Document:

Exhibit

Exhibit 10.2

May 30, 2018

Nikesh Arora
Sent via e-mail
Re: Terms of Employment
Dear Nikesh:
This letter agreement (the “Agreement”) is entered into between Palo Alto Networks, Inc. (“Company” or “we”) and Nikesh Arora (“Executive” or “you”). We intend that your start date will be June 6, 2018. This Agreement will be effective on your actual start date (the “Effective Date”). 
1.Position.  Beginning on the Effective Date, you will serve as Chief Executive Officer (“CEO”) of the Company. You will report to the Company’s Board of Directors (the “Board”) and shall perform the duties and responsibilities customary for such position and such other related duties as are assigned by the Board. This is a full-time position. In addition, subject to necessary corporate approvals, you will be appointed as Chairman of the Board.  Upon your termination as the CEO for any reason, you agree to resign from the Board and any officer positions with the Company and/or any subsidiary that you hold and will cease to be a service provider to the Company.
While you render services to the Company, you will not engage in any other employment, consulting or other business activity (whether full-time or part-time) that would create a conflict of interest with the Company. You may engage in civic and not-for-profit activities as long as such activities do not interfere with the performance of your duties hereunder. By signing this Agreement, you confirm to the Company that you have no contractual commitments or other legal obligations that would prohibit you from performing your duties for the Company.  
2.Cash Compensation.
(a)Base Salary. Your salary will be at an annualized rate of $1,000,000 per year beginning on the Effective Date, payable in accordance with the Company’s standard payroll schedule. Your salary, as well as any other cash amounts payable under this Agreement, will be subject to applicable tax withholdings. Your salary 

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may be adjusted from time to time by the Board or the Compensation Committee of the Board (the “Compensation Committee”) in their sole discretion, subject to Section 5.
(b)Annual Incentive Compensation Payment. You will have the opportunity to earn a target annual incentive compensation payment of 100% of your annual base salary for each fiscal year based on the achievement of certain objectives, which will be established by our Board and/or the Compensation Committee. Each incentive compensation payment is subject to your continued employment through and until the date of payment. Your target annual incentive compensation opportunity and the terms and conditions thereof may be adjusted from time to time by our Board or the Compensation Committee in their sole discretion. Your annual incentive for fiscal 2018 will be pro-rated based on the time you are employed during fiscal 2018. 
3.Equity.
(a)Time-Based RSUs. The Company will grant you restricted stock units pursuant to the Company’s 2012 Equity Incentive Plan (the “Plan”) having an approximate value of $40,000,000 (the “Time-Based RSUs”), with the number of shares determined based on the average closing price of the Company’s stock for the 30 trading days ending on the day before the Effective Date. The Time-Based RSUs will vest over a 7-year period with 1/7 of the shares subject to the Time-Based RSUs vesting on the one-year anniversary of the grant date, and 1/28 of the shares subject to the Time-Based RSUs vesting quarterly thereafter, subject to you continuing to be a Service Provider (as defined in the Plan) through each vesting date.
(b)Investment RSUs. On or before the 30th day after the Effective Date (the “Purchase Deadline”), you will purchase on the open market shares of Company common stock with a minimum aggregate value of $20,000,000 (the “Investment Shares”).  If during the period starting on the Effective Date and ending on the Purchase Deadline, you are unable to purchase the Investment Shares for a certain period of trading days by the terms of the Company’s Insider Trading Policy, then the Purchase Deadline will be extended by such number of trading days that purchase was restricted.  Upon the completion of such purchase, the Company will grant you a number of restricted stock units pursuant to the Plan equal to the number of Investment Shares, up to $20,000,000 aggregate value (the “Investment RSUs”). The Investment RSUs will vest over a 4-year period with 1/4 of the shares subject to the Investment RSUs vesting on the one-year anniversary of the grant date, and 1/16 of the shares subject to the subject to the Investment RSUs vesting quarterly thereafter, subject to your continuing to be a Service Provider and your holding all of the Investment Shares through each vesting date. If you cease to hold all of the Investment Shares until the fourth anniversary of Effective Date, you will forfeit all of the Investment RSUs. Purchase of the Investment Shares shall be made in accordance with the Company’s Insider Trading Policy. 
(c)Performance-Stock Option. The Company will grant you a stock option pursuant to the Plan to purchase a number of shares of the Company’s common stock that results in an approximate aggregate grant date fair value for financial accounting purposes of $66,000,000 on the terms set forth below (the “Performance 

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Option”). If the number of shares determined under the methodology in the prior sentence would result in an option to purchase less than 1,046,000 shares of the Company’s common stock, then the Performance Option will be with respect to 1,046,000 shares. The Performance Option will have a per share exercise price equal to the fair market value of a share of Company common stock on the grant date.  We expect the grant date of the Performance Option to occur the business day following the Effective Date.  The Performance Option will have a maximum term equal to 7 years, with the 1/4 of the Performance Option described under (iv) having a maximum term of 7.5 years.
Shares subject to the Performance Option become eligible to vest upon achievement of the following stock price targets (measured based on the average closing price for a 30 consecutive trading day period (“Stock Price Achievement”) during the period specified below following the grant date of the Performance Option (the “Performance Window”)):
(i)1/4 of the shares subject to the Performance Option become eligible to vest (“Eligible Option Shares”) upon Stock Price Achievement during a 4-year Performance Window that exceeds 150% of the exercise price of the Performance Option (the “Baseline Price”).
(ii)1/4 of the shares subject to the Performance Option become Eligible Option Shares upon Stock Price Achievement during a 5-year Performance Window that exceeds 200% of the Baseline Price.
(iii)1/4 of the shares subject to the Performance Option become Eligible Option Shares upon Stock Price Achievement during a 6-year Performance Window that exceeds 250% of the Baseline Price.
(iv)1/4 of the shares subject to the Performance Option become Eligible Option Shares upon Stock Price Achievement during a 7-year Performance Window that exceeds 300% of the Baseline Price. 
To the extent that Stock Price Achievements have been met, Eligible Option Shares will vest as to 1/4 of such shares on each annual anniversary of the Performance Option grant date, subject to you continuing to be a Service Provider through each vesting date. If a Stock Price Achievement milestone has been achieved once during the applicable Performance Window, then achievement related to such milestone shall be deemed to occur and no subsequent stock price drop will have any effect on a previous achievement. Any shares subject to the Performance Option that do not become Eligible Option Shares prior to the expiration of the applicable Performance Window shall forfeit. If a Change in Control occurs during a Performance Window, the per share price payable to Company stockholders at the closing shall be the final Stock Price Achievement, and any shares subject to the Performance Option that do not become Eligible Option Shares as of the Change in Control will terminate.
The terms of the Time-Based RSUs, the Investment RSUs and the Performance Option shall each be set forth in a form of award agreement under the Plan.

3000 TANNERY WAY | SANTA CLARA, CA 95054 | MAIN: 408.753.4000 | PALOALTONETWORKS.COM

4.At Will Employment. While we look forward to a productive relationship, your employment with the Company, however, is for an unspecified period of time and this Agreement creates an at-will employment relationship that may be terminated (subject to the terms of this Agreement) by you or the Company at any time for any reason and with or without cause or prior notice. Upon termination of your employment for any reason, you shall be entitled to receive any compensation earned and reimbursements due through the effective date of termination.
5.Termination Benefits.
(a)Subject to 5(d) below, if your employment terminates in a manner giving rise to benefits under either paragraph (b) or (c) below, the post-termination exercise period of your then-outstanding and vested stock options will be the 12 month anniversary of your separation unless the maximum term of any such stock options would occur prior to the 12 month anniversary, in which case it will be the maximum term of such stock options.
(b)Following a Change in Control. In the event that there is a Change in Control of the Company and the Company or its successor terminates your employment other than for Cause, or you terminate your employment for Good Reason, in either case upon or within 12 months following the Change in Control, then you will be entitled to receive: 
(i)a lump-sum payment equal to your then-current annual base salary, 100% of your target incentive compensation payment for that fiscal year, and reimbursement of 12 months of your COBRA premiums; 
(ii)accelerated vesting of each of the Time-Based RSUs and Investment RSUs equal to the greater of: (x) 50% of the unvested shares; or (y) the shares that would have vested by the 24 month anniversary of your last date of employment; and
(iii)accelerated vesting of 100% of any unvested Eligible Option Shares subject to the Performance Option (collectively, the “Change in Control Severance Benefits”). Your entitlement to the Change in Control Severance Benefits is subject to your compliance with subsection (b) below.
(c)Other Termination. In the event that your employment is terminated by the Company other than for Cause, at any time before a Change in Control or more than 12 months following a Change in Control, then you will receive:
(i)continued payment of your then current base salary for a period of 12 months and reimbursement of 12 months of your COBRA premiums; and
(ii)12 months of additional vesting of your Time-Based RSUs, Investment RSUs and Eligible Option Shares (the “Other Termination Severance Benefits”). For the avoidance of doubt, if you have met the Stock Price Achievement related to the Performance Option, then any shares that have become Eligible Option Shares are eligible for acceleration under this subsection (b). Your 

3000 TANNERY WAY | SANTA CLARA, CA 95054 | MAIN: 408.753.4000 | PALOALTONETWORKS.COM

entitlement to the Other Termination Severance Benefits is subject to your compliance with subsection (c) below.
(d)Form and Timing of Payment. This Section 5 will not apply unless you (i) have returned all Company property in your possession, (ii) have resigned as a member of the Board of the Company and all of its subsidiaries, to the extent applicable, and (iii) have executed a general release of all claims that you may have against the Company or persons affiliated with the Company. The release must be in the form prescribed by the Company. You must execute and return the release on or before the date specified by the Company in the prescribed form (the “Release Deadline”). The Release Deadline will in no event be later than 50 days after your separation. If you fail to return the release on or before the Release Deadline, or if you revoke the release, then you will not be entitled to the benefits described in this Section 5. The severance payments will be paid in lump sum and/or commence, as applicable, following the effectiveness of the release within 60 days after your separation and, once they commence, will include a catch-up payment covering the amount that would have otherwise been paid during the period between your termination of employment and the first payment date but for the application of this provision. Notwithstanding the foregoing, if the 60-day period described in the preceding sentence spans two calendar years and/or if your severance payments are Deferred Payments (as defined below), then the payments will be paid in lump sum and/or commence, as applicable, on the 60th day following your termination of employment, subject to Section 6.
(e)Definitions.
(i)For purposes of this Agreement, “Cause” shall mean: (i) conviction of any felony or any crime involving moral turpitude or dishonesty; (ii) participation in intentional fraud or an act of willful dishonesty against the Company; (iii) willful breach of the Company’s policies which materially harms the Company; (iv) intentional damage of a substantial amount of the Company’s property; (v) willful and material breach of this agreement or Employee Invention Assignment and Confidentiality Agreement; or (vi) a willful failure or refusal in a material respect by you to follow the lawful, reasonable policies or directions of the Company as specified by the Board after being provided with notice of such failure, such notice specifying in reasonable detail the tasks which must be accomplished and a timeline for the accomplishment to avoid termination for Cause, and an opportunity to cure within 30 days of receipt of such notice.
(ii)For purposes of this Agreement, “Good Reason” shall mean: (i) a material reduction in your authority, status, obligations or responsibilities, provided that following a Change in Control a change in title alone (not accompanied by a change in authority, status, obligations or responsibilities) shall not constitute a material reduction; (ii) a reduction of your total annual compensation of more than 10% unless such reduction is no greater (in percentage terms) than compensation reductions imposed on substantially all of the Company’s employees pursuant to a directive of the Board; (iii) any failure by the Company to pay your base salary; (iv) the relocation of the principal place of the Company’s business to a location that is more than 35 miles 

3000 TANNERY WAY | SANTA CLARA, CA 95054 | MAIN: 408.753.4000 | PALOALTONETWORKS.COM

further from your home than before the relocation; or (v) the Company’s material breach of this Agreement. Your resignation must occur within 12 months after one of the foregoing conditions has come into existence without your consent. A resignation for Good Reason will not be deemed to have occurred unless you give the Company written notice of the condition within 90 days after the condition comes into existence and the Company fails to remedy the condition within 30 days after receiving your written notice.
(iii)For purposes of this Agreement, “Change in Control” shall mean: (i) the sale or other disposition of all or substantially all of the assets of the Company; (ii) any sale or exchange of the capital stock of the Company by the stockholders of the Company in one transaction or series of related transactions where more than 50% of the outstanding voting power of the Company is acquired by a person or entity or group of related persons or entities; (iii) any reorganization, consolidation or merger of the Company where the outstanding voting securities of the Company immediately before the transaction represent or are converted into less than 50% of the outstanding voting power of the surviving entity (or its parent corporation) immediately after the transaction; or (iv) the consummation of the acquisition of 51% or more of the outstanding stock of the Company pursuant to a tender offer validly made under any federal or state law (other than a tender offer by the Company). Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Section 409A.
6.Section 280G. If any payments and other benefits provided for in this Agreement or otherwise constitute “parachute payments” within the meaning of Section 280G of the Code and, but for this Section6, would be subject to the excise tax imposed by Section 4999 of the Code, then payments and other benefits will be payable to you either in full or in such lesser amounts as would result, after taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, on your receipt on an after-tax basis of the greatest amount of payments and other benefits, by reducing payments in the following order: (i) cancellation of accelerated vesting of stock options that are out-of-the-money; (ii) reduction in cash payments; (iii) cancellation of accelerated vesting of all equity awards that are not out-of-the-money stock options; and (iv) other employee benefits. In the event that acceleration of vesting of equity award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant.  The Company will select a professional services firm to make all of the determinations required to be made under this section relating to parachute payments.  The Company will bear all costs the firm may reasonably incur in connection with any calculations contemplated by these paragraphs relating to parachute payments.
7.Section 409A. For purposes of this Agreement, a termination of employment will be determined consistent with the rules relating to a “separation from service” as defined in Section 409A of the Code and the regulations thereunder (“Section 409A”). Notwithstanding anything else provided herein, to the extent any payments provided under this Agreement in connection with your termination of employment constitute deferred compensation subject to Section 409A (“Deferred Payments”), and you are deemed at the time of such termination of employment to be a 

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“specified employee” under Section 409A, then such payment shall not be made or commence until the earlier of (i) the expiration of the 6-month period measured from your separation from service from the Company or (ii) the date of your death following such a separation from service; provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to you including, without limitation, the additional tax for which you would otherwise be liable under Section 409A(a)(1)(B) in the absence of such a deferral. The first payment thereof will include a catch-up payment covering the amount that would have otherwise been paid during the period between your termination of employment and the first payment date but for the application of this provision, and the balance of the installments (if any) will be payable in accordance with their original schedule. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A, the provision will be read in such a manner so that all payments hereunder comply with Section 409A. To the extent any payment under this Agreement may be classified as a “short-term deferral” within the meaning of Section 409A, such payment shall be deemed a short-term deferral, even if it may also qualify for an exemption from Section 409A under another provision of Section 409A. Payments pursuant to this Agreement are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.
8.Benefits. You will continue to be eligible to participate in benefit plans established by the Company for its employees from time to time. Upon your termination of employment with the Company for any reason, you will be paid your salary through your date of termination.
9.Confidentiality; Compliance with Policies. As an employee of the Company, you will have access to certain confidential information of the Company and you may, during the course of your employment, develop certain information or inventions that will be the property of the Company. To protect the interests of the Company, as a condition of your employment you are required to sign the Company’s “Employee Invention Assignment and Confidentiality Agreement” on or prior to your start date. A copy of that agreement is attached hereto as Exhibit A. We wish to impress upon you that we do not want you to, and we hereby direct you not to, bring with you any confidential or proprietary material of any former employer or to violate any other obligations you may have to any former employer. You represent that your signing of this Agreement and the Company’s Employee Invention Assignment and Confidentiality Agreement, and your commencement of employment with the Company, will not violate any agreement currently in place between yourself and current or past employers. You agree to be bound by the policies and procedures of the Company now or hereafter in effect relating to the conduct of employees.
10.Authorization to Work. Please note that because of employer regulations adopted in the Immigration Reform and Control Act of 1986, within 3 business days of commencing employment with the Company you will need to present documentation demonstrating that you have authorization to work in the United States. 
11.Governing Law; Arbitration. This Agreement shall be construed and enforced in accordance with the internal laws of the State of California (without regard 

3000 TANNERY WAY | SANTA CLARA, CA 95054 | MAIN: 408.753.4000 | PALOALTONETWORKS.COM

to its laws relating to choice-of-law or conflict-of-laws). You and the Company shall submit to mandatory and exclusive binding confidential arbitration of any controversy or claim arising out of, or relating to, this Agreement or any breach hereof or otherwise arising out of, or relating to, your employment with the Company or the termination thereof, provided, however, that the parties retain their right to, and shall not be prohibited, limited or in any other way restricted from, seeking or obtaining injunctive relief from a court having jurisdiction over the parties related to the improper use, disclosure or misappropriation of a party’s proprietary, confidential or trade secret information. Such arbitration shall be conducted through JAMS in the State of California, Santa Clara County, before a single neutral arbitrator, in accordance with the JAMS’ then-current rules for the resolution of employment disputes. The arbitrator shall issue a written decision that contains the essential findings and conclusions on which the decision is based. You shall bear only those costs of arbitration you would otherwise bear had you brought a covered claim in court. Judgment upon the determination or award rendered by the arbitrator may be entered in any court having jurisdiction thereof. This agreement to arbitrate does not restrict your right to file administrative claims you may bring before any government agency where, as a matter of law, the parties may not restrict the employee’s ability to file such claims (including, but not limited to, the National Labor Relations Board, the Equal Employment Opportunity Commission and the Department of Labor). However, the parties agree that, to the fullest extent permitted by law, arbitration shall be the exclusive remedy for the subject matter of such administrative claims.
12.Miscellaneous.
(a)Successors. This Agreement shall inure to the benefit of and be binding upon (a) the Company and any of its successors, and (b) you and your heirs, executors and representatives in the event of your death. Any successor to the Company shall be deemed substituted for the Company under the terms of this agreement for all purposes. In the event of a Change in Control, the Company agrees to obtain assumption of this Agreement by its successor.
(b)Modification. This Agreement, including, but not limited to the at will provision above, may not be amended or modified other than by a written agreement designated as an amendment and executed by you and a representative of the Board, although the Company reserves the right to unilaterally modify your compensation, benefits, job title and duties (subject to any express limitations set forth above).
(c)Severability. If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of this Agreement that can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable.
(d)Attorney’s Fees.  The Company will reimburse you for reasonable attorney’s fees involved in the negotiation of this Agreement, up to a maximum of $10,000.
(e)Complete Agreement. This Agreement (together with the Employee Invention Assignment and Confidentiality Agreement, the D&O Indemnification 

3000 TANNERY WAY | SANTA CLARA, CA 95054 | MAIN: 408.753.4000 | PALOALTONETWORKS.COM

Agreement (if any) and the Plan, any successor equity incentive plan and any equity award agreement issued thereunder) represents the entire agreement between you and the Company with respect to the material terms and conditions of your employment, and supersedes and replaces all prior discussions, negotiations and agreements.
(f)Counterparts. This Agreement may be executed (i) in counterparts, each of which shall be an original, with same effect as if the signatures hereto were on the same instrument; and (ii) by facsimile or pdf. The parties agree that such facsimile or pdf signatures shall be deemed original signatures for all purposes.
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[signature page to follow]

3000 TANNERY WAY | SANTA CLARA, CA 95054 | MAIN: 408.753.4000 | PALOALTONETWORKS.COM

We are extremely excited about you joining Palo Alto Networks.
Please indicate your acceptance of this Agreement, and confirmation that it contains our complete agreement regarding the terms and conditions of your employment, by signing the bottom portion of this Agreement and returning a copy to me via email. 
For and on behalf of Palo Alto Networks.
	
		
	/s/ DAN WARMENHOVEN

	Dan Warmenhoven, Lead Independent Director

 
Agreed to and accepted:
	
		
	/s/ NIKESH ARORA

	Nikesh Arora

	 
	 

	Dated:
	May 30, 2018

Attachments:
Exhibit A:    Employee Invention Assignment and Confidentiality Agreement

3000 TANNERY WAY | SANTA CLARA, CA 95054 | MAIN: 408.753.4000 | PALOALTONETWORKS.COM

EMPLOYEE INVENTION ASSIGNMENT AND 
CONFIDENTIALITY AGREEMENT

In consideration of, and as a condition of my employment with Palo Alto Networks, Inc., a Delaware corporation (the “Company”), I hereby represent to, and agree with the Company as follows:

1.Purpose of Agreement. I understand that the Company is engaged in a continuous program of research, development, production and marketing in connection with its business and that it is critical for the Company to preserve and protect its “Proprietary Information” (as defined in Section 7 below), its rights in “Inventions” (as defined in Section 2 below) and in all related intellectual property rights. Accordingly, I am entering into this Employee Invention Assignment and Confidentiality Agreement (this “Agreement”) as a condition of my employment with the Company, whether or not I am expected to create inventions of value for the Company.

2.Disclosure of Inventions. I will promptly disclose in confidence to the Company all inventions, improvements, designs, original works of authorship, formulas, processes, compositions of matter, computer software programs, databases, mask works and trade secrets that I make or conceive or first reduce to practice or create, either alone or jointly with others, during the period of my employment, whether or not in the course of my employment, and whether or not patentable, copyrightable or protectable as trade secrets (the “Inventions”).

3.Work for Hire; Assignment of Inventions. I acknowledge and agree that any copyrightable works prepared by me within the scope of my employment are “works for hire” under the Copyright Act and that the Company will be considered the author and owner of such copyrightable works. I agree that all Inventions that (i) are developed using equipment, supplies, facilities or trade secrets of the Company, (ii) result from work performed by me for the Company, or (iii) relate to the Company’s business or current or anticipated research and development (the “Assigned Inventions”), will be the sole and exclusive property of the Company and are hereby irrevocably assigned by me to the Company. Attached hereto as Exhibit A is a list describing all inventions, original works of authorship, developments and trade secrets which were made by me prior to the date of this Agreement, which belong to me and which are not assigned to the Company (“Prior Inventions”). I acknowledge and agree that if I use any of my Prior Inventions in the scope of my employment, or include them in any product or service of the Company, I hereby grant to the Company a perpetual, irrevocable, nonexclusive, world-wide, royalty-free license to use, disclose, make, sell, copy, distribute, modify and create works based on, perform or display such Prior Inventions and to sublicense third parties with the same rights. If no such list of Prior Inventions or Exhibit A is completed and/or attached hereto, I represent that I have no Prior Inventions at the time of signing this Agreement.

4.Labor Code Section 2870 Notice. I have been notified and understand that the provisions of Sections 3 and 5 of this Agreement do not apply to any Assigned Invention that qualifies fully under the provisions of Section 2870 of the California Labor Code, which states as follows:

ANY PROVISION IN AN EMPLOYMENT AGREEMENT WHICH PROVIDES THAT AN EMPLOYEE SHALL ASSIGN, OR OFFER TO ASSIGN, ANY OF HIS OR HER RIGHTS IN AN INVENTION TO HIS OR HER EMPLOYER SHALL NOT APPLY TO AN INVENTION THAT THE EMPLOYEE DEVELOPED ENTIRELY ON HIS OR HER OWN TIME WITHOUT USING THE EMPLOYER’S EQUIPMENT, SUPPLIES, FACILITIES, OR TRADE SECRET INFORMATION EXCEPT FOR THOSE INVENTIONS THAT EITHER: (1) RELATE AT THE TIME OF CONCEPTION OR REDUCTION TO PRACTICE OF THE INVENTION TO  THE  EMPLOYER’S  BUSINESS,  OR  ACTUAL  OR  DEMONSTRABLY ANTICIPATED  RESEARCH  OR  DEVELOPMENT  OF  THE  EMPLOYER; OR (2) RESULT FROM ANY WORK PERFORMED BY THE EMPLOYEE FOR THE EMPLOYER. TO THE EXTENT A PROVISION IN AN EMPLOYMENT AGREEMENT PURPORTS TO REQUIRE AN EMPLOYEE TO ASSIGN AN INVENTION OTHERWISE EXCLUDED FROM BEING REQUIRED TO BE ASSIGNED UNDER CALIFORNIA LABOR CODE SECTION 2870(a), THE PROVISION IS AGAINST THE PUBLIC POLICY OF THIS STATE AND IS UNENFORCEABLE.

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5.Assignment of Other Rights. In addition to the foregoing assignment of Assigned Inventions to the Company, I hereby irrevocably transfer and assign to the Company: (i) all worldwide patents, patent applications, copyrights, mask works, trade secrets and other intellectual property rights, including but not limited to rights in databases, in any Assigned Inventions, along with any registrations of or applications to register such rights; and (ii) any and all “Moral Rights” (as defined below) that I may have in or with respect to any Assigned Inventions. I also hereby forever waive and agree never to assert any and all Moral Rights I may have in or with respect to any Assigned Inventions, even after termination of my work on behalf of the Company. “Moral Rights” mean any rights to claim authorship of or credit  on an Assigned Inventions, to object to or prevent the modification or destruction of any Assigned Inventions or Prior Inventions licensed to Company under Section 3, or to withdraw from circulation or control the publication or distribution of any Assigned Inventions or Prior Inventions licensed to Company under Section 3, and any similar right, existing under judicial or statutory law of any country or subdivision thereof in the world, or under any treaty, regardless of whether or not such right is denominated or generally referred to as a “moral right.”

6.Assistance. I agree to assist the Company in every proper way to obtain for the Company and enforce patents, copyrights, mask work rights, trade secret rights and other legal protections for the Company’s Assigned Inventions in any and all countries. I will execute any documents that the Company may reasonably request for use in obtaining or enforcing such patents, copyrights, mask work rights, trade secrets and other legal protections. My obligations under this paragraph will continue beyond the termination of my employment with the Company, provided that the Company will compensate me at a reasonable rate after such termination for time or expenses actually spent by me at the Company’s request on such assistance. I appoint the Secretary of the Company as my attorney-in- fact to execute documents on my behalf for this purpose.

7.Proprietary Information. I understand that my employment by the Company creates a relationship of confidence and trust with respect to any information of a confidential or secret nature that may be disclosed to me by the Company or a third party that relates to the business of the Company or to the business of any parent, subsidiary, affiliate, customer or supplier of the Company or any other party with whom the Company agrees to hold information of such party in confidence (the “Proprietary Information”). Such Proprietary Information includes, but is not limited to, Assigned Inventions, marketing plans, product plans, business strategies, financial information, forecasts, personnel information, customer lists and data, and domain names.

8.Confidentiality. At all times, both during my employment and after its termination, I will keep and hold all such Proprietary Information in strict confidence and trust. I will not use or disclose any Proprietary Information without the prior written consent of the Company, except as may be necessary to perform my duties as an employee of the Company for the benefit of the Company. I understand that nothing in this Agreement prohibits me communicating with, or responding to any inquiry from, or providing testimony before, any state or federal regulatory agencies with regard to such information without first obtaining permission from the Company. However, I agree to notify such agency of the confidential nature of the information provided and request that necessary steps be taken to maintain its confidentiality. Upon termination of my employment with the Company, I will promptly deliver to the Company all documents and materials of any nature pertaining to my work with the Company and, upon Company request, will execute a document confirming my agreement to honor my responsibilities contained in this Agreement. I will not take with me or retain any documents or materials or copies thereof containing any Proprietary Information.

9.No Breach of Prior Agreement. I represent that my performance of all the terms of this Agreement and my duties as an employee of the Company will not breach any invention assignment, proprietary information, confidentiality or similar agreement with any former employer or other party. I represent that I will not bring with me to the Company or use in the performance of my duties for the Company any documents or materials or intangibles of a former employer or third party that are not generally available to the public or have not been legally transferred to the Company.

10.Efforts; Duty Not to Compete. I understand that my employment with the Company requires my undivided attention and effort during normal business hours. While I am employed by the Company, I will not provide services to, or assist in any manner, any business or third party that competes with the current or planned business of the Company, nor will I, without the prior written approval of (i) an officer of the Company if I am not an executive officer of the Company, or (ii) the Board of Directors of the Company if I am an executive officer of the Company, engage in any other professional employment or consulting.

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11.Notification. I hereby authorize the Company to notify third parties, including, without limitation, customers and actual or potential employers, of the terms of this Agreement and my responsibilities hereunder.

12.Non-Solicitation of Employees/Consultants. During my employment with the Company and for a period of one (1) year thereafter, I will not directly or indirectly solicit away employees or consultants of the Company for my own benefit or for the benefit of any other person or entity.

13.Non-Solicitation of Suppliers/Customers. During my employment with the Company and after termination of my employment, I will not directly or indirectly solicit or take away suppliers or customers of the Company if the identity of the supplier or customer or information about the supplier or customer relationship is a trade secret or is otherwise deemed confidential information within the meaning of California law.

14.Injunctive Relief. I understand that in the event of a breach or threatened breach of this Agreement by me the Company may suffer irreparable harm and will therefore be entitled to injunctive relief to enforce this Agreement.

15.Governing Law; Severability. This Agreement will be governed by and construed in accordance with the laws of the State of California, without giving effect to its laws pertaining to conflict of laws. If any provision of this Agreement is determined by any court or arbitrator of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such provision will be enforced to the maximum extent possible given the intent of the parties hereto. If such clause or provision cannot be so enforced, such provision shall be stricken from this Agreement and the remainder of this Agreement shall be enforced as if such invalid, illegal or unenforceable clause or provision had (to the extent not enforceable) never been contained in this Agreement.

16.Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.

17.Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

18.Amendment and Waivers. This Agreement may be amended only by a written agreement executed by each of the parties hereto. No amendment of or waiver of, or modification of any obligation under this Agreement will be enforceable unless set forth in a writing signed by the party against which enforcement is sought. Any amendment effected in accordance with this section will be binding upon all parties hereto and each of their respective successors and assigns. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance. No waiver granted under this Agreement as to any one provision herein shall constitute a subsequent waiver of such provision or of any other provision herein, nor shall it constitute the waiver of any performance other than the actual performance specifically waived.

19.Successors and Assigns; Assignment. Except as otherwise provided in this Agreement, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives. The Company may assign any of its rights and obligations under this Agreement. No other party to this Agreement may assign, whether voluntarily or by operation of law, any of its rights and obligations under this Agreement, except with the prior written consent of the Company.

20.Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.

21. “At Will” Employment. I understand that this Agreement does not constitute a contract of employment or obligate the Company to employ me for any stated period of time. I understand that I am an “at will” employee of the Company and that my employment can be terminated at any time, with or without notice and with or without cause, for any reason or for no reason, by either the Company or myself. I acknowledge that any statements or representations to the contrary are ineffective, unless put into a writing signed by the Company. I further acknowledge that my participation in any stock option or benefit program is not to be construed as any 

Page 3 of 5

assurance of continuing employment for any particular period of time. This Agreement shall be effective as of the first day of my employment by the Company.

Employee:
	
	
	/s/ NIKESH ARORA

	Signature

	 

	Nikesh Arora

	Name (Please Print)

	 

	Title

	 

	May 31, 2018

	Date

Page 4 of 5

EXHIBIT A

SCHEDULE OF PRIOR INVENTIONS

		
	1.
	The following is a complete list of all Prior Inventions relevant to the subject matter of my employment by the Company that have been made or discovered or conceived or first reduced to practice by me or jointly with others prior to my employment by the Company that I desire to remove from the operation of the Company’s Employee Invention Assignment and Confidentiality Agreement:

	
			
	 
	x
	  No inventions or improvements.

	 
	 
	 

	 
	 
	  Additional sheets attached.

	 
	 
	 

	 
	 
	  See below:

		
	2.
	I propose to bring to my employment the following materials and documents of a former employer:

	
			
	 
	x
	  No materials or documents.

	 
	 
	 

	 
	 
	  Additional sheets attached.

	 
	 
	 

	 
	 
	  See below:

	
				
	/s/ NIKESH ARORA
	 
	May 31, 2018
	 

	Employee Signature
	 
	Date
	 

Page 5 of 5Exhibit 10.1

 

$1,000,000.00

 

AMENDED AND RESTATED

REVOLVING PROMISSORY NOTE

 

 

THIS AMENDED AND
RESTATED REVOLVING PROMISSORY NOTE (this “Note”) is effective as of June 1, 2018 (the “Effective
Date”) in the principal amount of One Million and No/100 Dollars ($1,000,000.00).

 

RECITALS

 

A.       This
Note is made by JETPAY PAYMENT SERVICES, FL, LLC, a Delaware limited liability company (“Borrower”),
having an address of 7450 Tilghman Street, Allentown, PA 18106, and is payable to the order of FIFTH THIRD BANK, an Ohio banking
corporation, its successors and assigns (“Lender”), 201 East Kennedy Blvd., Suite 1800, Tampa, Florida 33602,
pursuant to the terms and conditions set forth in that certain Credit Agreement dated as of June 1, 2016 by and between Borrower
and Lender (the “Original Credit Agreement”), as amended by that certain Modification of Credit Agreement and
Other Loan Documents dated as of March 23, 2017, as amended by that certain Second Modification of Credit Agreement and Other Loan
Documents dated as of June 22, 2017, as further amended by that certain Third Modification of Credit Agreement and Other Loan Documents
dated of even date herewith by and among Borrower, Lender and Jetpay Corporation, a Delaware corporation (collectively, the “Modification
Agreements”, and together with the Original Credit Agreement, collectively, the “Credit Agreement”). The
amount disbursed by Lender to Borrower, repayment of which is evidenced by this Note, is referred to as the “Loan”.

 

B.       This
Note is secured by, among other items, (i) that certain Security Agreement dated June 1, 2016 by and between Borrower and Lender
(the “Security Agreement”) encumbering the Collateral (as defined therein); and (ii) certain other documents
securing repayment of this Note, including, without limitation, the Credit Agreement (this Note, the Security Agreement, the Credit
Agreement, the Modification Agreements and all other documents evidencing or securing the Loan are hereinafter collectively referred
to herein as the “Loan Documents”). All of the agreements, conditions, covenants, provisions and stipulations
contained in the Credit Agreement and other Loan Documents are hereby made a part of this Note to the same extent and with the
same force and effect as if they were fully set forth herein and Borrower covenants and agrees to keep and perform them, or cause
them to be kept and performed, strictly in accordance with their terms.

 

 

 

 

NOTE TO TAX EXAMINER: THIS NOTE RENEWS,
AMENDS AND RESTATES THE PRIOR NOTE (AS DEFINED HEREIN). THE PRIOR NOTE WAS MADE, EXECUTED AND DELIVERED OUTSIDE THE STATE OF FLORIDA
AND IS NOT SECURED BY A MORTGAGE ON FLORIDA REAL PROPERTY. NO DOCUMENTARY STAMP TAXES WERE DUE IN CONNECTION WITH THE EXECUTION
AND DELIVERY OF THE PRIOR NOTE. THIS NOTE HAS BEEN MADE, EXECUTED AND DELIVERED OUTSIDE THE STATE OF FLORIDA AND IS NOT SECURED
BY A MORTGAGE ON FLORIDA REAL PROPERTY. ACCORDINGLY, NO DOCUMENTARY STAMP TAXES OR INTANGIBLE TAXES ARE DUE IN CONNECTION HEREWITH
PURSUANT TO SECTION 201.09, FLORIDA STATUTES AND RULE 12B-4.054, FLORIDA ADMINISTRATIVE CODE.

 

     

     

    

 

1.       Agreement
to Pay. Borrower hereby promises to pay to the order of Lender the principal sum of One Million and No/100 Dollars ($1,000,000.00),
or so much thereof as may be outstanding hereunder, in lawful money of the United States of America on or before the earlier of
June 1, 2019 (the “Maturity Date”) or upon acceleration of the Note, together with interest thereon at the rate
or rates herein below set forth.

 

2.       Defined
Terms. In addition to the terms defined elsewhere in this Note, the following terms shall have the following meanings when
used in this Note. All capitalized terms used in this Note and not otherwise defined shall have the meanings ascribed thereto in
the Credit Agreement.

 

A.       
“Default” shall mean when used in reference to this Note or any other document, or in reference to any provision
or obligation under this Note or any other document, the occurrence of an event or the existence of a condition which, with the
passage of time or the giving of notice, or both, would constitute an Event of Default under this Note or such other document,
as the case may be.

 

B.       “Default
Rate” shall be as defined in Section 6 hereof.

 

C.       “Event
of Default” shall mean (i) when used in reference to this Note, one or more of the events or occurrences referred to
in Section 10.A. of this Note; and (ii) when used in reference to any other document, a default or event of default under such
document that has continued after the giving of any applicable notice and the expiration of any applicable grace or cure periods.

 

3.       Computation
of Interest. Moneys deposited by Lender in an escrow shall be deemed to have been disbursed as of, and shall bear interest
from, the date of deposit in escrow. Interest on amounts disbursed under this Note shall accrue commencing on the day on which
the disbursement of proceeds of the Loan or applicable portion thereof is made. Payments of interest that are periodically required
pursuant to the terms of this Note shall include interest accrued to but not including the day on which the payment is made. Payments
of principal on this Note shall include interest on the amount paid to but not including the date of payment if payment is received
prior to 2:00 P.M. Eastern Time, and if payment is received after such time, payment of principal on this Note shall include interest
to and including the day of payment.

 

4.       Interest
Rate Terms. 

 

A.       Additional
Defined Terms. In addition to the terms defined elsewhere in this Note, the following terms shall have the following meanings
when used in this Note:

 

“Adjusted
LIBOR Rate” shall mean a floating rate equal to (i) the then applicable LIBOR Rate plus (ii) the LIBOR Rate Margin
per annum.

 

“Adjusted
Prime Rate” shall mean, for any day, the rate equal to (i) the floating rate of interest established from time to time
by Fifth Third Bank at its principal office as its “Prime Rate”, whether or not Fifth Third Bank shall at times lend
to borrowers at lower rates of interest or, if there is no such Prime Rate, then such other rate as may be substituted by Fifth
Third Bank for such Prime Rate plus (ii) 100 basis points.

 

    2 

     

    

 

“Business
Day” shall mean (i) with respect to all notices and determinations in connection with the LIBOR Rate, any day (other
than a Saturday or Sunday) on which commercial banks are open in London, England, New York, New York, and Cincinnati, Ohio for
dealings in deposits in the London Interbank Market; and (ii) in all other cases, any day on which commercial banks in Cincinnati,
Ohio are required by law to be open for business; provided that, notwithstanding anything to the contrary in this definition of
“Business Day”, at any time during which a Rate Management Agreement (as defined in the Credit Agreement) with Lender
is then in effect with respect to all or a portion of this Note, then the definitions of “Business Day” and “Banking
Day”, as applicable, pursuant to such Rate Management Agreement shall govern with respect to all applicable notices and determinations
in connection with such portion of this Note subject to such Rate Management Agreement.

 

“Interest
Rate” shall mean the Adjusted LIBOR Rate; provided that, the reference to “Adjusted LIBOR Rate” shall
be deemed to be a reference to “Adjusted Prime Rate” at all times during which the LIBOR Rate is unavailable pursuant
to, and in accordance with, Section 4(F).

 

“LIBOR
Rate” shall mean, as of any date of determination in accordance with this Note, the rate of interest rounded upwards,
if necessary, to the next 1/8th of one percent (1%) and adjusted for reserves if Lender is required to maintain reserves with respect
to relevant advances fixed by ICE Benchmark Administration Limited (or any successor thereto, or replacement thereof, approved
by Lender, each an “Alternate LIBOR Source”) at approximately 11:00 a.m., London, England time (or the relevant
time established by ICE Benchmark Administration Limited, an Alternate LIBOR Source, or Lender, as applicable), two Business Days
prior to such date of determination, relating to quotations for the one month London InterBank Offered Rates on U.S. Dollar deposits,
displayed by Bloomberg LP (or any successor thereto, or replacement thereof, as approved by Lender, each an “Approved
Bloomberg Successor”), or if no longer displayed by Bloomberg LP (or any Approved Bloomberg Successor), such rate as
shall be determined in good faith by Lender from such sources as it shall determine to be comparable to Bloomberg LP (or any Approved
Bloomberg Successor), all as determined by Lender in accordance with this Note and Lender’s loan systems and procedures periodically
in effect. Notwithstanding anything to the contrary contained herein, in no event shall the LIBOR Rate be less than 0% as of any
date (the “LIBOR Rate Minimum”); provided that, at any time during which a Rate Management Agreement with Lender
is then in effect with respect to all or a portion of the Obligations, the LIBOR Rate Minimum shall be disregarded and no longer
of any force and effect with respect to such portion of the Obligations subject to such Rate Management Agreement. Each determination
by Lender of the LIBOR Rate shall be binding and conclusive in the absence of manifest error.

 

    3 

     

    

 

“LIBOR
Rate Loan” shall mean each portion of the outstanding principal balance of the Loan that is bearing interest at the Adjusted
LIBOR Rate.

 

“LIBOR
Rate Margin” shall mean two percent (2.00%) per annum.

 

“Prime
Rate” shall mean, for any day, the floating rate of interest established from time to time by Lender at its principal
office as its “Prime Rate”, whether or not Lender shall at times lend to borrowers at lower rates of interest or, if
there is no such prime rate, then such other rate as may be substituted by Lender for the prime rate. Each determination by Lender
of the Prime Rate shall be binding and conclusive in the absence of manifest error.

 

“Prime
Rate Loan” shall mean any portion of the outstanding principal amount of the Loan that is bearing interest at the Adjusted
Prime Rate.

 

B.       Interest
Accrual.

 

(i)       Interest
on the Loan shall accrue on the outstanding principal balance of this Note commencing on the date of the initial disbursement of
the Loan until the Loan has been fully paid and satisfied in cash.

 

(ii)       Interest
on any LIBOR Rate Loans or Prime Rate Loans shall be calculated based on a 360-day year and charged for the actual number of days
elapsed.

 

C.       Interest
Rate Determinations.

 

(i)       Subject
to the terms hereof, the outstanding principal balance of this Note shall bear interest at the Adjusted LIBOR Rate.

 

(ii)       Borrower
shall have the right on any Business Day to request Lender to provide a good faith estimate of the then current LIBOR Rate quotation
and Lender shall promptly provide such estimate.

 

(iii)       The
Adjusted LIBOR Rate: (a) shall initially be determined as of the date of this Note and (b) shall adjust automatically on the first
calendar day of each calendar month thereafter (each of the foregoing being a “LIBOR Adjustment Date”). Any
change in the Adjusted LIBOR Rate resulting from a change in the LIBOR Rate shall become effective as of each such LIBOR Adjustment
Date in accordance with this Note and Lender’s loan systems and procedures periodically in effect. Lender shall not be required
to notify Borrower of any adjustment in the LIBOR Rate; however, Borrower may request a quote of the prevailing LIBOR Rate
on any Business Day.

 

    4 

     

    

 

(iv)       The
Adjusted Prime Rate: (a) shall initially be determined as of the date of this Note and (b) shall adjust automatically with each
change in the Prime Rate occurring thereafter. Any change in the Adjusted Prime Rate resulting from a change in the Prime Rate
shall become effective as of the date of each change in the Prime Rate in accordance with Lender’s loan systems and procedures
periodically in effect. Lender shall not be required to notify Borrower of any adjustment in the Prime Rate; however, Borrower
may request a quote of the prevailing Prime Rate on any Business Day.

 

D.       Prepayments.
The outstanding principal balance of this Note may be prepaid, either in whole or in part, without penalty or premium, at any time
and from time to time upon two (2) Business Days prior written notice to Lender.

 

E.       Additional
Costs. Borrower hereby irrevocably agrees to reimburse and indemnify Lender from all increased costs and fees incurred by Lender
in connection with this Note subsequent to the date of the initial advance of funds to Borrower under this Note and relating to
or arising from (x) the offering of rates of interest based upon the LIBOR Rate or (y) a change in government regulation.
Without limiting the generality of the foregoing, if (any of the following being a “Change”): (i) any law, rule,
regulation, guideline, or directive (in each case whether or not having the force of law) is passed, enacted, promulgated, ordered,
issued or adopted after the date of the initial advance of funds to Borrower under this Note, (ii) there is any change after the
date of the initial advance of funds to Borrower under this Note in any law, rule, regulation, guideline, or directive (in each
case whether or not having the force of law and including, without limitation, any request, rule, guideline or directive (A) in
connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act (as amended, the “Dodd-Frank Act”)
or (B) enacted, promulgated, adopted, issued or implemented by the Bank of International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority), or the United States or foreign financial regulatory authorities), or in the
interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation,
application or administration of any of the foregoing, or (iii) Lender complies with any request or directive made after the date
of the initial advance of funds to Borrower under this Note regarding capital adequacy (whether or not having the force of law)
from any such authority, central bank or comparable agency, and such Change shall:

 

(x)       increase
the cost to Lender, by an amount which Lender deems to be material, of making, converting into, continuing or maintaining any portion
of any advance subject to the LIBOR Rate, or reduce any amount receivable hereunder in respect thereof, or

 

    5 

     

    

 

(y)       have
the effect of reducing the rate of return on Lender’s capital as a consequence of its obligations hereunder, with
respect to any LIBOR Rate Loan or Prime Rate Loan, to a level below that which Lender could have achieved but for such Change
by an amount deemed by Lender to be material, then, in any and each such case, after submission by Lender to Borrower of a
written request therefor, Borrower shall pay Lender any additional amounts necessary to compensate Lender for such increased
cost or reduction. Lender’s reasonable determination of the amount of such reimbursement shall be conclusive in the
absence of manifest error. Notwithstanding anything to the contrary contained herein, for all purposes of this Note, all
requests, rules, guidelines and directives (I) in connection with the Dodd-Frank Act or (II) enacted, promulgated, adopted,
issued or implemented by the Bank of International Settlements, the Basel Committee on Banking Supervision (or any successor
or similar authority), or the United States or foreign financial regulatory authorities shall, in each case, be deemed to
constitute a Change whether or not such request, rule, guideline or directive has the force of law and regardless of the date
on which such request, rule, guideline or directive was enacted, promulgated, adopted, issued or implemented. Notwithstanding
the foregoing, Borrower shall not be required to compensate Lender pursuant to this Section for any increased costs incurred
more than 180 days prior to the date that Lender notifies Borrower, in writing, of the increased costs and of Lender’s
intention to claim compensation thereof; provided, further, that if the circumstance giving rise to such
increased costs is retroactive, then the 180-day period referred to above shall be extended to include the period of
retroactive effect thereof.

 

F.       Unavailability
of LIBOR. Notwithstanding anything herein contained to the contrary, if Lender, by written or telephonic notice, notifies Borrower
that:

 

(i)       any
change in any law, regulation or official directive, or in the interpretation thereof, by any governmental body charged with the
administration thereof, has made it unlawful for Lender to fund or maintain its funding in Eurodollars of any portion of any advance
subject to the LIBOR Rate or otherwise give effect to Lender’s obligations as contemplated hereby, or

 

(ii)       (a)
LIBOR deposits for periods of one month are not readily available in the London Interbank Offered Rate Market, (b) by reason of
circumstances affecting such market or other economic conditions, adequate and reasonable methods do not exist for ascertaining
the rate of interest applicable to such deposits, or (c) the LIBOR Rate as determined by Lender will not adequately and fairly
reflect the cost to Lender of making or maintaining advances under this Note bearing interest with reference to the LIBOR Rate
(including inaccurate or inadequate reflection of actual costs resulting from the calculation of rates by reporting sources),

 

then, in any of such events: (I)
Lender’s obligations in respect of the LIBOR Rate shall terminate forthwith, (II) the LIBOR Rate with respect to Lender shall
forthwith cease to be in effect, (III) Borrower’s right to utilize LIBOR Rate index pricing as set forth in this Note shall
be terminated forthwith, and (IV) amounts outstanding hereunder shall, on and after such date, bear interest at the Adjusted Prime
Rate in accordance with the terms and provisions of this Note.

 

    6 

     

    

 

G.       Rounding
and Rate Management Agreement. At any time during which a Rate Management Agreement is then in effect with respect to this
Note, the provisions contained in this Note which round up the LIBOR Rate to the nearest 1/8th shall be disregarded and no longer
of any force and effect, notwithstanding anything to the contrary contained in this Note.

 

5.       Payment
Terms.

 

A.       Commencing
on the first (1st) day of July, 2018 and on the first (1st) day of each successive month thereafter (subject to earlier prepayment
as provided in Section 4D hereof or as otherwise provided herein or in any other Loan Document), until the Loan has been
fully paid and satisfied in cash, Borrower shall make payments to Lender of interest on the outstanding principal balance of the
indebtedness evidenced by this Note.

 

B.       The
Loan shall be due and payable, and Borrower hereby promises to pay the outstanding principal amount of the Loan to Lender, together
with all accrued interest thereon then remaining unpaid and all other unpaid amounts, charges, fees and expenses outstanding under
this Note or under any of the other Loan Documents, on the Maturity Date, subject to earlier prepayment as provided in Section
4D hereof or as otherwise provided herein or in any other Loan Document

 

6.       Late
Payments; Default Rate; Fees. If any payment is not paid when due (whether by acceleration or otherwise) or within ten
(10) days thereafter due under this Note or any of the other Loan Documents, Borrower agrees to pay to Lender a late payment fee
of five percent (5%) of the payment amount, with a minimum fee of $20.00. After an Event of Default, Borrower agrees to pay to
Lender a fixed charge of $25.00, or Borrower agrees that Lender may, without notice, increase the Interest Rate by three percentage
points (3.00%) (the “Default Rate”) for the period of time the default is continuing, whichever is greater.
Lender may impose a non-sufficient funds fee for any check that is presented for payment that is returned for any reason. In addition,
Lender may charge loan documentation fees as may be reasonably determined by the Lender.

 

7.       Maximum
Interest Rate. Notwithstanding any provisions of this Note or any instrument securing payment of the indebtedness evidenced
by this Note to the contrary, it is the intent of Borrower and Lender that Lender shall never be entitled to receive, collect or
apply, as interest on principal of the indebtedness, any amount in excess of the maximum rate of interest permitted to be charged
by applicable law; and if under any circumstance whatsoever, fulfillment of any provision of this Note, at the time performance
of such provision shall be due, shall involve transcending the limit of validity prescribed by applicable law, then, ipso facto,
the obligation to be fulfilled shall be reduced to the limit of such validity; and in the event Lender ever receives, collects
or applies as interest any such excess, such amount which would be excess interest shall be deemed a permitted partial prepayment
of principal without penalty or premium and treated hereunder as such; and if the principal of the indebtedness evidenced hereby
is paid in full, any remaining excess funds shall forthwith be paid to Borrower. In determining whether or not interest of any
kind payable hereunder exceeds the highest lawful rate, Borrower and Lender shall, to the maximum extent permitted under applicable
law, (a) characterize any non-principal payment as an expense, fee or premium rather than as interest, and (b) amortize, prorate,
allocate and spread such payment so that the interest on account of such indebtedness does not exceed the maximum amount permitted
by applicable law; provided that if the amount of interest received for the actual period of existence thereof exceeds the maximum
lawful rate, Lender shall refund to Borrower the amount of such excess. Lender shall not be subject to any penalties provided by
any laws for contracting for, charging or receiving interest in excess of the maximum lawful rate.

 

    7 

     

    

 

8.       Revolving
Loan. Provided that no Default or Event of Default under this Note or any of the other Loan Documents has occurred and
is continuing, any portion of the principal balance of this Note which is repaid may be reborrowed by Borrower prior to the Maturity
Date. There shall be no prepayment penalty or premium.

 

9.       Default
and Remedies.

 

A.       An
“Event of Default” shall occur under this Note upon the occurrence of (a) the failure of Borrower to make any
principal or interest payment owing hereunder on the date which is ten (10) days after the date when due, (b) the failure by Borrower
to pay any other amount payable to Lender under this Note within ten (10) days after the date when any such payment is due in accordance
with the terms hereof, (c) a breach by Borrower of any of the covenants, agreements, representations, warranties or other provisions
hereof, which is not cured within the grace or cure period, if any, applicable thereto, or (d) the occurrence of any Event of Default
under any of the other Loan Documents. An Event of Default under this Note shall also be deemed an Event of Default under the other
Loan Documents.

 

B.       If
an Event of Default has occurred and is continuing, Lender shall have the option, without demand or notice, other than specified
herein or in the other Loan Documents, to declare the unpaid principal of this Note, together with all accrued interest, prepayment
premium, if any, and other sums secured by the Security Agreement, or other Loan Documents, at once due and payable to the extent
permitted by law, to foreclose the Security Agreement and the other liens or security interests securing the payment of this Note,
and to exercise any and all other rights and remedies available at law or in equity under the Security Agreement or the other Loan
Documents.

 

C.       The
remedies of Lender, as provided herein or in the Security Agreement or any of the other Loan Documents shall be cumulative and
concurrent, and may be pursued singularly, successively or together, at the sole discretion of Lender, and may be exercised as
often as occasion therefor shall arise. No act of omission or commission of Lender, including specifically any failure to exercise
any right, remedy or recourse, shall be deemed to be a waiver or release of the same, such waiver or release to be effected only
through a written document executed by Lender and then only to the extent specifically recited therein. A waiver or release with
reference to any one event shall not be construed as continuing, as a bar to, or as a waiver or release of, any subsequent right,
remedy or recourse as to a subsequent event.

 

10.       Costs
and Attorneys’ Fees. If any Event of Default under this Note shall occur, or if Lender incurs
any expenses or costs in connection with the protection or realization of any collateral, whether or not suit is filed thereon
or on any instrument granting a security interest in said collateral, Borrower promises to pay all costs of collection of every
kind, including but not limited to all appraisal costs, reasonable attorneys’ fees, court costs, and expenses of every kind,
incurred by Lender in connection with such collection or the protection or enforcement of any or all of the security for this Note,
whether or not any lawsuit is filed with respect thereto.

 

    8 

     

    

 

11.       Waiver.
Borrower, and each guarantor and endorser hereon waives grace, notice, notice of intent to accelerate, notice of default, protest,
demand, presentment for payment and diligence in the collection of this Note, and in the filing of suit hereon, and agrees that
his or its liability and the liability of his or its heirs, beneficiaries, successors and assigns for the payment hereof shall
not be affected or impaired by any release or change in the security or by any increase, modification, renewal or extension of
the indebtedness or its mode and time of payment. It is specifically agreed by the undersigned that the Lender shall have the right
at all times to decline to make any such release or change in any security given to secure the payment hereof and to decline to
make any such increase, modification, renewal or extension of the indebtedness or its mode and time of payment.

 

12.       Notices.
All notices or other communications required or permitted hereunder shall be delivered in the manner set forth in the Credit
Agreement.

 

13.       Application
of Payments. All payments on account of the indebtedness evidencing the Note shall first be applied to late charges and
costs and fees incurred by Lender in enforcing its rights hereunder or under the Security Agreement and the other Loan Documents,
second to accrued interest on the unpaid principal balance, and third to reduce unpaid principal in inverse chronological order
of maturity.

 

14.       BillPayer
Service. Any payments and other amounts owing under this Note shall be initiated by Lender in accordance with the terms
of this Note from Borrower’s account through Auto BillPayer (or Lender’s then current automated billing paying service)
(“BillPayer Service”). Borrower hereby authorizes Lender to initiate such
payments from Borrower’s primary depository account with Lender. Borrower acknowledges and agrees that use of the
BillPayer Service shall be governed by the then current standard terms and conditions thereof, and Borrower hereby acknowledges
receipt of such Terms and Conditions as in effect on the date hereof. Borrower further acknowledges and agrees to maintain payments
hereunder through the BillPayer Service throughout the term of this Note (to the extent Lender and its affiliates continue to provide
such service). If the BillPayer Service is cancelled at any time, Borrower may be required to pay Lender the then current amount
of the difference between Lender’s customary Note processing fee and the discounted Note processing fee received by Borrower
in consideration of its use of the BillPayer Service.

 

15.       Miscellaneous.

 

A.       The
headings of the paragraphs of this Note are inserted for convenience only and shall not be deemed to constitute a part hereof.

 

    9 

     

    

 

B.       All
payments under this Note shall be payable in lawful money of the United States which shall be legal tender for public and private
debts at the time of payment; provided that a check will be deemed sufficient payment so long as it clears when presented for payment.
Each payment of principal or interest under this Note shall be paid not later than 2:00 P.M. Eastern Time on the date due therefor
and funds received after that hour shall be deemed to have been received by Lender on the following Business Day. If any payment
of principal, interest or any other amount due under this Note shall become due on a day which is not a Business Day, the due date
for such payment shall be automatically extended to the next succeeding Business Day, and, in the case of a principal payment,
such extension of time shall be included in computing interest on such principal. If an Event of Default has occurred and remains
uncured, Lender is hereby authorized to charge any account of Borrower maintained with Lender for each payment of principal, interest
and other amounts due under this Note, when each such payment becomes due. All amounts payable under this Note and the other Loan
Documents shall be paid by Borrower without offset or other reduction.

 

C.       The
obligations and liabilities under this Note of Borrower shall be binding upon and enforceable against Borrower and its heirs, legatees,
legal representatives, successors and assigns. This Note shall inure to the benefit of and may be enforced by Lender, its successors
and assigns.

 

D.       If
any provision of this Note or any payments pursuant to the terms hereof shall be invalid or unenforceable to any extent, the remainder
of this Note and any other payments hereunder shall not be affected thereby and shall be enforceable to the greatest extent permitted
by law.

 

E.       If
this Note is executed by more than one party, the obligations and liabilities of each Borrower under this Note shall be joint and
several and shall be binding upon and enforceable against each Borrower and their respective successors and assigns.

 

F.       Lender
may at any time assign its rights in this Note and the Loan Documents, or any part thereof and transfer its rights in any or all
of the collateral, and Lender thereafter shall be relieved from all liability with respect to such collateral. In addition, the
Lender may at any time sell one or more participations in the Note. Borrower may not assign its interest in this Note, or any other
agreement with Lender or any portion thereof, either voluntarily or by operation of law, without the prior written consent of Lender.

 

G.       Time
is of the essence of this Note and of each and every provision hereof.

 

H.       This
Note, together with the other Loan Documents, sets forth all of the covenants, promises, agreements, conditions and understandings
of the parties relating to the subject matter of this Note, and there are no covenants, promises, agreements, conditions or understandings,
either oral or written between them relating to the subject matter of this Note or other than as are set forth herein and in the
other Loan Documents. This Note and the other Loan Documents supersede all prior written and oral commitments and agreements relating
to the Loan. Borrower acknowledges that it is executing this Note without relying on any statements, representations or warranties,
either oral or written, that are not expressly set forth herein or in the other Loan Documents.

 

    10 

     

    

 

I.       This
Note and each provision hereof may be modified, amended, changed, altered, waived, terminated or discharged only by a written instrument
signed by the party sought to be bound by such modification, amendment, change, alteration, waiver, termination or discharge.

 

J.       Each
party to this Note and the legal counsel to each party have participated in the drafting of this Note, and accordingly the general
rule of construction to the effect that any ambiguities in a contract are to be resolved against the party drafting the contract
shall not be employed in the construction and interpretation of this Note.

 

K.       Borrower
certifies that the proceeds of this Loan are to be used for business purposes.

 

16.       Choice
of Laws. This Note shall be governed by and construed in accordance with the laws of the State of Florida.

 

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

 

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

 

    11 

     

    

 

2.       Loan
Fee. In consideration of Lender’s agreement to make the Loan, Borrower shall pay to Lender a non-refundable processing
fee in the amount of Four Hundred and 00/100 Dollars ($400.00), which shall be due and payable in full as a condition precedent
to the first disbursement of proceeds under this Note.

 

19.       Patriot
Act. Lender hereby notifies Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies
Borrower, which information includes the name and address of Borrower and other information that will allow Lender to identify
Borrower in accordance with the Act.

 

20.       Amendment
and Restatement; Payment of Documentary Stamp and Intangible Taxes.

 

A.       This
Note renews, amends, replaces and supersedes that certain Amended and Restated Revolving Promissory Note dated June 22, 2017 in
the original principal amount of One Million and No/100 Dollars ($1,000,000.00) executed by Borrower in favor of Lender (the “Prior
Note”). It is the intention of Lender and Borrower that while this Note renews, amends, replaces and supersedes the Prior
Note, it is not in payment or satisfaction of the Prior Note, but rather is the substitution of one evidence of debt for another
without any intent to extinguish the old.

 

B.       The
Prior Note was made, executed and delivered outside the State of Florida and is not secured by a mortgage on Florida real property.
No documentary stamp taxes were due in connection with the execution or delivery of the Prior Note. This Note has been made, executed
and delivered outside the State of Florida and is not secured by a mortgage on Florida real property. No documentary stamp taxes
are required pursuant to §201.09, Florida Statutes, and Rule 12B-4.054, Florida Administrative Code.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK; 

SIGNATURE PAGE FOLLOWS]

 

    12 

     

    

IN WITNESS WHEREOF,
Borrower has executed, sealed and delivered this Note as of the Effective Date.

 

	 	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	 

 

 

 

 

Signature Page to $1,000,000.00 Amended
and Restated Revolving Promissory Note

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