Exhibit 10.2


 


SETTLEMENT AGREEMENT AND RELEASE


 


This Settlement Agreement
and Release (this “Agreement”) is entered into as of the 26th day of July, 2016, among Trent Voigt, an individual (“Voigt”),
WLES, L.P., a Texas limited partnership (“WLES”), JetPay Corporation, a Delaware corporation f/k/a Universal Business
Payment Solutions Acquisition Corporation (“JetPay”), and JetPay, LLC, a Texas limited liability company (“JPLLC”),
JetPay Merchant Services, LLC a Texas limited liability company and JetPay ISO Services, LLC a Texas limited liability company.


 


RECITALS


 


WHEREAS, WLES, Voigt, JetPay and
certain other entities entered into that certain Agreement and Plan of Merger dated as of July 6, 2012, as amended (the “Merger
Agreement”), pursuant to which WLES and Voigt have certain indemnification obligations to JetPay; and


 


WHEREAS, WLES, JPLLC, JetPay, Merrick
Bank Corporation (“Merrick”) and JPMorgan Chase Bank, NA entered into that certain Escrow Agreement dated as of December
28, 2012 (the “Escrow Agreement”) regarding potential liability of JPLLC to Merrick regarding claims related to the
bankruptcy of Southern Sky Air & Tours LLC d/b/a Direct Air (“Direct Air”); and


 


WHEREAS, Merrick, WLES, JetPay,
JPLLC and certain other parties are entering into that certain Settlement Agreement and Release dated of even date herewith (the
“Merrick Release”) pursuant to which, among other things, JetPay and WLES will take certain actions in order to settle
all disputes between Merrick, WLES, JetPay and the other parties named therein; and


 


WHEREAS, WLES and Voigt on the one
hand, and JetPay, on behalf of itself and its subsidiaries on the other hand, wish to set forth their agreement regarding their
respective obligations and understandings regarding the actions to be taken with respect to the Merrick Release, and to compromise
and settle all claims and counterclaims that could be asserted regarding all things related to Merrick.


 


NOW, THEREFORE, for the mutual promises
and undertakings set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
and intending to be legally bound hereby, the parties agree as follows:


 


		1.	Promissory Notes. WLES will agree to transfer the indebtedness
(including principal and all accrued but unpaid interest) represented by that certain Promissory Note dated December 28, 2012 in
the original principal amount of $2,331,368.68 (the “December 2012 Note”), to Merrick, it being agreed that any obligation
to WLES under that note, except as otherwise detailed herein, shall no longer exist as of the date hereof and of no further force
and effect. WLES will agree to enter into an amendment that will extend the maturity date of that certain Promissory Note dated
June 7, 2013, and amended July 31, 2014 in the original principal amount of $491,693.00 (the “June 2013 Note”)
from September 30, 2016 to September 30, 2017, and agree to waive all interest payments for the period
from September 30, 2016 to September 30, 2017. The June 2013 Note shall become immediately due and payable in the event that Voigt’s
employment with JPLLC is terminated for any reason other than cause, as the same is defined in the amendment to the June 2013 Note.




 






     


     


    

 


		2.	Escrow Shares. The parties agree that 3,333,333 shares of JetPay common stock are being
held in escrow pursuant to the terms of the Escrow Agreement (the “Escrow Shares”). The Escrow Shares are issued in
the name of WLES and are to be released either to Merrick or to WLES upon a settlement of Direct Air related claims. Consistent
with the terms of the Merrick Release, WLES hereby authorizes JetPay to arrange, and WLES agrees to consummate, a private sale
of that number of shares of the Escrow Shares necessary to satisfy JetPay’s obligation to pay $5,000,000 to Merrick under
the Merrick Release; provided that WLES shall not be obligated to sell more than 2,200,000 shares of the Escrow Shares. Upon consummation
of the sale of the Escrow Shares as contemplated herein, JetPay shall issue to WLES fully vested and immediately exercisable warrants
with an expiration date of five years from the date of this Agreement to purchase that number of JetPay shares of common stock
equal to 50% of the difference between the number of Escrow Shares actually sold by WLES as contemplated herein and 1,666,666 shares,
at an exercise price equal to the amount paid for the sold Escrow Shares. By way of example only, if the entire 2,200,000 shares
of Escrow Shares were sold for a purchase price of $2.27 per share, then JetPay would issue WLES a warrant to purchase 266,667
shares at a purchase price of $2.27 per share (2,200,000 – 1,666,666 = 533,334/2 = 266,667). Additionally, as per the terms
of the Merrick Release, the balance of the Escrow Shares following the contemplated sale herein will remain in escrow to secure
JetPay’s obligations under the Merrick Release and all documents (including promissory notes) contemplated therein. In the
event that JetPay should default on its obligations to Merrick under the Merrick Release and some or all of the remaining Escrow
Shares shall be forfeited to Merrick, JetPay agrees to issue to WLES, for no further consideration, that number of JetPay common
stock equal to the forfeited Escrow Shares.



 


		3.	Valley National Bank Litigation. In the event that there is a recovery by JPMS in connection
with the claims brought by JPMS in American Express Travel Related Services and JetPay Merchant Services, LLC v. Valley National
Bank, Civil Action No. 2:14-cv-7827 (D. N.J.) (the “JP-VNB Action”), the parties agree that any proceeds received
will be disbursed as follows:



 






     


     


    

 


		4.	If JetPay receives a net $5,000,000 or more , after all out-of-pocket fees and expenses, from the
sale of the Escrow shares as detailed in #2 above (i) JetPay shall receive the first $3,850,000.00 (or such lesser amount if the
recovery does not exceed that amount) and shall use such amount to prepay JetPay’s obligations to Merrick under the $3.85MM
Note (as defined in the Merrick Release), (ii) the next $3,000,000 (or such lesser amount if the recovery does not exceed that
amount) shall be paid to WLES, and (iii) the remainder, if any, shall be split equally between JetPay and WLES.






 


		5.	If JetPay receives an amount of monies less that a net $5,000,000, after all out-of-pocket fees
and expenses from the sale of the Escrow shares as detailed in #2 above (this amount being the “Shortfall”): (i) JetPay
shall receive the first amount of the sum of $3,850,000 plus the Shortfall, up to a total of $4,100,000.00 (or such lesser amount
if the recovery does not exceed that amount) and shall use such amount to prepay JetPay’s obligations to Merrick under the
$3.85MM Note (as defined in the Merrick Release), (ii) the next $2,500,000 (or such lesser amount if the recovery does not exceed
that amount) shall be paid to WLES, and (iii) if the Shortfall was not fully covered in (i) above, JetPay will receive the next
up to $250,000 until the Shortfall is either fully covered up to a maximum of $500,000 and (iv.) the remainder, if any, shall be
split equally between JetPay and WLES. The parties agree that the provisions of this Agreement supersede the provisions of that
certain letter agreement among them dated as of October 31, 2014 (the “Letter Agreement”) and that the Letter Agreement
shall be null and void and of no effect. All Proceeds received by any party in connection with a final determination of the Direct
Air Matter (as such terms are defined in the Letter Agreement) that are not otherwise addressed in this Agreement shall belong
to WLES.



 


		6.	Release. JetPay, on behalf of itself and all of its affiliates and subject to the satisfaction
of the obligations created by this Agreement in favor of JetPay, for good and valuable consideration, waives, releases, and forever
discharges WLES and Voigt, together with their respective subsidiaries, affiliates, and predecessor companies and entities, and
their respective past and present employees, principals, owners, directors, officers, and agents, from any and all claims, causes
of action, charges, suits, debts, controversies, liabilities, promises, damages, judgments, and demands of any kind, that were
asserted or could have been asserted in connection with all indemnification obligations of WLES and Voigt under the Merger Agreement
with respect to Direct Air related claims.



 


		7.	Miscellaneous. The following provisions shall apply to this Agreement.



 






     


     


    

 


		(a)	Arm’s-Length Agreement. The parties agree that the amount paid and the other terms
of this Agreement were negotiated at arm’s-length in good faith by the parties and reflect a settlement that was reached
voluntarily after consultation with experienced legal counsel



		(b)	Modifications. This Agreement may not be modified or amended, nor may any of its provisions
be waived, except by a writing signed by the parties or their successors-in-interest.



		(c)	Entire Agreement. This Agreement contains the entire agreement and understanding between
the parties concerning the subject matter hereof, and supersedes any prior or contemporaneous discussion or agreements thereon.
The parties acknowledge that no party, or any agent, representative, attorney, or client of a party, has made any promise, representation,
or warranty whatsoever, express or implied, that is not contained herein concerning the subject matter hereof, to induce the other
party to execute this Agreement. The parties acknowledge that they have not executed this Agreement in reliance on any promise,
representation, or warranty not contained herein.



		(d)	Execution in Counterparts. This Agreement may be executed in two or more counterparts. All
executed counterparts and each of them shall be deemed to be one and the same instrument provided that counsel for the parties
to this Agreement shall exchange among themselves electronic copies of original signed counterparts.



		(e)	Governing Law and Jurisdiction. The construction, interpretation, operation, effect and
validity of this Agreement, and all documents necessary to effectuate it, shall be governed by the laws of the State of Texas without
giving effect to its conflict-of-law rules, and the parties expressly agree to be bound by, submit to, and subject to the jurisdiction
of the Federal District Court for the Northern District of Texas or the state courts located in Dallas County, Texas, with respect
to any filing, motion, claim, or action arising out of or relating to this Agreement.



		(f)	Authorized Signatories. Each signatory of this Agreement warrants that he or she is authorized
to enter into and execute this Agreement on behalf of the person or entity for whom/which he or she is signing.



		(g)	Cooperation. The parties agree to cooperate in executing and delivering such other and additional
documents or instruments, and to take all additional actions that may be necessary or appropriate to give full force and effect
to the terms and intent of this Agreement.



		(h)	Agreement the Product of Negotiation. The parties agree that this Agreement is the product
of negotiation between the parties through their separate and respective counsel. In the event of a dispute concerning the interpretation
of this Agreement or of any of its terms or provisions, the Agreement shall be deemed to have been drafted jointly by all of the
parties.



		(i)	No Agency. Nothing in this Agreement, or any action implemented pursuant hereto, shall be
deemed to create an agency or joint venture relationship between the parties.



		(j)	Attorney’s Fees. In the event of any dispute, claim or motion to enforce or
interpret the provisions and obligations of this Agreement, the prevailing party shall be entitled to recover reasonable attorney’s
fees, and all other related costs, plus applicable interest, in addition to any other relief to which that party may be entitled.



		(k)	Notice. Any notices, requests, or demands concerning this Agreement shall be sent by email
and FEDEX to:



 






     


     


    

 


For JetPay Corporation or
JetPay LLC:


 


1175 Lancaster Avenue, Suite
200 Berwyn, PA 19312


 


Attn: Chief Executive Officer


 


With a copy to:


 


Cooper & Sculley, PC


900 Jackson St. Suite 100


Dallas, TX 75202


Attn: Micah Dortch


Micah.Dortch@CooperSculley.com


 


 


For WLES, L.P. or Trent Voigt:


 


2233 Wolf Front Rd.


Van Alstyne, TX 75495


Attn: Trent Voigt


trent@jetpay.co.uk


 


With a copy to:


 


Scheef & Stone, L.L.P.


500 N. Akard, Suite 2700


Dallas, TX 75201


Attn: Brad L. Whitlock


Brad.whitlock@solidcounsel.com





 


Executed to be effective as of
the date set forth above.


 


[Signatures on Following Page]


 




     


     


    




 





	JETPAY CORPORATION	 
	 	 
	 	 
	By: /s/ Peter B. Davidson	 
	 	 
	Printed Name: Peter B. Davidson	 
	 	 
	Title: Vice Chairman	 
	 	 
	 	 
	JETPAY, LLC	 
	 	 
	By: /s/ Peter B. Davidson	 
	 	 
	Printed Name: Peter B. Davidson	 
	 	 
	Title: Vice Chairman	 
	 	 
	 	 
	WLES, L.P.	 
	BY: Transaction Guy & The Triumphant Ones, L.L.C., General Partner	 
	 	 
	By: /s/Trent Voigt	 
	 	 
	Printed Name: Trent Voigt	 
	 	 
	Title: General Partner	 
	 	 
	 	 
	/s/ Trent Voigt	 
	Trent Voigt	 




 






     


     


    

 


 





Side Agreement 


 


The undersigned, JetPay, LLC, (“JetPay”) and WLES,
L.P. (“WLES”), do hereby agree that, WLES agrees to amend the terms of that certain Promissory Note dated June 7, 2013,
and amended July 31, 2014 and September 30, 2014, in the principal amount of $491,693.00 (the “Note”) to extend the
most recent maturity date of the Note from September 30, 2016 to September 30, 2017. Interest will continue to accrue through September
30, 2016 but such accrual will end on September 30, 2016.


 


Executed to be effective as of the 30th day of September,
2016. 


 


JetPay, LLC


 


By: /s/ Peter B. Davidson


 


Its: Vice Chairman


 


  


WLES, L.P.


 


By: Transaction Technology Guy and the Triumphant Ones, LLC


 


General Partner


 


By: /s/ Trent Voigt


 


Trent Voigt, President