Exhibit 10.1

SETTLEMENT AGREEMENT

AND RELEASE

This Settlement Agreement and Release (the “Agreement”) is entered into by, between, and among Merrick Bank Corporation (“Merrick”), on the one hand, and JetPay Merchant Services, LLC (“JPMS”), JetPay ISO Services, LLC (“JP ISO”), JetPay, LLC (f/k/a Universal Business Payment Solutions Acquisition Corporation (“UBPS”), WLES, L.P. (“WLES”), and JetPay Corporation (“JetPay Corp.”), (collectively, the “Parties,” and each, a “Party”) on the other;

WHEREAS , Merrick entered into a (i) Merchant ISO Agreement with JPMS (f/k/a Standard Payments LLC) dated as of October 30, 2003, (ii) a Merchant ISO Agreement with JP ISO dated as of January 22, 2007, (ii) a Clearing Bank Agreement with JetPay, LLC dated as of October 30, 2006, (iv) a Forbearance Agreement with JP ISO and JPMS fully executed as of May 24, 2012, and (v) an Escrow Agreement with UBPS, JetPay, LLC, and WLES dated as of December 28, 2012 (collectively, the “Relevant Agreements”);

WHEREAS , Merrick asserts JPMS, JP ISO, JetPay, LLC, UBPS, and WLES, as well as JetPay Corp. as a successor entity (collectively, the “JetPay Entities”) are required under the Relevant Agreements to indemnify and reimburse Merrick for certain losses Merrick has accrued as a result of the Parties’ relationships;

WHEREAS , certain of the JetPay Entities have filed claims against Merrick disputing the JetPay Entities liability to Merrick for losses incurred by Merrick under the Relevant Agreements, and have asserted various claims against Merrick as set forth in the pleadings in the following civil actions in the Federal District Court for the District of Utah: 2:12-cv-197; 2:14-cv-149; and 2:14-cv-928 (collectively, the “Relevant Actions”);

WHEREAS , Merrick has asserted counterclaims in the Relevant Actions;

WHEREAS , the Parties wish to compromise and settle all claims and counterclaims asserted or that could have been asserted in the Relevant Actions (the “Claims”);

NOW THEREFORE , in consideration of the mutual agreements and covenants contained herein and for other good and valuable consideration the receipt and adequacy of which is hereby acknowledged by each party to this Agreement, and intending to be legally bound, the parties agree as follows:

1. Settlement Payments .

a. The ISO Reserve . The JetPay Entities release all claims to the funds that were held in reserve by Merrick pursuant to the Merchant ISO Agreements totaling $4,389,952.28.

b. The Secured Notes . Upon execution of the Agreement, JetPay Corp. shall execute and deliver to Merrick two notes, one in the principal amount of $5,000,000 in the form, and with the payment terms, set forth on Exhibit A hereto (the “5MM Note”); and one in the principal amount of $3,850,000 in the form, and with the payment terms, set forth on Exhibit B hereto (the “3.85MM Note,” and, collectively with the 5MM Note, the “Notes”). The JetPay Entities represent and agree that the Notes ( Exhibit A and B ) are enforceable in all respects, and that the JetPay Entities hereby additionally waive any objection, claim or right that they may otherwise have to challenge the enforceability or validity of the Notes. JetPay Corp.’s obligations under the Notes are secured by the 3,333,333 shares of JetPay Corp. common stock currently held in escrow pursuant to the Escrow Agreement (the “Escrow Shares”). The Notes will be subject to the following mandatory prepayment terms:

i. Any sale of the Escrow Shares shall be made on an arm’s-length basis and if to an affiliate of any of the JetPay Entities, shall be at a price and upon other terms equivalent to those of an arm’s-length sale to an unaffiliated third party buyer; and if the purchase price in any sale of the Escrow Shares is less than 90% of the most recently listed price per share on the NASDAQ Stock Market, then such sale shall be subject to the prior approval of Merrick. If there is a sale or sales of some, but not all, of the Escrow Shares, the JetPay Entities agree to execute and deliver to the Escrow Agent, as set forth in paragraph 2(a) of the Escrow Agreement, certificates representing the number of Escrow Shares intended to remain in escrow after such partial sale or sales together with stock powers for such shares. With respect to the $5MM Note, upon Merrick’s receipt of net payment from any bona fide purchasers for any of the Escrow Shares (the “Escrow Shares Sale Proceeds”), Merrick and the relevant JetPay Entities shall direct the escrow agent to release the purchased Escrow Shares from escrow in accordance with the “Direction Letter” procedures set forth in paragraph 4(i) of the Escrow Agreement. Any net Escrow Shares Sale Proceeds will reduce, dollar for dollar, the outstanding balance under the $5MM Note, applied first to accrued interest if any, and then to principal. If the Escrow Shares Sale Proceeds exceed the amounts due Merrick under the $5MM Note, the amount of such excess shall be deposited with the Escrow Agent to be held as an additional cash deposit under the Escrow Agreement; and each of the Parties agrees to execute and deliver to the Escrow Agent written instructions to this effect and any other amendments, waivers, consents, indemnities and other documents or instruments necessary to accomplish the same. Any additional cash deposit, along with any Escrow Shares not sold to prepay the JetPay Entities obligations under the $5MM Note will remain in escrow as security for the JetPay Entities’ obligations under this Agreement until all the JetPay Entities’ obligations to Merrick are satisfied.

ii. With respect to the $3.85MM Note, the JetPay Entities shall prepay that note upon any JetPay Entities’ receipt of any payment from Valley National Bank on account of the claims brought by JPMS in American Express Travel Related Services and JetPay Merchant Services, LLC v. Valley National Bank , Civil Action No. 2:14-cv-7827 (D. N.J.) (the “JP-VNB Action”). The JetPay Entities, through JPMS, shall pursue the claims brought by JPMS in the JP-VNB Action with reasonable diligence, at the sole expense and cost of JPMS.

iii. With respect to the $3.85MM Note, if JetPay Corp. shall enter into any refinancing, restructuring or other similar agreement relating to more than 50% of its outstanding debt, on a date that is prior to the Maturity Date of the $3.85MM Note (the “Refinancing Date”), then JetPay Corp. shall pre-pay the entire outstanding principal amount of the $3.85MM Note, all accrued Interest and all other amounts owed to Merrick hereunder, on or before the Refinancing Date.

2. Default Judgment . Merrick’s agreement to settle and compromise the Claims is expressly conditioned, as a condition precedent to Merrick’s obligations, on the timely receipt of all payments due under the Notes. If the JetPay Entities fail to make any payment when due under the Notes (hereinafter a “Payment Default”), Merrick is entitled to the entry of a default judgment in the amount agreed upon herein (the “Default Judgment”). To expedite the Default Judgment process, concurrently with execution of this Agreement, each of the JetPay Entities, other than WLES, shall execute and deliver to Merrick Stipulated and Confessed Judgments to enforce this settlement, jointly and severally, in the forms attached as Exhibit C hereto, and which may be filed and entered by the Federal District Court for Utah without notice to any of the JetPay Entities upon a Payment Default. The JetPay Entities represent and agree that the Stipulated and Confessed Judgments ( Exhibit C) are enforceable in all respects, and that the JetPay Entities hereby additionally waive any objection, claim or right that they may otherwise have to the enforceability and validity of the Stipulated and Confessed Judgments. Further, the JetPay Entities understand, represent and agree that Merrick can seek to obtain and/or enforce the Default Judgment in any court of competent jurisdiction, and that upon a Payment Default, the JetPay Entities waive any objection, claim or right that they may otherwise have to the entry or enforceability of the Default Judgment, and the JetPay Entities will cooperate with Merrick to file any papers necessary to assist in obtaining a Default Judgment. The amounts of the Default Judgments are as follows:

a. Thirty-Two Million Five Hundred Thousand Dollars ($32,500,000) if a Payment Default occurs prior to the complete pay-off of either of the Notes;

b. Twenty-Eight Million Six Hundred and Fifty Thousand Dollars ($28,650,000) if a Payment Default occurs after payoff of the $3.85MM Note but prior to the complete payoff of the $5MM Note;

c. Twenty-Seven Million Five Hundred Thousand ($27,500,000) if a Payment Default occurs after payoff of the $5MM Note but prior to the complete payoff of the $3.85MM Note.   

3. Release of Escrow Shares .

Except as specifically set forth in paragraph 1(b)(i) of this Agreement, the Escrow Shares shall remain in escrow to secure the JetPay Entities’ obligations to Merrick under this Agreement subject to the following:

a. In the event of any Payment Default, in addition to the default judgment remedies set forth in paragraph 2 above, Merrick shall be entitled to submit a Claim Notice (as defined in the Escrow Agreement) to the Escrow Agent for release of all Escrow Shares as well as any additional cash deposits, if any (the “Escrow Fund”), as of the date of the Payment Default, and WLES shall not file an Objection Notice (as defined in the Escrow Agreement) thereto, nor will any of the JetPay Entities object to the release or otherwise resist in any other manner the release of the Escrow Fund in favor of Merrick.  In addition, upon execution of this Agreement, WLES shall execute, along with Merrick, a Claim Resolution Certificate to be sent to the Escrow Agent, directing release of the Escrow Funds to Merrick, in the form attached as Exhibit D hereto, which letter Merrick shall be entitled to present to the Escrow Agent upon a Payment Default.

b. Upon full payment and satisfaction of the Notes, and absent any breach of this Agreement by any of the JetPay Entities, Merrick will notify the Escrow Agent, copying the JetPay Entities, that in accordance with the Escrow Agreement, Merrick relinquishes any further claims to the Escrow Shares.

4. Payment Allocation . The JetPay Entities, individually and together, acknowledge, represent and agree that Merrick’s Claims include the amounts listed on the Payment Allocation Chart attached as Exhibit E hereto, and that the JetPay Entities do not dispute the validity of each of the amounts set forth therein nor the manner in which Merrick will allocate those payments due under this Agreement. The JetPay Entities, individually and together, acknowledge, represent, and agree that part of the consideration for the settlement of the Claims is the JetPay Entities’ agreement to the allocation and stated amounts of settlement payments as set forth on Exhibit E , and the JetPay Entities, individually and together, agree to the allocation and stated amounts set forth in Exhibit E with the express understanding that the allocation and stated amounts may work to their detriment in that the less allocated to Direct Air Chargeback Losses (as defined on Exhibit E), the less the JetPay Entities, separately or together, may be able to claim as recoverable damages in the JP-VNB Action.

5. Release .

a. Upon timely payment in full of all amounts due under the Notes, and subject to the satisfaction of the obligations created by this Agreement in favor of Merrick, Merrick, for good and valuable consideration, waives, releases, and forever discharges the JetPay Entities, together with their subsidiaries, affiliates, and predecessor companies and entities, and their past and present employees, principals, owners, directors, officers, and agents, from any and all claims, causes of action, charges, suits, debts, controversies, liabilities, promises, damages, judgments, and demands of any kind, that were asserted or could have been asserted in the Relevant Actions.

b. Subject to satisfaction of the obligations created by this Agreement in favor of the JetPay Entities, the JetPay Entities, for good and valuable consideration, waive, release, and forever discharge Merrick, together with its subsidiaries, affiliates, and predecessor companies and entities, and its past and present employees, principals, owners, directors, officers, and agents, from any and all claims, causes of action, charges, suits, debts, controversies, liabilities, promises, damages, judgments, and demands of any kind, that were asserted or could have been asserted in the Relevant Actions.

6. Conditional Discontinuance . Upon execution of this Agreement, the parties shall file a proposed conditional stipulation of discontinuance in form attached as Exhibit F , which discontinuance shall be conditioned on an Order from the Court retaining jurisdiction to enforce the terms of this Agreement.

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

8. Modifications . This Agreement and all accompanying exhibits may not be modified or amended, nor may any of its provisions be waived, except by a writing signed by the Parties or their successors-in-interest.

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

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

11. Governing Law and Jurisdiction . The construction, interpretation, operation, effect and validity of this Agreement, and all documents necessary to effectuate it, shall be governed by the laws of the State of Utah without giving effect to its conflict-of-law rules, and the Parties expressly agree to be bound by, submit to, and subject to the jurisdiction of the Federal District Court for the District of Utah and to the jurisdiction of the Third Judicial District Court for Salt Lake County, State of Utah, with respect to any filing, motion, claim, or action arising out of or relating to this Agreement.

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

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

14. Reservation of Rights Against Others . Nothing contained in this Agreement shall be deemed or construed as a waiver by Merrick or the JetPay Entities of any claim, right, cause of action, or defense possessed by Merrick and the JetPay Entities against any person, entity, or insurer. Merrick and the JetPay Entities expressly reserve all defenses, claims, rights, and causes of action against all persons, insurers and entities that are not parties to this Agreement, including but not limited to the claims, causes of action, and defenses asserted in Merrick Bank Corporation v. Chartis Specialty Insurance Company, Civil Action No. 12-cv-07315 (S.D.N.Y), Merrick Bank Corporation v. Valley National Bank , Civil Action No. 13-cv-7756 (D. N.J.), Merrick Bank Corporation v. Royal Group Services, LTD, LLC et al , Civil Action No. 15-cv-5120 (S.D.N.Y.).

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

16. Jury Waiver and Summary Enforcement . The Parties irrevocably waive the right to trial by jury in any action or proceeding arising out of the Agreement, or relating to its subject matter. The Parties agree that the terms and obligations of this Agreement can be summarily enforced pursuant to motion by the Federal District Court for the District of Utah.

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

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

19. Notice . Any notices, requests, or demands concerning this Agreement shall be sent by email and Federal Express to:

For Merrick:

Brian W. Jones

General Counsel

Merrick Bank Corporation

10705 South Jordan Gateway, Ste. 200

South Jordan, Utah 84095

Brian.Jones2@MerrickBank.com

With Copy to:

Daniel Gurfein

Satterlee Stephens LLP

230 Park Ave

New York, NY 10169

dgurfein@ssbb.com

For JetPay Corporation :

Peter Davidson
JetPay Corporation

1175 Lancaster Avenue, Suite 200

Berwyn, PA 19312
Peter.Davidson@jetpaycorp.com

With Copy to:

T. Micah Dortch

Cooper & Scully, P.C.

900 Jackson Street, Suite 100

Dallas, TX 75202

Micah.Dortch@cooperscully.com

For JetPay Merchant Services, LLC :

Peter Davidson
JetPay Corporation

1175 Lancaster Avenue, Suite 200

Berwyn, PA 19312
Peter.Davidson@jetpaycorp.com

With Copy to:

T. Micah Dortch

Cooper & Scully, P.C.

900 Jackson Street, Suite 100

Dallas, TX 75202

Micah.Dortch@cooperscully.com

For JetPay ISO Services, LLC :

Peter Davidson
JetPay Corporation

1175 Lancaster Avenue, Suite 200

Berwyn, PA 19312
Peter.Davidson@jetpaycorp.com

With Copy to:

T. Micah Dortch

Cooper & Scully, P.C.

900 Jackson Street, Suite 100

Dallas, TX 75202

Micah.Dortch@cooperscully.com

For WLES, L.P. :

Trent Voigt
JetPay
3361 Boyington Drive, Suite 180
Carrollton, Texas 75006

trent@jetpay.com

With Copy to:

Scheef & Stone, L.L.P.

500 N. Akard, Suite 2700

Dallas, TX 75201

Brad.Whitlock@solidcounsel.com

[ Signatures on Following Page ]

Exhibit 10.2

SETTLEMENT AGREEMENT AND RELEASE

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

RECITALS

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

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

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

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

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

For JetPay Corporation or JetPay LLC :

1175 Lancaster Avenue, Suite 200 Berwyn, PA 19312

Attn: Chief Executive Officer

With a copy to:

Cooper & Sculley, PC

900 Jackson St. Suite 100

Dallas, TX 75202

Attn: Micah Dortch

Micah.Dortch@CooperSculley.com

For WLES, L.P. or Trent Voigt :

2233 Wolf Front Rd.

Van Alstyne, TX 75495

Attn: Trent Voigt

trent@jetpay.co.uk

With a copy to:

Scheef & Stone, L.L.P.

500 N. Akard, Suite 2700

Dallas, TX 75201

Attn: Brad L. Whitlock

Brad.whitlock@solidcounsel.com

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

[ Signatures on Following Page ]

Side Agreement 

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

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

JetPay, LLC

By : /s/ Peter B. Davidson

Its: Vice Chairman

WLES, L.P.

By: Transaction Technology Guy and the Triumphant Ones, LLC

General Partner

By: /s/ Trent Voigt

Trent Voigt, President

Exhibit 10.3

PROMISSORY NOTE

$3,850,000.00

FOR VALUE RECEIVED, JetPay Corporation, (f/k/a Universal Business Payment Solutions Acquisition Corporation) , a Delaware corporation with its principal place of business at 1175 Lancaster Avenue, Suite 200, Berwyn, PA 19312 (hereinafter the "Maker"), unconditionally promises to pay to the order of Merrick Bank Corporation , a Utah corporation with offices at 10705 S. Jordan Gateway Ste. 200, South Jordan, Utah 84095 or its assigns (hereinafter "Holder", and, together with the Maker, the “Parties”), the principal amount of Three Million Eight Hundred Fifty Thousand Dollars ($3,850,000.00), together with all accrued Interest thereon, as provided in this Promissory Note (the “Note”, as the same, may be amended, restated, supplemented or otherwise modified from time to time in accordance with its terms).

This Note is issued to evidence in part the obligations of the Maker to the Holder pursuant to that certain Settlement Agreement dated the date hereof (the “Settlement Agreement”) by and among the Maker, the Holder JetPay Merchant Services, LLC, JetPay ISO Services, LLC, JetPay, LLC, and WLES, L.P., (“WLES”). Pursuant to the Settlement Agreement, certain shares of the common stock and cash of the Maker (the “Escrow Fund”) that had previously been or will be placed in escrow to secure certain pre-existing obligations of Maker’s affiliates to Holder, were pledged by WLES to the Holder to secure the Maker’s obligations to the Holder thereunder including, without limitation, the obligations of the Maker under this Note.

1. Interest . The outstanding principal amount of this Note shall bear interest (“Interest”) from the date hereof at the rate of eight percent (8%) per annum (except that Interest on the outstanding principal amount of this Note from and after the occurrence of any Event of Default hereunder shall accrue at the rate of fifteen percent (15 %) per annum) until the entire principal amount hereof shall have been paid in full, whether at maturity, upon acceleration, by prepayment or otherwise. Interest hereunder shall be computed on the basis of a year of 360 days, and the actual number of days (including the first day but excluding the last day) elapsed.

2. Repayment Provisions . Subject to the provisions of Section 3 below, the outstanding principal amount of this Note shall be paid in quarterly installments of $100,000.00 each payable beginning on December 31, 2016, on September 30, December 31, March 31 and June 30 of each subsequent year, together with Interest on the outstanding principal amount hereof accrued to such date, with the first such quarterly installment of interest to be due and payable on September 30, 2016, provided that the entire outstanding principal balance hereof, along with all unpaid Interest accrued thereon, and all other amounts owed to the Holder hereunder shall be due and payable on or before December 28, 2017 ( the “Maturity Date”).

3. Prepayments.

(a) Optional Prepayments. The Maker may prepay this Note in whole or in part at any time or from time to time prior to the Maturity Date without penalty or premium by paying the principal amount to be prepaid together with all Interest accrued thereon (if any) to the date of prepayment.

(b) Mandatory Prepayments . Upon the recovery by the Maker, any of its affiliates or WLES, of any cash damages in connection with a pending litigation with Valley National Bank captioned American Express Travel Related Services and JetPay Merchant Services, LLC v. Valley National Bank , Civil Action No. 2:14-cv-7827 (D. N.J.), the Maker will immediately pay over such amount to the Holder as a pre-payment of its obligations hereunder. In addition, if the Maker shall enter into any refinancing, restructuring or other similar agreement relating to more than 50% of its debt, on a date that is prior to the Maturity Date (the “Refinancing Date”), then the Maker will pre-pay the entire outstanding principal amount of this Note, all accrued Interest and all other amounts owed to the Holder hereunder, on or before the Refinancing Date

4. Other Payment Provisions . The Maker shall make each payment and pre-payment hereunder not later than 1:00 P.M. (Eastern time) on the day when, without offset, in lawful money of the United States of America to the Holder by wire transfer of immediately available funds to the Holder’s account in accordance with wire transfer instructions to be provided by the Holder to the Maker from time to time. All payments will be applied first to costs and fees owing hereunder, second to the payment of Interest accrued hereunder through the date of payment and third to the payment of principal hereof, in such order as Holder may determine in its sole discretion. If the date for any payment hereunder falls on a day other than a Business Day, then for all purposes of this Note the same shall be deemed to have falen on the next following Business Day, and such extension of time shall in such case be included in the computation of payments of interest. As used herein, “Business Day” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in New York, NY are authorized or required by law to be closed.

5. Events of Default . The occurrence of any of the following shall constitute an Event of Default hereunder:

(a) Failure to Pay . The Maker fails to pay (i) any principal amount of this Note as and when due; or (ii) accrued Interest or any other amount as and when due hereunder and fails to cure any unpaid amount within five (5) days of the date said amount was due.

(b) Cross-Defaults . The Maker fails to pay when due any of its indebtedness (other than indebtedness under this Note) or any interest or premium thereon as and when due (whether by scheduled maturity, acceleration, demand or otherwise) and such failure continues after the applicable grace period, if any, specified in the agreement or instrument relating to such indebtedness.

(c) Breach of Settlement Agreement . The Maker is in breach of or otherwise fails to comply with any of its obligations under the Settlement Agreement or any other agreements, notes or instruments executed and delivered by it in connection therewith, or otherwise in connection with the Escrow Fund and fails to cure any such breach or compliance failure within five (5) days of the date of such breach or failure.

(d) Bankruptcy .  

(i) the Maker commences any case, proceeding or other action (A) under any existing or future law relating to bankruptcy, insolvency, reorganization, or other relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or the Maker makes a general assignment for the benefit of its creditors;

(ii) there is commenced against the Maker any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days;

(iii) there is commenced against the Maker any case, proceeding or other action seeking issuance of a warrant of attachment, execution or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which has not been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof;

(iv) the Maker takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii) or (iii) above; or

(v) the Maker is generally not, or is unable to, or admits in writing its inability to, pay its debts as they become due.

(e) Judgments . A judgment or decree is entered against the Maker and such judgment or decree has not been vacated, discharged, stayed or bonded pending appeal within thirty (30) days from the entry thereof.

6. Remedies . Upon the occurrence of an Event of Default and at any time thereafter during the continuance of such Event of Default, the Holder may at its option, by written notice to the Maker (a) declare the entire principal amount of this Note, together with all accrued Interest thereon and all other amounts payable hereunder, immediately due and payable and/or (b) exercise any or all of its rights, powers or remedies available to it under the Settlement Agreement or otherwise under applicable law; provided, however that, if an Event of Default described in Section 5(d) shall occur, the principal of and accrued Interest hereunder shall become immediately due and payable without any notice, declaration or other act on the part of the Holder.

7. Miscellaneous .

(a) Notices .  All notices, requests or other communications required or permitted to be delivered hereunder shall be delivered in writing, if to the Maker, at the address set forth above, or at such other address as may have been furnished to the Holder by the Maker in writing; or if to the Holder, to it at the address set forth above, or at such other address as may have been furnished to the Maker by the Holder in writing. Notices, if (i) mailed by certified or registered mail or sent by hand or overnight courier service shall be deemed to have been given when received, (ii) sent by facsimile during the recipient's normal business hours shall be deemed to have been given when sent (and if sent after normal business hours shall be deemed to have been given at the opening of the recipient's business on the next business day) and (iii) sent by e-mail shall be deemed received upon the sender's receipt of an acknowledgment from the intended recipient (such as by the "return receipt requested" function, as available, return e-mail or other written acknowledgment).

(b) Expenses . The Maker shall reimburse the Holder on demand for all reasonable out-of-pocket costs, expenses and fees (including reasonable expenses and fees of its counsel) incurred by the Holder in connection with the transactions contemplated hereby including the negotiation, documentation and execution of this Note and the enforcement of the Holder's rights hereunder.

(c) Governing Law . This Note and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Note and the transactions contemplated hereby shall be governed by the laws of the State of Utah.

(d) Submission to Jurisdiction .  The Maker hereby irrevocably and unconditionally (i) agrees that any legal action, suit or proceeding arising out of or relating to this Note may be brought in the Federal District Court in Salt Lake City, Utah and (ii) submits to the exclusive jurisdiction of any such court in any such action, suit or proceeding. Final judgment against the Maker in any action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction by suit on the judgment. Nothing in this 7(d) shall affect the right of the Holder to (i) commence legal proceedings or otherwise sue the Maker in any other court having jurisdiction over the Maker or (ii) serve process upon the Maker in any manner authorized by the laws of any such jurisdiction.

(e) Venue . The Maker irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Note in any court referred to in Section 7(d) and the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(f) Waiver of Jury Trial . THE MAKER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY.

(g) Counterparts; Integration; Effectiveness . This Note and any amendments, waivers, consents or supplements hereto may be executed in counterparts, each of which shall constitute an original, but all taken together shall constitute a single contract. This Note constitutes the entire contract between the Parties with respect to the subject matter hereof and supersedes all previous agreements and understandings, oral or written, with respect thereto. Delivery of an executed counterpart of a signature page to this Note by facsimile or in electronic (i.e., "pdf" or "tif") format shall be effective as delivery of a manually executed counterpart of this Note.

(h) Successors and Assigns . This Note may be assigned, transferred or negotiated by the Holder to any person or entity at any time without notice to or the consent of the Maker. The Maker may not assign or transfer this Note or any of its rights hereunder without the prior written consent of the Holder. This Note shall inure to the benefit of and be binding upon the Parties hereto and their permitted assigns.

(i) Waiver of Notice, etc . The Maker hereby waives presentment, demand for payment, protest, notice of dishonor, notice of protest or nonpayment, notice of acceleration of maturity and diligence in connection with the enforcement of this Note or the taking of any action to collect sums owing hereunder.

(j) Amendments and Waivers . No term of this Note may be waived, modified or amended except by an instrument in writing signed by both of the Parties hereto. Any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given.

(k) Headings . The headings of the various Sections and subsections herein are for reference only and shall not define, modify, expand or limit any of the terms or provisions hereof.

(l) No Waiver; Cumulative Remedies . No failure to exercise and no delay in exercising on the part of the Holder, of any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

(m) Severability . If any term or provision of this Note is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Note or invalidate or render unenforceable such term or provision in any other jurisdiction.

(n) Replacement of Note . Upon receipt of evidence reasonably satisfactory to the Maker of the loss, theft, destruction or mutilation of this Note and, in the case of any such loss, theft or destruction of this Note, upon delivery of an indemnity bond in such reasonable amount as the Maker may determine, or, in the case of any such mutilation, upon surrender and cancellation of such mutilated Note, the Maker will execute and deliver, in lieu thereof, a new Note of like tenor and of the same class, dated the date to which interest has been paid on such lost, stolen, destroyed or mutilated Note.

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IN WITNESS WHEREOF , the Maker has caused this Note to be executed by its officer thereunto duly authorized as of the 26 day of July, 2016.

STATE OF PA         )

I, Vincent J. Grandinetti , hereby certify on this 26 day of July, 2016, before me, the subscriber, a Notary Public of the jurisdiction aforesaid, personally appeared Peter B. Davidson ., known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument as the Vice Chairman of JetPay Corporation and acknowledged that he executed the same on behalf of JetPay Corporation, for the purposes therein contained, such instrument having been executed in my presence.

AS WITNESS my hand and notarial seal the day and year above written.

My Commission Expires: May 28, 2017

Exhibit 10.4

PROMISSORY NOTE

$5,000,000.00

FOR VALUE RECEIVED, JetPay Corporation (f/k/a Universal Business Payment Solutions Acquisition Corporation) , a Delaware corporation with its principal place of business at 1175 Lancaster Avenue, Suite 200, Berwyn, PA 19312 (hereinafter the "Maker"), unconditionally promises to pay to the order of Merrick Bank Corporation , a Utah corporation with offices at 10705 S. Jordan Gateway Ste. 200, South Jordan, Utah 84095 or its assigns (hereinafter "Holder", and, together with the Maker, the “Parties”), the principal amount of Five Million Dollars ($5,000,000.00), together with all accrued Interest thereon, as provided in this Promissory Note (the “Note”, as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with its terms).

This Note is issued to evidence in part the obligations of the Maker to the Holder pursuant to that certain Settlement Agreement dated the date hereof (the “Settlement Agreement”) by and among the Maker, the Holder, JetPay Merchant Services, LLC, JetPay ISO Services, LLC, JetPay, LLC, and WLES, L.P., (“WLES”). Pursuant to the Settlement Agreement, certain shares of the common stock and cash of the Maker (the “Escrow Fund”) that had previously been or will be placed into escrow to secure certain pre-existing obligations of Maker’s affiliates to Holder, were pledged by WLES to the Holder to secure the Maker’s obligations to Holder thereunder including, without limitation, the obligations of Maker under this Note.

1. Interest . The outstanding principal amount of this Note shall bear interest (“Interest”) from [Insert date that is the 91 ^st day after the date hereof] at the rate of twelve percent (12%) per annum (except that Interest on the outstanding principal amount of this Note from and after the occurrence of any Event of Default hereunder shall accrue at the rate of fifteen percent (15 %) per annum) until the entire principal amount hereof shall have been paid in full, whether at maturity, upon acceleration, by prepayment or otherwise. Interest hereunder shall be computed on the basis of a year of 360 days, and the actual number of days (including the first day but excluding the last day) elapsed.

2. Repayment Provisions . Subject to the provisions of Section 3 below, the outstanding principal amount of this Note, all unpaid interest accrued thereon, and all other amounts owed to the Holder hereunder shall be due and payable on or before [Insert date that is the 180 ^th day after the date hereof] ( the “Maturity Date”).

3. Prepayments.

(a) Optional Prepayments. The Maker may prepay this Note in whole or in part at any time or from time to time prior to the Maturity Date without penalty or premium by paying the principal amount to be prepaid together with all Interest accrued thereon (if any) to the date of prepayment.

(b) Mandatory Prepayments . Upon the sale of any of the Escrow Shares, pursuant to the provisions of the Settlement Agreement, all proceeds thereof will be paid to the Holder as a mandatory pre-payment of this Note until the outstanding principal amount of this Note, all unpaid interest accrued thereon, and all other amounts owed to the Holder hereunder shall have been paid in full.

4. Other Payment Provisions . The Maker shall make each payment and pre-payment hereunder not later than 1:00 P.M. (Eastern time) on the day when due, without offset, in lawful money of the United States of America to the Holder by wire transfer of immediately available funds to the Holder’s account in accordance with wire transfer instructions to be provided by the Holder to the Maker from time to time. All payments will be applied first to costs and fees owing hereunder, second to the payment of Interest accrued hereunder through the date of payment and third to the payment of principal hereof, in such order as Holder may determine in its sole discretion. If the date for any payment hereunder falls on a day other than a Business Day, then for all purposes of this Note the same shall be deemed to have fallen on the next following Business Day, and such extension of time shall in such case be included in the computation of payments of interest. As used herein, “Business Day” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in New York, NY are authorized or required by law to be closed.

5. Events of Default . The occurrence of any of the following shall constitute an Event of Default hereunder:

(a) Failure to Pay . The Maker fails to pay (i) any principal amount of this Note as and when due; or (ii) accrued Interest or any other amount as and when due hereunder and fails to cure any unpaid amount within five (5) days of the date said amount was due.

(b) Cross-Defaults . The Maker fails to pay when due any of its indebtedness (other than indebtedness under this Note) or any interest or premium thereon as and when due (whether by scheduled maturity, acceleration, demand or otherwise) and such failure continues after the applicable grace period, if any, specified in the agreement or instrument relating to such indebtedness.

(c) Breach of Settlement Agreement . The Maker is in breach of or otherwise fails to comply with any of its obligations under the Settlement Agreement or any other agreements, notes or instruments executed and delivered by it in connection therewith or otherwise in connection with the Escrow Fund and fails to cure any such breach or compliance failure within five (5) days of the date of such breach or failure.

(d) Bankruptcy .  

(i) the Maker commences any case, proceeding or other action (A) under any existing or future law relating to bankruptcy, insolvency, reorganization, or other relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or the Maker makes a general assignment for the benefit of its creditors;

(ii) there is commenced against the Maker any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days;

(iii) there is commenced against the Maker any case, proceeding or other action seeking issuance of a warrant of attachment, execution or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which has not been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof;

(iv) the Maker takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii) or (iii) above; or

(v) the Maker is generally not, or is unable to, or admits in writing its inability to, pay its debts as they become due.

(e) Judgments . A judgment or decree is entered against the Maker and such judgment or decree has not been vacated, discharged, stayed or bonded pending appeal within thirty (30) days from the entry thereof.

6. Remedies . Upon the occurrence of an Event of Default and at any time thereafter during the continuance of such Event of Default, the Holder may at its option, by written notice to the Maker (a) declare the entire principal amount of this Note, together with all accrued interest thereon and all other amounts payable hereunder, immediately due and payable and/or (b) exercise any or all of its rights, powers or remedies available to it pursuant to the Settlement Agreement or otherwise under applicable law; provided, however that, if an Event of Default described in Section 5(d) shall occur, the principal of and accrued Interest hereunder shall become immediately due and payable without any notice, declaration or other act on the part of the Holder.

7. Miscellaneous .

(a) Notices .  All notices, requests or other communications required or permitted to be delivered hereunder shall be delivered in writing, if to the Maker, at the address set forth above, or at such other address as may have been furnished to the Holder by the Maker in writing; or if to the Holder, to it at the address set forth above, or at such other address as may have been furnished to the Maker by the Holder in writing. Notices, if (i) mailed by certified or registered mail or sent by hand or overnight courier service shall be deemed to have been given when received, (ii) sent by facsimile during the recipient's normal business hours shall be deemed to have been given when sent (and if sent after normal business hours shall be deemed to have been given at the opening of the recipient's business on the next business day) and (iii) sent by e-mail shall be deemed received upon the sender's receipt of an acknowledgment from the intended recipient (such as by the "return receipt requested" function, as available, return e-mail or other written acknowledgment).

(b) Expenses . The Maker shall reimburse the Holder on demand for all reasonable out-of-pocket costs, expenses and fees (including reasonable expenses and fees of its counsel) incurred by the Holder in connection with the transactions contemplated hereby including the negotiation, documentation and execution of this Note and the enforcement of the Holder's rights hereunder.

(c) Governing Law . This Note and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Note and the transactions contemplated hereby shall be governed by the laws of the State of Utah.

(d) Submission to Jurisdiction .  The Maker hereby irrevocably and unconditionally (i) agrees that any legal action, suit or proceeding arising out of or relating to this Note may be brought in the Federal District Court in Salt Lake City, Utah and (ii) submits to the exclusive jurisdiction of such court in any such action, suit or proceeding. Final judgment against the Maker in any action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction by suit on the judgment. Nothing in this 7(d) shall affect the right of the Holder to (i) commence legal proceedings or otherwise sue the Maker in any other court having jurisdiction over the Maker or (ii) serve process upon the Maker in any manner authorized by the laws of any such jurisdiction.

(e) Venue . The Maker irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Note in any court referred to in Section (d) and the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(f) Waiver of Jury Trial . THE MAKER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY.

(g) Counterparts; Integration; Effectiveness . This Note and any amendments, waivers, consents or supplements hereto may be executed in counterparts, each of which shall constitute an original, but all taken together shall constitute a single contract. This Note constitutes the entire contract between the Parties with respect to the subject matter hereof and supersedes all previous agreements and understandings, oral or written, with respect thereto. Delivery of an executed counterpart of a signature page to this Note by facsimile or in electronic (i.e., "pdf" or "tif") format shall be effective as delivery of a manually executed counterpart of this Note.

(h) Successors and Assigns . This Note may be assigned, transferred or negotiated by the Holder to any person or entity at any time without notice to or the consent of the Maker. The Maker may not assign or transfer this Note or any of its rights hereunder without the prior written consent of the Holder. This Note shall inure to the benefit of and be binding upon the Parties hereto and their permitted assigns.

(i) Waiver of Notice, etc . The Maker hereby waives presentment, demand for payment, protest, notice of dishonor, notice of protest or nonpayment, notice of acceleration of maturity and diligence in connection with the enforcement of this Note or the taking of any action to collect sums owing hereunder.

(j) Amendments and Waivers . No term of this Note may be waived, modified or amended except by an instrument in writing signed by both of the Parties hereto. Any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given.

(k) Headings . The headings of the various Sections and subsections herein are for reference only and shall not define, modify, expand or limit any of the terms or provisions hereof.

(l) No Waiver; Cumulative Remedies . No failure to exercise and no delay in exercising on the part of the Holder, of any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

(m) Severability . If any term or provision of this Note is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Note or invalidate or render unenforceable such term or provision in any other jurisdiction.

(n) Replacement of Note . Upon receipt of evidence reasonably satisfactory to the Maker of the loss, theft, destruction or mutilation of this Note and, in the case of any such loss, theft or destruction of this Note, upon delivery of an indemnity bond in such reasonable amount as the Maker may determine, or, in the case of any such mutilation, upon surrender and cancellation of such mutilated Note, the Maker will execute and deliver, in lieu thereof, a new Note of like tenor and of the same class, dated the date to which interest has been paid on such lost, stolen, destroyed or mutilated Note.

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IN WITNESS WHEREOF , the Maker has caused this Note to be executed by its officer thereunto duly authorized as of the 26 day of July, 2016.

STATE OF PA     )

I, Vincent J. Grandinetti , hereby certify on this 26 day of July, 2016, before me, the subscriber, a Notary Public of the jurisdiction aforesaid, personally appeared Peter B. Davidson ., known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument as the Vice Chairman of JetPay Corporation and acknowledged that he executed the same on behalf of JetPay Corporation, for the purposes therein contained, such instrument having been executed in my presence.

AS WITNESS my hand and notarial seal the day and year above written.

My Commission Expires: May 28, 2017