Document:

Exhibit 10.3

 

SECOND MODIFICATION OF CREDIT AGREEMENT
AND OTHER LOAN DOCUMENTS

 

THIS SECOND MODIFICATION
OF CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS (this "Amendment") is made as of the 22nd day of June, 2017, by and
among JETPAY PAYMENT SERVICES, FL, LLC, a Delaware limited liability company f/k/a CSI ACQUISITION SUB ONE, LLC, a Delaware
limited liability company ("Borrower"), JETPAY CORPORATION, a Delaware corporation ("Guarantor"),
and FIFTH THIRD BANK, an Ohio banking corporation ("Lender").

 

RECITALS

 

A.           Lender
made a term loan to Borrower in the amount of One Million Sixty-Eight Thousand Nine Hundred Sixty and 30/100 Dollars ($1,068,960.30)
and a revolving line of credit loan to Borrower in the amount of Five Hundred Thousand and No/100 Dollars ($500,000.00) (collectively,
the "Loan") pursuant to the terms and conditions of a Credit Agreement dated as of June 1, 2016 by and between
Borrower and Lender (the "Credit Agreement"), as modified by that certain Modification of Credit Agreement and
Other Loan Documents dated March 23, 2017 (the “Modification Agreement”). The Loan is evidenced by a Promissory
Note dated June 2, 2016 in the original principal amount of One Million Sixty-Eight Thousand Nine Hundred Sixty and 30/100 Dollars
($1,068,960.30) executed by Borrower and made payable to Lender (the “Revolving Note”) and a Promissory Note
dated June 1, 2016 in the original principal amount of Five Hundred Thousand and No/100 Dollars ($500,000.00) executed by Borrower
and made payable to Lender, as increased, amended and restated by that certain Amended and Restated Revolving Promissory Note dated
of even date herewith in the original principal amount of One Million and No/100 Dollars ($1,000,000.00) executed by Borrower and
made payable to Lender (the “Overdraft Note” and together with the Revolving Note, collectively, the "Note").

 

B.           The
Loan is secured by (i) a Security Agreement dated June 1, 2016 executed by Borrower to and for the benefit of Lender (the
“Security Agreement”); (ii) a Continuing Guaranty Agreement dated June 1, 2016 executed by Guarantor in
favor of Lender (the "Guaranty"); and (iii) certain other loan documents (the Note, the Security Agreement,
the Guaranty, the Credit Agreement, the Modification Agreement and the other documents evidencing, securing and guarantying the
Loan, in their original form and as amended from time to time, are sometimes collectively referred to herein as the "Loan
Documents").

 

C.           Borrower
has requested that Lender modify various terms in the Credit Agreement, and Lender has agreed to such modification subject to the
terms and conditions herein provided.

 

NOW, THEREFORE,
in consideration of the Recitals set forth above, the agreements by Lender to modify the Credit Agreement, as provided herein,
the covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Borrower, Guarantor and Lender hereby agree as follows:

 

     

     

    

 

1.           Affirmation
of Recitals. The recitals set forth above are true and correct and are incorporated herein by this reference.

 

2.           Definitions.
Capitalized terms used but not defined in this Amendment shall have the meanings ascribed to such terms in the Credit Agreement.

 

3.           Modifications
to Credit Agreement. The Credit Agreement is hereby modified as follows:

 

(a)          Subsection
(i) in the first WHEREAS clause in the Recitals of the Credit Agreement is hereby amended and restated in its entirety to read
as follows:

 

(i) a term loan in
the amount of One Million Sixty-Eight Thousand Nine Hundred Sixty and 30/100 Dollars ($1,068,960.30); and

 

(b)          Section
1.2 of the Credit Agreement is hereby amended to amend and restate the following definitions in their entirety:

 

“EBITDA”
means, on a consolidated basis, the amount of Borrower’s earnings before interest, taxes, depreciation, amortization, and
noncash expenses for the measurement period.

 

“Fixed
Charge Coverage Ratio” means the ratio of: (a) Borrower’s EBITDA plus rent and operating lease payments, less
distributions, dividends, increases in loans to Guarantor and capital expenditures (other than capital expenditures: (w) incurred
with respect to the Magic Platform, (x) financed with equity contributions funded to Borrower by Guarantor, (y) financed with proceeds
of the purchase money indebtedness or capital leases to the extent permitted under the Loan Documents, or (z) incurred with respect
to the Illinois Contract) and other extraordinary items during the applicable test period, divided by (b) the consolidated sum
of (i) Borrower’s interest expense, plus (ii) all scheduled principal payments (but excluding principal that is payable upon
the Maturity Date) with respect to indebtedness paid or due and payable by the Constituent Entities during the applicable period
plus rent and operating lease expenses incurred in the same such period. For purposes of the definition of Fixed Charge Coverage
Ratio, (i) the term “Magic Platform” shall mean capital expenditures of up to Two Hundred Fifty Thousand and No/100
Dollars ($250,000.00) incurred by Borrower for the creation or implementation of its ‘Magic’ software and operating
platform during the period of June 1, 2016 to December 31, 2016 and (ii) the term “Illinois Contract” shall mean capital
expenditures of up to One Million and No/100 Dollars ($1,000,000.00) incurred by Borrower for the purpose of securing equipment
or funding software integration required under a contract with the State of Illinois during the period of January 1, 2017 to December
31, 2017.

 

    	 	2	 

     

    

 

“Note”
means, individually or collectively: (i) that certain Promissory Note in the stated principal amount of One Million Sixty-Eight
Thousand Nine Hundred Sixty and 30/100 Dollars ($1,068,960.30) dated June 2, 2016 made by Borrower in favor of Lender and (ii)
that certain Amended and Restated Revolving Promissory Note in the stated principal amount of One Million and No/100 Dollars ($1,000,000.00)
dated on or about June 22, 2017 made by Borrower in favor of Lender.

 

“Permitted
Indebtedness” means: (a) the Indebtedness; (b) indebtedness under Hedging Agreements entered into for the sole purpose of
hedging in the normal course of business and not for speculative purposes; (c) purchase money indebtedness (including Capitalized
Lease Obligations) hereafter incurred by Borrower to finance the purchase of fixed assets, provided that such Indebtedness incurred
which shall not exceed in the aggregate One Million and No/100 Dollars ($1,000,000.00) so long as the Loan Documents remain in
effect, other than as set forth on Schedule 1.2; (d) indebtedness existing on the Effective Date that is identified and described
on Schedule 1.2 attached hereto and made part hereof, including refinancing, replacement and renewals of such indebtedness, provided
that any refinancing shall not exceed the amount then outstanding; (e) indebtedness incurred in the ordinary course of business
for surety bonds and performance bonds obtained in connection with workers’ compensation, unemployment insurance and other
social security legislation, (f) indebtedness representing deferred compensation or reimbursable expenses owed to officers, directors,
employees or agents of the Borrower in the ordinary course of business, and (g) the Junior Debt in accordance with the Intercreditor
Agreement.

 

“Permitted
Liens” means (a) Liens securing taxes, assessments or governmental charges or levies for amounts that are not yet due and
payable; (b) Liens of suppliers, carriers, materialmen, warehousemen, workmen or mechanics and other similar Liens, in each case
imposed by law or arising in the ordinary course of business and for amounts that are not yet due and payable; (c) Liens incurred
or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance, social
security and other like laws (excluding Liens arising under ERISA); (d) pledges or cash deposits made in the ordinary course of
business (i) to secure the performance of bids, tenders, leases, sales or other trade contracts (other than for the repayment of
borrowed money or the payment of a deferred purchase price for property or services,) or (ii) made in lieu of, or to secure the
performance of, surety, customs, reclamation or performance bonds (in each case not related to judgments or litigation); (e) Liens
of landlords and mortgagees of landlords (i) with respect to any landlord, solely arising by statute or, with respect to any mortgagee
arising by statute or under any contractual obligations entered into in the ordinary course of business, (ii) on fixtures and movable
tangible property located on the real property leased or subleased from such landlord, (iii) for amounts not yet due or that are
being contested in good faith by appropriate proceedings diligently conducted and (iv) for which adequate reserves or other appropriate
provisions are maintained on the books of such Person in accordance with GAAP; (f) non-exclusive intellectual property licenses
granted in the ordinary course of business; (g) Liens in favor of collecting banks arising under Section 4-210 of the UCC and other
banker’s liens arising by operation of law; (h) Liens on fixed assets securing purchase money indebtedness, provided that,
(i) such Lien attached to such assets concurrently, or with twenty (20) days of the acquisition thereof, and only to the assets
so acquired, and (ii) a description of the asset is furnished to the Lender; (i) Liens existing on the Effective Date and shown
on Schedule 1.2(c) attached hereto and made part hereof; (j) other Liens in favor of Lender under the Loan Documents; (k) Liens
securing appeal bonds and judgments with respect to judgments that do not otherwise result in or cause an Event of Default; and
(l) Liens securing the Junior Debt in accordance with the Intercreditor Agreement.

 

    	 	3	 

     

    

 

(c)          Section
1.2 of the Credit Agreement is hereby amended to include the following additional definitions:

 

“Funded
Indebtedness to EBITDA” means the ratio of: (a) indebtedness (i) in respect of money borrowed, or (ii) evidenced
by a note, debenture (excluding Subordinated Indebtedness) or other like written obligation to pay money, or (iii) in respect of
rent or hire of property under leases or lease arrangements which under GAAP are required to be capitalized, or (iv) in respect
of obligations under conditional sales or other title retention agreements to, (b) EBITDA for the measurement period.

 

“Intercreditor
Agreement” means that certain Intercreditor Agreement by and between Lender and Junior Creditor dated October 18, 2016.

 

“Junior Creditor”
means LHLJ, Inc., a Delaware corporation.

 

“Junior Debt”
has the meaning ascribed to such term in the Intercreditor Agreement.

 

“Subordinated
Indebtedness” means (x) the Junior Debt, and (y) any other Debt that is subordinated to the Obligations owed to Lender,
in a manner satisfactory to Lender in form and substance.

 

(d)          Section
6.5 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

6.5          Additional
Reports and Information. Borrower also shall deliver to Lender, in form and substance reasonably satisfactory to Lender and
within fifteen (15) days of Lender’s written request therefore, all other information relating to Borrower, any guarantor
from time to time obligated to Lender with respect to the Loan, the Property or the Loan (or the Collateral and security therefor)
reasonably required by Lender from time to time, including but not limited to, company prepared agings of accounts.

 

    	 	4	 

     

    

 

(e)          Section
6.7 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

6.7          Financial
Reporting Requirements. During the term of the Loan, Borrower shall:

 

(a)          Commencing
as of December 31, 2017, and continuing annually thereafter within one hundred and twenty (120) days after the end of each
Fiscal Year, deliver annual CPA audited year-end Financial Statements on a consolidated basis with Guarantor (to include, without
limitation, a consolidated balance sheet and a profit and loss statement) as of the end of and for such year of Borrower (and its
subsidiaries, if any) acceptable to Lender in reasonable detail, setting forth in comparative form the corresponding figures for
the corresponding date and period in the preceding Fiscal Year.

 

(b)          Commencing
as of June 30, 2017 and continuing quarterly thereafter, within forty-five (45) days
after the end of each of Borrower’s fiscal quarters, provide to Lender, company-prepared consolidated and consolidating Financial
Statements as of the end of and for such period in reasonable detail to include, without limitation, an operating statement, balance
sheet, profit and loss statement, and statement of cash flows certified to Lender by an Officer of Borrower and acceptable to Lender
in its sole but reasonable discretion.

 

(c)          Commencing
as of June 30, 2017 and continuing quarterly thereafter, within forty-five (45) days
after the end of each of Guarantor’s fiscal quarters, provide to Lender, company-prepared consolidated and consolidating
Financial Statements as of the end of and for such period in reasonable detail to include, without limitation, an operating statement,
balance sheet, profit and loss statement, and statement of cash flows and statements necessary to verify Guarantor’s Liquidity
(as defined in the Guaranty) certified to Lender by an Officer of Borrower and acceptable to Lender in its sole but reasonable
discretion.

 

(d)          Commencing
as of December 31, 2017 and continuing annually thereafter, within one hundred twenty
(120) days after the end of each Fiscal Year, provide to Lender on a consolidated basis, an internally prepared profit and loss
projection statement (including projected balance sheets and cash flow statements) for the ensuing fiscal year, signed by an Officer
of Borrower.

 

    	 	5	 

     

    

 

(e)          Within
forty-five (45) days after the end of each fiscal quarter, commencing with Borrower’s fiscal quarter ending June
30, 2017, provide to Lender a covenant compliance certificate signed by a duly authorized
officer of Borrower in a form approved by Lender.

 

(f)           Intentionally
Omitted.

 

(g)          Promptly
upon receipt thereof, copies of all other material detailed reports (if any) submitted to Borrower by independent certified public
accountants in connection with each annual or interim review of the books of Borrower by such accountants.

 

(h)          Promptly
upon Borrower obtaining knowledge of the occurrence of any default hereunder, a notice thereof, specifying the nature thereof;
and promptly upon the occurrence of any event or the discovery of any fact which would reasonably be expected to result in a Material
Adverse Change, notice thereof specifying the nature thereof.

 

(i)           Borrower
shall maintain proper books of accounts and records and enter therein complete and accurate entries and records of all of its transactions
in accordance with generally accepted accounting principles and give representatives of Lender access thereto during normal business
hours and upon reasonable prior notice, including permission to: (i) examine, copy and make abstracts from any books and records
and such other information which might be helpful to Lender in evaluation the status of the Obligations as it may reasonably request
from time to time, and (ii) communicate directly with any of Borrower’s officers, employers, agents, accountants or other
financial advisors with respect to the business, financial conditions and other affairs of Borrower.

 

(f)           Section
6.8 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

6.8           Fixed
Charge Coverage Ratio. Borrower shall maintain a minimum Fixed Charge Coverage Ratio of 1.20 to 1.00, to be measured
quarterly and tested at each quarter end, commencing June 30, 2017 and continuing each quarter thereafter for the remaining term
of the Loan. This covenant shall be tested on a trailing 4-quarter basis.

 

(g)          Section
6.10 is hereby amended by amending and restating clause (g) thereof in its entirety as follows:

 

    	 	6	 

     

    

 

(g)          guaranty
or become obligated for the Debts of any other entity or person, or hold itself out to be responsible or pledge its assets or credit
worthiness for the Debts of another person or entity, or allow any person or entity to hold itself out to be responsible or pledge
its assets or credit worthiness for the Debts of Borrower (except for Guarantor, and except with respect to the Junior Debt in
accordance with the Intercreditor Agreement);

 

(h)          Section
6.18 is hereby added to the Credit Agreement reading as follows:

 

6.18        Funded
Indebtedness to EBITDA Ratio. At each quarter end, commencing June 30, 2017, and at the end of each quarter thereafter during
the term of the Loan, Borrower shall be obligated to maintain a Funded Indebtedness to EBITDA Ratio of not greater than 2.00 to
1.00. This covenant shall be tested on a trailing 4-quarter basis.

 

(i)           Section
7.2 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

7.2          Installation
of Collateral. Borrower shall not install in, or use in connection with, the Collateral, any personal property which any Person
other than Lender has the right to remove or repossess under any circumstances, or on which any Person other than Lender has a
lien, except, in each case, terminals installed with Borrower’s clients in the ordinary course of Borrower’s business.

 

(j)           Section
7.3 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

7.3          Removal
of Collateral. Borrower shall not cause or permit the removal from the Premises any items of Collateral, other than sales or
installations of terminals with Borrower’s clients in the ordinary course of Borrower’s business, unless: (a) no Event
of Default has occurred, and (b) Borrower promptly substitutes other items of equal or greater value, all of which items shall
be free of liens (other than liens in favor of Lender or such other Person as Lender shall permit in writing) and shall be subject
to the lien of the Security Agreement, and executes and delivers to Lender all documents required by Lender in connection with
the attachment of such liens to such items. Borrower shall keep records of each such removal and shall make such records available
to Lender upon written request from time to time

 

(j)           Section
8.1(t) of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

    	 	7	 

     

    

 

(t)           Borrower
fails to comply with the financial covenants contained in Section 6.8 or Section 6.18 of this Agreement; provided, however, if
and only if Borrower’s failure to comply with the financial covenant contained in Section 6.18 of this Agreement is caused
solely by the balance of that certain $1,000,000.00 overdraft Amended and Restated Revolving Promissory Note made by Borrower in
favor of Lender dated __________, 2017, such failure shall not be an Event of Default unless it continues unremedied for a period
of ten (10) days after Borrower obtains actual knowledge of such failure.

 

4.           Modifications
to Guaranty. The Guaranty is hereby amended to include new Section 9, reading as follows:

 

9.           Minimum
Liquidity. Until such time as the Loan has 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.

 

5.           Representations
and Warranties of Borrower. Borrower hereby represents, covenants and warrants to Lender as follows:

 

(a)          The
representations and warranties in the Credit Agreement and the other Loan Documents are true and correct in all material respects
as of the date hereof.

 

(b)          There
is currently no Event of Default under the Loan Documents and Borrower does not have knowledge of any event or circumstance which
with the giving of notice or the passage of time, or both, would constitute an Event of Default under the Loan Documents.

 

(c)          The
Loan Documents are in full force and effect and, following the execution and delivery of this Amendment, the Loan Documents continue
to be the legal, valid and binding obligations of Borrower, enforceable in accordance with their respective terms, subject to limitations
imposed by bankruptcy, insolvency, other debtor relief laws and general principles of equity.

 

    	 	8	 

     

    

 

(d)          As
of the date hereof, Borrower has no claims, counterclaims, defenses or set-offs with respect to the Loan or the Loan Documents
as modified herein.

 

(e)          Borrower
validly exists under the laws of the State of its formation or organization and has the requisite power and authority to execute
and deliver this Amendment and to perform the Loan Documents as modified herein. The execution and delivery of this Amendment by
Borrower and the performance by Borrower of the Loan Documents as modified herein have been duly authorized by all requisite action
by or on behalf of Borrower. This Amendment has been duly executed and delivered on behalf of Borrower.

 

6.           Reaffirmation
of Guarantor Documents. Guarantor hereby ratifies and affirms the Guaranty, as modified herein, and agrees that the Guaranty,
as modified herein, is in full force and effect following the execution and delivery of this Amendment. To Guarantor's actual knowledge,
the representations and warranties of Guarantor as contained in the Guaranty are, as of the date hereof, true and correct and Guarantor
does not have actual knowledge of any default thereunder. The Guaranty, as modified herein, continues to be the valid and binding
obligation of Guarantor, enforceable in accordance with its terms, subject to limitations imposed by bankruptcy, insolvency, other
debtor relief laws and principles of equity, and Guarantor has no claim or defense to the enforcement of the rights and remedies
of Lender thereunder, except as specifically provided otherwise in the Guaranty. The execution and delivery of this Amendment by
Guarantor and the performance by Guarantor of its obligations under the Loan Documents have been duly authorized by all requisite
action by or on behalf of Guarantor. This Amendment has been duly executed and delivered on behalf of Guarantor.

 

7.           Loan
Fees and Expenses. As a condition precedent to Lender's agreement to enter into this Amendment, Borrower hereby agrees
to pay, promptly upon request therefor, all reasonable out-of-pocket costs and expenses incurred by Lender in connection with this
Amendment, including, without limitation, reasonable attorneys’ fees and expenses.

 

8.           Release
of Claims. Borrower, Guarantor and any other obligors, on behalf of themselves and their respective successors and assigns
(collectively and individually, "Borrower Parties"), hereby fully, finally and completely RELEASE AND FOREVER
DISCHARGE  Lender and its successors, assigns, affiliates, subsidiaries, parents, officers, shareholders, directors, employees,
servicers, attorneys, agents and properties, past, present and future, and their respective heirs, successors and assigns (collectively
and individually, "Lender Parties"), of and from any and all claims, controversies, disputes, liabilities, obligations,
demands, damages, debts, liens, actions and causes of action of any and every nature whatsoever, known or unknown, whether at law,
by statute or in equity, in contract or in tort, under state or federal jurisdiction, and whether or not the economic effects of
such alleged matters arise or are discovered in the future, which Borrower Parties have as of the date of this Amendment or may
claim to have against Lender Parties arising out of or with respect to any and all transactions relating to the Loan or the Loan
Documents occurring on or before the date of this Amendment, including any loss, cost or damage of any kind or character arising
out of or in any way connected with or in any way resulting from the acts, actions or omissions of Lender Parties occurring on
or before the date of this Amendment.  The foregoing release is intended to be, and is, a full, complete and general release
in favor of Lender Parties with respect to all claims, demands, actions, causes of action and other matters described therein,
including specifically, without limitation, any claims, demands or causes of action based upon allegations of breach of fiduciary
duty, breach of any alleged duty of fair dealing in good faith, economic coercion, usury, or any other theory, cause of action,
occurrence, matter or thing which might result in liability upon Lender Parties arising or occurring on or before the date of this
Amendment.  Borrower Parties understand and agree that the foregoing general release is in consideration for the agreements
of Lender contained herein and that they will receive no further consideration for such release.

 

    	 	9	 

     

    

 

9.           Miscellaneous.

 

(a)          An
Event of Default hereunder shall be an "Event of Default" under Section 8.1 of the Credit Agreement entitling Lender
to all of the remedies afforded Lender in Section 8.2 of the Credit Agreement.

 

(b)          This
Amendment shall be governed by and construed in accordance with the laws of the State of Florida without regard to its conflict
of law principles.

 

(c)          Borrower,
Guarantor and Lender acknowledge that there are no other understandings, agreements or representations, either oral or written,
express or implied, with respect to the Loan that are not embodied in the Loan Documents and this Amendment, which collectively
represent a complete integration of all prior and contemporaneous agreements and understandings of Borrower, Guarantor and Lender
with respect to the Loan; and that all such prior understandings, agreements and representations are hereby modified as set forth
in this Amendment. Except as expressly modified hereby, the terms of the Loan Documents are and remain unmodified and in full force
and effect.

 

(d)          This
Amendment shall bind and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors
and assigns. The paragraph and section headings used herein are for convenience only and shall not limit the substantive provisions
hereof. All words herein which are expressed in the neuter gender shall be deemed to include the masculine, feminine and neuter
genders. Any word herein which is expressed in the singular or plural shall be deemed, whenever appropriate in the context, to
include the plural and the singular.

 

(e)          Any
references to the Note, the Credit Agreement or the Loan Documents, contained in any of the Loan Documents shall be deemed to refer
to the Note, the Credit Agreement and the other Loan Documents as amended hereby. This Agreement shall be deemed a "Loan Document"
and accordingly, the definition of the term "Loan Documents" appearing in the Loan Documents is hereby amended to include,
in addition to the documents already covered thereby, this Agreement.

 

    	 	10	 

     

    

 

(f)           This
Amendment may be executed in one or more counterparts, all of which, when taken together, shall constitute one original Amendment.

 

(g)          Time
is of the essence of each of Borrower's obligations under this Amendment.

 

(h)          If
one or more of the provisions contained in this Amendment shall for any reason be held to be invalid, illegal or unenforceable
in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other
provision of this Amendment, and this Amendment shall be construed as if such invalid, illegal or unenforceable provision had never
been contained herein or therein.

 

[SIGNATURE PAGE TO FOLLOW]

 

    	 	11	 

     

    

 

[Signature Page to Second Modification of
Credit Agreement and Other Loan Documents]

 

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

 

	 	BORROWER:
	 	 
	 	JETPAY PAYMENT SERVICES, FL, LLC, a Delaware limited liability company
	 	 	 	 
	 	By:	JetPay Corporation, its sole member
	 	 	 	 
	 	 	By	/s/ Gregory M. Krzemien
	 	 	Name:	Gregory M. Krzemien
	 	 	Its:	Chief Financial Officer
	 	 	 	 
	 	GUARANTOR:
	 	 
	 	JETPAY CORPORATION,
	 	a Delaware corporation 
	 	 	 	 
	 	By:	/s/ Gregory M. Krzemien
	 	Name:	Gregory M. Krzemien
	 	Its:	Chief Financial Officer
	 	 	 	 
	 	LENDER:
	 	 
	 	FIFTH THIRD BANK,
	 	an Ohio banking corporation 
	 	 	 	 
	 	By:  	/s/ Brian Holliday
	 	Name:	Brian Holliday
	 	Its:	Vice President

 

    	 	12Exhibit 10.4

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT
(this “Agreement”) is made as of June 22, 2017 (the “Effective Date”)
by and between FIFTH THIRD BANK, an Ohio banking corporation located at 201 East Kennedy
Blvd., Suite 1800, Tampa, Hillsborough County, Florida 33602 (the “Secured Party”) and JETPAY PAYMENT
SERVICES, FL, LLC, a Delaware limited liability company (the “Debtor”). The
Debtor’s principal address is 3939 West Drive, Center Valley, Pennsylvania 18034. Debtor and Secured Party hereby agree
as follows:

 

WITNESSETH:

 

WHEREAS, Debtor is indebted
to Secured Party in the aggregate principal amount of ONE MILLION SIX HUNDRED THOUSAND and 00/100 DOLLARS ($1,600,000.00) (the
“Loan”) pursuant to the terms and conditions of that certain Credit Agreement dated of even date herewith by
and between Borrower and Lender (the “Credit Agreement”) and which indebtedness is evidenced by that certain
Promissory Note of even date herewith, executed by Debtor and made payable to the order of Secured Party in the stated principal
amount of $1,600,000.00 (the “Note”), and all agreements, instruments and documents executed or delivered in connection
with any of the foregoing or otherwise related thereto (collectively, together with any amendments, modifications, or restatements
thereof, the “Loan Documents”).

 

1.           OBLIGATIONS.
This assignment of collateral and grant of security interest shall secure (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, this Agreement, the Note, and/or any of the other 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 this Agreement by its terms secures; (iii) the performance and observance of the covenants and
agreements contained in this Agreement, the Note and each of the other Loan Documents; (iv) the Rate Management Obligations (as
defined in the Credit Agreement), except for Rate Management Obligations that constitute Excluded Swap Obligations (as defined
in the Credit Agreement); (v) all obligations to perform or forbear from performing acts, and agreements, instruments 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 Secured Party hereunder or any other
document, instrument 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 Debtor owed to each of Secured
Party 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 Secured Party or owed to others and acquired
by Secured Party by purchase, assignment or otherwise, and all obligations to perform or forbear from performing acts, and agreements,
instruments 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 Secured Party
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 (collectively, the “Obligations”).

 

     

     

    

 

2.           COLLATERAL.
The Debtor hereby grants to Secured Party a security interest in all right, title and interest of Debtor in all now owned
or hereafter acquired or arising and wherever located personal property and assets of Debtor, including, but not limited to, those
identified below (together with all proceeds and products thereof and all additions and accessions thereto, replacements thereof,
supporting obligations therefor, software related thereto, guaranties thereof, insurance or condemnation proceeds thereof,
documents related thereto, all sales of accounts constituting a right to payment therefrom, all tort or other claims against
third parties arising out of damage thereto or destruction thereof, all property received wholly or partly in trade or exchange
therefor, all fixtures attached or appurtenant thereto, all leases thereof, and all rents, revenues, issues, profits and proceeds
arising from the sale, lease, license, encumbrance, collection, or any other temporary or permanent disposition thereof, or
any other interest therein, collectively, the “Collateral”):

 

(a)          All
Accounts, all Inventory, all Equipment, all General Intangibles, all Investment Property and any and all Rate Management Obligations.

 

(b)          All
instruments, chattel paper, electronic chattel paper, documents, securities, moneys, cash, letters of credit, letter of credit
rights, promissory notes, warrants, dividends, distributions, contracts, agreements, contract rights or other property, owned
by Debtor or in which Debtor has an interest, including but not limited to, those which now or hereafter are in the possession
or control of Secured Party or in transit by mail or carrier to or in the possession of any third party acting on behalf of
Secured Party, without regard to whether Secured Party received the same in pledge, for safekeeping, as agent for collection
or transmission or otherwise or whether Secured Party had conditionally released the same, and the proceeds thereof, all rights
to payment from, and all claims against Secured Party, and any deposit accounts of Debtor with Secured Party, including all
demand, time, savings, passbook or other accounts and all deposits therein.

 

(c)          All
assets and all personal property now owned or hereafter acquired; all now owned and hereafter acquired inventory, equipment,
fixtures, goods, accounts, chattel-paper, documents, instruments, farm products, general intangibles, supporting obligations,
software, commercial tort claims, minerals, standing timber, growing crops and all rents, issues, profits, products and proceeds
thereof, wherever any of the foregoing is located.

 

    	 	2	 

     

    

 

3.           DEFINITIONS.
Capitalized terms not otherwise defined in this Agreement shall have the meanings attributed thereto in the applicable version
of the Uniform Commercial Code adopted in the State of Delaware or, where appropriate, the jurisdiction in which the Collateral
is located, as such definitions may be enlarged or expanded from time to time by legislative amendment thereto or judicial
decision (the “Uniform Commercial Code” or the “UCC”). As used herein, the following
capitalized terms shall have the following meanings:

 

(a)          “Accounts”
means all accounts, accounts receivable, health-care insurance receivables, credit card receivables, contract rights, instruments,
documents, chattel paper, tax refunds from federal, state or local governments and all obligations in any form including without
limitation those arising out of the sale or lease of goods or the rendition of services by Debtor, all guaranties, letters
of credit and other security and support obligations for any of the above; all merchandise returned to or reclaimed by Debtor,
and all books and records (including computer programs, tapes and data processing software) evidencing any interest in or
relating to the above; all winnings in a lottery or other game of chance operated by a governmental unit or person licensed
to operate such game by a governmental unit and all rights to payment therefrom; and all “Accounts” as
same is now or hereinafter defined in the Uniform Commercial Code.

 

(b)          “Equipment"
means all goods (excluding inventory, farm products or consumer goods), all machinery, machine tools, equipment, fixtures,
office equipment, furniture, furnishings, motors, motor vehicles, tools, dies, parts, jigs, goods (including, without limitation,
each of the items of equipment set forth on any schedule which is either now or in the future attached to Secured Party’s
copy of this Agreement), and all attachments, accessories, accessions, replacements, substitutions, additions and improvements
thereto, all supplies used or useful in connection therewith, and all “Equipment” as same is now or hereinafter
defined in the Uniform Commercial Code.

 

(c)          “General
Intangibles” means all general intangibles, chooses in action, causes of action, obligations or indebtedness owed
to Debtor from any source whatsoever, payment intangibles, software and all other intangible personal .property of every kind
and nature (other than Accounts) including without limitation patents, trademarks, trade names, service marks, copyrights
and applications for any of the above, and goodwill, trade secrets, licenses, franchises, rights under agreements, tax refund
claims; and all books and records including all computer programs, disks, tapes, printouts, customer lists, credit files and
other business and financial records, the equipment containing any such information, and all “General Intangibles”
as same is· now or hereinafter defined in the Uniform Commercial Code.

 

(d)          “Inventory”
means goods, supplies, wares, merchandises and other tangible personal property, including raw materials, work in process,
supplies and components, and finished goods, whether held for sale or lease, or furnished or to be furnished under any contract
for service, or used or consumed in business, and also including products of and accessions to inventory, packing and shipping
materials, all documents of title, whether negotiable or non-negotiable, representing any of the foregoing, and all “Inventory”
as same is now or hereinafter defined in the Uniform Commercial Code.

 

    	 	3	 

     

    

 

(e)          “Investment
Property” means a security, whether certificated or uncertificated security, entitlement, securities account, commodity
contract or commodity account and all “Investment Property” as same is now or hereafter defined in the Uniform
Commercial Code.

 

4.           WARRANTIES
AS TO DEBTOR. Debtor hereby represents and warrants to Secured Party as follows:

 

(a)          Debtor
is a Delaware limited liability company, and is duly organized, validly existing and in good standing under the laws of the State
of Delaware and its status in Florida is active.

 

(b)          Debtor’s
exact legal name, its Taxpayer I.D. and its Organizational Number are as follows:

 

	DEBTOR:	 	TAXPAYER I.D.:	 	ORG. NO.:
	 	 	 	 	 
	JETPAY PAYMENT	 	81-2280449	 	M16000004288
	SERVICES, FL, LLC	 	 	 	 

 

(c)          Debtor’s
chief executive office and places of business are located at the addresses set forth on Exhibit A attached hereto and incorporated
herein by reference (collectively, the “Place of Business”).

 

5.           WARRANTIES
AS TO THE COLLATERAL. Debtor hereby represents and warrants to Secured Party that:

 

(a)          Except
for the security interest hereby granted and Permitted Liens (as defined in the Credit Agreement), Debtor is, and as to any property
which at any time forms a part of the Collateral, shall be, the sole owner of, with good and marketable title in, each and every
item of the Collateral, or otherwise shall have the full right and power to grant a security interest in the Collateral, free from
any lien, security interest or encumbrance whatsoever;

 

(b)          Each
item of Collateral is, and shall be, valid, and all information furnished to Secured Party with regard thereto is, and shall
be, accurate and correct in all respects when furnished;

 

(c)          The
provisions of this Agreement are sufficient to create in favor of Secured Party a valid and continuing lien on, and first
security interest in, the types of Collateral in which a security interest may be perfected by the filing of UCC Financing
Statements, and when such UCC Financing Statements are filed in the appropriate filing offices, and the requisite filing fees
are paid, such filings shall be sufficient to perfect such security interests (other than Equipment affixed to real property
so as to become fixtures);

 

    	 	4	 

     

    

 

(d)          If
any of the Collateral is or will be attached to real estate in such a manner as to become a fixture under applicable state
law, that said real estate is not encumbered in any way, or if said real estate is encumbered, Debtor will secure from the
lien holder or the party in whose favor it is or will become so encumbered a written acknowledgment and subordination to the
security interest hereby granted in such form as is acceptable to Secured Party;

 

(e)          The
financial statements of Debtor for the most recent ended fiscal period and heretofore submitted to the Secured Party are true and
correct in all material respects, and there are no material adverse changes in the conditions, financial or otherwise, of Debtor
since the date of said financial statements; and

 

(f)           All
Collateral consisting of goods (equipment, inventory, fixtures, crops, unborn young of animals, timber to be cut, manufactured
homes; and other tangible, movable personal property) shall be held at the Debtor’s Place of Business or at such other locations
as are acceptable to Secured Party or as otherwise permitted under the Credit Agreement. To the extent that the Collateral consists
of vehicles, or other titled property, Debtor shall not take or permit any action which would require application for certificates
of title for the vehicles outside of the state in which they are currently titled without Secured Party’s prior written consent.

 

6.           DEBTOR’S
RESPONSIBILITIES. Debtor covenants with, and warrants to, Secured Party that Debtor shall:

 

(a)          Execute
and deliver such supplemental instruments, documents, agreements and chattel paper, in the form of assignments or otherwise,
as Secured Party shall reasonably require for the purpose of confirming and perfecting, and continuing the perfection of,
Secured Party’s security interest in any or all of such Collateral, or as is reasonably necessary to provide Secured
Party with control over the Collateral or any portion thereof;

 

(b)          At
its expense and upon request of Secured Party, furnish copies of invoices issued by Debtor in connection with the Collateral,
furnish certificates of insurance evidencing insurance on Collateral, furnish proof of payment of taxes and assessments on
Collateral, make available to Secured Party, during normal business hours and upon reasonable prior notice, any and all of Debtor's
books, records, written memoranda, correspondence, purchase orders, invoices and other instruments or writings that in any
way evidence or relate to the Collateral;

 

(c)          Keep
the Collateral insured at all times against risks of loss or damage by fire (including so-called extended coverage), theft
and such other casualties including collision in the case of any motor vehicle, in accordance with the Credit Agreement;

 

(d)          Pay
all taxes or assessments imposed on or with respect to the Collateral, unless the same are being contested in accordance with Section
6.13 of the Credit Agreement;

 

(e)          Keep
all of the Collateral in good condition and repair (ordinary wear and tear excepted), protecting it from weather and other contingencies
which might adversely affect it as secured hereunder;

 

    	 	5	 

     

    

 

(f)           Notify
Secured Party immediately in writing of any information which Debtor has or may receive which might in any material respect
adversely affect the value of the Collateral or the rights of Secured Party with respect thereto;

 

(g)          Notify
Secured Party promptly, in writing, of any change in the Debtor's exact legal name or any change in the legal name of Debtor
or of any change in the location of the Collateral or of any Place of Business or mailing addresses or the establishment of
any new place of business or mailing address;

 

(h)          Pay
all costs of filing any financing, continuation or termination statements with respect to the security interest created hereby;

 

(i)           Upon
the occurrence of an Event of Default or breach of any provision of this Security Agreement, pay all expenses and reasonable
attorneys’ fees of Secured Party; and Debtor agrees that said expenses and fees shall be secured under this Agreement;

 

(j)           Maintain
possession of all Collateral at the location disclosed to Secured Party and not remove the Collateral from that location except
in the ordinary course of Debtor's business or upon advance notice to Lender;

 

(k)          Except
as permitted in the Credit Agreement, not sell, contract to sell, lease, encumber, or otherwise transfer the Collateral (other
than inventory) until the Obligations have been paid and performed, Debtor acknowledging nonetheless that Secured Party
has a security interest in the proceeds of such Collateral; and

 

(l)           Take
any other and further action necessary or desirable as requested by Secured Party to grant Secured Party control over the
Collateral, as “control” is defined in the applicable version of the Uniform Commercial Code, including without
limitation (i) executing and/or authenticating any assignments or third party agreements; (ii) delivering, or causing the
delivery of, any of the Collateral to the possession of Secured Party; or (iii) using commercially reasonable efforts to obtain
written acknowledgements of the lien of Secured Party and agreements of subordination to such lien from third parties in possession
of the Collateral in a form acceptable to Secured Party. Debtor consents to and hereby authorizes any third party in an authenticated
record or agreement between Debtor, Secured Party, and the third party, including but not limited to depository institutions,
securities intermediaries, and issuers of letters of credit or other support obligations, to accept direction from Secured
Party regarding the maintenance and disposition of the Collateral and the products and proceeds thereof, and to enter into
agreements with Secured Party regarding same, without further consent of the Debtor.

 

7.           ACCOUNTS
RECEIVABLE. Debtor hereby agrees that, upon an Event of Default, Secured Party shall have the absolute right to take any one
or all of the following actions:

 

(a)          Secured
Party may serve written notice on Debtor instructing Debtor to deliver to Secured Party all subsequent payments on accounts
receivable which Debtor shall do until notified otherwise;

 

    	 	6	 

     

    

 

(b)          Secured
Party may notify the account debtor(s) of its security interest and instruct such account debtor(s) to make further payments
on such accounts to Secured Party instead of to Debtor; and

 

(c)          Secured
Party may serve written notice upon Debtor that all subsequent billings or statements of account rendered to any account debtor
shall bear a notation directing the account debtor(s) to make payment directly to Secured Party. Any payment received by Secured
Party pursuant to this paragraph shall be retained in a separate non-interest bearing account as security for the payment
and performance of all Obligations of Debtor.

 

8.           POWER
OF ATTORNEY. Upon an Event of Default, Debtor hereby makes, constitutes and appoints Secured Party its true and lawful
attorney in fact to act, with full power of substitution, with respect to the Collateral in any transaction, legal proceeding,
or other matter in which Secured Party is acting pursuant to this Agreement, including but not limited to executing, authenticating
and/or filing on its behalf: (i) UCC Financing Statements and amendments thereto reflecting the lien of Secured Party upon
the Collateral and any other documents necessary or desirable to perfect or otherwise continue the security interest granted
herein; and (ii) any third party agreements or assignments to grant Secured Party control over the Collateral, including but
not limited to third party agreements between Debtor, Secured Party, and depository institutions, securities intermediaries,
and issuers of letters of credit or other support obligations, which third party agreements direct the third party to accept
direction from Secured Party regarding the maintenance and disposition of the Collateral and the products and proceeds thereof.

 

9.           EVENTS
OF DEFAULT. Any of the following events shall be an “Event of Default” hereunder:

 

(a)          An
event of default occurs under any agreement, instrument or document evidencing, guarantying, securing or otherwise executed or
delivered in connection with any of the Obligations, as “Event of Default” shall be defined therein;

 

(b)          Transfer
or disposition of any of the Collateral other than in the ordinary course of business, except as expressly permitted by this Agreement
or the Credit Agreement;

 

(c)          Attachment,
execution or levy on any of the Collateral; or

 

(d)          Secured
Party shall receive at any time following the closing a UCC filing report indicating that Secured Party’s security interest
is not prior to all other security interests or other interests reflected in the report (other than Permitted Liens).

 

10.         REMEDIES.
Upon any Event of Default, Secured Party may pursue any remedy available at law (including those available to a secured party under
the provisions of the UCC) or in equity to collect, enforce or satisfy any Obligations then owing, whether by acceleration or otherwise.
Upon any Event of Default, Secured Party shall have the right to pursue any of the following remedies separately, successively
or concurrently:

 

    	 	7	 

     

    

 

(a)          Declare
the Obligations, including any prepayment penalty which Borrower would be required to pay, immediately due and payable, without
notice of any kind to Debtor.

 

(b)          File
suit and obtain judgment and, in conjunction with any action, Secured Party may seek any ancillary remedies provided by law or
at equity, including levy of attachment and garnishment.

 

(c)          Take
possession of any Collateral if not already in its possession without demand and without legal process. Upon Secured Party’s
demand, Debtor will assemble and make the Collateral available to Secured Party as it directs. Debtor grants to Secured Party the
right, for this purpose, to enter into or on any premises where Collateral may be located.

 

(d)          Without
taking possession, sell, lease or otherwise dispose of the Collateral at public or private sale in accordance with the UCC.

 

(e)          Seek
appointment of a receiver to take possession of all or any part of the Collateral, with the power to protect and preserve the Collateral,
to operate the Collateral preceding foreclosure or sale, and to collect the rents from the Collateral and apply the proceeds, over
and above the cost of the receivership, against the Obligations. The receiver may serve without bond if permitted by law.

 

(f)           Collect
the payments, rents, income, and revenues from the Collateral.

 

(g)          If
Secured Party chooses to sell any or all of the Collateral, Secured Party may obtain a judgment against Borrower for any deficiency
remaining on the Obligations after application of amounts received from the exercise of the rights provided in this Security Agreement.

 

11.         FORECLOSURE
PROCEDURES. 

 

(a)          No
delay or omission by Secured Party to exercise any right or remedy accruing upon any Event of Default shall (i) impair any right
or remedy, (ii) waive any default or operate as an acquiescence to the Event of Default, or (iii) affect any subsequent default
of the same or of a different nature.

 

(b)          Secured
Party shall give Debtor such notice of any private or public sale as may be required by the UCC.

 

(c)          Secured
Party has no obligation to repair, clean-up or otherwise prepare the Collateral for sale.

 

(d)          Secured
Party has no obligation to attempt to satisfy the Obligations by collecting them from any other person liable for them and Secured
Party may release, modify or waive any collateral provided by any other person to secure any of the Obligations, all without affecting
Secured Party's rights against Debtor. Debtor waives any right it may have to require Secured Party to pursue any third person
for any of the Obligations.

 

    	 	8	 

     

    

 

(e)          Secured
Party may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance
will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral.

 

(f)           Secured
Party may sell the Collateral without giving any warranties as to the Collateral and may specifically disclaim any warranties of
title or the like. This procedure will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral.

 

(g)          If
Secured Party sells any of the Collateral upon credit, Debtor will be credited only with payments actually made by the purchaser,
received by Secured Party and applied to the indebtedness of the purchaser. In the event the purchaser fails to pay for the Collateral,
Secured Party may resell the Collateral and Debtor shall be credited with the proceeds of the sale as and when received, less expenses.

 

(h)          In
the event Secured Party purchases any of the Collateral being sold, Secured Party may pay for the Collateral by crediting some
or all of the Obligations.

 

(i)           Secured
Party has no obligation to marshal any assets in favor of Debtor, or against or in payment of: (i) the Note; (i)any of the
other Obligations; or (ii)any other obligation owed to Secured Party or any other person.

 

12.         MISCELLANEOUS
PROVISIONS.

 

(a)          All
rights of Secured Party shall inure to the benefit of its successors and assigns and all obligations of Debtor shall bind
the heirs, executors, administrators, successors and assigns of Debtor.

 

(b)          Debtor
acknowledges and agrees that, in addition to the security interests granted herein, Secured Party has a bankers lien and common
law right of set-off in and to Debtor's deposits, accounts and credits held by Secured Party and Secured Party may apply or
set-off such deposits or other sums against the Obligations upon the occurrence of an Event of Default as set forth in this
Agreement.

 

(c)          This
Agreement contains the entire Agreement of the parties and no oral agreement whatsoever, whether made contemporaneously herewith
or hereafter shall amend, modify or otherwise affect the terms of this Agreement.

 

(d)          All
rights and liabilities hereunder shall be governed and limited by, and construed in accordance with, the laws of the State
of New York (except any choice of law provision of New York law shall not apply if the law of a jurisdiction other than New York
would apply thereby).

 

    	 	9	 

     

    

 

(e)          Any
provision herein which may prove limited or unenforceable under any law or judicial ruling shall not affect the validity or
enforceability of the remainder of this Agreement.

 

(f)          Debtor
hereby authorizes Secured Party to file a copy of this Agreement as a Financing Statement with appropriate county and state
government authorities necessary to perfect Secured Party’s security interest in the Collateral as set forth herein.
Debtor hereby further authorizes Secured Party to file UCC Financing Statements on behalf of Debtor and Secured Party with
respect to the Collateral.

 

(g)          This
Agreement may be executed in any number of counterparts, each of which when executed and delivered shall constitute a duplicate
original, but all counterparts together shall constitute a single agreement.

 

[SIGNATURES APPEAR ON FOLLOWING
PAGE]

 

    	 	10	 

     

    

 

IN WITNESS WHEREOF, each of the parties has
duly executed this Agreement as of the Effective Date.

 

	 	DEBTOR:
	 	 
	 	JETPAY PAYMENT SERVICES, FL, LLC,
	 	a Delaware limited liability company
	 	 	 	 
	 	By:	JetPay Corporation, its sole member
	 	 	 	 
	 	 	By:	/s/ Gregory M. Krzemien
	 	 	Name:	Gregory M. Krzemien
	 	 	Its:	Chief Financial Officer

 

STATE
OF PENNSYLVANIA

COUNTY
OF Lehigh____

 

The foregoing document
was acknowledged before me this 22nd day of June, 2017, by Gregory M. Krzemien as Chief Financial Officer
of JETPAY CORPORATION, the sole member of JETPAY PAYMENT SERVICES, FL, LLC, a Delaware limited liability company.
He/She is personally known to me or has produced ____known___________________________ as identification.

 

	 	/s/ Lisa J. Sell
	 	NOTARY PUBLIC
	 	Name: 	Lisa J. Sell
	 	Serial No. 	1236202

	 	My Commission Expires: 	
        8-26-2019

 

[SIGNATURE OF SECURED PARTY
APPEARS ON FOLLOWING PAGE]

 

Signature Page to Security Agreement

 

     

     

    

 

	 	SECURED PARTY:
	 	 
	 	FIFTH THIRD BANK,
	 	an Ohio banking corporation
	 	 	 
	 	By: 	/s/ Brian Holliday
	 	 	Brian Holliday, Vice President

 

STATE
OF FLORIDA

COUNTY
OF _Hillsborough______________

 

The
foregoing instrument was acknowledged before me this 22nd day of June, 2017, by
Brian Holliday, as Vice President of FIFTH THIRD BANK, an Ohio banking corporation,
on behalf of the bank. He is personally known to me or has produced ____known___________as identification.

 

	 	/s/ Nicole Sterni
	 	NOTARY PUBLIC	 
	 	Name:	Nicole Sterni
	 	Serial No. 	FF 109345

	 	My Commission Expires: 	April 2, 2018

 

Signature Page to Security Agreement

 

     

     

    

 

EXHIBIT A

 

PLACES OF BUSINESS

 

Chief Executive Office:

 

JetPay Corporation

3939 West Drive

Center Valley, PA 18069

ATTN: Gregory Krzemien

 

Places
of Business:

 

316 South Baylen Street, Suite 590

Pensacola, Florida 32502

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