Exhibit 10.1

 

 

 

____________________________________________________________________

 

SECURITIES PURCHASE AGREEMENT

 

by and among

 

Jetpay Corporation

 

and

 

THE INVESTORS LISTED ON THE SIGNATURE PAGES HERETO

 

Dated as of March 28, 2014

 

________________________________________________________________________

 

 

 

 

ARTICLE I PURCHASE OF SECURITIES		1
1.1.	Sale and Purchase of Common Stock	1
1.2.	Closing	1
1.3.	Conditions to the Investor’s Obligations	2
1.4.	Conditions to the Company’s Obligations	2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY		3
2.1.	Representations and Warranties of the Company	3
ARTICLE III REPRESENTATIONS AND WARRANTIES  OF INVESTOR		4
3.1.	Representations and Warranties of the Investor	4
ARTICLE IV MISCELLANEOUS		5
4.1.	Legend	5
4.2.	Amendment and Modification	5
4.3.	Survival of Representations and Warranties	5
4.4.	Successors and Assigns	5
4.5.	Separability	5
4.6.	Notices	6
4.7.	Governing Law	6
4.8.	Headings	6
4.9.	Counterparts	6
4.10.	Further Assurances	7
4.11.	Entire Agreement	7

 

SCHEDULES

 

Schedule I Investor and Securities Purchased

 

 

INDEX OF DEFINED TERMS

 

 

Agreement	1
Closing	1
Closing Date	1
Common Stock	1
Company	1
Investor	1
Person	3

 

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT, dated as of March 28, 2014 (“Agreement”), by and among JetPay Corporation, a Delaware corporation (the “Company”), and each of the investors listed on the signature pages hereto, (each, an “Investor”).

 

Background

 

WHEREAS, in connection with EarlyBirdCapital, Inc.’s judgment against the Company following certain arbitration proceedings, the Company desires to sell to each Investor, and each Investor desires to acquire, up to the number of shares of the Company’s Common Stock, par value $0.001 per share (“Common Stock”) set forth opposite such Investor’s name on Schedule I hereto in exchange for cash up to the amount set forth opposite such Investor’s name on Schedule I; and

 

WHEREAS, the Company and each Investor desire to make such purchase and sale contingent upon the occurrence of certain events set forth herein.

 

NOW, THEREFORE, in consideration of the mutual agreements set forth herein and other valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as set forth in this Agreement.

 

ARTICLE I

PURCHASE OF COMMON STOCK

 

1.1. Sale and Purchase of Common Stock. (a) Subject to the terms and conditions set forth herein, the Company will sell to each Investor, and each Investor will purchase, up to the number of shares of Common Stock set forth opposite the name of such Investor on Schedule I hereto.

 

(b) The per share purchase price for the Common Stock to be purchased under this Section 1.1 shall be $3.00 per share. The maximum aggregate purchase price to be paid by each Investor is set forth opposite such Investor’s name on Schedule I hereto. At the Closing (as defined herein), each Investor agrees to deliver to the Company, by wire transfer of immediately available funds, the amount obtained by multiplying the number of shares of Common Stock set forth in the noticed delivered by the Company pursuant to Section 1.3(c) by $3.00.

 

1.2. Closing. (a) The closing (the “Closing”) of the purchase and sale of the Common Stock referred to in Section 1.1 will take place on the next business day after the satisfaction of the conditions set forth in Sections 1.3 and 1.4 hereto or such other date as the Company and each Investor mutually agree, it being understood that such date must not precede the time at which the satisfaction of the conditions set forth in Sections 1.3 and 1.4 hereto has occurred. The date such Closing occurs is referred to herein as the “Closing Date.”

 

 

 

 

(b) At the Closing, the Company will instruct its transfer agent to issue the number of shares of Common Stock to be purchased by each Investor in book entry form registered in such Investor’s name against payment of the purchase price set forth on Schedule I hereto by wire transfer of immediately available funds.

 

1.3. Conditions to Each Investor’s Obligations. The obligation of each Investor to purchase the Common Stock at the Closing is subject to the satisfaction on or prior to the date hereof of the following conditions:

 

(a) The representations and warranties of the Company set forth in Article II hereof shall be true and correct in all material respects on and as of the Closing Date as though then made, and all covenants of the Company set forth in Article I required to be performed on or prior to the Closing shall have been performed in all material respects.

 

(b) No statute, rule or regulation shall have been enacted or promulgated by any Governmental Authority which prohibits the consummation of the transactions contemplated by this Agreement and there shall be no order or injunction of a court of competent jurisdiction in effect preventing the consummation of the transactions contemplated by this Agreement.

 

(c) The Company shall have delivered written notice to such Investor of its intention to consummate the purchase of the Common Stock contemplated herein, which such notice shall contain the amount of Common Stock the Company desires to purchase from each Investor.

 

(d) The Company shall have instructed its transfer agent to issue the Common Stock purchased by such Investor in book entry.

 

(e) The corporate and other proceedings set forth in Section 1.4(c) shall have been taken.

 

1.4. Conditions to the Company’s Obligations. The obligations of the Company to issue and sell the Common Stock to each Investor as set forth herein at the Closing are subject to the satisfaction on or prior to the Closing of the following conditions, none of which may be waived by the Company:

 

(a) The representations and warranties of each Investor set forth in Article III hereof shall be true and correct in all material respects at and as of the Closing Date as though then made, and all covenants of each Investor required to be performed at or prior to the Closing shall have been performed in all material respects.

 

(b) No statute, rule or regulation shall have been enacted or promulgated by any Governmental Authority which prohibits the consummation of the transactions contemplated by this Agreement and there shall be no order or injunction of a court of competent jurisdiction in effect preventing the consummation of the transactions contemplated by this Agreement.

 

 

(c) The Company shall have obtained the written consent to consummate the transactions contemplated hereby from each of (i) the Audit Committee of its Board of Directors, (ii) its Board of Directors and (iii) Flexpoint Fund II, L.P.

 

(d) Each Investor shall have delivered the cash for the purchase price required to be delivered by such Investor under this Article I.

 

1.5. Termination. This Agreement shall terminate and be of no further force and effect if the Closing has not occurred by April 30, 2014.

 

1.6. Registration Rights. The Company agrees to use commercially reasonable efforts to register the resale of the shares of Common Stock purchased hereunder on a registration statement on Form S-3, or such other form as may be available to the Company to effect such registration, as soon as reasonably practicable.

 

ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY

 

2.1. Representations and Warranties of the Company. The Company represents and warrants to the Investor as follows:

 

(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.

 

(b) The Company has all requisite corporate power and corporate authority to execute, deliver and perform this Agreement and to consummate the transactions provided for herein, without the need for the consent of any other Person (other than such consents as have heretofore been obtained). As used herein, the term “Person” means an individual or a corporation, partnership, limited liability company, joint venture, trust, regulatory or governmental agency or authority or other organization or entity of any kind.

 

(c) The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby, including, but not limited to, the sale of the Common Stock to be issued by it hereunder, have been duly authorized, and this Agreement constitutes the valid and binding obligation of the Company, enforceable against it in accordance with the terms hereof.

 

(d) No action, suit, proceeding or investigation is pending or, to the Company’s knowledge, threatened, against the Company with respect to its execution and delivery of this Agreement or the consummation by the Company of the transactions contemplated hereby.

 

(e) The Common Stock sold to the Investor under Article I hereof, when sold in compliance with the provisions of this Agreement, will be validly issued, fully paid and non-assessable.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES
OF INVESTOR

 

3.1. Representations and Warranties of the Investor. Each Investor represents and warrants to the Company that:

 

(a) The Investor has the requisite legal capacity to execute, deliver and perform this Agreement and to consummate the transactions provided for herein, without the need for the consent of any other Person (other than such consents as have heretofore been obtained); this Agreement has been duly authorized, executed and delivered by the Investor; and this Agreement constitutes the valid and binding obligation of the Investor, enforceable against the Investor in accordance with the terms hereof.

 

(b) No action, suit, proceeding or investigation is pending or, to the Investor’s knowledge, threatened, against the Investor with respect to the Investor’s execution and delivery of this Agreement or the consummation by the Investor of the transactions contemplated hereby.

 

(c) No consent, approval or authorization of or registration, qualification or filing with, any Person, governmental agency or authority is required for the execution and delivery of this Agreement by the Investor or for the consummation by the Investor of the transactions contemplated hereby.

 

(d) The Common Stock is being purchased by the Investor hereunder for investment, and not with a view to any distribution thereof that would violate the Securities Act, or the applicable state securities laws of any state. The Investor will not distribute the Common Stock in violation of the Securities Act or the applicable securities laws of any state.

 

(e) The Investor understands that the Common Stock has not been registered under the Securities Act or the securities laws of any state and must be held indefinitely unless subsequently registered under the Securities Act and any applicable state securities laws or unless an exemption from such registration becomes or is available.

 

(f) The Investor is an "accredited investor" as defined in Regulation D of the Securities Act.

 

(g) In formulating a decision to enter into this Agreement, the Investor has relied solely upon (i) the provisions of this Agreement, (ii) an independent investigation of the Company’s business, and (iii) consultations with his legal and financial advisors with respect to this Agreement and the nature of his investment; and that in entering into this Agreement no reliance was placed by the Investor upon any representations or warranties other than those contained in this Agreement.

 

(h) The Investor is financially able to hold the Common Stock for long-term investment, believes that the nature and amount of the Common Stock being purchased is consistent with his overall investment program and financial position, and recognizes that there are substantial risks involved in the purchase of the Common Stock. The Investor understands that the investment in the Common Stock is illiquid and risky, and the Investor may lose his entire investment.

 

 

(i) The Investor confirms that (i) he is familiar with the business of the Company, (ii) he has had the opportunity to ask questions of the officers and directors of the Company and to obtain (and that the Investor has received to his satisfaction) such information about the business and financial condition of the Company as he has reasonably requested, and (iii) the Investor has such knowledge and experience in financial and business matters that the Investor is capable of evaluating the merits and risks of the prospective investment in the Common Stock.

 

ARTICLE IV

MISCELLANEOUS

 

4.1. Legend. (a) The Company shall instruct its transfer agent to issue the Common Stock with the following legend, in addition to any other legend required under applicable law, with respect to any Common Stock issued hereunder:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR THE DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.

 

4.2. Amendment and Modification. This Agreement may be amended or modified, or any provision hereof may be waived, provided that such amendment, modification or waiver is set forth in a writing executed by (a) the Company and (b) the Investor. No course of dealing between or among any Persons having any interest in this Agreement will be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any Person under or by reason of this Agreement.

 

4.3. Survival of Representations and Warranties. The representations, warranties, covenants and agreements set forth in this Agreement shall survive the Closing.

 

4.4. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the successors and permitted assigns of each party hereto. This Agreement, and any rights or obligations existing hereunder, may not be assigned or otherwise transferred by any party without the prior written consent of the other parties hereto.

 

4.5. Separability. In the event that any provision of this Agreement or the application of any provision hereof is declared to be illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect unless deletion of such provision causes this Agreement to become materially adverse to any party, in which event the parties shall use reasonable efforts to arrive at an accommodation which best preserves for the parties the benefits and obligations of the offending provision.

 

 

4.6. Notices. All notices, requests, demands, claims, and other communications hereunder shall be in writing and shall be deemed duly given (i) when delivered personally to the recipient, (ii) one business day after being sent to the recipient by reputable overnight courier service (charges prepaid), (iii) upon transmission by facsimile if a customary confirmation of transmission is received during normal business hours and, if not, the next business day after transmission, or (iv) three business days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid, and addressed to the intended recipient as set forth below:

 

If to the Company, to:

 

 

JetPay Corporation

1175 Lancaster Avenue, Suite 100
Berwyn, PA 19312

Attention: Gregory M. Krzemien
Fax: (484) 318-8370

 

with a required copy to:

 

Dechert LLP
Cira Centre
2929 Arch Street
Philadelphia, PA 19104
Attention: James A. Lebovitz, Esq.
Fax: (215) 994-2222

 

If to an Investor, to the Investor’s address as set forth on the signature pages hereto. Any party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other parties notice in the manner herein set forth.

 

4.7. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to principles of conflicts of law.

 

4.8. Headings. The headings preceding the text of the sections and subsections of this Agreement are for convenience of reference only and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect.

 

4.9. Counterparts. This Agreement may be executed in two or more counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original, and all of which taken together shall constitute one and the same instrument.

 

4.10. Further Assurances. Each party shall cooperate and take such action as may be reasonably requested by another party in order to carry out the provisions and purposes of this Agreement and the transactions contemplated hereby.

 

4.11. Entire Agreement. This Agreement sets forth the entire agreement and understanding among the parties and supersedes all prior agreements and understandings, written or oral, relating to the subject matter of this Agreement.

 

 

 

[REMAINDER OF THIS PAGE INTENTIONALLY BLANK]

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Securities Purchase Agreement the day and year first above written.

 

	JETPAY CORPORATION
	By:	/s/ Gregory M. Krzemien
	Name:	Gregory M. Krzemien
	Title:	Chief Financial Officer

 

 

 

 

 

	INVESTOR:
	/s/ Bipin C. Shah
	Name: Bipin C. Shah
	Address:
	Facsimile No.:
	INVESTOR:
	/s/ C. Nicholas Antich
	Name: C. Nicholas Antich
	Address:
	Facsimile No.:

 

 

 

 

 

 

[Signature Page to Securities Purchase Agreement] 

 

Schedule I

Purchasing Investor and Securities Purchased

 

 

Name	Shares of Common Stock	Common Stock Purchase Price	Aggregate Purchase Price
Bipin C. Shah	200,000	$3.00	$600,000
C. Nicholas Antich	133,333	$3.00	$400,000