Exhibit 10.1


 


INDEMNIFICATION AGREEMENT


 


THIS INDEMNIFICATION
AGREEMENT (this "Agreement") is made and entered into as of October 18, 2016, between JetPay Corporation, a Delaware
corporation (the "Company"), and Laurence L. Stone ("Indemnitee"). Except as otherwise indicated
herein, capitalized terms used herein are defined in Section 23 hereof.


 


WITNESSETH THAT:


 


WHEREAS, highly competent
persons have become more reluctant to serve corporations as directors, officers or in other capacities unless they are provided
with adequate protection through insurance and/or adequate indemnification against inordinate risks of claims and actions against
them arising out of their service to and activities on behalf of the corporation;


 


WHEREAS, the Board
of Directors of the Company (the "Board") has determined that officers, directors and other persons in service
to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to,
among other things, matters that traditionally would have been brought only against the Company or the business enterprise itself;


 


WHEREAS, the uncertainties
relating to indemnification have increased the difficulty of attracting and retaining such persons;


 


WHEREAS, the Board
has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the
Company's stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection
in the future;


 


WHEREAS, it is reasonable,
prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such
persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue
concern that they will not be so indemnified;


 


WHEREAS, this Agreement
is a supplement to and in furtherance of the Amended and Restated Certificate of Incorporation of the Company adopted August 2,
2013 (as the same may be amended from time to time in accordance with its terms, the "Certificate of Incorporation")
and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights
of Indemnitee thereunder or under the laws of State of Delaware;


 


WHEREAS, Indemnitee
is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that
he be provided adequate protection with respect to indemnification;


 


WHEREAS, Indemnitee
has certain rights to indemnification and/or insurance provided by Sundara Investment Partners, LLC, a Delaware limited liability
company (“LS Purchaser”), which Indemnitee and LS Purchaser intend to be secondary to the primary obligation
of the Company to indemnify Indemnitee as provided herein, with the Company's acknowledgement and agreement to the foregoing being
a material condition to Indemnitee's willingness to serve on the Board; and


 


NOW, THEREFORE, in
consideration of Indemnitee's agreement to serve as a director and/or officer of the Company from and after the date hereof, the
parties hereto agree as follows:


 


1. Indemnity of Indemnitee.
The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by Delaware Law, as such may
be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof:


 


(a) Proceedings
Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided
in this Section l(a) if, by reason of his Company Status, the Indemnitee is, or is threatened to be made, a party to or
participant in any Proceeding other than a Proceeding by or in the right of the Company. Pursuant to this Section 1(a),
Indemnitee shall be indemnified against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably
incurred by him, or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, unless it has
been finally adjudicated by a court of competent jurisdiction that, in connection with such specific claim, issue or matter, Indemnitee
failed to act (i) in good faith and (ii) in a manner Indemnitee reasonably believed to be in or not opposed to the best interests
of the Company, or, with respect to any criminal Proceeding, Indemnitee had reasonable cause to believe that Indemnitee’s
conduct was unlawful.


 




     


     


    

 


(b) Proceedings
by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section
1(b) if, by reason of his Company Status, the Indemnitee is, or is threatened to be made, a party to or participant in any
Proceeding brought by or in the right of the Company. Pursuant to this Section 1(b), Indemnitee shall be indemnified against
all Expenses actually and reasonably incurred by the Indemnitee, or on the Indemnitee's behalf, in connection with such Proceeding,
unless it has been finally adjudicated by a court of competent jurisdiction that, in connection with such specific claim,
issue or matter, Indemnitee failed to act (i) in good faith and (ii) in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company, or, with respect to any criminal Proceeding, Indemnitee had reasonable cause to believe
that Indemnitee’s conduct was unlawful. Notwithstanding anything herein to the contrary, no indemnification against such
Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged
to be liable to the Company unless and to the extent that the Court of Chancery of the State of Delaware shall determine that such
indemnification may be made.


 


(c) Indemnification
for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his Company Status, a party to and is successful, on the merits or otherwise, in any Proceeding,
he shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses
actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf
in connection with each successfully resolved claim, issue or matter. For purposes of this Section 1(c) and without limitation,
the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to
be a successful result as to such claim, issue or matter.


 


2. Additional Indemnity.
In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 of this Agreement,
the Company shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by him or on his behalf if, by reason of his Company Status, he is,
or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by or in the right of the Company),
including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee. The only
limitation that shall exist upon the Company's obligations pursuant to this Agreement shall be that the Company shall not be obligated
to make any payment to Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth
in Sections 6 and 7 hereof) to be unlawful.


 


3. Contribution.


 


(a) Whether or not
the indemnification provided in Sections 1 and 2 hereof is available, in respect of any Proceeding in which the Company
is jointly liable with Indemnitee (or would be if joined in such Proceeding) to a third party, and subject to Section 10,
the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such Proceeding without requiring
Indemnitee to contribute to such payment and the Company hereby irrevocably waives and relinquishes any right of contribution it
may have against Indemnitee. The Company shall not enter into any settlement of any Proceeding in which the Company is jointly
liable with Indemnitee (or would be if joined in such Proceeding) unless such settlement provides for a full and final release
of all claims asserted against Indemnitee.


 


(b) Without diminishing
or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect
or be required to pay all or any portion of any judgment or settlement in any Proceeding in which the Company is jointly liable
with Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of Expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative
benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly
liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, from the
transaction from which such Proceeding arose; provided, however, that the proportion determined on the basis of relative
benefit may, or to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company
and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would
be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted
in such Expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may
require to be considered. The relative fault of the Company and all officers, directors or employees of the Company, other than
Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee,
on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by
intent to gain personal profit or advantage, the degree to which their liability is primary or secondary in the degree to which
their conduct is active or passive.


 




     


     


    

 


(c) The Company hereby
agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by directors, officers,
employees or other agents or representatives of the Company, other than Indemnitee, who may be jointly liable with Indemnitee,
for amounts in excess of Indemnitee’s pro rata portion of the amount for which all of the foregoing persons are jointly liable.


 


(d) To the fullest
extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for
any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,
whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection
with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in
light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and
Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding and/or (ii) the relative fault of
the Company (and its directors, officers, employees, agents and representatives) and Indemnitee in connection with such event(s)
and/or transactions, for amounts in excess of Indemnitee's pro rata portion of the amount for which all of the foregoing persons
are jointly liable.


 


4. Indemnification
for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason
of his Company Status, a witness, or is made (or asked) to respond to discovery requests, in any Proceeding to which Indemnitee
is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection
therewith.


 


5. Advancement of
Expenses. Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf
of Indemnitee in connection with any Proceeding by reason of Indemnitee's Company Status within thirty (30) days after the receipt
by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior
to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred
by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses.
Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free.


 


6. Procedures and
Presumptions for Determination of Entitlement to Indemnification; Limitations Period. It is the intent of this Agreement to
secure for Indemnitee rights of indemnity that are as favorable as may be permitted under Delaware Law. Accordingly, the parties
agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled
to indemnification under this Agreement:


 


(a) To obtain indemnification
under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation
and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee
is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification,
advise the Board in writing that Indemnitee has requested indemnification. Notwithstanding the foregoing, any failure of Indemnitee
to provide such a request to the Company, or to provide such a request in a timely fashion, shall not relieve the Company of any
liability that it may have to Indemnitee unless the Company is materially prejudiced by such failure.


 




     


     


    

 


(b) Upon written request
by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a determination with respect to
Indemnitee's entitlement thereto shall be made in the specific case by one of the following four methods, which shall be at the
election of the Board: (i) by a majority vote of the Disinterested Directors, even though less than a quorum, (ii) by a committee
of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum, (iii)
if there are no Disinterested Directors or if the Disinterested Directors so direct, by Independent Counsel in a written opinion
to the Board, a copy of which shall be delivered to the Indemnitee or (iv) if so directed by the Board, by the stockholders of
the Company; provided that from and after the date that a Change of Control occurs, a determination with respect to Indemnitee's
entitlement thereto shall be made in the specific case by Independent Counsel selected by Indemnitee and approved by the Company
(which approval shall not be unreasonably withheld) in a written opinion to the Board, a copy of which shall be delivered to the
Indemnitee.


 


(c) If the determination
of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b)(iii) hereof, the Independent
Counsel shall be selected as provided in this Section 6(c). The Independent Counsel shall be selected by the Board. Indemnitee
may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection
to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected
does not meet the requirements of "Independent Counsel" as defined in Section 23 of this Agreement, and
the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the
person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel
selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such
objection is without merit. If, within twenty (20) days after submission by Indemnitee of a written request for indemnification
pursuant to Section 5(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company
or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction
for resolution of any objection which shall have been made by the Indemnitee to the Company's selection of Independent Counsel
and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall
designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent
Counsel under Section 6(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel
incurred by such Independent Counsel in connection with acting pursuant to Section 6(b) hereof, and the Company shall pay
all reasonable fees and expenses incident to the procedures of this Section 6(c), regardless of the manner in which such
Independent Counsel was selected or appointed.


 


(d) In making a determination
with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume
that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the
burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of the Company (including by
its directors or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement
that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual
determination by the Company (including by its directors or Independent Counsel) that Indemnitee has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.


 


(e) Indemnitee shall
be deemed to have acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests
of the Company if Indemnitee's action is based on (i) the records or books of account of the Enterprise, including financial statements,
(ii) information supplied to Indemnitee by the directors, officers, employees, agents or representatives of the Enterprise in the
course of their duties, (iii) the advice of legal counsel for the Enterprise or (iv) information or records given or reports made
to the Enterprise by an independent certified public accountant, appraiser or other expert or advisor selected by the Enterprise.
In addition, the knowledge and/or actions, or failure to act, of any director, officer, employee, agent or representative of the
Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. It
shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof
and the burden of persuasion by clear and convincing evidence.


 




     


     


    

 


(f) If the person,
persons or entity empowered or selected under Section 6(b) to determine whether Indemnitee is entitled to indemnification
shall not have made a determination within sixty (60) days after the later of (i) receipt by the Company of the request therefor
or (ii) selection of Independent Counsel pursuant to Section 6(c) hereof, the requisite determination of entitlement to
indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement
by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading,
in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided,
however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person,
persons or entity making such determination with respect to entitlement to indemnification in good faith requires such additional
time to obtain or evaluate documentation and/or information relating thereto; and provided, further, that the foregoing provisions
of this Section 6(f) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders
pursuant to Section 6(b) of this Agreement and if (x) within fifteen (15) days after receipt by the Company of the request
for such determination, the Board or the Disinterested Directors, if appropriate, resolve to submit such determination to the stockholders
for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination
is made thereat, or (y) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose
of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such
determination is made thereat.


 


(g) Indemnitee shall
reasonably cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance written request any documentation or information
which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary
to such determination. Any Independent Counsel, member of the Board or stockholder of the Company shall act reasonably and in good
faith in making a determination regarding the Indemnitee's entitlement to indemnification under this Agreement. Any costs or expenses
(including attorneys' fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making
such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification)
and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.


 


(h) The Company acknowledges
that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay,
distraction, disruption and uncertainty. In the event that any Proceeding to which Indemnitee is a party is resolved in any manner
other than by adverse judgment against Indemnitee (including, without limitation, settlement of such Proceeding with or without
payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in
such Proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear
and convincing evidence.


 


(i) The termination
of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the
right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the Company or, solely with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was unlawful.


 


 


(j) No legal action shall be brought and no cause of action
shall be asserted by or in the right of the Company against Indemnitee, Indemnitee's spouse, heirs, executors or personal or legal
representatives after the expiration of 1 year from the date of accrual of such cause of action, and any claim or cause of action
of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such 1 year
period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.


 


7. Remedies of Indemnitee.


 


(a) In the event that
(i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification under
this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 4 of this Agreement, (iii) no determination
of entitlement to indemnification is made pursuant to Section 6(b) of this Agreement within ninety (90) days after the time
periods set forth in Section 6(f) delivery to the Company of the request for indemnification or (iv) payment of indemnification
is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or such determination
is deemed to have been made pursuant to Section 6 of this Agreement or by a court of competent jurisdiction, as applicable,
Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent
jurisdiction, of Indemnitee's entitlement to such indemnification. Indemnitee shall commence such proceeding seeking an adjudication
within two (2) years following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section
7(a). The Company shall not oppose Indemnitee's right to seek any such adjudication.


 




     


     


    

 


(b) In the event that
a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled to indemnification,
any judicial proceeding commenced pursuant to this Section 7 shall be conducted in all respects as a de novo trial on the
merits, and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b).


 


(c) If a determination
shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to indemnification, the Company
shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 7, absent (i) a misstatement
by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's misstatement not materially
misleading in connection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable
law.


 


(d) To the fullest
extent allowable under applicable law, in the event that Indemnitee, pursuant to this Section 7, seeks a judicial adjudication
of his rights hereunder, recovery of damages for breach of this Agreement, or recovery under any directors' and officers' liability
insurance policies maintained by the Company, the Company shall pay on his behalf, in advance, any and all Expenses actually and
reasonably incurred by Indemnitee in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advancement of expenses or insurance recovery; provided, that in the event Indemnitee
is ultimately determined not to be entitled to such indemnification or insurance recovery, as the case may be, then all amounts
advanced pursuant to this Section 7(d) shall be repaid to the Company by Indemnitee.


 


(e) The Company shall
be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures and presumptions
of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all
the provisions of this Agreement. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee,
shall (within ten (10) days after delivery to the Company of a written request therefore) advance, to the extent not prohibited
by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification
or advance of Expenses from the Company under this Agreement or under any directors' and officers' liability insurance policies
maintained by the Company.


 


(f) Notwithstanding
anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be
required to be made prior to the final disposition of the Proceeding.


 


8. Defense of Underlying
Proceedings.


 


(a) Indemnitee agrees
to notify the Company promptly upon being served with any summons, citation, subpoena, complaint, indictment, information, or other
document relating to any Proceeding which may result in the payment of indemnifiable amounts or the advancement of Expenses hereunder;
provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise
affect in any manner any right of Indemnitee, to receive indemnification or advancements of Expenses unless the Company’s
ability to defend in such Proceeding is materially and adversely prejudiced thereby.


 


(b) Subject to the
provisions of the last sentence of this Section 8(b) and of Section 8(c) below, the Company shall have the right
to defend Indemnitee in any Proceeding which may give rise to the payment of indemnifiable amounts hereunder; provided,
however that the Company shall notify Indemnitee of any such decision to defend within ten (10) calendar days of receipt of notice
of any such Proceeding under Section 8(a) above. The Company shall not, without the prior written consent of Indemnitee,
consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission
of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability
in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee. This Section
8(b) shall not apply to a Proceeding brought by Indemnitee.


 


(c) Notwithstanding
the provisions of Section 8(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s
Company Status, (i) Indemnitee reasonably concludes that he or she may have separate defenses or counterclaims to assert with respect
to any issue which may not be consistent with the position of other defendants in such Proceeding, (ii) a conflict of interest
or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense
of such proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s
choice at the expense of the Company.


 




     


     


    

 


9. Non-Exclusivity;
Survival of Rights; Insurance; Primacy of Indemnification.


 


(a) The rights of indemnification
provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under
applicable law, the certificate of incorporation or bylaws (or any similar governing documents), certificate of designation or
otherwise of any Enterprise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict
any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Company Status
prior to such amendment, alteration or repeal. To the extent that a change in the Delaware Law, whether by statute or judicial
decision, permits greater indemnification than would be afforded currently under the Certificate of Incorporation and this Agreement,
it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change.
No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy
shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity
or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion
or employment of any other right or remedy.


 


(b) To the extent that
the Company maintains an insurance policy or policies providing liability insurance for directors, managers, officers, employees
or agents or fiduciaries of any Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their
terms to the maximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy
or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance
with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to
cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with
the terms of such policies.


 


(c) The Company hereby
acknowledges that Indemnitee has certain rights to indemnification, advancement of expenses and/or insurance provided by LS Purchaser.
The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any
obligation of LS Purchaser to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee
are secondary), (ii) that it shall be required to advance the full amount of Expenses incurred by Indemnitee and shall be liable
for the full amount of all Expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted
and as required by the terms of this Agreement and the Certificate of Incorporation (or any other agreement between the Company
and Indemnitee), without regard to any rights Indemnitee may have against LS Purchaser, and (iii) that it irrevocably waives, relinquishes
and releases LS Purchaser from any and all claims against LS Purchaser for contribution, subrogation or any other recovery of any
kind in respect thereof. The Company further agrees that no advancement or payment by LS Purchaser on behalf of Indemnitee with
respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing, and LS Purchaser
shall have a right of contribution and/or be subrogated to the extent of any such advancement or payment to all of the rights of
recovery of Indemnitee against the Company. The Company and Indemnitee agree that LS Purchaser is an express third party beneficiary
of the terms of this Section 8(c).


 


(d) Except as provided
in Section 8(c), in the event of any payment under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of Indemnitee (other than against LS Purchaser or its insurers), who shall execute all
papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.


 


(e) Except as provided
in Section 8(c), the Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable
hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract,
agreement or otherwise.


 


(f) Except as provided
in Section 8(c), the Company's obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving
at the request of the Company as a director, officer, employee or agent of any other corporation, limited liability company, partnership,
joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received
as indemnification or advancement of expenses from such other corporation, limited liability company, partnership, joint venture,
trust, employee benefit plan or other enterprise.


 




     


     


    

 


10. Exception to Right
of Indemnification. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement
to indemnify any Indemnitee in connection with any claim made against Indemnitee:


 


(a) for which payment
has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect
to any excess beyond the amount paid under any insurance policy or other indemnity provision provided, however, that the
foregoing shall not affect the rights of Indemnitee or LS Purchaser set forth in Section 8(c);


 


(b) for an accounting
of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning
of Section 16(b) of the Securities Exchange Act of 1934, as amended, any successor statute or any similar provisions of state statutory
law or common law;


 


(c) in connection with
any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding)
initiated by Indemnitee against the Company or its directors, officers, employees, agents, representatives or other indemnitees,
unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides
the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law; or


 


(d) if such indemnification
is prohibited by applicable law.


 


11. Duration of Agreement.
All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is a director or officer
of the Company (or is or was serving at the request of the Company as a director, manager, officer, employee or agent of another
limited liability company, corporation, partnership, joint venture, trust or other enterprise) and for a period of six (6) years
thereafter and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced
under Section 7 hereof) by reason of his Company Status, whether or not he is acting or serving in any such capacity at
the time any liability or expense is incurred for which indemnification can be provided under this Agreement.


 


12. Successors.
This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective
successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially
all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.


 


 


13. Enforcement. The Company expressly
confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce
Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as a director or officer of the Company.


 


14. Entire Agreement.
This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes
all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter
hereof.


 


15. Severability.
Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable
law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or the effectiveness
or validity of any provision in any other jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained herein. Without limiting the generality of the
foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable
laws.


 


16. Modification and
Waiver. No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing
by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. The failure of any
party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall
not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.


 




     


     


    

 


17. Notices. All
notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given or made (i) when delivered personally to the recipient, (ii) when sent by
confirmed facsimile or email if sent during normal business hours of the recipient; but if not, then on the next Business Day (provided
that any such notice under this clause (ii) shall not be effective unless within one Business Day after the notice is sent, a copy
of such notice is sent to the recipient by first-class mail, return receipt requested, or reputable overnight courier service (charges
prepaid)), (iii) one Business Day after it is sent to the recipient by reputable overnight courier service (charges prepaid) or
(iv) three Business Days after it is mailed to the recipient by first-class mail, return receipt requested. All communications
shall be sent:


 


(a) To Indemnitee at
the address set forth below Indemnitee signature hereto.


 


(b) To the
Company at:


 


JetPay Corporation


1175 Lancaster Avenue, Suite 200


Berwyn, Pennsylvania 19312


Email: gkrzemien@jetpaycorp.com


 


with copies to (which shall
not constitute notice to):


 


Dechert LLP


Cira Centre


2929 Arch Street


Philadelphia, PA 19104


Attention: James A. Lebovitz


Facsimile: (215) 994-2222


Email: james.lebovitz@dechert.com


 


or to such other address as may have been
furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.


 


18. Counterparts;
Electronic Delivery. This Agreement may be executed in multiple counterparts with the same effect as if all signing parties
had signed the same document. All counterparts shall be construed together and constitute the same instrument. This Agreement,
the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated
hereby or thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a photographic, photostatic,
facsimile, or similar reproduction of such signed writing using a facsimile machine or electronic mail shall be treated in all
manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request of any party hereto or as required by any such
agreement or instrument, each other party hereto or thereto shall execute original forms thereof and deliver them to all other
parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or electronic mail to
deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of
a facsimile machine or electronic mail as a defense to the formation or enforceability of a contract and each such party forever
waives any such defense.


 


19. Headings.
The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement.


 




     


     


    

 


20. Governing Law
and Consent to Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of
Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. The
Company and Indemnitee each hereby irrevocably submits to the nonexclusive jurisdiction of the United States District Court for
the State of Delaware and the state courts of the State of Delaware for the purposes of any suit, action or other proceeding arising
out of this Agreement or any transaction contemplated hereby. Each party hereto further agrees that service of any process, summons,
notice or document by United States certified or registered mail to such party's address set forth in Section 17 or such
other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending
party shall be effective service of process in any action, suit or proceeding in Delaware with respect to any matters to which
it has submitted to jurisdiction as set forth above in the immediately preceding sentence. Each party hereto irrevocably and unconditionally
waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in the United States District Court for the State of Delaware or the state courts of the State of Delaware
and hereby irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit
or proceeding brought in such court has been brought in an inconvenient forum.


 


21. MUTUAL WAIVER
OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES),
THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, EACH PARTY TO THIS AGREEMENT
(INCLUDING THE COMPANY) HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE
BETWEEN OR AMONG ANY OF THE PARTIES HERETO, WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED
OR INCIDENTAL TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY AND/OR THE RELATIONSHIPS ESTABLISHED AMONG THE PARTIES HEREUNDER.


 


22. Further Action.
The parties shall execute and deliver all documents, provide all information, and take or refrain from taking such actions as may
be necessary or appropriate to achieve the purposes of this Agreement.


 


23. Definitions.
For purposes of this Agreement:


 


(a) "Beneficial
Owner" with respect to any securities means a person having "beneficial ownership" of such securities (as determined
pursuant to Rule 13d-3 under the Securities Exchange Act, including without limitation, the 60-day provision in paragraph (d)(1)(i)
thereof).


 


(b) “Business
Day” means any day, other than a Saturday, Sunday, or any other date in which banks located in Philadelphia, Pennsylvania
are closed for business as a result of federal, state or local holiday.


 


(c) "Capital
Stock" shall mean any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents
of or interests in (in each case, however designated) stock issued by the Company.


 


(d) "Change
of Control" shall mean (a) any sale or other disposition of all or substantially all of the assets of the Company and
its subsidiaries on a consolidated basis in any transaction or series of related transactions, (b) any sale, transfer or issuance
or series of related sales, transfers and/or issuances of shares of the Capital Stock by the Company or any holder thereof, other
than as a result of the transactions contemplated by the Securities Purchase Agreement, which results in any single Person or group
(as defined in Rule 13d-5 of the Securities Exchange Act of 1934) becoming the Beneficial Owners of Capital Stock of the Company
representing (x) 50% or more of the voting power of all outstanding voting Capital Stock of the Company or (y) the power to elect
a majority of the Board (under ordinary circumstances, by contract or otherwise), or (c) any merger or consolidation to which the
Company is a party; provided that the foregoing clause (c) shall not apply to any merger in which (i) the Company is the
surviving entity and (ii) the holders of the Company's outstanding Capital Stock possessing the voting power (under ordinary circumstances)
to elect a majority of the Company's Board immediately prior to the merger continue to own the Company's outstanding Capital Stock
possessing the voting power (under ordinary circumstances) to elect a majority of the Company's Board immediately after the merger.


 


(e) "Company
Status" describes the status of a person who is or was a manager, director, officer, employee, agent or fiduciary of the
Company or of any other limited liability company, corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise that such person is or was serving at the request of the Company.


 


(f) "Delaware
Law" shall mean the laws of the State of Delaware, each as amended from time to time.


 




     


     


    

 


(g) "Disinterested
Directors" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.


 


(h) "Enterprise"
shall mean the Company and any other limited liability company, corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise that Indemnitee is or was serving at the request of the Company as a manager, director, officer, employee,
agent or fiduciary.


 


(i) "Expenses"
shall include all reasonable attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating,
participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery
in any Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding and
any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments
under this Agreement, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas
bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or
the amount of judgments or fines against Indemnitee.


 


(j) "Independent
Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporate law and neither presently
is, nor in the past five (5) years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either
such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar
indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding
the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine
Indemnitee's rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to
above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating
to this Agreement or its engagement pursuant hereto.


 


(k) "Person"
or "person" shall mean an individual, corporation, limited liability company, association, partnership, group
(as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934), trust, joint venture, business trust or unincorporated
organization, or a government or any agency or political subdivision thereof.


 


(l) "Proceeding"
includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of
the Company or otherwise and whether civil, criminal, administrative or investigative; including one pending on or before the date
of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section 6 of this Agreement to enforce such
Indemnitee’s rights under this Agreement.


 


(m) "Securities
Purchase Agreement" shall mean that certain Amended and Restated Securities Purchase Agreement by and among the Company,
Flexpoint Fund II, L.P. and LS Purchaser dated as of the date hereof.


 


SIGNATURE PAGE TO FOLLOW


 




     


     


    

 


IN WITNESS WHEREOF, the
parties hereto have executed this Agreement on and as of the day and year first above written.


 


	 	COMPANY
	 	 
	 	JETPAY CORPORATION
	 	 	 
	 	By:	 /s/ Gregory M. Krzemien
	 	Name:	 Gregory M. Krzemien
	 	Title:	 Chief Financial Officer
	 	 	 
	 	INDEMNITEE
	 	 	 
	 	 /s/ Laurence L. Stone
	 	Name: Laurence L. Stone
	 	 
	 	Address:
	 	725 Eagle Farm Road
	 	Villanova, PA 19085
	 	 
	 	with a copy (which shall not constitute notice) to:
	 	 
	 	Morgan, Lewis & Bockius LLP
	 	101 Park Avenue
	 	New York, NY 10178-0060
	 	Attention: Eric Tajcher
	 	Facsimile: (212) 309-6001
	 	Email: eric.tajcher@morganlewis.com


 


[Signature Page
to Indemnification Agreement]