Exhibit 10.5

 

GUARANTY AGREEMENT

 

THIS GUARANTY AGREEMENT (this “Guaranty”) is made as of June 22, 2017, (the
“Effective Date”) by JETPAY CORPORATION, a Delaware corporation (“Guarantor”)
for the benefit of FIFTH THIRD BANK, an Ohio banking corporation, its successors
and assigns (“Lender”).

 

WITNESSETH:

 

WHEREAS, pursuant to that certain Credit Agreement dated as of the date hereof
between JetPay Payment Services, FL, LLC, a Delaware limited liability company
(“Borrower”) and Lender (together with all renewals, amendments, modifications,
increases and extensions thereof, the “Credit Agreement”), Lender has agreed to
make a loan to Borrower in the amount of One Million Six Hundred Thousand and
No/100 Dollars ($1,600,000.00) (the “Loan”). The Loan is evidenced by that
certain Promissory Note dated of even date herewith, executed by Borrower and
made payable to the order of Lender in the stated principal amount of
$1,600,000.00 (as modified, renewed or otherwise amended from time to time, the
“Note”);

 

WHEREAS, the Loan is secured by that certain Security Agreement by Borrower for
the benefit of Lender dated of even date herewith (together with all renewals,
modifications, increases and extensions thereof, the “Security Agreement”),
which grants Lender a first priority security interest in the Collateral (as
defined therein);

 

WHEREAS, Lender is contemporaneously entering into a certain Master Equipment
Lease Agreement (the “Master Lease” and collectively, together with the Credit
Agreement, the Note, the Security Agreement, any Rate Management Agreement (as
defined in the Credit Agreement) and each of the other documents evidencing or
securing the Loan or the Master Lease, the “Obligor Loan Documents”) to provide
leasing (the “Lease”) to Borrower;

 

WHEREAS, Lender is not willing to make the Loan, to enter into the Lease or to
otherwise extend credit to Borrower unless Guarantor unconditionally guarantees
payment and performance to Lender of the Guaranteed Obligation (as herein
defined); and

 

WHEREAS, Guarantor is the owner of a direct or indirect interest or has a
financial interest in Borrower, and Guarantor will directly benefit from
Lender’s making the Loan to Borrower and entering into the Master Lease with
Borrower.

 

NOW, THEREFORE, as an inducement to Lender to make the Loan to Borrower, to
enter into the Master Lease with Borrower and to extend such additional credit
as Lender may from time to time agree to extend under the Obligor Loan
Documents, and for other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, Guarantor does hereby agree as
follows:

 

 

 

 

Article 1
DEFINED TERMS

 

Section 1.1           Defined Terms. Capitalized terms used in this Guaranty and
not specifically defined in this Guaranty have the meaning provided in the
Credit Agreement.

 

Article 2
NATURE AND SCOPE OF GUARANTY

 

Section 2.1           Guaranty of Obligation. Guarantor hereby irrevocably and
unconditionally guarantees to Lender the payment and performance of the
Guaranteed Obligation (as hereinafter defined) as and when the same shall be due
and payable, whether by lapse of time, by acceleration of maturity or otherwise.
Guarantor hereby irrevocably and unconditionally covenants and agrees that
Guarantor is liable for the Guaranteed Obligation as a primary obligor.

 

Section 2.2           Definition of Guaranteed Obligation. The term “Guaranteed
Obligation” means (i) the payment when and as due and payable of the principal
of and interest on the Loan or so much thereof as may be advanced from time to
time, and any and all late charges, Additional Costs (as defined in the Note),
and all other indebtedness, loans, advances, and each and every obligation and
liability evidenced by, owing, arising under or in connection with the Loan, the
Security Agreement, the Note, the Master Lease and/or any of the other Obligor
Loan Documents, together with any extensions, modifications, renewals or
refinancings of any of the foregoing; (ii) the payment of all other expenses,
costs, advances and indebtedness which the Security Agreement by its terms
secures and which the Master Lease by its terms secures; (iii) the performance
and observance of the covenants and agreements contained in the Security
Agreement, the Note, the Master Lease and each of the other Obligor Loan
Documents; (iv) the Rate Management Obligations, except for Rate Management
Obligations that constitute Excluded Swap Obligations; (v) all obligations to
perform or forbear from performing acts, and agreements, Agreements and
documents evidencing, guarantying, securing or otherwise executed in connection
with any of the foregoing, together with any amendments, modifications and
restatements thereof, and all expenses and attorneys’ fees incurred by Lender
hereunder or any other document, Agreement or agreement related to any of the
foregoing to the extent required to be paid or reimbursed by Borrower
thereunder; and (vi) all other loans, advances, indebtedness and each and every
other obligation or liability of Borrower owed to each of Lender and/or any
affiliate of Fifth Third Bancorp or its successors, however created, of every
kind and description whether now existing or hereafter arising and whether
direct or indirect, primary or as guarantor or surety, absolute or contingent,
liquidated or unliquidated, matured or unmatured, participated in whole or in
part, created by trust agreement, lease overdraft, agreement or otherwise,
whether or not secured by additional collateral, whether originated with Lender
or owed to others and acquired by Lender by purchase, assignment or otherwise,
and all obligations to perform or forbear from performing acts, and agreements,
Agreements and documents evidencing, guarantying, securing or otherwise executed
in connection with any of the foregoing, together with any amendments,
modifications and restatements thereof, and all expenses and attorneys’ fees
incurred by Lender hereunder or any other document, instrument or agreement
related hereto or to any of the foregoing to the extent required to be paid or
reimbursed by Borrower thereunder.

 

 2 

 

 

Article 3
GENERAL TERMS AND CONDITIONS

 

Section 3.1           Nature of Guaranty. This Guaranty is an irrevocable,
absolute, continuing guaranty of payment and not a guaranty of collection. This
Guaranty may not be revoked by Guarantor and shall continue to be effective with
respect to any Guaranteed Obligation existing after any attempted revocation by
Guarantor. This Guaranty may be enforced by Lender and any subsequent holder of
any of the Notes and shall not be discharged by the assignment or negotiation of
all or part of the Obligor Loan Documents.

 

Section 3.2           Guaranteed Obligation Not Reduced by Offset. The
Guaranteed Obligation shall not be reduced, discharged or released because or by
reason of any existing or future offset, claim or defense of Borrower or any
other Person (as defined below) against Lender or against payment of the
Guaranteed Obligation, whether such offset, claim or defense arises in
connection with the Guaranteed Obligation (or the transactions creating the
Guaranteed Obligation) or otherwise. As used in this Guaranty, “Person” shall
mean any individual, corporation, partnership, joint venture, association, joint
stock company, trust, trustee, estate, limited liability company, unincorporated
organization, real estate investment trust, government or any agency or
political subdivision thereof, or any other form of entity.

 

Section 3.3           No Duty To Pursue Others. Lender has the right to require
Guarantor to pay, comply with and satisfy the Guaranteed Obligation under this
Guaranty, and shall have the right to proceed immediately against Guarantor with
respect thereto. Without limitation of the generality of the foregoing, it shall
not be necessary for Lender (and Guarantor hereby waives any rights which
Guarantor may have to require Lender), in order to enforce the Guaranteed
Obligation against Guarantor, first to (i) institute a suit or exhaust its
remedies against Borrower or others liable on the Loan, the Master Lease or the
Guaranteed Obligation or any other Person or any of the collateral for the Loan
or the Master Lease, (ii) enforce Lender’s rights against any of the collateral
for the Loan or the Master Lease, (iii) join Borrower or any others liable on
the Guaranteed Obligation in any action seeking to enforce this Guaranty, (iv)
demonstrate that the collateral for the Loan provides inadequate security for
the Loan or that the collateral for the Master Lease provides inadequate
security for the Master Lease, or (v) resort to any other means of obtaining
payment of the Guaranteed Obligation.

 

Section 3.4           Payments; Interest on Amounts Payable Hereunder. If all or
any part of the Guaranteed Obligation shall not be punctually paid when due
(taking into account any cure periods provided under the Obligor Loan
Documents), whether on demand, maturity, acceleration or otherwise, Guarantor
shall pay, immediately upon demand by Lender and without presentment, protest,
notice of protest, notice of non-payment, notice of intention to accelerate the
maturity, or notice of acceleration of the maturity, in immediately available
lawful money of the United States of America, as an addition to the Guaranteed
Obligation, interest on the Guaranteed Obligation (to the extent not paid when
due) at a rate equal to the interest rate specified in the Note increased by
three percentage points (3%) until paid in full (without duplication of any
imposition of the Default Rate as defined in and pursuant to the Note). Lender
may apply all money received by Lender from Guarantor to payment or reduction of
the Loan, the obligations under the Master Lease or reimbursement of Lender’s
expenses to the extent payable pursuant to the Obligor Loan Documents, in such
priority and proportions, and at such time or times as Lender may elect in its
sole discretion.

 

 3 

 

 

Section 3.5           Enforcement Costs. Guarantor hereby agrees to pay, on
written demand by Lender, all reasonable, documented and out-of-pocket costs
incurred by Lender in collecting any amount payable under this Guaranty or
enforcing or protecting its rights under the Obligor Loan Documents, in each
case whether or not legal proceedings are commenced (the “Enforcement Costs”).
Such fees and expenses shall be in addition to the Guaranteed Obligation and
shall include, without limitation, costs and expenses of outside counsel,
paralegals and other hired professionals, special servicing fees (including
portfolio management fees), court fees, costs incurred in connection with
pre-trial, trial and appellate level proceedings (including discovery and expert
witnesses), costs incurred in post-judgment collection efforts or in any
Bankruptcy Proceeding to the extent such costs relate to the Guaranteed
Obligation or the enforcement of this Guaranty. Amounts incurred by Lender shall
be immediately due and payable, and shall bear interest at the Default Rate from
the date of disbursement until paid in full upon Lender’s written demand for
payment. This Section 3.5 shall survive the payment in full of the Guaranteed
Obligation.

 

Section 3.6           Cumulative Remedies. Guarantor acknowledges that,
following an Event of Default, Lender is entitled to accelerate the Loan and/or
the Master Lease and to exercise all other rights and remedies as have been
provided to Lender under the Obligor Loan Documents and by law or in equity,
including, without limitation, enforcement of this Guaranty. All rights and
remedies of Lender are cumulative and may be exercised independently,
concurrently or successively in Lender’s sole discretion and as often as
occasion therefor shall arise. Lender’s delay or failure to accelerate the Loan
or the Master Lease or to exercise any other remedy upon the occurrence of an
Event of Default shall not be deemed a waiver of such right or remedy. No
partial exercise by Lender of any right or remedy will preclude further exercise
thereof. Notice or demand given to Guarantor in any instance will not entitle
Guarantor to notice or demand in similar or other circumstances nor constitute
Lender’s waiver of its right to take any future action in any circumstance
without notice or demand. Lender may release other security for the Loan or the
Master Lease, may release any party liable for the Loan or the Master Lease, may
grant extensions, renewals or forbearances with respect thereto, may accept a
partial or past due payment or grant other indulgences, or may apply any other
security held by it to payment of the Loan or the Master Lease, in each case
without prejudice to its rights under this Guaranty and without such action
being deemed an accord and satisfaction or a reinstatement of the Loan or the
Master Lease. Lender will not be deemed as a consequence of its delay or failure
to act, or any forbearances granted, to have waived or be estopped from
exercising any of its rights or remedies.

 

Section 3.7           Unimpaired Liability. Guarantor acknowledges and agrees
that all obligations hereunder are and shall be absolute and unconditional under
any and all circumstances without regard to the validity, regularity or
enforceability of any or all of the Obligor Loan Documents or the existence of
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor or surety. Without limiting the foregoing,
Guarantor acknowledges and agrees that the liability hereunder shall in no way
be released, terminated, discharged, limited or impaired by reason of any of the
following (whether or not Guarantor has any knowledge or notice thereof):

 

 4 

 

 

(a)          Borrower’s or any other Person’s lack of authority or lawful right
to enter into any of the Obligor Loan Documents or any officers’ or
representatives’ lack of authority or right to enter into Obligor Loan Documents
on its behalf, or the obligations thereunder being ultra vires;

 

(b)          any modification, supplement, extension, consolidation,
restatement, waiver or consent provided by Lender with respect to any of the
Obligor Loan Documents including, without limitation, the grant of extensions of
time for payment or performance;

 

(c)          the failure to record any Loan Document or to perfect any security
interest intended to be provided thereby;

 

(d)          the release, surrender, exchange, subordination, deterioration,
waste, loss, impairment or substitution, in whole or in part, of any collateral
for the Loan or the Master Lease, the failure to protect, secure or insure any
such collateral, the acceptance of additional collateral for the Loan or the
Master Lease or the failure of Lender or any other party to exercise diligence
or reasonable care in the preservation, protection, enforcement, sale or other
handling or treatment of all or any part of such collateral for the Loan or the
Master Lease;

 

(e)          Lender’s failure to exercise, or delay in exercising, any rights or
remedies Lender may have under the Obligor Loan Documents, or under this
Guaranty, or otherwise available at law or in equity, including but not limited
to any neglect, delay, omission, failure or refusal of Lender (i) to take or
prosecute any action for the collection of all or any part of the Guaranteed
Obligation, or (ii) to foreclose, or initiate any action to foreclose, or, once
commenced, prosecute to completion any action to foreclose upon any collateral
for the Loan or the Master Lease, or (iii) to take or prosecute any action in
connection with any instrument or agreement evidencing or securing all or any
part of the Guaranteed Obligation;

 

(f)           the release of Borrower or any other Person now or hereafter party
to a Loan Document from performance, in whole or in part, under any of the
Obligor Loan Documents to which each is a party, in each case whether by
operation of law, Lender’s voluntary act, or otherwise;

 

(g)          any bankruptcy, insolvency, reorganization, adjustment,
dissolution, liquidation or other like proceeding involving or affecting
Borrower or any other Person;

 

(h)          the termination or discharge of the Security Agreement or any other
Loan Document or the exercise of any power of sale or any foreclosure (judicial
or otherwise) or delivery or acceptance of a deed-in-lieu of foreclosure;

 

(i)           the existence of any claim, setoff, counterclaim, defense or other
rights which Guarantor may have against Borrower, Lender or any other Person,
whether in connection with the Loan, the Master Lease or any other transaction;

 

 5 

 

 

(j)           the accuracy or inaccuracy of the representations and warranties
made by Borrower or any other Person in any of the Obligor Loan Documents;

 

(k)          any adjustment, indulgence, forbearance or compromise that might be
granted or given by Lender to Borrower or any other Person;

 

(l)           any sale, lease or transfer of any or all of the assets of
Borrower or any other Person;

 

(m)         any valid defenses, claims or offsets (whether at law, in equity or
by agreement) by Borrower which render the Guaranteed Obligation wholly or
partially uncollectible from Borrower, whether arising in connection with the
Obligor Loan Documents or otherwise,

 

(n)          the illegality or unenforceability of, or the inability to collect,
the Guaranteed Obligation;

 

(o)          any of the Obligor Loan Documents being irregular or not genuine or
authentic; or

 

(p)          any changes (whether directly or indirectly) in the shareholders,
partners or members of Borrower or the reorganization, merger or consolidation
of Borrower into or with any other Person.

 

Section 3.8           Waivers. Guarantor hereby waives and relinquishes, to the
fullest extent permitted by law: (a) all rights or claims of right to cause a
marshalling of assets or to cause Lender to proceed against any of the
collateral for the Loan or the Master Lease before proceeding under this
Guaranty against Guarantor or any other guarantor or indemnitor under the Loan
or the Master Lease; (b) all rights and remedies accorded by applicable law to
sureties or guarantors, except any rights of subrogation and contribution (the
exercise of which are subject to the terms of this Guaranty); (c) the right to
assert a counterclaim, other than a mandatory or compulsory counterclaim, in any
action or proceeding brought by or against Guarantor; (d) notice of acceptance
of this Guaranty and of any action taken or omitted in reliance hereon; (e)
presentment for payment, demand, protest, notice of nonpayment or failure to
perform or observe, or any other proof, notice or demand to which they might
otherwise be entitled with respect to the Guaranteed Obligation; (f) all
homestead or exemption rights against the Guaranteed Obligation and the benefits
of any statutes of limitation or repose; and (g) any defense based upon an
election of remedies by Lender, including any election to proceed by judicial or
non-judicial foreclosure of any such collateral, whether real property or
personal property security, or by deed in lieu thereof, and whether or not every
aspect of any foreclosure sale is commercially reasonable or any election of
remedies, including remedies relating to real property or personal property
security, which destroys or otherwise impairs the subrogation rights of
Guarantor or the rights of Guarantor to proceed against Borrower or any other
guarantor for reimbursement, or both.

 

 6 

 

 

Section 3.9           Waivers of Notice. Guarantor agrees to the provisions of
the Obligor Loan Documents and hereby waives notice of (a) any disbursements
thereunder made by Lender to Borrower, (b) any amendment or extension of the
Obligor Loan Documents, (c) the execution and delivery by Borrower and Lender of
any other loan or credit agreement or of Borrower’s execution and delivery of
any promissory notes or other documents arising under the Obligor Loan Documents
or in connection with the Property, (d) the occurrence of any Event of Default,
(e) Lender’s transfer or disposition of the Guaranteed Obligation, or any part
thereof, (f) the sale or foreclosure (or posting or advertising for sale or
foreclosure) of the Property, (g) any default by Borrower or any other Person
under or with respect to the Obligor Loan Documents, or (h) any other action at
any time taken or omitted by Lender and, generally, all demands and notices of
every kind in connection with this Guaranty and the other Obligor Loan
Documents.

 

Section 3.10         Guarantor Bound by Judgment Against Borrower. Guarantor
agrees that Guarantor shall be bound conclusively, in any jurisdiction, by the
judgment in any action by Lender against Borrower in connection with the Obligor
Loan Documents (wherever instituted) as if Guarantor was a party to such action
even if not so joined as a party.

 

Section 3.11         Certain Consequences of Borrower’s Bankruptcy.

 

(a)          Any payment made on the Loan or in connection with the Master
Lease, whether made by Borrower or Guarantor or any other Person, that is
required to be refunded or recovered from Lender as a preference or a fraudulent
transfer or is otherwise set-aside pursuant to 11 U.S.C. § 101 et seq., as the
same may be amended from time to time (the “Bankruptcy Code”), or any other
present or future state or federal law regarding bankruptcy, reorganization or
other relief to debtors (collectively with the Bankruptcy Code, the “Debtor
Relief Laws”) shall not be considered as a payment made on the Loan, the Master
Lease or under this Guaranty. Guarantor’s liability under this Guaranty shall
continue with respect to any such payment, or be deemed reinstated, with the
same effect as if such payment had not been received by Lender, notwithstanding
any notice of revocation of this Guaranty prior to such avoidance or recovery or
payment in full of the Loan or the obligations in connection with the Master
Lease, until such time as all periods have expired within which Lender could be
required to return any amount paid at any time on account of the Guaranteed
Obligation.

 

(b)          Until payment in full of the Obligations (as defined in the Credit
Agreement) (including interest accruing after the commencement of a proceeding
by or against Borrower under the Bankruptcy Code or any other Debtor Relief Law,
which interest the parties agree remains a claim that is prior and superior to
any claim of Guarantor notwithstanding any contrary practice, custom or ruling
in cases under any applicable Debtor Relief Law generally), Guarantor agrees not
to accept any payment or satisfaction of any kind of indebtedness of Borrower to
Guarantor and hereby assigns such indebtedness to Lender, including the right
(but not the obligation) to file proof of claim and to vote in any other
bankruptcy or insolvency action, including the right to vote on any plan of
reorganization, liquidation or other proposal for debt adjustment under Federal
or state law.

 

 7 

 

 

Section 3.12         Subrogation and Contribution. Guarantor agrees that no
payment by Guarantor under this Guaranty shall give rise to, and Guarantor
hereby unconditionally and irrevocably waives, releases and abrogates any and
all rights Guarantor may now or hereafter have under any agreement, at law or in
equity (including, without limitation, any law subrogating Guarantor to the
rights of Lender) to assert, (a) any rights of subrogation against Borrower or
the collateral for the Loan or the Master Lease, or (b) any rights of
contribution against any other guarantor of the Loan or the Master Lease or any
other Person, in each case unless and until Lender has received full and
indefeasible payment of the Obligations. If the deferral of such rights shall be
unenforceable for any reason, Guarantor agrees that: (x) Guarantor’s rights of
subrogation shall be junior and subordinate to Lender’s rights against Borrower
and the collateral for the Loan or the Master Lease, and (y) such Guarantor’s
rights of contribution against any such other guarantor shall be junior and
subordinate to Lender’s rights against such other guarantor.

 

Section 3.13         Subordination of Debt to any Guarantor.

 

(a)          Any indebtedness of Borrower to any Guarantor, whether now or
hereafter existing, whether direct, contingent, primary, secondary, several,
joint and several, or otherwise, and irrespective of whether such debts or
liabilities be evidenced by note, contract, open account or otherwise, and
irrespective of the person or persons in whose favor such debts or liabilities
may, at their inception, have been or may hereafter be created, or the manner in
which they have been or may hereafter be acquired by Guarantor, including,
without limitation, all rights and claims of Guarantor against Borrower (arising
as a result of subrogation or otherwise) as a result of Guarantor’s payment of
all or a portion of the Guaranteed Obligation, together with any interest
thereon (collectively, “Guarantor Claims”), shall be and hereby is deferred,
postponed and subordinated to the prior payment in full of the Loan and the
Master Lease. Further, until payment in full of the Obligations, Guarantor
agrees that should the Guarantor receive any payment, satisfaction or security
for any Guarantor Claim, then upon request of the Lender, the same shall be
delivered to Lender in the form received (endorsed or assigned as may be
appropriate) for application on account of, or as security for, the Loan and the
Master Lease and until so delivered to Lender, shall be held in trust for Lender
as security for the Loan and the Master Lease.

 

(b)          In the event of receivership, bankruptcy, reorganization,
arrangement, debtor’s relief, or other insolvency proceedings involving
Guarantor as debtor, Lender shall have the right to prove its claim in any such
proceeding so as to establish its rights hereunder and receive directly from the
receiver, trustee or other court custodian dividends and payments which would
otherwise be payable upon Guarantor Claims. Guarantor hereby assigns such
dividends and payments to Lender. Should Lender receive, for application against
the Guaranteed Obligation, any dividend or payment which is otherwise payable to
Guarantor and which, as between Borrower and Guarantor, shall constitute a
credit against the Guarantor Claims, then, upon payment to Lender in full of the
Guaranteed Obligation, Guarantor shall become subrogated to the rights of Lender
to the extent that such payments to Lender on the Guarantor Claims have
contributed toward the liquidation of the Guaranteed Obligation, and such
subrogation shall be with respect to that portion of the Guaranteed Obligation
which would have been unpaid if Lender had not received dividends or payments
upon the Guarantor Claims.

 

 8 

 

 

(c)          Guarantor agrees that any liens, security interests, judgment
liens, charges or other encumbrances upon Borrower’s assets securing payment of
the Guarantor Claims shall be and remain inferior and subordinate to any liens,
security interests, judgment liens, charges or other encumbrances upon
Borrower’s assets securing payment of the Guaranteed Obligation, regardless of
whether such encumbrances in favor of Guarantor or Lender presently exist or are
hereafter created or attach. Without the prior written consent of Lender,
Guarantor shall not (i) exercise or enforce any creditor’s right Guarantor may
have against Borrower, or (ii) foreclose, repossess, sequester or otherwise take
steps or institute any action or proceedings (judicial or otherwise, including
without limitation the commencement of, or joinder in, any liquidation,
bankruptcy, rearrangement, debtor’s relief or insolvency proceeding) to enforce
any liens, mortgage, deeds of trust, security interests, collateral rights,
judgments or other encumbrances held by Guarantor on assets of Borrower.

 

Section 3.14        Lender Transferees; Secondary Market Activities; No Transfer
by Guarantor. Guarantor acknowledges and agrees that Lender, without notice to
Guarantor or Guarantor’s consent, may assign all or any portion of its rights
hereunder in connection with any sale or assignment of the Loan or servicing
rights related to the Loan, grant participations in the Loan, transfer the Loan
as part of a securitization in which Lender assigns its rights to a
securitization trustee, or contract for the servicing of the Loan, and that each
such assignee, participant or servicer shall be entitled to exercise all of
Lender’s rights and remedies hereunder. Guarantor further acknowledges that
Lender may provide to third parties with an existing or prospective interest in
the servicing, enforcement, ownership, purchase, participation or securitization
of the Loan, including, without limitation, any rating agency rating the
securities issued in respect of a securitization or participation of the Loan,
and any entity maintaining databases on the underwriting and performance of
commercial mortgage loans, any and all information which Lender now has or may
hereafter acquire relating to the Loan, the Property or with respect to Borrower
or Guarantor, as Lender determines necessary or desirable. Guarantor irrevocably
waives all rights Guarantor may have under applicable law, if any, to prohibit
such disclosure, including, without limitation, any right of privacy. Guarantor
may not assign any of Guarantor’s rights, powers, duties and obligations
hereunder, or substitute another Person in lieu of Guarantor as the obligor
hereunder.

 

Section 3.15         Financial Statements. Guarantor represents and warrants to
Lender that (i) the financial statements of Guarantor previously submitted to
Lender are true, complete and correct in all material respects, disclose all
actual and contingent liabilities, and fairly present the financial condition of
Guarantor, and do not contain any untrue statement of a material fact or omit to
state a fact material to the financial statements submitted or this Guaranty,
and (ii) no material adverse change has occurred in the financial statements
from the dates thereof until the date hereof. Guarantor shall furnish to Lender
the financial information and reports as set forth in Section 6.6 of the Credit
Agreement.

 

Section 3.16         No reliance. Guarantor agrees and acknowledges that: (a)
Guarantor is not entering into this Guaranty in reliance on, or in contemplation
of the benefits of, the validity, enforceability, ability to collect, or value
of the collateral for the Loan or the Master Lease; (b) Guarantor may be
required to pay the Guaranteed Obligation in full without assistance or support
of any other party, and (c) Guarantor has not been induced to enter into this
Guaranty on the basis of a contemplation, belief, understanding or agreement
that other parties will be liable to pay the Guaranteed Obligation, or that
Lender will look to other parties to pay or perform the Guaranteed Obligation.

 

 9 

 

 

Section 3.17        Termination. This Guaranty shall be automatically discharged
as of the date on which the Obligations have been indefeasibly paid in full.

 

Section 3.18         Setoff. Guarantor hereby grants to Lender a security
interest in, and Lender is hereby authorized at any time following an Event of
Default, without prior notice to Guarantor (any such notice hereby being
expressly waived by Guarantor), to set off and apply, any and all accounts and
deposits (general or special, time or demand, provisional or final) at any time
held by Lender, or any branch, subsidiary, or affiliate of Lender, and all other
indebtedness at any time owing by Lender or any branch, subsidiary, or affiliate
of Lender, to or for the credit or the account of Guarantor (including all
accounts held jointly with another, but excluding any IRA or Keogh accounts, or
any trust accounts for which a security interest would be prohibited by law),
against any and all of the obligations of Guarantor due and payable under this
Guaranty. Such security interest may be enforced, and such right of setoff may
be exercised, by Lender irrespective of whether or not Lender shall have made
any demand under this Guaranty. Lender agrees promptly to notify a Guarantor
after any such setoff and application, provided that the failure to give such
notice shall not affect the validity or such setoff and application. The rights
of Lender under this section are in addition to other rights and remedies
(including, without limitation, other rights of setoff) which Lender may have.

 

Section 3.19         Intentionally Omitted.

 

Section 3.20         Minimum Liquidity. Until such time as the Loan and the
obligations in connection with the Master Lease have been indefeasibly paid in
full, Guarantor and its wholly-owned and controlled consolidated subsidiaries
shall maintain a minimum, unrestricted and unpledged Liquidity of Two Million
and No/100 Dollars ($2,000,000.00), which shall be tested quarterly as of the
last day of each fiscal quarter of Guarantor. As used herein “Liquidity” means,
without duplication, unrestricted and unpledged (i) cash (including cash pledged
in favor of Lender); (ii) certificates of deposit or time deposits with terms of
six (6) months or less; (iii) A-1/P-1 commercial paper with a term of six (6)
months or less; (iv) U.S. treasury bills and other obligations of the Federal
government, all with terms of six (6) months or less; (v) readily marketable
securities (excluding “margin stock” within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System), restricted stock and stock
subject to the provisions of Rule 144 of the Securities and Exchange
Commission); (vi) bankers’ acceptances issued for terms of six (6) months or
less by satisfactory financial institutions; (vii) repurchase agreements with
terms of six (6) months or less covering U.S. government securities; and (viii)
a publicly traded fund, other than a hedge fund, that invests in any of the
items (i) – (vii). Notwithstanding anything herein to the contrary, cash that is
pledged in favor of Lender shall not be excluded for purposes of calculating
Liquidity.

 

 10 

 

 

Article 4
REPRESENTATIONS AND WARRANTIES

 

Section 4.1           Guarantor Due Diligence and Benefit. Guarantor represents
and warrants to Lender that (a) the Loan, the Master Lease and this Guaranty are
for commercial purposes, (b) Guarantor has had adequate opportunity to review
the Obligor Loan Documents, (c) Guarantor is fully aware of obligations of
Borrower thereunder and of the financial condition, assets and prospects of
Borrower, and (d) Guarantor is executing and delivering this Guaranty based
solely upon Guarantor’s own independent investigation of the matters
contemplated by clauses (a) through (c) of this Section 4.1 and in no part upon
any representation, warranty or statement of Lender with respect thereto.

 

Section 4.2           General. Guarantor represents and warrants to Lender that:

 

(a)          Authority. Guarantor has all requisite corporate authority to
execute and deliver this Guaranty and perform Guarantor’s obligations hereunder.

 

(b)          Valid and Binding Obligation. This Guaranty constitutes Guarantor’s
legal, valid and binding obligation, enforceable against Guarantor in accordance
with its terms, except to the extent enforceability may be limited under
applicable bankruptcy and insolvency laws and similar laws affecting creditors’
rights generally and to general principles of equity.

 

(c)          No Conflict with Other Agreement. Guarantor’s execution, delivery
and performance of this Guaranty will not (i) violate any of the organizational
documents of Guarantor, (ii) result in the breach of, or conflict with, or
result in the acceleration of, any obligation under any guaranty, indenture,
credit facility or other instrument to which Guarantor, Borrower or any of their
respective assets may be subject, or (iii) violate any order, judgment or decree
to which Guarantor, Borrower or any of their respective assets are subject.

 

(d)          No Pending Litigation. No action, suit, proceeding or
investigation, judicial, administrative or otherwise (including without
limitation any reorganization, bankruptcy, insolvency or similar proceeding),
currently is pending or, to the best of Guarantor’s knowledge, threatened
against Guarantor which, either in any one instance or in the aggregate, may
have a material, adverse effect on Guarantor’s ability to perform Guarantor’s
obligations under this Guaranty.

 

(e)          Consideration. Guarantor owns a direct or indirect interest or has
a financial interest in Borrower and will derive substantial benefit from
Lender’s making of the Loan to Borrower and entering into the Master Lease.

 

(f)           Financial Condition. Guarantor currently is solvent and will not
be rendered insolvent by providing this Guaranty. No adverse change has occurred
in the financial condition of Guarantor since the date of Guarantor’s most
recent financial statements submitted to Lender, other than such changes that
have been disclosed in writing to Lender and acknowledged by Lender.

 

 11 

 

 

Article 5
EVENT OF DEFAULT

 

Section 5.1           Default. Any Event of Default hereunder shall be deemed an
“Event of Default” under the Credit Agreement and the other Obligor Loan
Documents. Any of the following occurrences shall constitute an “Event of
Default” under this Guaranty:

 

(a)          An Event of Default occurs under the terms of the Obligor Loan
Documents, as “Event of Default” shall be defined therein.

 

(b)          Guarantor shall fail to observe or perform any covenant, condition,
or agreement under this Guaranty for a period of thirty (30) days from the date
of such breach, or any representation or warranty of Guarantor set forth in this
Guaranty shall be materially inaccurate or misleading when made or delivered.

 

(c)          The monetary default by Guarantor under the terms of any
indebtedness of Guarantor now or hereafter existing, which default has not been
cured within any time period permitted pursuant to the terms and conditions of
such indebtedness and which would impair Lender’s ability to exercise its rights
under the Obligor Loan Documents.

 

(d)          The commencement by Guarantor of a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect; or the entry of a decree or order for relief in respect of Guarantor in
a case under any such law or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of Guarantor, or
for any substantial part of Guarantor’s property, or ordering the wind-up or
liquidation of Guarantor’s affairs; or the filing or pendency for sixty (60)
days without dismissal of a petition initiating an involuntary case under any
such bankruptcy, insolvency or similar law; or the making by Guarantor of any
general assignment for the benefit of creditors; or the failure of Guarantor
generally, to pay Guarantor’s debts as such debts become due; or the taking of
action by Guarantor in furtherance of the foregoing.

 

(e)          The revocation or attempted revocation of this Guaranty by
Guarantor before the termination of this Guaranty in accordance with its terms,
or the assignment or attempted assignment of this Guaranty by Guarantor.

 

Article 6
MISCELLANEOUS

 

Section 6.1           Notices. All notices or other written communications
hereunder shall be deemed to have been properly given (a) upon delivery, if
delivered in person, (b) one (1) business day after having been deposited for
overnight delivery with any reputable overnight courier service, or (c) three
(3) business days after having been deposited in any post office or mail
depository regularly maintained by the U.S. Postal Service and sent by
registered or certified mail, postage prepaid, return receipt requested,
addressed to the addresses set forth below in this Section or as such party may
from time to time designate by written notice to the other parties. Either party
by notice to the other in the manner provided herein may designate additional or
different addresses for subsequent notices or communications:

 

 12 

 

 

To Lender: Brian Holliday, Vice President   Fifth Third Bank   201 East Kennedy
Blvd.   Suite 1800, Tampa, Florida 33602     With copy to: Fifth Third Equipment
Finance Company   38 Fountain Square Plaza   MD10904A   Cincinnati, Ohio 45263  
Facsimile:  (513) 534-6706     And to: Bradley Arant Boult Cummings LLP   100
North Tampa Street   Suite 2200   Tampa, Florida 33602-5809   Attn: Stephanie
Kane, Esq.     To Guarantor: JetPay Corporation   3939 West Drive   Center
Valley, PA 18037   Attn: Gregory M. Krzemien     With copy to: Dechert LLP  
Cira Centre   2929 Arch Street   Philadelphia, Pennsylvania  19104-2808   Attn:
Gary L. Green, Esq.

 

Section 6.2           Invalid Provisions. If any provision of this Guaranty is
held to be illegal, invalid or unenforceable in whole or in part, such provision
shall be fully severable; this Guaranty shall be construed and enforced as if
such illegal, invalid or unenforceable provision (or portion thereof) had never
comprised a part hereof; the remaining provisions hereof shall remain in full
effect and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance therefrom; and in lieu of such illegal, invalid or
unenforceable provision there shall be added automatically as a part of this
Guaranty a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible to be legal, valid and enforceable.

 

Section 6.3           Time of the Essence. Time is of the essence with respect
to this Guaranty and the performance and observance by Guarantor of each
covenant, agreement, provision and term of this Guaranty.

 

Section 6.4           Successors and Assigns. This Guaranty shall be binding
upon Guarantor and Guarantor’s heirs, representatives, successors and assigns
and shall inure to the benefit of the Lender, and its successors and assigns,
except that (a) Guarantor may not assign or transfer Guarantor’s rights
hereunder or any interest herein or delegate its duties hereunder, and (b)
Lender shall have the right to assign its rights hereunder in accordance with
the Credit Agreement.

 

 13 

 

 

Section 6.5          JURY WAIVER. GUARANTOR AND LENDER, BY ITS ACCEPTANCE
HEREOF, HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG GUARANTOR AND LENDER ARISING OUT
OF OR IN ANY WAY RELATED TO THIS GUARANTY, ANY OTHER LOAN DOCUMENT, OR ANY
RELATIONSHIP BETWEEN GUARANTOR AND LENDER. THIS PROVISION IS A MATERIAL
INDUCEMENT TO LENDER TO PROVIDE THE LOAN AND THE MASTER LEASE DESCRIBED HEREIN
AND IN THE OTHER OBLIGOR LOAN DOCUMENTS.

 

Section 6.6           Governing Law. This Guaranty shall be governed by and
construed in accordance with the laws of the State of New York.

 

Section 6.7           JURISDICTION AND VENUE. GUARANTOR HEREBY AGREES THAT ALL
ACTIONS OR PROCEEDINGS INITIATED BY GUARANTOR AND ARISING DIRECTLY OR INDIRECTLY
OUT OF THIS GUARANTY MAY BE LITIGATED IN THE CIRCUIT COURT OF HILLSBOROUGH
COUNTY, FLORIDA OR HAMILTON COUNTY, OHIO, OR THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF FLORIDA OR, IF LENDER INITIATES SUCH ACTION, ANY
COURT IN WHICH LENDER SHALL INITIATE SUCH ACTION AND WHICH HAS JURISDICTION.
GUARANTOR HEREBY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
IN ANY ACTION OR PROCEEDING COMMENCED BY LENDER IN ANY OF SUCH COURTS, AND
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR
PAPERS ISSUED THEREIN, AND AGREES THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR
OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO
GUARANTOR, AT THE ADDRESS TO WHICH NOTICES ARE TO BE SENT PURSUANT TO THIS
GUARANTY. GUARANTOR WAIVES ANY CLAIM THAT HILLSBOROUGH COUNTY, FLORIDA, HAMILTON
COUNTY, OHIO OR THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF
FLORIDA IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE.
SHOULD GUARANTOR, AFTER BEING SO SERVED, FAIL TO APPEAR OR ANSWER TO ANY
SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS
PRESCRIBED BY LAW AFTER THE MAILING THEREOF, GUARANTOR SHALL BE DEEMED IN
DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED BY LENDER AGAINST GUARANTOR
AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. THE
EXCLUSIVE CHOICE OF FORUM FOR GUARANTOR SET FORTH IN THIS SECTION SHALL NOT BE
DEEMED TO PRECLUDE THE ENFORCEMENT BY LENDER OF ANY JUDGMENT OBTAINED IN ANY
OTHER FORUM OR THE TAKING BY LENDER OF ANY ACTION TO ENFORCE THE SAME IN ANY
OTHER APPROPRIATE JURISDICTION, AND GUARANTOR HEREBY WAIVES THE RIGHT, IF ANY,
TO COLLATERALLY ATTACK ANY SUCH JUDGMENT OR ACTION.

 

 14 

 

 

Section 6.8           Entire Agreement. This Guaranty embodies the entire
agreement and understanding between Lender and Guarantor with respect to the
subject matter hereof and supersedes all prior agreements and understandings
between such parties relating to the subject matter hereof. Accordingly, this
Guaranty may not be contradicted by evidence of prior, contemporaneous, or
subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties.

 

Section 6.9           Phrases. When used in this Guaranty, the phrase
“including” (or a word of similar import) shall mean “including, but not limited
to,” the phrase “satisfactory to Lender” shall mean “in form and substance
satisfactory to Lender in all respects,” the phrase “with Lender’s consent” or
“with Lender’s approval” shall mean such consent or approval at Lender’s
discretion, and the phrase “acceptable to Lender” shall mean “acceptable to
Lender at Lender’s discretion”, except as provided otherwise herein. Wherever
the context of this Guaranty may so require, the gender shall include the
masculine, feminine and neuter, and the singular shall include the plural and
vice versa. This Guaranty shall be construed as though drafted by all of the
parties hereto and shall not be construed against or in favor of any party.

 

Section 6.10         Titles of Articles, Sections and Subsections. All titles or
headings to articles, sections, subsections or other divisions of this Guaranty
or the exhibits hereto are only for the convenience of the parties and shall not
be construed to have any effect or meaning with respect to the other content of
such articles, sections, subsections or other divisions, such other content
being controlling as to the agreement between Guarantor and Lender.

 

Section 6.11         Survival. All of the representations, warranties,
covenants, and indemnities hereunder, and any modification or amendment hereof,
shall survive the closing and funding of the Loan and the Master Lease, shall
not be deemed to have merged herein, and shall (except to the extent expressly
provided for herein) remain as continuing representations, warranties, covenants
and indemnities so long as any Obligations is outstanding.

 

Section 6.12         Representation by Legal Counsel. Guarantor acknowledges
that Guarantor has been advised by Lender to seek the advice of legal counsel in
connection with the negotiation and preparation of this Guaranty. If Guarantor
has chosen not to obtain legal representation, whether due to cost
considerations or for other reasons, the lack of such representation shall not
furnish Guarantor with any defense to the enforcement of Lender’s rights
hereunder.

 

Section 6.13         Injunctive Relief. Guarantor recognizes that in the event
Guarantor fails to perform, observe or discharge any of Guarantor’s obligations
hereunder, no remedy of law will provide adequate relief to Lender, and agrees
that Lender shall be entitled to pursue temporary and permanent injunctive
relief in any such case without the necessity of proving actual damages.

 

Section 6.14         Credit Agreement. Guarantor hereby agrees to be bound by
any covenants applicable to, or binding upon, Guarantor in the Obligor Loan
Documents and such covenants are hereby incorporated by reference as if fully
set forth herein.

 

Section 6.15         Modification. This Guaranty shall not be modified,
supplemented, or terminated, nor any provision hereof waived, except by a
written instrument signed by the party against whom enforcement thereof is
sought, and then only to the extent expressly set forth in such writing.

 

 15 

 

 

Section 6.16         Duplicate Originals; Counterparts. This Guaranty may be
executed in any number of duplicate originals, and each duplicate original shall
be deemed to be an original. This Guaranty (and each duplicate original) also
may be executed in any number of counterparts, each of which shall be deemed an
original and all of which together constitute a fully executed Guaranty even
though all signatures do not appear on the same document. Receipt of an executed
signature page to this Guaranty by facsimile or other electronic transmission
shall constitute effective delivery thereof

 

Section 6.17         Recitals. The recital and introductory paragraphs hereof
are a part hereof, form a basis for this Guaranty and shall be considered prima
facie evidence of the facts and documents referred to therein.

 

Section 6.18         Joint and Several Obligations. If Guarantor is a
partnership, the obligations of Guarantor under this Guaranty are the joint and
several obligation of each general partner thereof Any married person signing
this Guaranty agrees that recourse may be had against community property assets
and against his or her separate property for the satisfaction of all obligations
contained herein.

 

Section 6.19         Reliance. Lender would not make the Loan or the Master
Lease to the Borrower without this Guaranty. Accordingly, Guarantor
intentionally and unconditionally enters into the covenants and agreements
herein and understands that, in reliance upon and in consideration of such
covenants and agreements, the Loan and the Master Lease shall be made and, as
part and parcel thereof, specific monetary and other obligations have been, are
being and shall be entered into which would not be made or entered into but for
such reliance.

 

Section 6.20         Waiver of Bankruptcy Stay. Guarantor covenants and agrees
that upon the commencement of a voluntary or involuntary Bankruptcy Proceeding
by or against Guarantor, Guarantor shall not seek a supplemental stay or
otherwise pursuant to 11 U.S.C. §105 or any other provision of the Bankruptcy
Code or any other Debtor Relief Law, to stay, interdict, condition, reduce or
inhibit the ability of Lender to enforce any rights of Lender against Guarantor
by virtue of this Guaranty or otherwise.

 

Section 6.21         Further Assurances. Guarantor shall, upon request by
Lender, execute, with acknowledgment or affidavit if required, and deliver, any
and all documents and instruments required to effectuate the provisions hereof
and of any other Loan Document.

 

[Remainder of page INTENTIONALLY LEFT blank;
signature PAGE FOLLOWS]

 

 16 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Guaranty as of the
Effective Date.

 

  GUARANTOR:       JETPAY CORPORATION,   a Delaware corporation         By: /s/
Gregory M. Krzemien   Name:   Gregory M. Krzemien   Its:   Chief Financial
Officer

 

STATE OF PENNSYLVANIA )   )  SS. COUNTY OF Lehigh )

 

The undersigned, a Notary Public in and for the said County, in the State
aforesaid, DOES HEREBY CERTIFY that Gregory M. Krzemien the Chief Financial
Officer of JETPAY CORPORATION, a Delaware corporation, who is personally known
to me to be the same person whose name is subscribed to the foregoing instrument
appeared before me this day in person and acknowledged that he/she signed and
delivered the said instrument as his/her own free and voluntary act and as the
free and voluntary act of said corporation, for the uses and purposes therein
set forth.

 

GIVEN under my hand and notarial seal this 22nd day of June, 2017.

 

  /s/ Lisa J. Sell   Notary Public       My Commission Expires:       8-26-2019

 

Signature Page to Guaranty Agreement