representations and warranties (except for representations and warranties that speak as of a specific date, which representations and warranties shall be true and correct as of such date) set forth in Section 3.2 of Article III of the Agreement are true and correct in all respects on the date hereof as if made on the date hereof.