AMENDMENT NO. 2 TO RIGHTS AGREEMENT
EXHIBIT 7
AMENDMENT NO. 2 TO RIGHTS AGREEMENT
This AMENDMENT NO. 2 (this “Amendment”) to the Rights Agreement dated as of May 12, 2003, as
amended by Amendment No. 1 to thereto dated as of November 28, 2005 (such agreement as amended the
“Agreement”), between iPayment, Inc., a Delaware corporation (the “Company”), and Wachovia Bank,
National Association, as rights agent (the “Rights Agent”), is entered into as of this 27th day of
December, 2005. Capitalized terms used herein and not otherwise defined shall have the respective
meanings ascribed to such terms in the Agreement.
Section 1. Amendment. The definition of “Acquiring Person” set forth in Section 1(a) of the
Agreement is hereby amended to add the following before the last sentence of Section 1(a):
“For the avoidance of doubt, pursuant to the foregoing sentence and the approval by the
Special Committee of the Agreement and Plan of Merger dated as of December 27, 2005 (as amended,
modified or supplemented from time to time, the “Merger Agreement”), among the Company, iPayment
Holdings, Inc. (“Parent”), and iPayment MergerCo, Inc. (“MergerCo”), and notwithstanding anything
in this Agreement to the contrary, none of Parent, MergerCo, any stockholder of Parent or any of
their respective Affiliates or Associates from time to time shall be deemed to be an Acquiring
Person in connection with the transactions contemplated by the Merger Agreement, provided that in
the event that the Merger Agreement is terminated in accordance with its terms any Person that
would otherwise be an Acquiring Person shall divest himself within 10 business days of such
termination of a sufficient number of Common Shares so that such Person would not be an Acquiring
Person without reliance on this
sentence.”
Section 2. Certification. This Section 2 shall constitute a certificate from an appropriate
officer of the Company for purposes of Section 27 of the Agreement, and the Company and the officer
of the Company signing this Amendment below, on behalf of the Company, (i) hereby certify that to
their knowledge this Amendment is in compliance with the terms of Section 27 of the Agreement and
(ii) request and direct that the Rights Agent execute and deliver this Amendment, in accordance
with Section 27.
Section 3. Full Force and Effect. Except as expressly amended hereby, the Agreement shall
continue in full force and effect unamended and in accordance with the provisions thereof on the
date hereof. This Amendment and the Agreement, as hereby amended, shall constitute one and the
same instrument.
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Section 4. Governing Law. This Amendment shall be deemed to be a contract made under the laws
of the State of Delaware, and for all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts made and to be performed entirely within such
State.
Section 5. Counterparts. This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original, and all of which together shall constitute one and the same
instrument.
[SIGNATURE PAGE FOLLOWS]
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iPAYMENT, INC. |
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By: | /s/ Xxxxxx X. Xxxxxxx | |||
Name: | Xxxxxx X. Xxxxxxx | |||
Title: | Executive Vice President, General Counsel and Secretary | |||
WACHOVIA BANK, NATIONAL ASSOCIATION |
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By: | /s/ Xxxxxxx X. XxXxxxxx | |||
Name: | Xxxxxxx X. XxXxxxxx | |||
Title: | Corporate Trust Officer |