8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 3, 2013 (December 28, 2012)

UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	001-35170	90-0632274
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)
150 North Radnor-Chester Rd, Suite F-200	19087

(Address of Principal Executive Offices) (Zip Code)

(610) 977-2482

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c))

Item 1.01 Entry into a Material Definitive Agreement

Note Purchase Agreement and Secured Convertible Notes

On December 28, 2012 (the “Closing Date”), Universal Business Payment Solutions Acquisition Corporation (“UBPS” or “we” or “us” or “our”) entered into a Secured Convertible Note Agreement (the “Note Agreement”) with Special Opportunities Fund, Inc., R8 Capital Partners, LLC, Bulldog Investors General Partnership, Ira Lubert, Mendota Insurance Company and American Services Insurance Company, Inc. (collectively, the “Note Investors”) interested investors pursuant to which, UBPS issues $10 million in promissory notes secured by 50% of UBPS’s ownership of JetPay, LLC (“JetPay”). In connection with the Note Agreement, the Company entered into separate Secured Convertible Promissory Notes with each of the Investors (the “Notes”). Amounts outstanding under the Notes will accrue interest at a rate of 12% per annum. The Notes mature on December 31, 2014. The Notes are not prepayable.

Pursuant to the Notes, the Note Investors will be entitled to convert all or any amounts outstanding under the Notes into common stock of UBPS, par value $0.001 (“Common Stock”) at a conversion price of $5.15 per share, subject to certain adjustments.

In connection with the Note Agreement, UBPS entered into Registration Rights Agreements (the “Note Registration Rights Agreements”) on the Closing Date with each of the Note Investors, pursuant to which UBPS agreed to provide registration rights with respect to the shares issuable upon conversion whereby the Note Investors would be entitled up to three “demand” registration requests and unlimited “piggy back” registration requests. To the extent a registration for the shares has not been declared effective by June 30, 2013, the conversion price will be reduced by $0.15 per share with additional reductions of $0.05 per share for every 30 days thereafter until a registration has been declared effective.

Pursuant to the Notes, the Note Investors will be entitled to convert all or any amounts outstanding under the Notes into common stock of UBPS, par value $0.001 (“Common Stock”) at a conversion price of $5.15 per share, subject to certain adjustments.

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In connection with the Notes, certain stockholders of UBPS agreed to transfer up to approximately 840,000 shares of Common Stock that they acquired prior to UBPS’s initial public offering to certain of the Note Investors. Such shares were previously held in an escrow account established at the time of UBPS’s initial public offering pursuant to Stock Escrow Agreements, each dated as of May 13, 2011, among each such stockholder, UBPS and Continental Stock Transfer & Trust Company. Following the proposed transfers, such shares will no longer be held in escrow. As part of such share issuance, UBPS entered into Registration Rights Agreements (the “Transfer Registration Rights Agreements”), dated as of the Closing Date, with such investors which entitle such investors to up to three “demand” registration requests and unlimited “piggy back” registration requests.

As partial consideration for Mr. Lubert to enter into the Note Agreement, UBPS agreed, pursuant to the Stock Escrow Termination Agreement (the “Escrow Termination Agreement”), dated as of the Closing Date, to terminate the Stock Escrow Agreement, dated as of May 13, 2011, among Mr. Lubert, UBPS and Continental Stock Transfer & Trust Company (the “Agent”), with respect to 826,000 shares of Common Stock. Following the proposed transfers, such shares will no longer be held in escrow.

The foregoing description of the Note Agreement, Notes, Note Registration Rights Agreements, Transfer Registration Rights Agreements and Escrow Termination Agreement and the transactions contemplated thereby do not purport to be complete and are qualified in their entireties by reference to the Note Agreement, the form of Transfer Registration Rights Agreement and the Escrow Termination Agreement, which are attached hereto as Exhibits 10.1, 10.2 and 10.3, respectively, and incorporated by reference herein. The form of the Notes and Note Registration Rights Agreements are included as exhibits to the Note Agreement and attached hereto to Exhibit 10.1.

Warrant Termination Agreement

On the Closing Date, the Company and the Agent entered into the Warrant Termination Agreement (the “Warrant Termination Agreement”). The Warrant Termination Agreement was entered into in connection with the approval of the warrant proposal set forth in the Definitive Proxy Statement on Schedule 14A (the “Proxy Statement”) filed by UBPS with the Securities and Exchange Commission (“SEC”) on November 13, 2012, on December 11, 2012 at a meeting of the warrantholder of UBPS, which such approval was disclosed by UBPS in a Current Report Form 8-K filed with the SEC. In connection with Warrant Termination Agreement and the approval of the warrant proposal, each issued and outstanding warrant will be converted into .1333 shares of Common Stock.

The foregoing description of the Warrant Termination Agreement and the transactions contemplated thereby do not purport to be complete and is qualified in its entirety by reference to the Warrant Termination Agreement, which is attached hereto as Exhibit 10.4, and incorporated by reference herein.

Assumption Agreement

On the Closing Date, UBPS entered into an Amendment, Guarantee and Waiver Agreement (the “Assumption Agreement”) with JetPay and Ten Lords Ltd. Pursuant to the Assumption Agreement, UBPS agreed to guarantee JetPay’s obligations with respect to an existing loan agreement between JetPay, Ten Lords, Ltd. and Providence Interactive Capital, LLC (collectively, the “Payees”). JetPay also agreed to compensate the Payees for any negative tax consequences as a result of the note remaining outstanding after December 31 2012. Amounts outstanding under the loan will be convertible at the holders’ option into Common Stock at a conversion price of $6.00 per share, unless JetPay is in default under the loan agreement, in which case, amounts outstanding under the loan agreement can be converted at the lower of (i) $6.00 per share and (ii) the average trading price of the Common Stock for the ten trading days prior to the delivery of notice requesting such conversion. JetPay also agreed to increase the interest rate on amounts outstanding under the loan to 9.5% for the first 180 days after the execution of the Assumption Agreement and 13.5% thereafter.

In exchange, Ten Lords Ltd agreed to consent to the transactions contemplated by the Agreement and Plan of Merger, dated as of July 6, 2012, as amended, by and among UBPS, JP Merger Sub, LLC, JetPay, WLES, L.P., and Trent Voigt (the “JetPay Agreement”). JetPay was obligated to pay any amounts still outstanding on the existing loan in excess of $6 million upon closing of the transactions contemplated by the JetPay Agreement. All amounts outstanding under the loan agreement must be repaid within one year.

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The foregoing descriptions of the Assumption Agreement and the transactions contemplated thereby do not purport to be complete and are qualified in their entirety by reference to the Assumption Agreement attached hereto as Exhibit 10.5 and incorporated by reference herein.

Loan and Security Agreement

On December 28, 2012, A. D. Computer Corporation (“ADC”) and Payroll Tax Filing Services, Inc. (“PTFS”, together with ADC, the “Borrowers”), as borrowers, entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with Metro Bank as the lender for a term loan with a principal amount of $9,000,000. Amounts outstanding under the notes will accrue interest at a rate of 4% per annum. The loan matures on December 28, 2019 and amortizes over the course of the loan in equal monthly installments.

The loans are guaranteed by UBPS and are secured by all assets of ADC and PTFS, as well as a pledge by UBPS of its ownership of ADC. The Loan and Security Agreement contains affirmative and negative covenants, including limitations on the incurrence of indebtedness, liens, transactions with affiliates and other customary restrictions for loans of this type and size. The Borrowers are also subject to financial covenants related to their debt coverage ratio and total leverage ratio during the term of the loan. The loans may be prepaid at the option of the Borrowers without any premium or penalty and are subject to mandatory prepayments upon certain asset sales, casualty events, the incurrence of indebtedness and issuance of capital stock.

In connection with the Loan and Security Agreement, ADC and UBPS entered into an Advisory Agreement dated as of December 28, 2012, pursuant to which ADC agreed to pay UBPS $30,000 per month, payable in advance each quarter, for certain advisory services UBPS will provide ADC. The Advisory Agreement has a term of ten years.

In order to use the proceeds of the Loan and Security Agreement to fund a portion of the proceeds due pursuant to the ADC Agreement, on December 28, 2012, UBPS executed a promissory note (the “Intercompany Note”) in favor of ADC in the amount of $9 million. All principal and interest is due on December 28, 2020. Interest on amounts due on the Intercompany Note at the Applicable Federal Rate as required by Section 7872(f)(2)(B) of the Internal Revenue Code. The Intercompany Note is prepayable in full or in part at any time without penalty.

The foregoing descriptions of the Loan and Security Agreement, Advisory Agreement and Intercompany Note and the transactions contemplated thereby do not purport to be complete and are qualified in their entireties by reference to the Loan and Security Agreement, Advisory Agreement an d Intercompany Note attached hereto as Exhibits 10.6, 10.7 and 10.8, respectively and incorporated by reference herein.

Note and Indemnity Side Agreement

In connection with the closing of the transactions contemplated by the JetPay Agreement, UBPS, JP Merger Sub, LLC, WLES, L.P. and Trent Voigt entered into a Note and Indemnity Side Agreement (the “Note and Indemnity Side Agreement”) dated as of December 28, 2012. Pursuant to the Note and Indemnity Side Agreement, UBPS agreed to issue a promissory note in the amount of $2,331,368.68 in favor of WLES, L.P. Interest accrues on amounts due under the note at a rate of 5% per annum. The note is due in full on December 31, 2017. The note can be prepaid in full or in part at any time without penalty. As partial consideration for offering the note, UBPS and JP Merger Sub, LLC agreed to waive certain specified indemnity claims against WLES, L.P. and Mr. Voigt to the extent the losses under such claims do not exceed $2,331,368.68.

The foregoing description of the Note and Indemnity Side Agreement and the transactions contemplated thereby do not purport to be complete and is qualified in its entirety by reference to the Note and Indemnity SideAgreement, which is attached hereto as Exhibit 10.9, and incorporated by reference herein.

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Item 2.01 Completion of Acquisition or Disposition of Assets

On the Closing Date, pursuant to the JetPay Agreement and the Agreement and Plan of Merger, dated as of July 6, 2012, as amended, by and among UBPS, ADC Merger Sub, Inc., ADC, PTFS, Carol and C. Nicholas Antich as Joint Tenants, C. Nicholas Antich, Carol Antich, Eric Antich, Lynn McCausland, the B N McCausland Trust, Joel E. Serfass and C. Nicholas Anitch as Representative (the “ADC Agreement” and collectively with the JetPay Agreement, the “Acquisition Agreements”), ADC Merger Sub, Inc., a wholly owned subsidiary of UBPS and JP Merger Sub, LLC, a wholly owned subsidiary of UBPS, merged with and into ADC and JetPay, respectively with ADC and JetPay surviving such mergers. The summaries of each of the Acquisition Agreements contained in the Proxy Statement are incorporated herein by reference. The description of the terms of JetPay Agreement and ADC Agreement are qualified in their entirety by reference to the JetPay Agreement and the ADC Agreement attached hereto as Exhibits 2.1 and 2.2, respectively, and incorporated herein by reference.

In connection with UBPS’s Amended and Restated Certificate of Incorporation, UBPS’s stockholders, other than its initial stockholders who acquired Common Stock prior to its initial public offering, had the right upon consummation of an initial business combination to redeem their shares of Common Stock for their pro rata share of the funds being held in a trust account containing proceeds from the initial public offering. On the Closing Date, 9,994,625 shares were redeemed and subsequently canceled by UBPS.

On the Closing Date, UBPS caused $16 million in cash to be delivered to the stockholders of ADC and approximately $6.8 million to WLES, L.P., JetPay’s sole member. Additionally, UBPS issued 1 million shares of Common Stock to the stockholders of ADC and 3,666,667 shares of Common Stock to WLES, L.P., 3,333,333 of which was deposited in an escrow account to secure the obligations of WLES, L.P. under the JetPay Agreement.

Prior to the mergers, UBPS was a blank check company with no operations, formed as a vehicle for an acquisition of one or more operating businesses. The following information, which is required by Item 2.01(f) of Form 8-K, reflects the post-merger company on a consolidated basis (the “Company”).

Business

The Company has not been engaged in any business prior to the transactions described in Items 1.01 and 2.01 above. Following the consummation of the Acquisition Agreements, the Company’s business will consist of the businesses of ADC and JetPay. The businesses of ADC and JetPay (collectively, the “Businesses”) are described in the Proxy, in the sections titled “Information about AD Computer”, and “Information about JetPay”, each of which section is incorporated herein by reference.

Risk Factors

The risks associated with the Businesses are described in the Proxy Statement in the section titled “Risk Factors”, which is incorporated herein by reference.

Financial Information

The information in the Proxy Statement contained on pages F-19 through F-32, F-68 through F-80, F-93 through F-117 and F-126 through F-140 is incorporated herein by reference.

SELECTED HISTORICAL FINANCIAL INFORMATION OF UBPS

(In $000’s)

UBPS is providing the information set forth below to assist you in your analysis of the financial aspects of the business combination. The following selected financial information of UBPS as of and for the periods ended September 30, 2012 and 2011, has been derived from UBPS’s unaudited financial statements for 2012 and audited financial statements for 2011, which are included in this filing. The financial information of UBPS as of and for the fiscal year ended September 30, 2011, has been derived from UBPS’s audited financial statements for that year, which are incorporated by reference herein.

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The information set forth below is only a summary and is not necessarily indicative of the results of future operations of UBPS or the combined company, and you should read the following information together with UBPS’s audited consolidated financial statements, the notes related thereto and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, which appears below.

	For the Period
	November 12, 2010			For the Twelve
	(Inception) through			Months Ended
	Sept 30, 2011			Sept 30, 2012 (unaudited)
Income Statement Data:
Other Income	$	7		$	22
Total Expenses		(97	)		(637	)
Net Income		(90	)		(615	)
Average Weighted Shares		3,363,742			3,825,660
Gain (Loss) Per Share	$	(0.03	)	$	(0.16	)
Selected Balance Sheet Data:
Current Assets	$	69		$	24
Other Assets		68,931			68,811
Total Assets		69,000			68,835
Current Liabilities		14			593
Common Stock Subject to Redemption		63,906			63,777
Capital		5,080			4,465
Total Capital & Liabilities		69,000			68,835

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS OF UBPS

Overview

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with UBPS’s financial statements and the related notes thereto. UBPS has a current fiscal year end of September 30. Upon consummation of the transactions contemplated by the Acquisition Agreements, UBPS will adopt a fiscal year end of December 31.

UBPS was formed on November 12, 2010, to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition or other similar business combination with an operating business. UBPS intends to utilize cash derived from the proceeds of its initial public offering, its capital stock, debt or a combination of cash, capital stock and debt, in effecting this Acquisition and other future business combinations.

To date, UBPS has neither engaged in any operations nor generated any revenues, except interest income. UBPS's entire activity since inception has been to search for targets for a business combination.

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Results of Operations

(Dollar amounts in thousands)

	For the Period
	November 12, 2010			For the Twelve
	(Inception) through			Months Ended
	Sept 30, 2011			Sept 30, 2012 (unaudited)
Revenues:
Fees	$	-		$	-
Interest Income		7			22
Total Revenue		7			22
Costs & Expenses:
Related Party Expense		37			90
Operating Expense		60			547
Total Cost & Expenses		97			637
Net Income	$	(90	)	$	(615	)

For the period from November 12, 2010 (inception) to September 30, 2012, UBPS had a net loss of ($615), consisting of interest income of $22 less operating expenses of ($637). For the twelve months ended September 30, 2011, UBPS had a net loss of ($90), consisting of interest income of $7 and expenses of ($97).

Financial Condition and Liquidity

On May 13, 2011 UBPS consummated its initial public offering (the “Offering”) of 12,000,000 units at a price of $6.00 per unit. Simultaneously with the Offering, certain of the initial stockholders in UBPS and the underwriters of the Offering purchased 6,960,000 warrants at $0.50 per warrant (for an aggregate purchase price of $3,480,000) from the Company. UBPS raised aggregate gross proceeds of $75,480,000 from the Offering and the warrant offering, of which $72,720,000 is being held in a trust account for our benefit. UBPS intend to use this cash, our capital stock, incurred debt, or a combination of cash, capital stock, and debt, in effecting our initial business combination.

UBPS has not conducted any operations nor generated any revenues to date. Our entire activity since inception up to the closing of the Offering was in preparation for that event. After the Offering, our activity has been limited to the evaluation of business combination candidates, and UBPS will not be generating any operating revenues until the closing and completion of our initial business combination. UBPS incurred increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

UBPS incurred a net loss of ($704) for the period from November 12, 2010 (inception) through September 30, 2012. Until UBPS enters into a business combination, UBPS will not generate revenues.

As of September 30, 2012, UBPS had approximately $23,000 in its operating bank account. On May 13, 2011, after the consummation of the Offering, approximately $600,000 was placed into its operating bank account to be available for use by management to cover operating costs and the costs associated with identifying a target business and negotiating a business combination. Of this amount, approximately $340,000 was used to pay accrued offering costs and $125,000 was used to repay notes held by certain of UBPS’s initial stockholders.

UBPS used the approximately $69,000 of remaining net proceeds not held in the trust account plus the interest earned on the funds held in the trust account that were released to us to fund our working capital requirements. As of September 30, 2012, U.S Treasury Bills with maturities less than six month were approximately yielding under .05%. UBPS believes such rates are representative of those UBPS may receive on the balance of the trust account. From December 6, 2010 through September 30, 2012, UBPS issued a series of principal amount unsecured promissory notes to UBPS Services, LLC, an entity controlled by Mr. Shah totaling $355,000. These notes are non-interest bearing and are payable on the earlier of their anniversary or the consummation of an initial business combination.

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The net proceeds from the Offering, after deducting offering expenses of approximately $473,000 and underwriting discounts of $2,160,000, were approximately $69,366,994. Of this amount, $69,240,000, plus the $3,480,000 UBPS received from the warrant offering, was being held in the trust account. The remaining net proceeds not in trust were being used for working capital purposes. To the extent that Common Stock was used in whole or in part as consideration to effect a business combination, the remaining proceeds held in the trust account as well as any other net proceeds not expended will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target’s business operations, for strategic acquisitions and for marketing, research and development of existing or new products.

SELECTED HISTORICAL FINANCIAL INFORMATION OF JETPAY

(In $000’s)

JetPay is providing the information set forth below to assist you in your analysis of the financial aspects of the business combination. The following selected consolidated financial information of JetPay as of and for the nine months ended September 30, 2012 and 2011, has been derived from JetPay’s unaudited financial statements for 2012, which are included in this filing and management’s presentation for 2011, which is not included in this filing. The consolidated financial information of JetPay as of and for the fiscal year ended December 31, 2011and 2010 has been derived from JetPay’s audited financial statements for that year, which are incorporated by reference herein.

The information set forth below is only a summary and is not necessarily indicative of the results of future operations of JetPay or the combined company, and you should read the following information together with JetPay’s audited consolidated financial statements, the notes related thereto and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, which appears below.

	For the Nine			For the Nine
	Months Ended			Months Ended			Year Ended
	Sept 30, 2012 (unaudited)			Sept 30, 2011 (unaudited)			2011
Income Statement Data:
Total Revenues	$	14,082		$	12,970		$	17,473
Total Expenses		13,934			9,610			15,321
Net Income		148			3,360			2,152
Selected Balance Sheet Data:
Current Assets		2,693			2,823			3,974
Other Assets		3,466			1,587			1,524
Total Assets		6,159			4,410			5,498
Current Liabilities		2,277			1,901			2,267
Long-Term Liabilities		7,634			8,104			7,874
Capital		(3,752	)		(5,595	)		(4,643	)
Total Capital & Liabilities		6,159			4,410			5,498

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Components of Revenue and Expenses

Revenues

JetPay’s revenues fall into two categories: transaction processing revenue and merchant discount revenue. JetPay’s processing revenues consist of billings of transaction fees to its merchant and independent sales organization (“ISO”) customers. JetPay’s discount revenues are generally a fixed percentage of the merchant’s dollar volume. Merchant billings primarily consist of transaction fees and discount fees, which are a percentage of the dollar amount of each credit or debit transaction. JetPay derives the balance of its merchant billings from a variety of fixed transaction or service fees, and fees for other miscellaneous services, such as handling charge-backs. Interchange costs are set by the card networks, and are paid based upon a percentage of transaction amounts and / or a fixed price per transaction. JetPay refers to the ratio of processing revenues to the dollar amount of card transactions processed as the “margin.” If margin increases, processing revenues will tend to increase accordingly. Further, both the number of merchants who process transactions, and the average dollar amount of transactions processed per merchant, will impact the total transaction volume and thus the total processing revenues. As such, growth in JetPay’s merchant count and / or growth in the same store transaction volume will also drive JetPay’s processing revenue growth. Revenues are recorded at the time service is provided.

Expenses

The most significant components of operating expenses are salaries and other employment costs. These costs are largely fixed in nature, increasing slightly with the growth in numbers of customers, but tending to grow with inflation. Assessments and bank costs include assessment fees payable to card associations, which are generally a percentage of card volume, and bank sponsorship costs which are largely based upon transaction counts and volumes. General and administrative expenses include fixed costs such as occupancy and office costs, outside services, and depreciation and amortization expense, which is recognized on a straight-line basis over the estimated useful life of the assets. General and administrative expenses also include charge-back losses, which vary over the long term based upon transaction volume processed by JetPay’s merchants, but can vary from period to period depending upon specific events in that period. Interest expense is primarily a result of a loan to buy out the interest of a former partner of JetPay. This expense is fixed based upon a schedule of increasing interest rates over the life of the loan.

Results of Operations

(Dollar amounts in thousands)

					Nine Months		Nine Months
	Year Ended 2011		Year Ended 2010		Ended September 30, 2012		Ended September 30, 2011
Revenues:
Processing Fees	$	17,473	$	15,608	$	14,082	$	12,970
Interest Income		43		3		52		25
Total Revenue		17,516		15,611		14,134		12,995
Costs & Expenses:
Cost Of Goods Sold		7,684		7,323		6,944		5,881
Operating Expenses		2,311		1,978		1,948		1,661
Selling And Administrative		4,761		2,897		4,634		2,144
Interest Expense		389		12		395		256
Sales Tax		219		56		81		169
Total Cost & Expenses		15,364		12,266		14,002		10,111
Net Income	$	2,152	$	3,345	$	132	$	2,884

Comparison of years ended December 31, 2011 and December 31, 2010

JetPay’s processing revenues increased from $15,608 in 2010 to $17,473 in 2011, or 11.9%, and were driven by an increase in bank card volume of $382 million from 2010 to 2011, or 17.5%. The primary driver was an increase in the ISO business of $3,057, or 70.8%, as JetPay added 20 ISOs (going from 24 at year-end 2010 to 44 at year-end 2011). As the ISOs signed in 2010 added more merchants to JetPay. The direct merchant business line revenue growth was essentially flat from 2010 to 2011, despite adding another 517 merchants for a total of 3,027 at the end of 2011 versus 2,510 at the end of 2010, as margins declined among some larger customers. There was a decrease of 18.1% of revenues (from $6,388 in 2010 to $5,231 in 2011) for processing-only customers, as JetPay focused more on the ISO business. The two volume-driven costs (Costs of Goods Sold and Operating Expenses) combined increased 7.6% from 2010 to 2011, while Selling and Administrative Expenses increased 64.3%, or $1,864 from 2010 to 2011. The primary driver of this expense was a one-time loss of $1,908 with a merchant that delivered fraudulent transactions. This merchant was covered under JetPay’s chargeback insurance and insurance was been notified of a potential loss, and while management expects to be covered, JetPay elected to write this balance off in 2011. Without this one-time event, Selling and Administrative Expenses would have increased $250, or 8.6%. As a result of the foregoing, net income decreased from $3,345 in 2010 to $2,152 in 2011, or 35.6%. Without the one-time loss expense, net income would have increased from $3,345 in 2010 to 3,766 in 2011, a 12.6% increase.

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Comparison of nine months ended September 30, 2012 and September 30, 2011

JetPay’s processing revenues increased from $12,970 in 2011 to $14,082 in 2012, or 8.6%.The primary driver was an increase in the ISO business as JetPay as new ISOs signed in 2010 and 2011 added more merchants to JetPay. The direct merchant business line revenue declined slightly despite adding additional merchants, as JetPay lost a large customer (see Direct Air discussion below). There was also an increase in revenues processing-only customers as processing volumes increased. The two volume-driven costs (Costs of Goods Sold and Operating Expenses) combined increased $1,350, or 17.9% from 2011 to 2012, while Selling and Administrative Expenses increased over 100%, or $2,490 from 2010 to 2011. The primary drivers of these expenses were one-time costs and expenses related to Direct Air, as well as approximately $300 related to the proposed transaction. Direct Air, a JetPay customer since 2004, suddenly ceased operations on March 14, 2012 and declared bankruptcy. While JetPay and its sponsor bank have catastrophic insurance on this merchant, the resulting chargebacks from consumers were being funded until such time as the insurance claim can be validated. The insurance has a $250 deductible and a $25,000 limit. To date, JetPay has incurred $1,694 in losses, which are composed of $250 for the deductible, $911 for chargebacks over the $25,000 limit plus $532 related legal expense. As a result of the foregoing, net income decreased from $2,884 in 2011 to $132 in 2012.

Liquidity and Capital Resources

As of September 30, 2012, December 31, 2011, JetPay had cash and cash equivalents of approximately $0.8 million and $1.8 million respectively, of which $0.1 million and $0.1 million respectively was restricted cash. The decrease in cash at September 30, 2012 was a result of the Direct Air loss detailed above. JetPay expects that its cash flow from operations and proceeds from borrowings under JetPay’ lines of credit will be its primary sources of liquidity and will be sufficient to fund JetPay’ cash requirements for the next twelve months. See “Contractual Obligations” below for a description of future required uses of cash.

Operating activities

Net cash provided by JetPay’ operating activities was $0.2 million, and $2.9 million during the nine month period ended Sept 30, 2012, and 2011 respectively. Major differences between JetPay’s net income and cash provided by operating activities are typically depreciation and amortization, along with the timing differences between when JetPay recognizes revenues and expenses and when those revenues and expenses are collected or paid.

Investing activities

JetPay’ net cash used in investing activities was $0.2 million, and $0.2 million during the first nine months of 2012 and 2011 respectively. Net cash used in investing activities consisted of property and equipment expenditures. JetPay currently has no material capital spending or purchase commitments, but expects to continue to engage in capital spending in the ordinary course of business.

Financing activities

JetPay used cash for financing activities of $0.6 million, and $2.2 million during the first nine months of 2012 and 2011 respectively, consisting of repayments on JetPay’s loan and distributions to JetPay’s equity holders.

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Critical Accounting Policies

Reserve for Charge-back Losses

Disputes between a cardholder and a merchant periodically arise as a result of, among other things, cardholder dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction is “charged back” to the merchant, which means the purchase price is refunded to the customer through the merchant’s bank and charged to the merchant. If the merchant has inadequate funds, JetPay must bear the credit risk for the full amount of the transaction. JetPay evaluates the risk for such transactions and estimates the potential loss for charge-backs based primarily on historical experience and records a loss reserve accordingly. JetPay believes its reserve for charge-back losses is adequate to cover both the known probable losses and the incurred but not yet reported losses at the balance sheet dates.

Unsettled Merchant Accounts

In certain cases, JetPay withholds funds payable to merchants while it verifies transaction activity. In other cases, JetPay withholds funds payable to merchants in order to provide a reserve fund for potential merchant charge-back losses. In each case, JetPay records an unsettled merchant account liability for the amounts payable to the merchants. JetPay also establishes cash reserves in segregated reserve merchant bank accounts to secure JetPay’s potential liability with their acquiring banks, which are classified as restricted cash on JetPay’s balance sheets.

Seasonality

JetPay’s revenues and earnings are impacted by the volume of consumer usage of credit and debit cards at the point of sale. For example, JetPay experiences increased point of sale activity during the first and second quarters due to season volumes of some merchants in JetPay’s portfolio. Revenues during the first and second quarters tend to increase in comparison to the remaining two quarters of JetPay’s fiscal year on a same store basis.

Off-Balance Sheet Arrangements

JetPay does not have transactions, arrangements and other relationships with unconsolidated entities that are reasonably likely to affect JetPay’s liquidity or capital resources. JetPay has no special purpose or limited purpose entities that provide off-balance sheet financing, liquidity or market or credit risk support, engage in leasing, hedging, research and development services, or other relationships that expose JetPay to liability that is not reflected on the face of the financial statements.

Contractual Obligations

JetPay’s material contractual obligations which will impact JetPay’s cash flows in future periods are JetPay’s loan to its former partner (which matures in 2016), and JetPay’s operating lease commitments, which are summarized in note 7 to JetPay’s annual financial statements. JetPay intends to pay off the loan to its former partner in connection with the consummation of the transactions contemplated by the JetPay Agreement. As of December 31, 2011, these obligations were as follows:

Contractual Obligations	Total		Less than 1 year		1-3 Years		3-5 Years		More than 5 Years
Long-Term Debt Obligations (1)	$	8,239	$	465	$	1,166	$	6,608	$	-
Capital Lease Obligations	$	-	$	-	$	-	$	-	$	-
Operating Lease Obligations	$	-	$	-	$	-	$	-	$	-
Purchase Obligations	$	-	$	-	$	-	$	-	$	-
Other Long-Term Liabilities Reflected on the Balance Sheet under GAAP	$	-	$	-	$	-	$	-	$	-
Total	$	8,239	$	465	$	1,166	$	6,608	$	-

($ in thousands)

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Effects of Inflation

JetPay’s monetary assets, consisting primarily of cash and receivables, are not significantly affected by inflation. JetPay’s non-monetary assets, consisting primarily of intangible assets, are not affected by inflation. JetPay believes that replacement costs of equipment, furniture and leasehold improvements will not materially affect JetPay’s operations. However, the rate of inflation affects JetPay’s expenses, such as those for employee compensation and other operating expenses, which may not be readily recoverable in the price of services offered by JetPay. The rate of inflation can also affect JetPay’s revenues by affecting JetPay’s merchant charge volume and corresponding changes to processing revenue.

SELECTED HISTORICAL FINANCIAL INFORMATION OF ADC

(In $000’s)

ADC is providing the information set forth below to assist you in your analysis of the financial aspects of the business combination. The following selected financial information of ADC as of and for the nine months ended September 30, 2012 and 2011, has been derived from ADC’s unaudited financial statements for 2012 and for 2011, which are included in this filing. The financial information of ADC as of and for the calendar years ended December 31, 2011 and 2010, has been derived from ADC’s audited financial statements for those years, which are incorporated by reference herein.

The information set forth below is only a summary and is not necessarily indicative of the results of future operations of ADC or the combined company, and you should read the following information together with ADC’s audited financial statements, the notes related thereto and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” which appears below.

	For the Nine		For the Nine
	Months Ended		Months Ended		Year Ended
	Sept 30, 2012 (unaudited)		Sept 30, 2011 (unaudited)		2011
Income Statement Data:
Total Revenues	$	7,730	$	7,616	$	11,015
Total Expenses		6,764		6,139		10,951
Net Income		966		1,477		64
Selected Balance Sheet Data:
Current Assets		2,199		2,967		3,089
Other Assets		637		301		451
Total Assets		2,836		3,268		3,540
Current Liabilities		403		325		2,032
Long-Term Liabilities		-		-		-
Capital		2,433		2,943		1,508
Total Capital & Liabilities		2,836		3,268		3,540

SELECTED HISTORICAL FINANCIAL INFORMATION OF PTFS

PTFS is providing the information set forth below to assist you in your analysis of the financial aspects of the business combination. The following selected financial information of PTFS as of and for the nine months ended September 30, 2012 and 2011, has been derived from PTFS’s unaudited financial statements for 2012 and 2011. The financial information of PTFS as of and for the calendar years ended December 31, 2011 and 2010 has been derived from PTFS’s audited financial statements for those years, which are incorporated by reference herein.

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The information set forth below is only a summary and is not necessarily indicative of the results of future operations of PTFS or the combined company, and you should read the following information together with PTFS’s audited financial statements, the notes related thereto and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” which appears below.

	For the Nine		For the Nine		For the Twelve
	Months Ended		Months Ended		Months Ended
	Sept 30, 2012 (unaudited)		Sept 30, 2011 (unaudited)		December 31, 2011
Income Statement Data:
Total Revenues	$	2,193	$	2,150	$	2,757
Total Expenses		1,891		1,712		2,681
Net Income		302		438		76
Selected Balance Sheet Data:
Current Assets		43,358		41,928		50,238
Other Assets		-		-		-
Total Assets		43,358		41,928		50,238
Current Liabilities		43,023		41,457		49,921
Long-Term Liabilities		30		30		30
Capital		305		441		287
Total Capital & Liabilities		43,358		41,928		50,238

ADC AND PTFS’S BUSINESSES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

ADC serves approximately 5,000 clients and has focused on providing customized payroll solutions tailored to the specific needs of its clients. The needs of most clients are met through the many options and reporting capabilities available in its standard comprehensive system. For the more complex clients, numerous custom interfaces have been developed to integrate with general ledger systems, time and attendance systems and other in-house HR systems. ADC’s business strategy is focused on achieving strong long-term financial performance by providing high-quality, timely, accurate, and affordable services while steadily growing its client base.

A related company, PTFS, prepares, processes and files tax deposits and required federal, state and local payroll tax returns exclusively for clients of AD Computer. Approximately 4,400 clients of ADC use the services of PTFS. A separate trust account is maintained by PTFS, which is reconciled on a daily basis. PTFS is focused on continuing to grow its client base by providing a comprehensive solution to the tax filing and deposit requirements in a complex regulatory environment.

Revenues

The majority of ADC’s revenue is derived from its payroll processing operations, which includes the calculation, preparation, collection and delivery of employer payroll obligations and the production of internal accounting records and management reports. ADC experiences increased revenues at calendar year-end due to additional employer annual processing and filing requirements.

PTFS pays a portion of the fees it earns to ADC. In exchange for these fees, ADC provides PTFS with all of its clients and all of the information necessary to prepare tax deposits and filings. The fee payable by PTFS to ADC was equal to 50% of all fees collected by PTFS through December 31, 2010 and 45% thereafter.

The majority of PTFS’s revenue is derived from fee income as a result of the preparation of federal, state and local payroll tax returns and the collection and remittance of clients’ payroll tax obligations. PTFS experiences increased revenues at calendar year-end due to additional employer annual filing requirements.

PTFS’s trust account earnings represents the interest earned on the daily trust fund balance. This amount can fluctuate throughout the year based on the amount held in trust and changes in the corresponding applicable interest rate.

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Expenses

The most significant component of ADC’s operating expenses is payroll and related expenses. Payroll expense is largely fixed in nature, but tends to increase with capacity levels and inflation. A significant component of payroll expense represents shareholder bonuses, which are reflected in the year-end results of operations.

Another significant component of ADC’s operating expenses is cost of goods sold, which is primarily comprised of the direct expenses of the various payroll-processing departments within ADC. These expenses vary directly with payroll processing revenue.

ADC’s general and administrative expenses include items such as delivery, outside services, rent, office expense, insurance, sales and marketing, professional services and other costs incurred to support its business.

PTFS’s significant operating expenses are split between outside services and payroll and related expenses. Outside services represent the fees paid to ADC in exchange for all of PTFS’ clients and all the information necessary to prepare tax deposits and filings. Payroll expense is largely fixed in nature, but tends to increase with inflation. A significant component of payroll expense represents shareholder bonuses, which are reflected in the year-end results of operations.

PTFS’s general and administrative expenses include items such as office expense, computer program costs, insurance, professional services and other costs incurred to support its business. 

Results of Operations (Dollar amounts in thousands)

AD Computer

					Nine Months		Nine Months
	Year Ended 2011		Year Ended 2010		Ended September 30, 2012 (unaudited)		Ended September 30, 2011 (unaudited)
Revenues:
Payroll Processing	$	9,793	$	9,443	$	6,982	$	6,860
Fee Income From PTFS		1,138		1,189		700		692
Other Income		84		91		48		64
Total Revenue		11,015		10,723		7,730		7,616
Costs & Expenses:
Cost Of Goods Sold		4,295		4,173		3,309		3,072
Payroll & Related Expense		5,544		5,285		2,467		2,307
General And Administrative		1,112		1,117		988		760
Total Cost & Expenses		10,951		10,575		6,764		6,139
Net Income	$	64	$	148	$	966	$	1,477

AD Computer’s payroll processing revenues increased from $9,443,000 in 2010 to $9,793,000 in 2011, or 3.7%, due primarily to increased payroll processing as a result of steady, organic growth in its client base. Fees received from PTFS decreased from $1,189,000 in 2010 to $1,138,000 in 2011, or 4.3%, due primarily to ADC’s reduced share of PTFS fees from 50% in 2010 to 45% in 2011, offset partially by an increase in the overall fees earned by PTFS.

ADC’s cost of goods sold, which varies directly with payroll processing fees, increased from $4,173,000 in 2010 to $4,295,000 in 2011, or 2.9%, due primarily to increased payroll processing as a result of steady, organic growth in its client base. Payroll and related expenses increased from $5,285,000 in 2010 to $5,544,000 in 2011, or 4.9%, due primarily to increased compensation and benefit costs. General and administrative expense remained relatively unchanged from 2010 to 2011.

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Comparison of nine months ended September 30, 2012 and September 30, 2011

ADC’s payroll processing revenues increased from $6.860,000 in 2011 to $6,982,000 in 2012, or 1.8%, due primarily to increased payroll processing as a result of steady, organic growth in its client base. Fees received from PTFS remained relatively unchanged from 2011 to 2012.

ADC’s cost of goods sold, which varies directly with payroll processing fees, increased from $3.072,000 in 2011 to $3,309,000 in 2012, or 7.7%, due primarily to increased payroll processing as a result of steady, organic growth in its client base. Payroll and related expenses increased from $2,307,000 in 2011 to $2,467,000 in 2012, or 6.9%, due primarily to increased compensation and benefit costs. General and administrative expense increased from $760,000 in 2011 to $988,000 in 2012, or 30.0%, due primarily to increased professional fees and depreciation expense.

PTFS 

					Nine Months		Nine Months
	Year Ended 2011		Year Ended 2010		Ended September 30, 2012 (unaudited)		Ended September 30, 2011 (unaudited)
Revenues:
Fee Income	$	2,454	$	2,354	$	1,922	$	1,842
Trust Account Earnings		299		384		199		243
Other Income		4		9		74		68
Total Revenue		2,757		2,747		2,195		2,153
Costs & Expenses:
Outside Services		1,138		1,189		912		912
Payroll & Related Expense		1,209		1,156		631		566
General And Administrative		331		343		350		237
Interest Expense		3		3		-
Total Cost & Expenses		2,681		2,691		1,893		1,715
Net Income	$	76	$	56	$	302	$	438

Comparison of years ended December 31, 2011 and December 31, 2010

PTFS’s fee income increased from $2,354,000 in 2010 to $2,454,000 in 2011, or 4.2%, due primarily to steady, organic growth in its client base. Trust account earnings decreased from $384,000 in 2010 to $299,000 in 2011, or 22.1%, due primarily to the declining interest-rate environment.

PTFS’s outside services expense decreased from $1,189,000 in 2010 to $1,138,000 in 2011, or 4.3%, due primarily to AD Computer’s reduced share of PTFS fees from 50% in 2010 to 45% in 2011, offset partially by PTFS’s increased fee income. Payroll and related expenses increased from $1,156,000 in 2010 to $1,209,000 in 2011, or 4.6%, due primarily to increased compensation and benefit costs. General and administrative expense decreased from $343,000 in 2010 to $331,000 in 2011, or 3.5%, due primarily to decreased computer programming costs, offset partially by increased office expense.

Comparison of nine months ended September 30, 2012 and September 30, 2011

PTFS’s fee income increased from $1,842,000 in 2011 to $1,922,000 in 2012, or 4.3%, due primarily to steady, organic growth in its client base. Trust account earnings decreased from $243,000 in 2011 to $199,000 in 2012, or 18.1%, due primarily to the declining interest-rate environment.

PTFS’s outside services expense remained relatively unchanged from 2011 to 2012. Payroll and related expenses increased from $566,000 in 2011 to $631,000 in 2012, or 11.5%, due primarily to increased compensation and benefit costs. General and administrative expense increased from $237,000 in 2011 to $350,000 in 2012, or 47.7%, due primarily to increased professional fees.

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Liquidity and Capital Resources

As of September 30, 2012 and December 31, 2011, AD Computer had unrestricted cash and cash equivalents of approximately $1.8 million and $1.8 million, respectively. As of the same periods, PTFS held restricted cash for payroll taxes payable of $44.2 million and $43.9 million, respectively. As of September 30, 2012, PTFS held unrestricted cash and cash equivalents of $0.4 million, and an immaterial amount was held as of December 31, 2011 respectively. Additionally, ADC held no debt as of September 30, 2012 and December 31, 2011 respectively, and PTFS had an immaterial amount of debt as of the same periods.

ADC and PTFS expect that cash flows from operations will continue to be the primary source of liquidity and will be sufficient to fund normal business operations and capital expenditures for current and planned operations. Neither ADC nor PTFS have any external lines of credit or other external financing arrangements with any financial institutions. As such, the companies are dependent on continued cash flows from operations to fund normal business operations and capital expenditures.

Operating activities

Net cash provided by ADC’s operating activities was $0.4 million and $0.4 million during the first nine months of 2012 and calendar 2011 respectively. Major differences between ADC’s net income and cash provided by operating activities are typically depreciation and amortization, along with the timing differences between when ADC recognizes revenues and expenses and when those revenues and expenses are collected or paid. The decrease in ADC’s operating cash flows for calendar 2011 resulted mainly from fluctuations in operating assets and liabilities, decreased net income adjusted for non-cash items and increased payments for compensation.

Net cash provided by PTFS’s operating activities was immaterial during the first nine months of 2012 and calendar 2011.

Investing activities

Net cash used in investing activities primarily consists of purchases of property and equipment. The amounts purchased by ADC totaled $0.4 million during the first nine months of 2012, and were immaterial for calendar 2011. PTFS did not have any investing activities during the same periods.

Financing activities

ADC used cash for financing activities of $0.1 million during the first nine months of 2012, and $0.2 million during calendar 2011, consisting of distributions to ADC’s shareholders. PTFS used an immaterial amount of cash for financing activities during the same periods, consisting of distributions to PTFS’s shareholders.

Contractual Obligations

The following table summarizes the contractual obligations of each of ADC and PTFS as of December 31, 2011:

ADC:

			Payments due by
			period
Contractual obligations			Less than		1-3		3-5		More than
(In thousands)	Total		1 year		years		years		5 years
Long-Term Debt Obligations	$	-	$	-	$	-	$	-	$	-
Capital Lease Obligations		-		-		-		-		-
Operating Lease Obligations		2,568		594		1,155		819		-
Purchase Obligations		-		-		-		-		-
Other Long-Term Liabilities Reflected on the
Registrant's Balance Sheet under GAAP		-		-		-		-		-
Total	$	2,568	$	594	$	1,155	$	819	$	-

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PTFS:

			Payments due by
			period
Contractual obligations			Less than		1-3		3-5		More than
(In thousands)	Total		1 year		years		years		5 years
Long-Term Debt Obligations	$	30	$	30	$	-	$	-	$	-
Capital Lease Obligations		-		-		-		-		-
Operating Lease Obligations		-		-		-		-		-
Purchase Obligations		-		-		-		-		-
Other Long-Term Liabilities Reflected on the
Registrant's Balance Sheet under GAAP		-		-		-		-		-
Total	$	30	$	30	$	-	$	-	$	-

Critical Accounting Policies

Concentration of credit risk

ADC maintains deposits in excess of federally insured limits with its financial institution. These deposits may exceed the amount of any insurance provided.

Restricted cash

PTFS has entered into a cash management agreement with its financial institution. The agreement provides for the daily collected balance within the restricted trust account to be invested in a repurchase agreement at a variable rate.

Use of estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates, judgments, and assumptions that affect reported amounts of assets, liabilities, revenue and expenses during the reporting period. Actual amounts and results could differ from these estimates.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information regarding the beneficial ownership of the Company’s common stock as of December 28, 2012, by:

- each person known by the Company to be the beneficial owner of more than 5% of its outstanding shares of common stock;

- each of the Company’s officers and directors; and

- all of the Company’s officers and directors as a group.

As used in the table below, the term beneficial ownership with respect to the Company’s common stock consists of sole or shared voting power (which includes the power to vote, or to direct the voting of shares of the Company’s common stock) or sole or shared investment power (which includes the power to dispose, or direct the disposition of, shares of the Company’s common stock) through any contract, arrangement, understanding, relationship or otherwise, including a right to acquire such power(s) during the 60 days following December 28, 2012. Unless otherwise indicated, the Company believes that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them.

The Company has based its calculation of the percentage of beneficial ownership on 11,519,094 shares of its common stock outstanding on December 28, 2012.

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Name and Address of Beneficial Owner	Number of Shares of Common Stock Beneficially Owned		Approximate Percentage of Outstanding Common Stock Beneficially Owned
WLES, L.P.(1)		3,666,667		31.83	%
Wellington Management Company, LLP (5)		1,123,000		9.75	%
C. Nicholas Antich (2)		813,320		7.06	%
Carol A. Antich (2)		813,320		7.06	%
Ira Lubert (3)		1,009,417		8.76	%
Bipin C. Shah (4)		160,310		1.39	%
Peter Davidson (4)		160,191		1.39	%
Arthur F. Ryan (4)		33,266		0.29	%
Frederick S. Hammer (4)		33,266		0.29	%
Robert Palmer (4)		33,266		0.29	%
Richard S. Braddock (4)		33,266		0.29	%
Jonathan M. Lubert (4)		123,492		1.07	%
All directors and executive officers as a group (7 people)		577,060		5.01	%

(1) The business address of WLES, L.P. is 3361 Boyington Drive, Carrollton, TX 75006.

(2) The business address of each of the individuals is 3939 West Drive, Center Valley PA 18034.

(3) The business address of the individual is 2929 Arch Street, 29^th Floor, Philadelphia, PA 19104.

(4) The business address of each of the individuals is c/o Universal Business Payment Solutions Acquisition Corporation, Radnor Financial Center, 150 North Radnor-Chester Road, Suite F-200, Radnor, PA 19087. 

(5) Based solely on the information contained in Schedule 13D filed by Wellington Management Company, LLP on December 17, 2012. The business address of the entity is 80 Congress Street, Boston, Massachusetts 02210. 

Directors and Executive Officers

The information in the section of the Proxy Statement titled “UBPS Executive Officers and Directors” is incorporated herein by reference.

Executive Compensation

The information in the section of the Proxy Statement titled “Compensation of Executive Officers and Directors of UBPS” is incorporated herein by reference.

Certain Relationships and Related Transactions, and Director Independence

The information in the section of the Proxy Statement titled “Certain Relationships and Related Transactions” is incorporated herein by reference.

Legal Proceedings

The information in the section of the Proxy Statement titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations (JetPay) – Legal Proceedings is incorporated herein by reference.

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Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

Market Information

The Common Stock trades on the NASDAQ Capital Market under the symbol UBPS. On the Closing Date, all warrants of the Company were canceled and as a result, the Company’s units and warrants will cease trading on the NASDAQ Capital Market. The information contained in Section 1.01 above is incorporated herein by reference. .

The Company has no outstanding options. The information in Item 1.01 above, relating to registration rights granted to certain holders of the Company’s common stock is incorporated herein by reference.

Holders of Record

As of December 22, 2012, there were 168 holders of record of our common stock, 161 holders of record of our warrants and 76 holders of record of our units.

Dividends

The Company has not paid any cash dividends on the Common Stock to date. The payment of cash dividends in the future will be dependent upon the Company’s revenues and earnings, if any, capital requirements and general financial condition. The payment of any dividends will be within the discretion of the Company’s board of directors at such time. It is the present intention of the Company’s board of directors to retain all earnings, if any, for use in its business operations and, accordingly, the Company’s board of directors does not anticipate declaring any dividends in the foreseeable future. In addition, the Company’s board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future.

Price Range of Common Stock

The Common Stock commenced listing on the NASDAQ Capital Market under the symbols “UBPS” on May 13, 2011. The following tables set forth, for the calendar quarter indicated, the quarterly high and low sale prices for the Common Stock as reported on the NASDAQ Capital Market, as applicable.

Common Stock

Quarter Ended	High		Low
December 31, 2012(1)	$	6.09	$	5.25
September 30, 2012	$	6.08	$	5.97
June 30, 2012	$	6.08	$	5.80
March 31, 2012	$	6.15	$	5.75
December 31, 2011	$	6.00	$	5.75
September 30, 2011	$	5.75	$	5.75
June 30, 2011(2)	$	-		-

(1) Represents the high and low sales prices for Common Stock for the quarter as of December 28, 2012

(2) Represents the high and low sales prices for Common Stock from May 13, 2011, the date of the IPO, through June 30, 2011

Price Performance Graph

The graph below compares the cumulative total return of the Common Stock from August 8, 2011, the date that the Common Stock first became separately tradable, through December 27, 2012 with the comparable cumulative return of two indices, the S&P 500 Index and the Dow Jones Industrial Average Index. The graph plots the growth in value of an initial investment of $100 in UBPS Common Stock, the Dow Jones Industrial Average Index and the S&P 500 Index over the indicated time periods, and assuming reinvestment of all dividends, if any, paid on its securities. UBPS has not paid any cash dividends and, therefore, the cumulative total return calculation for UBPS is based solely upon stock price appreciation and not upon reinvestment of cash dividends. The stock price performance shown on the graph is not necessarily indicative of future price performance.

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Recent Sales of Unregistered Securities

The information set forth in Items 1.01 above relating to the issuance of Common Stock to WLES, L.P. and the stockholders of ADC is incorporated herein by reference.

The Common Stock was be issued in a private placement not involving a public offering under the Securities Act of 1933, as amended, pursuant to Section 4(2) of the Securities Act of 1933 and/or Regulation D promulgated under the Securities Act of 1933. UBPS has not engaged in general solicitation or advertising with regard to the issuance of its shares of common stock and has not offered securities to the public in connection with this issuance.

Indemnification of Directors and Officers

UBPS’s amended and restated certificate of incorporation provides that all of its directors, officers, employees and agents will be entitled to be indemnified by us to the fullest extent permitted by Section 145 of the Delaware General Corporation Law.

Section 145 of the Delaware General Corporation Law concerning indemnification of officers, directors, employees and agents is set forth below.

Section 145. Indemnification of officers, directors, employees and agents; insurance.

(a) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust account or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.

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(b) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust account or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

(c) To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.

(d) Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.

(e) Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.

(f) The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office.

(g) A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust account or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section.

21

(h) For purposes of this section, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.

(i) For purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.

(j) The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

(k) The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation’s obligation to advance expenses (including attorneys’ fees).

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

Paragraph A of Article Ten of our amended and restated certificate of incorporation provides:

The Corporation shall promptly indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended (but, in the case of an amendment of the DGCL, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), any person (an “Indemnitee”) who was or is made, or is threatened to be made, a party or witness or is otherwise involved in any threatened, pending or completed investigation, action, suit or proceeding, whether civil, criminal, administrative or investigative and whether external or internal to the Corporation (a “Proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or an officer of the Corporation or, while a director or an officer of the Corporation, is or was serving at the request of the Corporation as a director or the like, officer or the like, employee, member, trustee or agent of another corporation or of a partnership, joint venture, trust, nonprofit entity or other enterprise or association (including, but not limited to, service with respect to employee benefit plans) (any such entity, an “Other Entity”), against all liability and loss (including, but not limited to, expenses (including, but not limited to, attorneys’ fees and expenses), judgments, fines and amounts paid in settlement actually and reasonably incurred or suffered by such Indemnitee in connection with such Proceeding). Notwithstanding the preceding sentence, the Corporation shall be required to indemnify an Indemnitee in connection with a Proceeding (or part thereof) commenced by such Indemnitee only if the commencement of such Proceeding (or part thereof) by the Indemnitee (i) was authorized by the Board of Directors of the Corporation, (ii) relates to counterclaims or affirmative defenses asserted by a person seeking indemnification in an action brought against such person, (iii) relates to any proceeding brought by a person seeking indemnification or payment under any directors’ and officers’ liability insurance covering such person or (iv) the Proceeding (or part thereof) relates to the enforcement of the Corporation’s obligations under this Article IX.

22

The Article Seven of the amended and restated bylaws of UBPS provides:

The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he or she is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

The Corporation shall indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

Financial Statements and Supplementary Data

The information set forth above is incorporated by reference.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Financial Statements and Exhibits

The information on pages F-1 through F-4 of the Proxy Statement related to UBPS, JetPay and ADC is incorporated by reference herein.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information regarding (i) the Note Agreement and the Notes (ii) the Assumption Agreement and (iii) the Credit Facility set forth in Item 1.01 above is incorporated herein by reference.

23

Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

On December 28, 2012, UBPS received a letter from The Nasdaq Stock Market (“Nasdaq”) indicating that Nasdaq believes that UBPS did not comply with IM-5101-2. Nasdaq advised that such failure serves as a basis for delisting. Nasdaq also advised that the Company may not meet Listing Rule 5505(a)(3), which requires a minimum of 300 public holders. Nasdaq had previously notified UBPS of its failure to comply with such requirement. UBPS filed a Current Report on Form 8-K disclosing such failure. UBPS was granted an extension until February 9, 2013 to achieve compliance with the minimum holders requirement.

UBPS has until January 4, 2013 to appeal the delisting decision in front of a Nasdaq Hearings Panel. If UBPS is not successful or does not appeal the decision, Nasdaq will suspend trading of the Common Stock and file a Form 25-NSE with the SEC.

The letter did not indicate non-compliance with any other listing requirement.

Item 3.03. Material Modification to Rights of Security Holders.

The information in the section of the Proxy Statement entitled “Material Differences in the Rights of UBPS Stockholders Following the Transaction” is incorporated herein by reference.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On December 28, 2012, UBPS filed with the Delaware Secretary of State an Amended and Restated Certificate of Incorporation, a copy of which is attached hereto as Exhibit 3.1 and incorporated herein by reference. In addition, as disclosed in the Proxy Statement, upon consummation of the transactions contemplated by the Acquisition Agreements, UBPS changed its fiscal year end from September 30 to December 31. UBPS will file an Annual Report on Form 10-K covering the transition period.

Item 5.06. Change in Shell Company Status.

The information set forth in Item 2.01 above is incorporated herein by reference.

Item 5.07 Submission of Matters to a Vote of Security Holders.

On December 28, 2012, the Company held a special meeting of its stockholders at which such stockholders voted to adopt the Acquisition Agreements and approve the amendments to the amended and restated certificate of incorporation. The final voting results were as follows:

Proposal to Adopt the Jet Pay Agreement:

	For			Against			Abstain/Withhold
Number of votes		12,025,077			439,308			481,567
Percentage of shares outstanding and entitled to vote		92.89	%		3.39	%		3.72	%

Proposal to Adopt the ADC Agreement:

	For			Against			Abstain/Withhold
Number of votes		12,025,077			439,308			481,567
Percentage of shares outstanding and entitled to vote		92.89	%		3.39	%		3.72	%

24

Proposal to Amend the Charter to Allow the Board to Set the Size of the Board:

	For			Against			Abstain/Withhold
Number of votes		10,193,177			439,308			2,313,467
Percentage of shares outstanding and entitled to vote		78.74	%		3.39	%		17.87%

Proposal to Amend the Charter to Remove Provisions Only Applicable to Special Purchase Acquisition Corporations:

	For			Against			Abstain/Withhold
Number of votes		9,293,277			1,335,208			2,317,467
Percentage of shares outstanding and entitled to vote		71.79	%		10.31	%		17.90%

Proposal to Amend the Charter to Provide for a Classified Board:

	For			Against			Abstain/Withhold
Number of votes		10,189,177			443,308			2,313,467
Percentage of shares outstanding and entitled to vote		78.71	%		3.42	%		17.87%

Proposal to Amend the Charter to Require 66.67% Majority to Amend the Charter or Bylaws:

	For			Against			Abstain/Withhold
Number of votes		9,293,277			1,339,208			2,313,467
Percentage of shares outstanding and entitled to vote		71.79	%		10.34	%		17.87%

Proposal to Amend the Charter to Make the Company’s Existence Perpetual:

	For			Against			Abstain/Withhold
Number of votes		9,295,277			1,337,208			2,313,467
Percentage of shares outstanding and entitled to vote		71.80	%		10.33	%		17.87%

Proposal to Amend the Charter to Make other Changes:

	For			Against			Abstain/Withhold
Number of votes		9,291,277			1,341,208			2,313,467
Percentage of shares outstanding and entitled to vote		71.77	%		10.36	%		17.87%

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired

The information contained in Section 2.01 above is incorporated herein by reference.

(c) Pro Forma Financial Information

25

UNIVERSAL BUSINESS PAYMENTS SOLUTIONS ACQUISITION CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

September 30, 2012

																		Combined
																		Following
										Combined Before			Pro Forma					Redemption of
										Acquisition			Acquisition					9,994,625
	UBPS			JetPay			The ADC Entities			Adjustments			Adjustments			Note #		Shares
Assets
Current assets
Cash and cash equivalents	$	23,692		$	690,977		$	2,221,128		$	2,935,797		$	68,811,113			A	$	2,574,699
														(60,763,730	)		A
														(1,059,620	)		C
														(335,000	)		D
														(25,991,361	)		E
														9,000,000			E
														10,000,000			E
														(22,500	)		E
Restricted Cash		-			101,972			41,525,520			41,627,492								41,627,492
Accounts receivable, trade		-			1,805,000			1,584,184			3,389,184								3,389,184
Accounts receivable, related parties		-			75,000			-			75,000								75,000
Inventory		-			-			128,147			128,147								128,147
Prepaid expenses and other current assets		-			19,928			98,564			118,492								118,492
Total current assets		23,692			2,692,877			45,557,543			48,274,112								47,913,014
Property, Plant and equipment		-			546,402			588,892			1,135,294								1,135,294
Other assets
Cash and cash equivalents held in trust		68,811,113			-			-			68,811,113			(68,811,113	)		A		-
Goodwill		-			-			14,000			14,000			17,982,730			E		39,967,822
														21,971,092			G
Deposits		-			2,920,389			-			2,920,389								2,920,389
Deferred financing costs		-			-			-						22,500			E		22,500
Customer relationships and related covenants		-			-			-						30,945,000			E		30,945,000
Software and technology		-			-			-						6,000,000			E		6,000,000
Other assets		-			-			33,361			33,361								33,361
Total other assets		68,811,113			2,920,389			47,361			71,778,863								79,889,072
Total assets	$	68,834,805		$	6,159,668		$	46,193,796		$	121,188,269			$				$	128,937,380
Liabilities and Stockholders' Equity
Current Liabilities
Note payable, current maturities	$	335,000		$	374,150		$	-		$	709,150		$	(335,000	)		D	$	352,555
														(21,595	)		E
Accounts payable		257,873			883,117			106,716			1,247,706			(125,000	)		C		3,317,706
														2,195,000			C
Payroll taxes payable		-			-			43,020,659			43,020,659								43,020,659
Accrued expenses		-			1,019,621			296,555			1,316,176								1,316,176
Other current liabilities		-			-			2,276			2,276								2,276
Total current liabilities		592,873			2,276,888			43,426,206			46,295,967								48,009,372
Bank loans payable														9,000,000			E		9,000,000
Note payable - long term		-			7,510,316			-			7,510,316			10,000,000			E		17,957,489
														447,173			E
ISO reserves		-			124,177			-			124,177								124,177
Payable to sellers		-			-			-						2,000,000			E		2,000,000
Long-term deferred tax liability		-			-			-						21,971,092			G		21,971,092
Due to stockholders		-			-			30,000			30,000			(30,000	)		E		-
Total liabilities		592,873			9,911,381			43,456,206			53,960,460								99,062,130
Commitments and contingencies
Common stock subject to possible redemption,		63,776,921			-			-			63,776,921			(60,763,730	)		A
10,494,067 shares at September 30, 2012 at redemption value														(3,013,191	)		B
Stockholders' Equity
Common stock, $0.01 par value. Authorized		3,826			-			8,974			12,800			500			B		11,519
100,000,000 shares. Issued and outstanding														4,666			E
at September 30, 2012 - 11,519,094 shares after														(8,974	)		E
redemption of 9,994,625 Public Shares.														2,527			E
Additional paid-in capital		5,165,954			-			37,853			5,203,807			3,012,691			B		33,698,120
														25,522,002			E
														(37,853	)		E
														(2,527	)		E
Retained Earnings		(704,769	)		(3,751,713	)		2,635,654			(1,820,828	)		1,116,059			E		(3,834,389	)
														(3,129,620	)		C
Treasury stock		-			-			(152,250	)		(152,250	)		152,250			E		-
Non-controlling interest		-			-			207,359			207,359			(207,359	)		E		-
(Accumulated Deficit)
Total Stockholders' Equity		4,465,011			(3,751,713	)		2,737,590			3,450,888								29,875,250
Total Liabilities and Stockholder's Equity	$	68,834,805		$	6,159,668		$	46,193,796		$	121,188,269		$					$	128,937,380

See Notes to the Unaudited Pro Forma Condensed Combined Financial Information

UNIVERSAL BUSINESS PAYMENTS SOLUTIONS ACQUISITION CORPPORATION

Notes to Unaudited Pro Forma Condensed Combined Balance Sheet

Note A
	The Pro Forma reflects that 9,994,625 shares are redeemed by public shareholders share at a pro rata share of the funds held in the trust account equal to approximately $6.08 per share for total redemptions of $60,763,760.
	This entry records the transfer of funds from the trust account to cash available to UBPS and the adjustment of available cash to redeem 9,994,625 shares for $60,763,730.
Note B	This entry records the transfer of the shares subject to redemption and not redeemed (499,342) to permanent capital.
Note C	To record estimated costs of completing the merger, including legal, accounting, consultants, proxy solicitation and financial advisory services as shown in the following table:

Schedule of Estimated Costs of Closing Transaction 

Advisory services	$	2,070,000
Legal fees		500,000
Consulting fees		305,000
Accounting and auditing fees		246,000
Other consulting, advisory and miscellaneous fees		133,620
Total estimated closing costs to be paid at closing		3,254,620
Less: amounts accrued but unpaid at September 30, 2012
primarily accounting and auditing fees		125,000
Estimated costs to be expensed at closing	$	3,129,620
Amount of the above accrued but not paid	$	2,195,000

Note D	To record repayment of note payable to affiliated company controlled by the Chairman and Chief Executive Officer of UBPS $335,000
Note E	Represents the pro forma entries to record the acquisition of JetPay and ADC, recording the Common Stock issued and the purchase price of the acquisitions in excess of the fair value of acquired assets.
	The combination constitutes an acquisition method transaction under US GAAP, with UBPS acquiring JetPay and ADC. The cash and securities issued to the stockholders of the acquired companies are shown in the following table.
	In addition to the securities to be issued upon completion of the acquisition, the sellers will be paid additional cash and Common Stock if certain conditions are met.
	At closing of the proposed transaction, certain amounts of the cash and Common Stock consideration to be paid to the sellers will be held in escrow to be released to the sellers in eighteen months from closing less amounts withheld for any claims against the seller company. These escrowed amounts are not under the control of UBPS and are not forfeitable, and have not been included in the Pro Forma Balance Sheet.
	In accordance with US GAAP, the securities issued to the sellers of JetPay and ADC have been valued at fair value, the best measure of which is the closing market price of the Common Stock on December 28, 2012, which was $5.47 (as of December 28, 2012).

Of the deferred consideration due the sellers in the future, $2,000,000 is guaranteed to be paid and has been recorded in the Pro Forma Balance Sheet as of September 30, 2012. The balance of deferred consideration due the sellers in the future, of $5 million in cash and $5 million in Common Stock valued at $6.00 per share is subject to conditions that Management believes are not likely to be achieved and have not been recorded in the Pro Forma Balance Sheet at September 30, 2012.

UBPS assumed a $9,000,000 bank loan obtained by the ADC Entities.

The interest rate on the $9,000,000 bank loan is 4.0% per annum with a term of 7 years with principal payment of equal monthly installments over 7 years.

UBPS incurrred commitment fees of $22,500 which is being amortized over 7 years.

UBPS assumed amounts owed to a former owner of JetPay in the amount of $6,000,000 evidenced by a note payable on the books of JetPay. The interest rate on the note is 9.5% with monthly principal payments of $32,244. This note is convertible into shares of UBPS Common Stock at $6.00 per share unless the note is in default in which case it can be converted at the current market price.

UBPS issued an unsecured 3-year note to a former owner of JetPay in the amount of $2,331,639 at an interest rate of 5%. Principal and interest on the note is due in 3 years.

UBPS issued $10,000,000 in 2-year notes. These notes are secured by a portion of UBPS's equity interest in JetPay. The interest rate on the notes is 12% per annum, payable quarterly. These notes are convertible into Common Stock at $5.15 per share (subject to certain adjustments).

UBPS is not assuming certain obligations of the acquired companies and accordingly, these obligations, amounting to $51,595 at September 30, 2012 are being eliminated under the acquisition method.

	Consideration assuming redemption of 9.994,625 shares
	JetPay			ADC		Total
Cash consideration at closing before adjustment	$	10,000,000		$	7,000,000	$	17,000,000
Debt assumed from sellers				$	9,000,000	$	9,000,000
Total consideration paid and debt assumed at closing	$	10,000,000		$	16,000,000	$	26,000,000
Adjustments to cash consideration at closing:
Working capital adjustment		(859,631	)		850,992		(8,639	)
Consideration before stock consideration to be paid at closing		9,140,369			16,850,992		25,991,361
Common stock consideration issued at closing
Shares issued		3,666,667			1,000,000		4,666,667
Fair value at December 28, 2012 of shares issued	$	5.47		$	5.47	$	5.47
Total common stock consideration issued		20,056,668			5,470,000		25,526,668
Total consideration paid or issued at closing		29,197,037			22,320,992		51,518,029
Deferred consideration guaranteed paid in the future		-			2,000,000		2,000,000
Total consideration	$	29,197,037		$	24,320,992	$	53,518,029

	Calculation of purchase price in excess of net assets acquired
	JetPay			ADC			Total
Net cash consideration paid at closing and assumed debt	$	9,140,369		$	16,850,992		$	25,991,361
Common Stock consideration paid at closing		20,056,668			5,470,000			25,526,668
Guaranteed deferred consideration		-			2,000,000			2,000,000
Total consideration to sellers at closing		29,197,037			24,320,992			53,518,029
Net assets acquired:
Total assets, September 30, 2012		6,159,668			46,193,796			52,353,464
Less Net liabilities:
Total liabilities, September 30, 2012		9,911,381			43,456,206			53,367,587
Less: obligations not assumed		(21,595	)		(30,000	)		(51,595	)
Net liabilities, September 30, 2012		9,889,786			43,426,206			53,315,992
Net book value, per books as adjusted, September 30, 2012		(3,730,118	)		2,767,590			(962,528	)
Excess of purchase price over net book value of assets acquired before reallocation to identifiable intangibles
	$	32,927,155		$	21,553,402		$	54,480,557

While a final determination of the value of identifiable intangibles has not been completed, management has made an initial determination that approximately $36,945,000 of the excess of cost over the net book value of the net assets should be allocated to identifiable intangible assets as shown in the table below:

	Estimated Identifiable Intangible Assets
		JetPay		ADC		Total
Software and technology	$	2,500,000	$	3,500,000	$	6,000,000
Customer relationships and related covenants		15,749,000		15,196,000		30,945,000
Total initially estimated identifiable intangible assets	$	18,249,000	$	18,696,000	$	36,945,000

Management has also made the initial determination that all other assets and liabilities to be acquired are primarily estimated to be stated at their fair values, which approximates their recorded cost.

Based on the above estimate of identifiable intangibles, the unidentified excess of purchase price over fair value of assets acquired is as shown below and has been recorded as goodwill:

Total excess of purchase price over fair value of assets acquired
	$	54,480,557
Less estimated identified intangibles:
Software and technology		6,000,000
Customer relationships and related covenants		30,945,000
Unidentified excess of purchase price over fair value of assets acquired (goodwill)
	$	17,535,557

Management believes the technology inherent in each of the companies and not recognized on the books of the companies has substantial unrecognized value. Their initial determination is based on their estimate of the replacement cost of the scalable technology being acquired.

In addition, management has made an initial determination that the value of customer relationships, based on the nature of contracts with customers and expected future revenue streams and related non-compete covenants. Their analysis was based on the estimated future gross profit generated by existing customer and relationships, after applying historical attrition rate of customer and clients and applying a modest estimate of organic growth from remaining customers and discounting the results by 35%, which management believes is a fair representation of the risk structure of the businesses to be acquired.

The initial values to be attributed to the identified intangibles are subject to formal appraisal and valuation subsequent to the closing of the transaction and are subject to change.

In addition, the warrant holders approved a conversion of all outstanding UBPS warrants on a basis of 1 share for each .1333 warrants.

This entry records the conversion of the 18,960,000 warrants to 2,257,359 shares

Note F The capital accounts of UBPS post transaction reflect the issuance of Common Stock to the sellers of JetPay and ADC valued at fair market value ($5.47 on December 28, 2012, before the closing of the transaction) resulting in capital at closing and included in the Unaudited Pro Forma Condensed Combined Balance  as shown below:

	September 30, 2012
	Before		After
	Consummation		Consummation
	of		of the
	Transaction		Transaction
UBPS Capital, before transaction	$	4,542,232	$	4,542,232
Common Stock subject to redemption				63,776,921
Fair market value of shares issued to sellers at closing:
JetPay				20,056,668
ADC				5,470,000
Estimated expenses associated with the transactions net of previously accrued amount of $125,000				(3,129,620	)
Less: 9,994,625 shares redeemed at redemption value				(60,763,730	)
UBPS capital, post transaction	$	4,465,011	$	29,875,250

Note G	Because there is no step up in tax basis due to the nature of the transactions, there is a permanent difference between amortization recorded for GAAP and tax. This permanent tax difference will be reduced for annual amortization of the amortizable intangibles recorded in the transaction and will be reduced only for impairment of Goodwill or sale of the assets.
	This entry recording the long term deferred tax liability reflects the permanent long term deferred tax liability.

Total identified and unidentified intangibles	$	54,927,730
Estimated marginal tax rate		40	%
Long-term deferred tax liability	$	21,971,092

UNIVERSAL BUSINESS PAYMENTS SOLUTIONS ACQUISITION CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Nine Months Ended September 30, 2012

																		Following
																		Assuming
	Universal Business									Combined Before			Pro Forma					Redemption of
	Payments Solutions									Acquisition			Acquisition					9,994,625
	Acquisition Corporation			JetPay			AD Computer			Adjustments			Adjustments			Note #		Shares
Revenues:
Processing fees	$	-		$	14,082,036		$	9,023,437		$	23,105,473							$	23,105,473
Equipment & lease sales - Net		-			-			-			-								-
Total revenues		-			14,082,036			9,023,437			23,105,473								23,105,473
Costs and expenses :
Assessments and processing costs		-			6,944,221			3,309,182			10,253,403								10,253,403
Cost of equipment sales		-			-			-			-								-
Sales commissions		-			-			-			-								-
General and administrative expenses		471,355			6,581,122			4,433,987			11,486,464		$	(2,072,073	)		2		9,212,086
														(202,305	)		7
Amortization of intangible assets		-			-			-						3,445,875			5		3,445,875
Related party expenses		67,500			-			-			67,500			(67,500	)		1		-
Total costs and expenses		538,855			13,525,343			7,743,169			21,807,367								22,911,364
Operating income (loss)		(538,855	)		556,693			1,280,268			1,298,106								194,109
Other income and (expenses)
Interest and dividend income		20,150			52,282			201,688			274,120								274,120
Interest expense		-			(395,570	)		(1,500	)		(397,070	)		(1,290,277	)		3		(1,687,347	)
Other income and (expenses)		-			-			3,638			3,638								3,638
Total other income (expenses)		20,150			(343,288	)		203,826			(119,312	)							(1,409,589	)
Income (loss) before income taxes		(518,705	)		213,405			1,484,094			1,178,794								(1,215,480	)
Income tax expense (benefit)		-			81,360			-			81,360			(567,552	)		8		(486,192	)
Net income (loss)		(518,705	)		132,045			1,484,094			1,097,434								(810,648	)
Less: Net income attributable to the non-controlling interest		-			-			86,568			86,568			(86,568	)		9		-
Net income (loss) attributable to Controlling interest		(518,705	)		132,045			1,397,526			1,010,866								(729,288	)
Total comprehensive income (loss)	$	(518,705	)	$	132,045		$	1,397,526		$	1,010,866							$	(729,288	)
Weighted average number of shares
Basic and diluted		14,319,693																	11,519,094
Income (loss) per share
Basic and diluted	$	(0.04	)														4	$	(0.06	)

See Notes to the Unaudited Pro Forma Condensed Combined Financial Information

UNIVERSAL BUSINESS PAYMENTS SOLUTIONS ACQUISITION CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Twelve Months Ended December 31, 2011

																		Following
	Universal Business									Combined Before			Pro Forma					Redemption of
	Payments Solutions									Acquisition			Acquisition					9,994,625
	Acquisition Corporation			JetPay			AD Computer			Adjustments			Adjustments			Note #		Shares
Revenue:
Processing fees	$	-		$	17,473,475		$	12,326,468		$	29,799,943							$	29,799,943
Total revenue					17,473,475			12,326,468			29,799,943								29,799,943
Costs and expenses :
Processing costs		-			9,995,185			4,295,028			14,290,213								14,290,213
General and administrative expenses		115,284			4,761,121			8,194,672			13,071,077		$	(2,762,764	)		2		10,308,313
Amortization of intangible assets		-			-			-						4,594,500			5		4,594,500
Related party expenses		78,599			-			-			78,599			(78,599	)		1		-
Total costs and expenses		193,883			14,756,306			12,489,700			27,439,889								29,193,026
Operating income (loss)		(193,883	)		2,717,169			(163,232	)		2,360,054								606,917
Other income and (expenses)
Interest income		9,387			43,404			303,885			356,676								356,676
Interest expense		-			(389,141	)		(3,000	)		(392,141	)		(1,860,073	)		3		(2,252,214	)
Other income and (expenses)		-			-			2,848			2,848								2,848
Income (loss) before income taxes		(184,496	)		2,371,432			140,501			2,327,437								(1,285,773	)
Income tax expense (benefit)		-			219,497			1,000			220,497			(734,806	)		8		(514,309	)
Net income (loss)		(184,496	)		2,151,935			139,501			2,106,940								(771,464	)
Less: Net income attributable to the
non-controlling interest		-			-			37,357			37,357			(37,357	)		9		-
Net income (loss) attributable to Controlling interest		(184,496	)		2,151,935			102,144			2,069,583								(771,464	)
Total comprehensive income (loss)	$	(184,496	)	$	2,151,935		$	102,144		$	2,069,583							$	(771,464	)
Weighted average number of shares
Basic and diluted		14,319,693																	11,519,094
Income (loss) per share
Basic and diluted	$	(0.01	)														4	$	(0.07	)

See Notes to the Unaudited Pro Forma Condensed Combined Financial Information

UNIVERSAL BUSINESS PAYMENTS SOLUTIONS ACQUISITION CORPPORATION

Notes to Unaudited Pro Forma Condensed Combined Statements of Operations

Note 1	To eliminate the administrative fee (year ended December 31, 2011 - $78,599; nine months ended September 30, 2012 - $67,500) that per agreement was paid to a company affiliated with the Chairman and CEO of UBPS. This agreement terminated upon consummation of a business combination.
Note 2	Based on contractual agreements with the sellers and with certain officers who will continue to be employees of UBPS, salaries and related costs will be reduced as shown in the following table and are reflected in the pro forma income statements:

	Twelve months		Nine months
	ended		ended
	December 31,		September 30,
	2011		2012
Salary, bonus and related tax saving - ADC	$	2,762,764	$	1,496,495

	The savings in ADC for the year ended December 31, 2011 reflects an agreed upon reduction in compensation for the owners and certain executives who will remain with the company from a total of $3,530,238 (including bonuses) to a total of $767,474,  reflecting the new  employment agreements had they been in effect for the year ended December 31, 2011. For the nine months ended September 30, 2012, compensation to these same individuals would have been reduced from $2,072,073 to $575,606.
Note 3	UBPS is assuming a $9,000,000 bank loan obtained by ADC and is assuming a note payable to a former owner of JetPay in the amount of $6,000,000.
	The interest rate on the $9,000,000 bank loan is 4.0% per annum with a term of 7 years with principal payment of equal monthly installments over 7 years.
	UBPS will incur commitment fees $22,500 which is being amortized over 7 years.
	UBPS is also assuming amounts owed to a former owner of JetPay in the amount of $6,000,000 evidenced by a note payable on the books of JetPay. The interest rate on the note is 9.5% for the first 180 days and then increases to 13.5% thereafter with monthly principal payments of $32,244. This note is convertible into shares of Common Stock at $6.00 per share unless the Note is in default in which case it can be converted at the current market price.
	UBPS issued an unsecured 3-year note to a former owner of JetPay in the amount of $2,331,639 at an interest rate of 5%. Principal and interest on the note is due in 3 years.
	UBPS issued $10,000,000 in 2-year notes. These notes are secured by a portion of UBPS's interest in JetPay. The interest rate on the notes is 12% per annum, payable quarterly. These notes are convertible into Common Stock at $5.15 per share.
	Interest and fee expense on the bank loan and notes payable assumed by the company of $2,252,214 and $1,684,936 has been recorded for the year ended December 31, 2011 and the nine months ended September 30, 2012 respectively, including fees of $3,214 and $2,411 for the year ended December 31, 2011 and nine months ended September 30, 2012 respectively.
Note 4	Earnings per share is based on the weighted shares that would have been outstanding assuming the business combination was effectuated on January 1, 2011 and January 1, 2012. In addition, it was assumed that the initial public offering of 12,000,000 shares occurred prior to January 1, 2011. Shares repurchased during calendar year 2011 and 2012 were weighted based on the trade date.
	In addition to the shares issued, 833,333 shares of Common Stock are contingently due to the sellers in the combination, based on the occurrence of certain events in the future. Since those events are in the future and are not certain at the present time, the shares contingently issuable have not been included in either basic or diluted earnings per share.
	In addition, the warrant holders approved a conversion of all outstanding UBPS warrants on a basis of 1 share of Common Stock for each .1333 warrants. This converts the 18,960,000 warrants to 2,257,359 shares.
	UBPS's historical statement of operations includes a presentation of earnings per share for Common Stock excluding public shares subject to possible redemption. Since any redemptions will be a one-time event occurring at closing, pro forma basic and diluted earnings per share is presented including common shares which are no longer subject to redemption, and after the redemption of 9,994,625 Public Shares.

Pro forma net income per share was calculated by dividing pro forma net income by the weighted average number

of shares as follows:

	Year Ended December 31, 2011
	Before		Assuming
	Consummation		Redemption of
	of		9,994,625
	Transaction		Shares
UBPS pro forma weighted average shares		14,319,693		4,325,068
Weighted average of shares issued in transactions				4,666,667
Weighted average of shares from warrant conversion				2,527,359
Weighted average of shares redeemed
UBPS pro forma weighted average shares - basic and diluted
		14,319,693		11,519,094

	Six Months Ended June 30, 2012
	Before		Assuming
	Consummation		Redemption of
	of		9,994,625
	Transaction		Shares
UBPS pro forma weighted average shares	14,319,693		4,325,068
Weighted average of shares issued in transactions				4,666,667
Weighted average of shares from warrant conversion				2,527,359
Weighted average of shares redeemed
UBPS pro forma weighted average shares - basic and diluted
		14,319,693		11,519,094

	In connection with the consummation of the transaction, holders of 18,960,000 warrants elected to exchange those warrants for .1333 shares of Common Stock for each warrant for a total of 2,527,359 shares.
	The fully diluted per share data is not shown because the underwriters purchase option to purchase 600,000 units at a price of $6.60 per unit is more than the fair market value of the Common Stock of $5.47.
Note 5	The estimated life and the annual amortization of the intangibles in Note F are shown below:

			Amortization
			for the
			Year ended
	Estimated		December 31,
	Life (Years)		2011
Software and technology		4	$	1,500,000
Customer and supplier relationships		10		3,094,500
			$	4,594,500

Note 6	At the inception of UBPS, UBPS elected to have a fiscal year ending on September 30. As of the closing of the contemplated transactions, UBPS will adopt a fiscal year ending on December 31. The statements of operations of UBPS included herein have been adjusted to reflect a fiscal year ending on December 31.
Note 7	Reflects the elimination of expenses related to the transaction that were previously recorded as general and administrative expenses in the accounts of UBPS as shown below:

Accrued accounting and auditing fees	$	125,000
Expense deposit to banker		50,030
Consulting expenses		16,463
Travel expenses		10,812
Transaction expenses in general and administrative expenses eliminated	$	202,305

Note 8	Adjusts Federal tax expense (benefit) for consolidated tax purposes to an estimated tax rate of 40%.
Note 9	Prior to the transactions, the non controlling interests will be acquired by the controlling stockholders.

(d) Exhibits.

Exhibit Number	Description
2.1	Agreement and Plan of Merger, dated as of July 6, 2012, by and among the Company, JP Merger Sub, LLC JetPay, WLES, L.P. and Trent Voigt (incorporated by reference to UBPS’s Current Report on Form 8-K filed with the United States Securities and Exchange Commission on July 9, 2012.)
2.2	Agreement and Plan of Merger, dated as of July 6, 2012, by and among the Company, ADC Merger Sub, Inc., ADC, PTFS, Carol and C. Nicholas Antich as Joint Tenants, C. Nicholas Antich, Carol Antich, Eric Antich, Lynn McCausland, the B N McCausland Trust, Joel E. Serfass and C. Nicholas Antich, as Representative (incorporated by reference to UBPS’s Current Report on Form 8-K filed with the United States Securities and Exchange Commission on July 9, 2012.)
2.3	Amendment to Agreement and Plan of Merger, dated as of August 9, 2012, by and among Company and JetPay (incorporated by reference to UBPS’s Current Report on Form 8-K filed with the United States Securities and Exchange Commission on August 10, 2012)
2.4	Amendment to Agreement and Plan of Merger, dated as of August 9, 2012, by and among the Company, ADC and PTFS (incorporated by reference to UBPS’s Current Report on Form 8-K filed with the United States Securities and Exchange Commission on August 10, 2012)
2.5	Amendment to Agreement and Plan of Merger, dated as of November 19, 2012, by and among Company and JetPay (incorporated by reference to UBPS’s Current Report on Form 8-K filed with the United States Securities and Exchange Commission on November 20, 2012)
2.6	Amendment to Agreement and Plan of Merger, dated as of December 4, 2012, by and among Company and JetPay (incorporated by reference to UBPS’s Current Report on Form 8-K filed with the United States Securities and Exchange Commission on December 5, 2012)
2.7	Amendment to Agreement and Plan of Merger, dated as of December 24, 2012, by and among the Company, ADC and PTFS (incorporated by reference to UBPS’s Current Report on Form 8-K filed with the United States Securities and Exchange Commission on December 26, 2012)
3.1*	Amended and Restated Certificate of Incorporation of UBPS
10.1*	Note Agreement, dated as of December 28, 2012, by and between UBPS and the Note Investors
10.2*	Form of Transfer Registration Rights Agreement
10.3*	Escrow Termination Agreement, dated as of December 28, 2012, by and between UBPS, Ira Lubert, EarlyBirdCapital, Inc. and the Agent
10.4*	Warrant Termination Agreement, dated as of December 28, 2012, by and between UBPS and the Agent
10.5*	Assumption Agreement, dated as of December 28, 2012, by and between UBPS, Ten Lords, Ltd, and JetPay
10.6*	Loan and Security Agreement, dated as of December 28, 2012, by and between the Borrowers and Metro Bank

26

10.7*	Advisory Agreement, dated as of December 28, 2012, by and between UBPS and ADC
10.8*	Promissory Note, dated as of December 28, 2012
10.9*	Note and Indemnity Side Agreement, dated as of December 28, 2012, by and between UBPS, JP Merger Sub, LLC, WLES, L.P. and Trent Voigt

* Filed herewith

27

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: January 4, 2013
	UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION
	By:	/s/ Bipin C. Shah
		Name: Bipin C. Shah
		Title: Chairman and Chief Executive Officer

28

INDEX TO FINANCIAL STATEMENTS OF UBPS

	Page No.
Balance Sheet	F-1
Statement of Operations	F-2
Statement of Changes in Stockholders’ Equity	F-3
Statement of Cash Flows	F-4
Notes to Financial Statements	F-5

Universal Business Payment Solutions Acquisition Corporation

(A Company in the Development Stage)

Condensed Consolidated Balance Sheet

	September 30,
	2012
Assets
Current assets - Cash and cash equivalents	$	23,692
Cash and cash equivalents held in Trust		68,811,113
Total assets		68,834,805
Liabilities and Stockholder's Equity
Current Liabilities
Accounts payable and accrued expenses	$	257,873
Note Payable		335,000
Total current liabilities		592,873
Common Stock, subject to possible redemption, 10,494,067 shares at Sept 30,
2012 and 10,516,291 at September 30, 2011 at redemption value		63,776,921
Commitments and Contingencies
Stockholder's Equity
Preferred stock, $0.01 par value
Authorized 1,000,000 shares, none issued
Common Stock, $0.001 par value
Authorized 100,000,000 shares; 3,825,626 issued and outstanding at Sept 30, 2012 and
3,825,709 issued and outstanding September 30, 2011		3,826
(which excludes 10,494,067 shares subject to possible redemption at Sept 30, 2012
and 10,516,291 shares subject to possible redemption at September 30, 2011)
Additional paid-in capital		5,165,953
Accumlated deficit		(704,769	)
Total Shareholder's Equity		4,465,011
Total Liabilities and Shareholder's Equity	$	68,834,805

(1) Reflects the cancellation of 450,000 shares of common stock that were forfeited on June 27,2011 by the initial stockholders upon the underwriter's election not to exercise their over-allotment option (Notes 3 and 9).

(2) As a result of repurchases of shares of common stock , in connection with the Share Repurchase Plan (Note 1) through Sept 30, 2011 aggregate shares of common stock subject to possible redemption were 10,516,291 and thriugh September 30, 2012 aggregate shares of common stock subject to possible redemption are 10,494,067.

The accompanying notes are an integral part of these condensed financial statements.

F-1

Universal Business Payment Solutions Acquisition Corporation

(A Company in the Development Stage)

Condensed Consolidated Statement of Operations

				For the Period
	For the Twelve			November 12, 2010
	Months Ended			(Inception) through
	Sept 30, 2012			Sept 30, 2012
Related Party Expense	$	(90,000	)	$	(127,500	)
Operating Cost		(547,029	)		(606,805	)
Total Expense		(637,029	)		(734,305	)
Interest Income		22,217			29,536
Net Loss	$	(614,812	)	$	(704,769	)
Weighted average shares outstanding, basic and diluted		3,825,660			3,826,630
Basic and diluted net loss per share	$	(0.16	)	$	(0.19	)

The accompanying notes are an integral part of these condensed financial statements.

F-2

Universal Business Payment Solutions Acquisition Corporation

(A Company in the Development Stage)

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

For the Period from November 12, 2010 (Inception) to September 30, 2011 and

For the twelve months ended September 30, 2012

							Additional
	Common Stock						Paid-In			Accumulated			Shareholder's
	Shares			Amount			Capital			Deficit			Equity
				(1) (2)
Common stock issued November 12, 2010 (Inception) at $0.00839 per share for cash (1)		3,000,000		$	3,000		$	22,000					$	25,000
Proceeds from issuance of Warrant Offering Warrants on May 13, 2011 at $0.50 per warrant for cash								3,480,000						3,480,000
Sale of 12,000,000 Units on May 13, 2011 at $6.00 per Unit, net underwriter's discount of $2,160,000 for cash and net offering cost.		12,000,000			12,000			69,354,994						69,366,994
Net proceeds subject to possible redemption (11,171,999 shares at redemption value)		(11,171,999	)		(11,172	)		(67,691,142	)					(67,702,314	)
Proceeds from issuance of UPO on May 13, 2011 for cash								100						100
Repurchase of 658,000 units at $5.75 per Unit in accordance with Company's Share Repurchase Plan		(658,000	)		(658	)		(3,796,024	)					(3,796,682	)
Reduction of net proceeds subject to possible redemption (2)		655,708			656			3,796,026						3,796,682
Net Loss											(89,956	)		(89,956	)
Balance at September 30, 2011		3,825,709			3,826			5,165,954			(89,956	)		5,079,824
Repurchase of 22,307 units at $5.75 per Unit in accordance with Company's Share Repurchase Plan		(22,307	)		(22	)		(128,689	)					(128,711	)
Reduction of net proceeds subject to possible redemption (2)		22,224			22			128,689						128,711
Net Loss											(614,812	)		(614,812	)
Balance at September 30, 2012		3,825,626		$	3,826		$	5,165,954		$	(704,768	)	$	4,465,012

(1)	Reflects the cancellation of 450,000 shares of common stock that were forfeited on June 27,2011 by the initial stockholders upon the underwriter's election not to exercise their over-allotment option (Notes 3 and 8).
(2)	As a result of repurchases of shares of common stock through Sept 30, 2012, in connection with the Share Repurchase Plan (Note 1) aggregate shares of common stock subject to possible redemption are 10,494,067.

The accompanying notes are an integral part of these condensed financial statements.

F-3

Universal Business Payment Solutions Acquisition Corporation

(A Company in the Development Stage)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CASH FLOWS

				For the Period
	For the Twelve			November 12, 2010
	Months Ended			(Inception) through
Operating Activities	Sept 30, 2012			Sept 30, 2012
Net loss	$	(614,812	)	$	(704,769	)
Adjustments to reconcile net loss to net cash provided by operating activities
Change in operating assets and liabilities
Accrued expense		243,601			257,874
Net cash used in operating activities		(371,211	)		(446,895	)
Investing Activities
Investment in restrictive cash and cash equivalents		(9,217	)		(72,736,506	)
Amounts from restricted cash and cash equivalents to repurchase shares
of common stock		128,711			3,925,393
Net cash provided by (used in) investing activities		119,493			(68,811,113	)
Financing Activities
Proceeds from sale of common stock to initial shareholders		-			25,000
Proceeds from note payable to affiliate		335,000			460,000
Repayment of note payable to affiliate		-			(125,000	)
Proceeds from public offering		-			72,000,000
Proceeds from issuance of warrants		-			3,480,000
Proceeds from sale of unit purchase option		-			100
Repurchase of Common Stock		(128,711	)		(3,925,393	)
Payment of offering cost		-			(2,633,006	)
Net cash provided by financing activities		206,289			69,281,701
Net (decrease) increase in cash and cash equivalents		(45,428	)		23,693
Cash and cash equivalents, beginning	$	69,121		$	-
Cash and cash equivalents, ending	$	23,693		$	23,693

The accompanying notes are an integral part of these condensed financial statements.

F-4

UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION

(A Company in the Development Stage)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

Note 1—Organization, Business Operations and Liquidity

Universal Business Payment Solutions Acquisition Corporation (the “Company”) was incorporated in Delaware on November 12, 2010 as a blank check company whose objective is to acquire, through a merger, share exchange, asset acquisition, stock purchase, plan of arrangement, recapitalization, reorganization or other similar business combination, one or more operating businesses (a “Business Combination”).

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the accounting and disclosure rules and regulations of the United States Securities and Exchange Commission (“SEC”).

On May 13, 2011 the Company completed its initial public offering of shares of its common stock (the “Offering”). All activity prior to May 13, 2011 relates to the Company’s formation and Public Offering described below. All activity from May 13, 2011 through September 30, 2012 relates to the Company’s activities in seeking a Business Combination.

The Company is considered to be a development stage company and as such, its financial statements are prepared in accordance with the Accounting Standards Codification (‘‘ASC’’) topic 915 ‘‘Development Stage Entities.’’ The Company is subject to all of the risks associated with development stage companies.

The registration statement relating to the Offering was declared effective on May 9, 2011. The Company consummated the Offering on May 13, 2011 and received proceeds net of transaction costs of $69,366,994 which is discussed in Note 3 (“Public Offering”) and $3,480,000 from the private placement of warrants to the initial stockholders of the Company and the underwriters of the Offering (“Insider Warrants”) which is described in Note 4 (“Insider Warrants”). The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Offering and Insider Warrants, although substantially all of the net proceeds are intended to be generally applied toward consummating a Business Combination. The Company’s initial Business Combination must be with a target business whose collective fair value is at least equal to 80% of the balance in the Trust Account (as defined herein) at the time of the execution of a definitive agreement for such Business Combination. Furthermore, there is no assurance that the Company will be able to effect a Business Combination successfully. An amount of $72,720,000 (including the $3,480,000 of proceeds from the sale of Insider Warrants) was placed in a trust account (‘‘Trust Account’’) for the benefit of the Company and invested in United States treasuries having a maturity of 180 days or less until the earlier of (i) the consummation of the Company’s first Business Combination, (ii) the Company’s failure to consummate a Business Combination within the prescribed time and (iii) such time as the Company’s common stock (the “Common Stock”) trades at or below $5.75 per share, subject to certain criteria discussed below. In the event that the Common Stock trades at or below $5.75 per share, there will be released to the Company from the Trust Account amounts necessary for the Company to purchase up to an average of $1,900,000 worth of shares each month up to an aggregate amount of 50% of the shares sold in the Offering (or 6,000,000 shares). Such purchases were eligible to commence on July 10, 2011 pursuant to a share repurchase plan entered into between the Company and Morgan Stanley & Co. Incorporated. The share repurchase plan between the Company and Morgan Stanley & Co. Incorporated was terminated by mutual agreement of the parties on August 8, 2011 and a new share repurchase plan was simultaneously entered into between the Company and Ladenberg Thalmann (the “Share Repurchase Plan”). The Share Repurchase Plan was terminated on May 18, 2012. Purchases under the Share Repurchase Plan were made only in open market transactions pursuant to the Share Repurchase Plan which required the Company to maintain a limit order for the shares at $5.75 per share during the purchase period. All shares purchased by the Company were cancelled and resumed the status of authorized but unissued shares of the Company. As of September 30, 2012, a total of 680,307 shares had been repurchased at a cost of $3,925,393 under the Share Repurchase Plan. The placing of funds in the Trust Account may not protect those funds from third party claims against the Company. Although the Company will seek to have all vendors, prospective target businesses or other entities it engages, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account, there is no guarantee that they will execute such agreements.

F-5

The Company’s Chief Executive Officer has agreed that he will be liable under certain circumstances to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or vendors or other entities that are owed money by the Company for services rendered, contracted for or products sold to the Company. However, there can be no assurance that he will be able to satisfy those obligations should they arise. The remaining net proceeds (not held in the Trust Account) may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. Additionally, the interest earned on the Trust Account balance may be released to the Company to fund working capital requirements as well as for any amounts that are necessary to pay the Company’s tax obligations.

The Company, after signing a definitive agreement for the acquisition of a target business, is required to provide stockholders who acquired shares in the Offering (“Public Stockholders”) with the opportunity to redeem their shares of common stock for a pro rata interest in the Trust Account. In the event that stockholders owning 93.1% (87.5% as adjusted for repurchases through September 30, 2012) or more of the shares sold in the Offering exercise their redemption rights (the “Redemption Threshold”) described below or are sold to the Company for cancellation, the Business Combination will not be consummated. All of the Company’s stockholders prior to the Offering, including all of the officers and directors of the Company (“Initial Stockholders”), have waived any redemption rights they may have in connection with a Business Combination.

With respect to a Business Combination which is consummated, Public Stockholders can demand that the Company redeem their shares of common stock for a full pro rata interest in the Trust Account (initially $6.06 per share and approximately $6.08 per share at September 30, 2012). Accordingly, Public Stockholders holding up to one share less than 93.1% (87.5% as adjusted for repurchases through September 30, 2012) of the aggregate number of shares owned by all Public Stockholders or 10,513,973 shares may seek redemption of their shares in the event of a Business Combination. The Redemption Threshold may be further limited by the terms and conditions of a proposed initial Business Combination. In this event, the Company would disclose the number of shares it purchased and the revised Redemption Threshold in the materials distributed to its stockholders in connection with the vote to approve a Business Combination. Notwithstanding the foregoing, the Restated Certificate of Incorporation of the Company provides that a Public Stockholder, together with any affiliate or other person with whom such Public Stockholder is acting in concert or as a “group” (within the meaning of Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from seeking redemption with respect to an aggregate of more than 10% of the shares sold in the Offering (but only with respect to the amount over 10% of the shares sold in the Offering). A “group” will be deemed to exist if Public Stockholders (i) file a Schedule 13D or 13G indicating the presence of a group or (ii) acknowledge to the Company that they are acting, or intend to act, as a group.

If the Company has not completed a Business Combination by November 9, 2012 or February 9, 2013 if a definitive agreement has been executed by November 9, 2012 but a Business Combination has not been consummated by February 9, 2013, the Company will liquidate and distribute its remaining assets, including the Trust Account, to the Public Stockholders and its corporate existence will cease except for the purpose of winding up its affairs. In the event of a liquidation, the Public Stockholders will be entitled to receive a full pro rata interest in the Trust Account (initially $6.06 per share and approximately $6.08 per share at September 30, 2012), plus any pro rata interest earned on the Trust Account not previously released to the Company. The Company will pay the costs of liquidation from remaining assets outside of the Trust Account. If such funds are insufficient, the Company’s Chief Executive Officer has agreed to advance the funds necessary to complete the liquidation.

F-6

The Company anticipates that in order to fund its working capital requirements, the Company will need to use all of the remaining funds not held in trust, the interest earned on the funds held in the Trust Account, as well as entering into contingent fee arrangements with its vendors. The Company may need to raise additional capital through loans or additional investments from its Initial Stockholders, officers, directors, or third parties. None of the Initial Stockholders, officers or directors is under any obligation to advance funds to, or to invest in, the Company. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of its business plan, and controlling overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Note 2—Significant Accounting Policies

Cash and cash equivalents

The Company considers all short-term investments with a maturity of three months or less when purchased to be cash equivalents. The Company maintains cash balances that at times may be uninsured or in deposit accounts that exceed Federal Deposit Insurance Corporation limits. The Company maintains its cash deposits with major financial institutions.

Restricted cash and cash equivalents held in trust account

The amounts held in the Trust Account represent substantially all of the proceeds of the Offering and are classified as restricted assets since such amounts can only be used by the Company in connection with the consummation of a Business Combination or to repurchase shares.

Loss per share

Loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. 10,513,974 shares of common stock, subject to possible redemption at September 30, 2012, have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate in their pro rata share of the earnings on the Trust Account. Loss per share assuming dilution would give effective to dilutive options, warrants and other potential common shares outstanding during the period. The Company has not considered the effect of warrants to purchase 18,960,000 shares of common stock or the effect of the unit purchase option in the calculation of diluted loss per share, since the exercise of the warrants and the unit purchase are contingent upon the occurrence of future events.

Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets or liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Securities held in Trust Account

At September 30, 2012, investment securities consisted of United States Treasury securities. The Company classified its securities as held-to-maturity in accordance with ASC 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts.

F-7

A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary.

Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion is included in the “interest income” line item in the statements of operations. Interest income is recognized when earned.

Fair value measurements

Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:

● Level 1. Observable inputs such as quoted prices in active markets;

● Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

● Level 3. Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

Assets and liabilities measured at fair value are based on one or more of three valuation techniques identified in the tables below. The valuation techniques are as follows:

(a).	Market approach. Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities;
(b).	Cost approach. Amount that would be required to replace the service capacity of an asset (replacement cost); and

(c). Income approach. Techniques to convert future amounts to a single present amount based on market expectations (including present value techniques, option-pricing and excess earnings models).

Assets Measured at Fair Value on a Recurring Basis

	September 30, 2012		Quoted Prices in Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Restricted cash and cash equivalents held in trust account	$	68,811,113	$	68,811,113	$	-	$	-

F-8

Common stock subject to possible redemption

The Company accounts for its common stock subject to possible redemption in accordance with the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity”. Common stock subject to mandatory redemption (if any) is classified as liability instruments and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered by the Company to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly at September 30, 2012, the common stock subject to possible redemption is presented as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.

Income taxes

The Company accounts for income taxes under ASC 740 Income Taxes (‘‘ASC 740’’). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company is required to file income tax returns in the United States (federal) and in various state and local jurisdictions. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. The evaluation was performed for the 2010 and 2011 tax years, which will be the only periods subject to examination. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in a material changes to its financial position.

The Company’s policy for recording interest and penalties associated with audits is to record such interest and penalties as a component of income tax expense. There were no amounts accrued for penalties or interest as of or during the period from November 12, 2010 (inception) through September 30, 2012. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

Subsequent Events

Management evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the review, Management did not identify any recognized or non-recognized subsequent events, other than those discussed in Note 10–Subsequent Events, that would have required adjustment or disclosure in the financial statements (See Note 10–Subsequent Events).

F-9

Note 3—Public Offering

On May 13, 2011 the Company sold 12,000,000 units (“Units”) at a price of $6.00 per unit in the Offering. Each unit consists of one share of the Company’s common stock, par value $0.001, and one warrant (“Warrants”). Each Warrant entitles the holder to purchase one share of the Company’s common stock at a price of $6.90 commencing on the later of the Company’s completion of a Business Combination and May 9, 2012 and expires on the earlier of (i) five years from the completion of a Business Combination, (ii) the liquidation of the Trust Account if the Company has not completed a business combination within the required time period or (iii) earlier redemption of the Warrant. The Company may redeem the Warrants at a price of $0.01 per Warrant upon 30 days notice while the Warrants are exercisable, only in the event that the last sale price of the shares of common stock is at least $9.50 per share for any 20 trading days within a 30 trading day period ending on the third day prior to the date on which notice of redemption is given and there is a current registration statement in effect with respect to the shares of common stock underlying such Warrants commencing five business days prior to the 30-day trading period and continuing each day thereafter until the date of redemption. If the Company redeems the Warrants as described above, management will have the option to require any holder that wishes to exercise his Warrant to do so on a “cashless basis.” In such event, the holder would pay the exercise price by surrendering his Warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of (i) the number of shares of common stock underlying the Warrants, and (ii) the difference between the exercise price of the Warrants and the ‘‘fair market value’’ (defined below) by (y) the fair market value. The ‘‘fair market value’’ shall mean the average reported last sale price of the shares of common stock for the five trading days ending on the third trading day prior to the date on which the notice of redemption is sent to holders of Warrants. In accordance with the warrant agreement relating to the Warrants sold and issued in the Offering, the Company is only required to use its best efforts to maintain the effectiveness of the registration statement covering the Warrants. The Company will not be obligated to deliver securities, and there are no contractual penalties for failure to deliver securities, if a registration statement is not effective at the time of exercise. Additionally, in the event that a registration statement is not effective at the time of exercise, the holder of such Warrant shall not be entitled to exercise such Warrant and in no event (whether in the case of a registration statement not being effective or otherwise) will the Company be required to net cash settle the Warrant exercise. Consequently, the Warrants may expire unexercised and unredeemed. Notwithstanding the foregoing, if the Company has not filed with the Securities and Exchange Commission a registration statement covering the shares issuable upon exercise of the Warrants by the 6-month anniversary of the consummation of its initial Business Combination, commencing on that day, Warrant holders may, until such time as there is an effective registration statement, exercise Warrants on a cashless basis, provided that such cashless exercise is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The Company does not believe that such an exemption is currently available.

The Company paid the underwriters of the Offering an underwriting discount of 3.0% of the gross proceeds of the Offering ($2,160,000). The Company also issued a unit purchase option, for $100, to EarlyBirdCapital, Inc. (“EBC”) or its designees to purchase 600,000 units at an exercise price of $6.60 per unit. The units issuable upon exercise of this option are identical to the units sold in the Offering, with the exception of containing a provision for cashless exercise by EBC. The Company has accounted for the fair value of the unit purchase option, inclusive of the receipt of the $100 cash payment, as an expense of the Offering resulting in a charge directly to stockholders’ equity. The Company estimates that the fair value of this unit purchase option is approximately $1,053,551 (or $1.76 per unit) using a Black-Scholes option-pricing model. The fair value of the unit purchase option granted to EBC is estimated as of the date of grant using the following assumptions: (1) expected volatility of 35.0%, (2) risk-free interest rate of 2.07% and (3) expected life of five years. The unit purchase option may be exercised for cash or on a “cashless” basis, at the holder’s option (except in the case of a forced cashless exercise upon the Company’s redemption of the Warrants, as described above), such that the holder may use the appreciated value of the unit purchase option (the difference between the exercise prices of the unit purchase option and the underlying Warrants and the market price of the Units and underlying shares of common stock) to exercise the unit purchase option without the payment of any cash. The Company will have no obligation to net cash settle the exercise of the unit purchase option or the Warrants underlying the unit purchase option. The holder of the unit purchase option will not be entitled to exercise the unit purchase option or the Warrants underlying the unit purchase option unless a registration statement covering the securities underlying the unit purchase option is effective or an exemption from registration is available. If the holder is unable to exercise the unit purchase option or underlying Warrants, the unit purchase option or Warrants, as applicable, will expire worthless.

F-10

Note 4—Insider Warrants

Simultaneously with the Offering, certain of the Initial Stockholders and the underwriters of the Offering purchased 6,960,000 Insider Warrants at $0.50 per warrant (for an aggregate purchase price of $3,480,000) from the Company. All of the proceeds received from these purchases were placed in the Trust Account. The Insider Warrants are identical to the warrants underlying the Units sold in the Offering except that: (i) the Insider Warrants were purchased pursuant to an exemption from the registration requirements of the Securities Act, (ii) the Insider Warrants are non-redeemable and (iii) the Insider Warrants are exercisable on a ‘‘cashless’’ basis, in each case, if held by the initial holders or permitted assigns. The transfer restriction does not apply to transfers made pursuant to an effective registration statement or an exemption that is occasioned by operation of law or for estate planning purposes, while remaining in escrow.

The Initial Stockholders and the holders of the Insider Warrants (or underlying shares of common stock) are entitled to registration rights with respect to their founding shares and the Insider Warrants (or underlying shares of common stock) pursuant to agreements signed May 13, 2011. The holders of the majority of the founding shares are entitled to demand that the Company register these shares at any time commencing three months prior to the first anniversary of the consummation of a Business Combination. The holders of the Insider Warrants (or underlying shares of common stock) are entitled to demand that the Company register these securities at any time after the Company consummates a Business Combination. Pursuant to the terms of the unit purchase option, the holders of the unit purchase option will be entitled to registration rights with respect to the securities. In addition, the Initial Stockholders and holders of the Insider Warrants (or underlying shares of common stock) have certain “piggy-back” registration rights on registration statements filed after the Company’s consummation of a Business Combination.

Note 5—Investment in Trust Account

Subsequent to the Offering, the net proceeds of the Offering totaling $72,720,000 were deposited into an interest-bearing trust account and invested only in United States “government securities” (within the meaning of Section 2(a)(16) of the Investment Company Act of 1940) having a maturity of 180 days or less until the earlier of either (i) the consummation of a Business Combination or (ii) liquidation of the Company.

As of September 30, 2011, investment securities in the Company’s Trust Account consisted of $10,000,000 in United States Treasury Bills and $58,811,113 in a “held as cash” account. The Company classifies its United States Treasury and equivalent securities as held-to-maturity in accordance with FASB ASC 320, “Investments – Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying balance sheets and adjusted for the amortization or accretion of premiums or discounts. The carrying amount, excluding accrued interest income, gross unrealized holding gains and fair value of held-to-maturity securities at September 30, 2012 are as follows:

	Carrying Amount		Unrealized Holding Gains		Fair Value
Held-to-Maturity U.S. Treasury Securities	$	10,000,000	$	-	$	10,000,000

Note 6—Notes Payable to Stockholders

From December 6, 2010 through August 20, 2012, the Company issued a series of principal amount unsecured promissory notes to UBPS Services, LLC, an entity controlled by Mr. Shah totaling $372,500. These notes are non-interest bearing and are payable on the earlier of their anniversary or the consummation of an initial business combination.

F-11

Note 7—Commitments

The Company granted the underwriters of the Offering a 45 day option to purchase up to an additional 1,800,000 Units to cover over-allotments, if any. The underwriters elected not to exercise the over-allotment option and the over-allotment option expired on June 27, 2011.

The Company presently occupies office space provided by an affiliate of the Company’s Chairman and Chief Executive Officer. Such affiliate has agreed that, until the Company consummates a Business Combination, it will make such office space as well as certain office and secretarial services available to the Company, as may be required by the Company from time to time. The Company has agreed to pay such affiliate an aggregate of $7,500 per month for such services commencing on May 9, 2011. Aggregate payments made under this agreement amounted to $127,599 as of September 30, 2012.

Pursuant to letter agreements executed May 13, 2011 among the Company and the underwriters of the Offering, the Initial Stockholders have waived their right to receive distributions with respect to their founding shares upon the Company’s liquidation.

The Company has engaged EBC on a non-exclusive basis to act as its advisor and investment banker in connection with its initial Business Combination. EBC will provide the Company with assistance in negotiating and structuring the terms of its initial Business Combination. The Company will pay EBC a cash fee of $2,070,000 for such services upon the consummation of its initial Business Combination.

Note 8 — Income Taxes

The Company’s deferred tax assets are as follows at September 30, 2012:

Net operating loss carryforwards	$	281,908
Total deferred tax assets	$	281,908
Less: valuation allowance		(281,908	)
Net deferred tax assets		-

The Company has a net operating loss of approximately $704,769 that expires in 2032. The ultimate realization of the net operating loss is dependent upon future taxable income, if any, of the Company and may be limited in any one period by alternative minimum tax rules. Although management believes that the Company will have sufficient future taxable income to absorb the net loss carryovers before the expiration of the carryover period, there may be circumstances beyond the Company’s control that limit such utilization. Accordingly, management has determined that a full valuation allowance of the deferred tax asset is appropriate as of September 30, 2012.

Internal Revenue Code Section 382 imposes limitations on the use of net operating loss carryovers when the stock ownership of one or more 5% shareholders (shareholders owning more than 5% of the Company’s outstanding capital stock) has increased on a cumulative basis more than 50 percentage points within a period of two years. Management cannot control the ownership changes occurring as a result of public trading of the Company’s Common Stock. Accordingly, there is a risk of an ownership change beyond the control of the Company that could trigger a limitation of the use of the loss carryover.

The Company established a valuation allowance of $281,908 as of September 30, 2012, which fully offset the deferred tax asset of $281,908. The deferred tax asset results from applying an effective combined federal and state tax rate of 40% to the net operating losses of approximately $704,769. Effective tax rates differ from statutory rates.

F-12

A reconciliation of the statutory tax rate to the Company’s effective tax rate as of September 30, 2012 is as follows:

Tax benefit at federal statutory rate	(34.0	)%
State income tax	(6.0	)%
Increase in valuation allowance	40.0	%
Effective income tax rate	-	%

Note 9—Shareholders’ Equity

Preferred Stock

The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors.

As of September 30, 2012, there are no shares of preferred stock issued or outstanding.

Common Stock

The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.001 per share.

In connection with the organization of the Company, on December 6, 2010, a total of 3,450,000 shares of the Company’s shares of common stock were sold to the Initial Stockholders at a price of $0.00725 per share for an aggregate of $25,000.

On August 10, 2011, the Company repurchased 329,000 shares of its common stock under the Share Repurchase Plan, and on September 1st, 6th, and 12th the Company repurchased an additional 329,000 shares in aggregate. On October 27 the Company repurchased an additional 2,328 shares, and the Company repurchased an additional 19,979 shares on March 14, 2012. All such shares were purchased at the price of $5.75 per share in accordance with the Share Repurchase Plan. A total of $3,925,393 was withdrawn from the Company’s trust account to complete such repurchases. The repurchased shares were subsequently cancelled.

As of September 30, 2012, 14,319,693 shares of common stock were issued and outstanding, following the cancellation of 450,000 shares which were forfeited by the Initial Shareholders upon the underwriters’ election not to exercise their over-allotment option; and the repurchase and subsequent cancellation of 658,000 shares under the Company’s Share Repurchase Plan. In addition, 750,000 of such shares are subject to forfeiture in the event that the Company does not satisfy the conditions required to redeem any outstanding Warrants as described in Note 3.

Note 10—Subsequent Events

The Company issued a series of unsecured promissory notes to UBPS Services, LLC, an entity controlled by one of the Initial Stockholders, Bipin Shah on October 9, November 13, November 28 and December 6, 2012 in the amounts of $7,000, $15,000, $29,379.81, and 44,500 respectively. . These notes are non-interest bearing and are payable on the earlier of their first anniversary or the consummation of an initial business combination.

The Company filed its Proxy Statement on Schedule 14/A and amendments thereto on October 30, 2012, November 9, 2012, and November 13, 2012.

On November 13, 2012, the Company filed with the SEC its Definitive Proxy Statement, This statement invited all of the Company’s stockholders and warrant holders as of November 9, 2012 (the “record date”) to attend a special meeting of the Company’s stockholders and warrant holders, which was on December 11, 2012. At the special meeting the Company’s stockholders and warrant holders, as appropriate, were asked to”

F-13

(i) adopt:

(a) the Agreement and Plan of Merger, dated as of July 6, 2012 and as amended on August 9, 2012, by and among the Company, JP Merger Sub, LLC (the “JetPay Merger Sub”), JetPay, LLC (“JetPay”), WLES, L.P., (“WLES”) and solely for purposes of Sections 6.12 and 9.9 therein, Trent Voigt and the partners of WLES (the “JetPay Agreement”), and approve the transactions contemplated thereby, pursuant to which, through a series of transactions, JetPay will become a wholly-owned subsidiary of the Compay in exchange for $40 million in cash and Company common stock upon closing of the transaction and up to $10 million in cash and Company common stock upon the occurrence of certain events (the “JetPay Proposal”);

(b) the Agreement and Plan of Merger, dated as of July 6, 2012 and as amended on August 9, 2012, by and among the Company, Enzo Merger Sub, Inc. (the “EMS Merger Sub”), Francis David Corporation d/b/a Electronic Merchant Systems (“EMS”), the stockholders of EMS and James Weiland, as representative of the stockholders of EMS (the “EMS Agreement”), and approve the transactions contemplated thereby, pursuant to which, through a series of transactions, EMS will become a wholly-owned subsidiary of the Company in exchange for $80 million in cash and Company common stock upon closing of the transaction, $10 million in cash to be released on the 18-month anniversary of the closing and up to $15 million in cash and Company common stock upon the occurrence of certain events (the “EMS Proposal”); and

(c) the Agreement and Plan of Merger, dated as of July 6, 2012 and as amended on August 9, 2012, by and among the Company, ADC Merger Sub, Inc. (the “ADC Merger Sub”), AD Computer Corporation (“ADC”), Payroll Tax Filing Services, Inc. (“PTFS”), Carol and C. Nicholas Antich as Joint Tenants, C. Nicholas Antich, Carol Antich, Eric Antich, Lynn McCausland, the B N McCausland Trust, Joel E. Serfass and C. Nicholas Antich, as representative of the stockholders of ADC and PTFS (the “ADC Agreement”), and approve the transactions contemplated thereby, pursuant to which, through a series of transactions, ADC will become a wholly-owned subsidiary of the Company in exchange for $22 million in cash and Company common stock upon closing of the transaction and $2 million in cash payable on the 24-month anniversary of the closing (the “ADC Proposal” and together with the JetPay Proposal and the EMS Proposal, the “Acquisition Proposals”);

(ii) adopt separate proposals for changes to the Restated Certificate of Incorporation of the Company (the “Charter”) to: (a) allow the size of the board of directors of the Company to be set by resolution of the Company’s board of directors; (b) delete various provisions applicable only to special purpose acquisition corporations prior to the completion of a business combination transaction that are currently contained in Article Six of the Charter; (c) arrange the Company’s board of directors into three classes of directors, whereby the directors serve for three-year staggered terms of office; (d) require an affirmative vote of the holders of at least 66.67% of the voting power of the voting stock of the Company in order to adopt amendments to the Charter or the bylaws of Company; (e) make the Company’s corporate existence perpetual; and (f) make certain other changes including, but not limited to: (i) elimination of any preemptive rights of the Company’s stockholders, (ii) limiting the liability of the board of directors to the fullest extent permitted by law, (iv) changes to the Company’s indemnification obligations to the board of directors, (v) permitting uncertificated shares; (vi) specifying that Delaware is exclusive jurisdiction for certain actions, (vii) changes to include provisions regarding no action by written consent, special meetings of stockholders and election of directors by written ballots, (viii) changes to specify that the provisions of the Charter are severable and other grammatical changes and language-clarifying changes (each, a “Charter Proposal” and collectively, the “Charter Proposals”);

(iii) approve the termination of the warrant agreement (the “Warrant Agreement”) that governs all of the Company’s warrants and conversion of each issued and outstanding warrant into .1333 shares of Company common stock (the “Warrant Proposal”); and

F-14

(iv) approve, if necessary or appropriate, the adjournment of the special meeting of the Company’s stockholders to solicit additional proxies if there are insufficient votes at the time of the meeting to approve the Acquisition Proposals and the Charter Proposals (the “Stockholder Adjournment Proposal”).

If some but not all of the Acquisition Proposals are approved, UBPS may consummate any combination of the transactions contemplated by the approved Acquisition Proposals that would result in the acquisition of businesses whose fair value, as measured by the market value of the consideration paid under such proposals on July 6, 2012, is at least equal to $55,042,046, or 80% of the value of the funds being held in trust by the Company as of July 6, 2012 (the “Minimum Acquisition”). The Company intends to consummate each of the Acquisition Proposals that are approved by the Company’s stockholders and for which the conditions to consummation have been satisfied and its board of directors has not ascribed any particular preference to one of the proposed deals over any of the others. If all of the Company’s conditions to closing each of the Acquisitions Agreements have been satisfied, the Company could be subject to damages if it chose not to close such transaction for whatever reason. Consummation of the Charter Proposals and the Warrant Proposal are contingent upon the approval and consummation of the Acquisition Proposals constituting the Minimum Acquisition.

The Company’s Initial Stockholders have agreed, with respect to each of the Acquisition Proposals, to vote their 3,000,000 shares of Company common stock acquired prior to the Offering, representing an aggregate of approximately 21.0% of the outstanding shares of the Company’s common stock, in accordance with the vote of the majority of the common stock sold in the Offering. The Initial Stockholders also intend to vote all of their shares of the Company’s common stock “FOR” each of the Charter Proposals, the Warrant Proposal and Stockholder Adjournment Proposal.

Pursuant to the Charter, in connection with the Acquisition Proposals, the Company is providing all holders of shares of its common stock issued as part of the units in the Offering (the “Public Shares”) with the opportunity to have their Public Shares redeemed in connection with the Acquisition Proposals pursuant to, and subject to the limitations set forth in the Charter, for cash equal to the applicable redemption price per share determined in accordance with the Charter (a “Redemption”). If the holders of 93.1% (87.5% as adjusted for repurchases) or more of the Company’s Common Stock issued in the Offering demand a Redemption, then, in accordance with the terms of the Charter, the Company will not consummate the proposed transactions. The Company’s common stock, units and public warrants are listed on the NASDAQ Capital Market under the symbol “UBPS,” “UBPSU” and “UBPSW,” respectively.

On November 19, 2012, the Company entered into the Second Amendment to the JetPay Agreement (the “Second Amendment”), pursuant to which the relevant parties amended two provisions of the JetPay Agreement. First, the provision obligating the Company to pay $5,000,000 in cash upon a consummation of a redemption of the Company’s public warrants was amended so that such consideration is now payable if and when the trading price of the Company’s common stock is at least $9.50 per share for any 20 trading days out of a 30 trading day period. Second, the Second Amendment changed the date on which both parties could terminate the agreement if the closing of the transaction had not occurred, from November 15, 2012 to December 31, 2012.

On December 4, 2012, the Company and JetPay entered into the Third Amendment to the JetPay Agreement (the “Third Amendment”), pursuant to which the relevant parties amended the consideration due and payable at closing. Pursuant to the Third Amendment, for every share in excess of 4,740,746 shares of Company common stock that is to be redeemed for a pro rata portion of the funds held in trust, the cash consideration to be paid into the escrow account established at JPMorgan Chase Bank, N.A. at closing will be reduced by the product of such excess redemptions and $6.08, up to a maximum of $10,000,000 and the merger consideration to be paid into such escrow account will be increased by the lesser of (i) the product of such excess redemptions and $6.08, divided by $6.00 and (ii) 1,666,667 shares.

On December 11, 2012, the Company, Enzo Merger Sub, Inc. and the Francis David Corporation d/b/a Electronic Merchant Systems mutually agreed to terminate that certain Agreement and Plan of Merger, dated as of July 6, 2012, among the Company, Enzo Merger Sub, Inc., EMS, the stockholders of EMS and James Weiland, as Representative.

F-15

On December 11, 2012, the Company held a special meeting of its warrant holders at which such warrant holders voted to adopt the proposal to approve the termination of the warrant agreement that governs all of the Company’s issued and outstanding warrants and the conversion of each issued and outstanding warrant of the Company into .1333 shares of the Company’s common stock. The consummation of this proposal is contingent upon consummation of certain of the acquisition proposals described in the Definitive Proxy Statement the Company filed with the Securities and Exchange Commission on November 13, 2012 on Schedule 14A. The final voting results were as follows:

	For			Against			Abstain/Withhold
Number of votes		13,159,682			232,500			1,500
Percentage of shares outstanding and entitled to vote		98.25	%		1.74	%		0.01	%

On December 17, 2012, the Company entered into agreements with two investment advisory clients of Wellington Management Company, LLP: (i) an Option Issuance Agreement (the “Bermuda Issuance Agreement”) by and among the Company, Wolf Creek Investors (Bermuda) L.P. (“Bermuda”) and each of Bipin C. Shah, Peter Davidson, Frederick S. Hammer, Arthur F. Ryan, Robert Palmer, Richard S. Braddock, Jonathan M. Lubert and Ira Lubert (collectively, the “Grantors”) and (ii) an Option Issuance Agreement (the “Partners Issuance Agreement” and together with the Bermuda Issuance Agreement, the “Issuance Agreements”) by and among the Company, Wolf Creek Partners, L.P. (“Partners”) and each of the Grantors.

Pursuant to the Bermuda Issuance Agreement, the Grantors agreed that if (i) the transactions contemplated by (A) the JetPay Agreement and (B) the ADC Agreement are consummated and (ii) in connection with the proposed transactions, Bermuda does not exercise its rights to redeem its shares of Company common stock for its pro rata share of the funds being held in the trust account established in connection with the Company’s Offering (“Redemption Rights”), the Grantors will, at the closing of the proposed transactions, issue to Bermuda an immediately exercisable option to purchase an aggregate of 188,384 shares of Company common stock owned by the Grantors at an exercise price of $0.005 per share.

Pursuant to the Partners Issuance Agreement, the Grantors agreed that if (i) the proposed transactions are consummated and (ii) in connection with the proposed transactions, Partners does not exercise its Redemption Rights, the Grantors will, at the closing of the proposed transactions, issue to Partners an immediately exercisable option to purchase an aggregate of 198,427 shares of Company common stock owned by the Grantors at an exercise price of $0.005 per share.

Each of the options will have an exercise period of five years. Both options prevent the holder from exercising the option to the extent (and only to the extent) that such exercise would result in beneficial ownership by such holder or any of its affiliates of more than 9.9% of the outstanding Company common stock. The Issuance Agreements contain the form of option to be granted to each of Bermuda and Partners by the Grantors as an exhibit.

The Grantors are obligated to deposit the aggregate number of shares that may be issued under each of the options that may be issued under the Issuance Agreements in an escrow account to be maintained by Continental Stock Transfer & Trust Company no later than December 20, 2012. The form of Escrow Agreement to be entered into among the Grantors, Bermuda, Partners and Continental Stock Transfer & Trust Company is an exhibit to each of the Issuance Agreements.

Pursuant to the Issuance Agreements, the Company agreed to file a registration statement covering resale of the shares that may be issued upon exercise of options no later than 30 days after consummation of the proposed transactions. The Company must use its reasonable best efforts to have such registration statement declared effective by the Securities and Exchange Commission as soon as possible and within certain time frames specified in the Issuance Agreements.

F-16

Pursuant to the Issuance Agreements, the Company also represented that until the proposed transactions are consummated there are material conditions to the consummation of the Transaction and agreed that the consummation of the proposed transactions will in no event occur prior to December 28, 2012.

On December 24, 2012, the Company, ADC and PTFS entered into the Second Amendment to the ADC Agreement (the “ADC Amendment”), pursuant to which the parties amended one of the representations being made by the Company with respect to its capitalization after the consummation of a business combination. In connection with amending such representation, a closing condition was added giving ADC the right to terminate the ADC Agreement if any material changes to the pro forma capitalization were made that were materially adverse to selling stockholders of ADC in the aggregate. The parties also agreed to specify the treatment of certain indebtedness and to extend the date on which the parties could terminate the ADC Agreement until December 31, 2012.

On December 27, 2012, the Company held a special meeting of its stockholders at which such stockholders voted to adjourn the special meeting until December 28, 2012 at 11:00 A.M., local time, at its original location. The final voting results were as follows:

	For			Against			Abstain/Withhold
Number of votes		11,870,327			458,308			482,537
Percentage of shares outstanding and entitled to vote		92.66	%		3.58	%		3.77	%

On December 28, 2012, the Company held a special meeting of its stockholders at which such stockholders voted to adopt the JetPay and ADC Agreements and approve the amendments to the Charter. The final voting results were as follows:

Proposal to Adopt the Jet Pay Agreement:

	For			Against			Abstain/Withhold
Number of votes		12,025,077			439,308			481,567
Percentage of shares outstanding and entitled to vote		92.89	%		3.39	%		3.72	%

Proposal to Adopt the ADC Agreement:

	For			Against			Abstain/Withhold
Number of votes		12,025,077			439,308			481,567
Percentage of shares outstanding and entitled to vote		92.89	%		3.39	%		3.72	%

Proposal to Amend the Charter to Allow the Board to Set the Size of the Board:

	For			Against			Abstain/Withhold
Number of votes		10,193,177			439,308			2,313,467
Percentage of shares outstanding and entitled to vote		78.74	%		3.39	%		17.87%

Proposal to Amend the Charter to Remove Provisions Only Applicable to Special Purchase Acquisition Corporations :

	For			Against			Abstain/Withhold
Number of votes		9,293,277			1,335,208			2,317,467
Percentage of shares outstanding and entitled to vote		71.79	%		10.31	%		17.90%

F-17

Proposal to Amend the Charter to Provide for a Classified Board:

	For			Against			Abstain/Withhold
Number of votes		10,189,177			443,308			2,313,467
Percentage of shares outstanding and entitled to vote		78.71	%		3.42	%		17.87%

Proposal to Amend the Charter to Require 66.67% Majority to Amend the Charter or Bylaws:

	For			Against			Abstain/Withhold
Number of votes		9,293,277			1,339,208			2,313,467
Percentage of shares outstanding and entitled to vote		71.79	%		10.34	%		17.87%

Proposal to Amend the Charter to Make the Company’s Existence Perpetual:

	For			Against			Abstain/Withhold
Number of votes		9,295,277			1,337,208			2,313,467
Percentage of shares outstanding and entitled to vote		71.80	%		10.33	%		17.87%

Proposal to Amend the Charter to Make other Changes:

	For			Against			Abstain/Withhold
Number of votes		9,291,277			1,341,208			2,313,467
Percentage of shares outstanding and entitled to vote		71.77	%		10.36	%		17.87%

On December 28, 2012, pursuant to the ADC Agreement and the JetPay Agreement, ADC Merger Sub and JetPay Merger Submerged with and into ADC and JetPay, respectively, with ADC and JetPay surviving such mergers. In connection with the closing, the Company caused $16 million in cash to be delivered to the stockholders of ADC and approximately $6.8 million to WLES, L.P., JetPay’s sole member. Additionally, the Company issued 1 million shares of Common Stock to the stockholders of ADC and 3,666,667 shares of Common Stock to WLES, L.P., 3,333,333 of which was deposited in an escrow account to secure the obligations of WLES, L.P. under the JetPay Agreement.

In order to finance a portion of the proceeds payable in the Proposed Transactions, on December 28, 2012, the Company entered into a Secured Convertible Note Agreement (the “Note Agreement”) with Special Opportuntiies Fund, Inc., R8 Capital Partners, LLC, Bulldog Investors General Partnership, Ira Lubert, Mendota Insurance Company and American Services Insurance Company, Inc. (collectively, the “Note Investors”)pursuant to which, the Company issued $10 million in promissory notes secured by 50% of the Company’s ownership interest in JetPay. In connection with the Note Agreement, the Company entered into separate Secured Convertible Promissory Notes with each of the Note Investors (the “Notes”). Amounts outstanding under the Notes will accrue interest at a rate of 12% per annum. The Notes mature on the earlier of December 31, 2014 and consummation of $10 million in debt or equity financing by the Company. The Notes are not prepayable.

Pursuant to the Notes, the Note Investors will be entitled to convert all or any amounts outstanding under the Notes into shares of Common Stock at a conversion price of $5.15 per share, subject to certain adjustments.

F-18

In connection with the Note Agreement, the Company entered into Registration Rights Agreements on December 28, 2012 with each of the Note Investors, pursuant to which the Company agreed to provide registration rights with respect to the common shares issuable upon conversion whereby the Note Investors would be entitled up to three “demand” registration requests and unlimited “piggyback” registration requests. To the extent a registration for the shares has not been declared effective by June 30, 2013, the conversion price will be reduced by $0.15 per share with additional reductions of $0.05 per share for every 30 day delay thereafter until a registration has been declared effective.

In connection with the Notes, certain stockholders of the Company agreed to transfer up to approximately 840,000 shares of Common Stock that they acquired prior to Public Offering to certain of the Note Investors. Such shares were previously held in an escrow account established at the time of the Public Offering pursuant to Stock Escrow Agreements, each dated as of May 13, 2011, among each such stockholder, the Company and Continental Stock Transfer & Trust Company. Following the proposed transfers, such shares will no longer be held in escrow. As part of such share issuance, the Company entered into Registration Rights Agreements, dated as of December 28, 2012, with such investors which entitle such investors to up to three “demand” registration requests and unlimited “piggyback” registration requests.

As partial consideration for Mr. Lubert to enter into the Note Agreement, the Company agreed, pursuant to the Stock Escrow Termination Agreement, dated as of December 28, 2012, to terminate the Stock Escrow Agreement, dated as of May 13, 2011, among Mr. Lubert, the Company and Continental Stock Transfer & Trust Company, with respect to 826,000 common shares.

In order to finance the proposed transactions, on December 28, 2012, the Company also entered into an Amendment, Guarantee and Waiver Agreement (the “Assumption Agreement”) with JetPay and Ten Lords Ltd. Pursuant to the Assumption Agreement, the Company agreed to guarantee JetPay’s obligations with respect to an existing loan agreement between JetPay, Ten Lords, Ltd. and Providence Interactive Capital, LLC (collectively, the “Payees”). JetPay also agreed to compensate the Payees for any negative tax consequences as a result of the existing note remaining outstanding after December 31, 2012. Amounts outstanding under the loan will be convertible at the holders’ option into shares of Common Stock at a conversion price of $6.00 per share, unless JetPay is in default under the loan agreement, in which case, amounts outstanding under the loan agreement can be converted at the lower of (i) $6.00 per share and (ii) the average trading price of shares of Common Stock for the ten trading days prior to the delivery of notice requesting such conversion. JetPay also agreed to increase the interest rate on amounts outstanding under the loan to 9.5% for the first 180 days after the execution of the Assumption Agreement and 13.5% thereafter.

In exchange, Ten Lords Ltd agreed to consent to the transactions contemplated by the JetPay Agreement. JetPay was obligated to pay any amounts still outstanding on the existing loan in excess of $6 million upon closing of the transactions contemplated by the JetPay Agreement. All amounts outstanding under the loan agreement must be repaid within one year.

On December 28, 2012, ADC and Payroll Tax Filing Services, Inc. (“PTFS”, together with ADC, the “Borrowers”), as borrowers, entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with Metro Bank as the lender for a term loan with a principal amount of $9,000,000. Amounts outstanding under the notes will accrue interest at a rate of 4% per annum. The loan matures on December 28, 2019 and amortizes over the course of the loan in equal monthly installments.

The loans are guaranteed by the Company and are secured by all assets of ADC and PTFS, as well as a pledge by the Company of its ownership of ADC. The Loan and Security Agreement contains affirmative and negative covenants, including limitations on the incurrence of indebtedness, liens, transactions with affiliates and other customary restrictions for loans of this type and size. The Borrowers are also subject to financial covenants related to their debt coverage ratio and total leverage ratio during the term of the loan. The loans may be prepaid at the option of the Borrowers without any premium or penalty and are subject to mandatory prepayments upon certain asset sales, casualty events, the incurrence of indebtedness and issuance of capital stock.

F-19

A D COMPUTER CORPORATION

BALANCE SHEETS

SEPTEMBER 30, 2012 AND 2011 (unaudited)

	2102			2011
	(Unaudited)			(Unaudited)
ASSETS
Current Assets
Cash and Cash Equivalents	$	1,892,828		$	2,687,982
Accounts Receivable		89,045			86,128
Inventory		128,147			117,469
Employee Advances		750			450
Prepaid Expenses		88,879			74,575
Total current assets		2,199,649			2,966,604
Property and Equipment, net		588,892			247,874
Other Assets
Goodwill		14,000			14,000
Intangibles, net		33,361			39,394
		47,361			53,394
Total Assets	$	2,835,902		$	3,267,872
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable		106,716			54,965
Accrued Liabilities		296,555			269,861
Deferred Revenue		-			-
Total Current Liabilities		403,271			324,826
Long-Term Liabilities		-			-
Total Liabilities		403,271			324,826
Members' Equity
Common Stock, 100,000 shares authorized each of voting and nonvoting, 59,734 of voting issued and 27,010 shares of nonvoting issued and outstanding.  Voting - $.10 par value, Nonvoting - no par value		5,974			5,974
Additional Paid-in capital		37,853			37,853
Retained Earnings		2,541,054			3,051,469
Less: Treasury stock (32,724 shares of voting shares), at cost		(152,250	)		(152,250	)
Total stockholders' equity		2,432,631			2,943,046
Total Liabilities and Members' Equity	$	2,835,902		$	3,267,872

F-20

A D COMPUTER CORPORATION

STATEMENTS OF INCOME

NONE MONTHS ENDING SEPTEMBER 30, 2012 AND 2011 (unaudited)

	2012		2011
	(Unaudited)		(Unaudited)
Revenue
Sales	$	7,727,678	$	7,615,047
Cost of goods sold		3,309,182		3,072,423
Gross profit		4,418,496		4,542,624
Operating expenses	$	3,454,285	$	3,066,856
Operating income		964,211		1,475,768
Other income (loss)		-		-
Interest and dividends		452		905
Realized gain (loss) on sale of fixed assets		1,593		-
Total other income (loss)		2,045		905
Income before taxes		966,256		1,476,673
Provision for income taxes		-		-
Net income	$	966,256	$	1,476,673

F-21

A D COMPUTER CORPORATION

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

NINE MONTHS ENDING SEPTEMBER 30, 2012 AND 2011 (unaudited)

			Additional								Total
	Common		Paid-in		Treasury			Retained			Stockholders'
	Stock		Capital		Stock			Earnings			Equity
Balance January 1, 2011	$	5,974	$	37,853	$	(152,250	)	$	1,752,824		$	1,644,401
Net Income - 2011		-		-		-			1,126,506			1,126,506
Stockholder distributions		-		-		-			(200,418	)		(200,418	)
Balance - September 30, 2012	$	5,974	$	37,853	$	(152,250	)	$	2,678,912		$	2,570,489
Balance January 1, 2012	$	5,974	$	37,853	$	(152,250	)	$	2,202,851		$	2,094,428
Net income - 2012		-		-		-			966,256			966,256
Stockholder distributions		-		-		-			(117,638	)		(117,638	)
Balance September 30, 2012	$	5,974	$	37,853	$	(152,250	)	$	3,051,469		$	2,943,046

F-22

A D COMPUTER CORPOTATION

STATEMENTS OF CASH FLOWS

NINE MONTHS ENDING SEPTEMBER 30, 2012 AND 2011 (unaudited)

	2102			2011
	(Unaudited)			(Unaudited)
Operating Activities
Net income	$	966,256		$	1,476,673
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		39,822			33,014
Gain from disposal of equipment		-
Decrease in accounts receivable		698,548			723,262
Decrease in inventoru		-			-
Increase in employee advances		(150	)		1,925
Increase in prepaid expenses		(48,346	)		(29,384	)
Increase (decrease) in accounts payable		(50,183	)		(2,954	)
Decrease in accrued liabilities		(1,023,523	)		(948,799	)
Decrease in deferred revenue
Net cash provided by operating activities		582,424			1,253,737
Investing activities
Proceeds from sale of property
Purchase of property and equipment		(396,533	)		(43,444	)
Net cash used by investing activities		(396,533	)		(43,444	)
Financing activities
Stockholder distributions		(109,850	)		(230,258	)
Net cash used in financing activities		(109,850	)		(230,258	)
Increase in cash		76,041			980,035
Cash at January 1		1,816,787			1,707,947
Cash at Sept 30	$	1,892,828		$	2,687,982

F-23

NOTES TO FINANCIAL STATEMENTS

Note 1 – Summary of Significant Accounting Policies

Nature of Operations

A D Computer Corporation (the Company) provides comprehensive payroll services to businesses of all types and sizes located throughout the United States. The services range from standard payroll processing to payroll tax filing, human resources and benefits software.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In some instances below, the Company references June 30 instead of September numbers. The June period was used as it was the last period reviewed. If there was a significant change in the quarter from June 30 to September 30, it is so noted.

Inventory

Inventory consists of supplies used in payroll processing and shipping materials and are stated at the lower of cost or market value.

Property and Equipment

Property and equipment are stated at cost. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of assets are as follows:

ASSET TYPE	Years
Furniture and fixtures	5-7
Transportation equipment	3-5
Machinery and equipment	5-7
Leasehold improvements	5-39

Maintenance and repairs are charged to expense as incurred.

Goodwill and Intangible Assets

Goodwill is measured for impairment on an annual basis or when a triggering event occurs. No indicators of impairment were identified during 2012 and 2011. Intangible assets consist of customer lists and purchased technology and are carried at cost. Amortization expense is recorded using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of assets are as follows:

F-24

ASSET TYPE	Years
Computer software	5
Other intangible assets	5-15

Bad Debt Expense

The Company uses the direct write-off method as losses have historically been insignificant to the financial statements. The Company recorded no bad debts during the six-months ended June 30, 2012 and 2011.

Income Taxes

The Company, with the consent of its stockholders, has elected to be taxed as an “S” corporation for both Federal and Pennsylvania income tax purposes. The Company has not elected to be treated as an “S” corporation in the state of New Jersey. Generally under the “S” election, any Federal or state taxable income of the Company is included in the personal income tax returns of the stockholders of the Company. In accordance with the Financial Accounting Standards Board guidance on accounting for uncertainty in income taxes, management evaluated the Company’s tax positions and concluded that the Company had taken no uncertain tax positions that require adjustment to the financial statements to comply with the provisions of this guidance. With few exceptions, the Company is no longer subject to income tax examinations by the U.S. federal, state or local tax authorities for years before 2009.

Long-Lived Assets

The Company reviews the carrying value of long-lived assets for impairment whenever events or changes in circumstances indicate that carrying amounts of the assets might not be recoverable.

Cash Flows

For purposes of the Statements of Cash Flows, the Company considers cash on hand and demand deposits with financial institutions to be cash and cash equivalents. The Company paid no income taxes and no interest during each of the nine-months ended September 30, 2012 and 2011.

Concentration of Credit Risk

The Company maintains deposits in excess of Federally insured limits, which is identified as a concentration of credit risk.

Subsequent Events

The Company has evaluated subsequent events through September 30, 2012, the date that these financial statements were available to be issued, and concluded no events or transactions occurred during that period requiring recognition or disclosure.

F-25

Note 2 – Property and Equipment

Property and equipment at June 30, 2012 and 2011 consisted of the following:

	2012		2011
Furniture and fixtures	$	995,574	$	990,214
Transportation equipment		528,980		456,892
Machinery and equipment		1,663,788		1,568,177
Leasehold improvements		452,307		275,512
		3,640,649		3,290,795
Less: Accumulated Depreciation		2,984470		2,866,100
Property and Equipment, net	$	656,179	$	424,695

Note 3 – Intangible Assets

Intangible assets at June 30, 2012 and 2011 consisted of the following:

	2012		2011
Computer software	$	995,574	$	990,214
Customer lists		528,980		456,892
		241,845		241,845
Less: Accumulated Depreciation		206,976		200,942
Intangibles, net	$	34,869	$	40,903

Note 4 – Operating Leases

The Company leases its operating facility from its majority stockholders at a monthly rate of $38,605 through May 2012 and increasing to $40,150 for June 2012. The lease payment increases 4% annually on June 1. The lease expires May, 2016. The Company also leases an off-site disaster recovery site at a monthly rate of $2,734 with successive renewal terms of one year and off-site backup systems at a monthly rate of $2,513 expiring in December 2014. The Company leases various equipment at a combined monthly rate of $4,444 with various expiration dates through 2014. Future minimal annual lease payments at June 30, 2012 are as follows:

Period Ending June 30,	Amount
2013	$	556,350
2014		575,070
2015		575,322
2016		559,316
Total	$	2,270,058

F-26

Note 5 – Pension Plan

The Company maintains a 401(k) profit-sharing plan covering all eligible employees. The Company is required to match each employee contribution in the amount of 100% of the first 3% of eligible compensation. Additional contributions may be made at the discretion of the Board of Directors. The Company’s contribution amounted to $72,772 and $67,534 for the six-months ended June 30, 2012 and 2011, respectively.

Note 6 – Related Party Transactions

The Company provides payroll tax filing related services to a company that is 50% owned by shareholders of the Company. The Company recorded $576,948 and $571,049 of income related to these fees for the six-months ended June 30, 2012 and 2011, respectively. Accounts receivable in the amount of $283,987 and $221,443 and a related deferred revenue amount of $114,659 and $110,721 for the six-months ended June 30, 2012 and 2011, respectively, are included on the accompanying balance sheet related to these fees.

F-27

PAYROLL TAX FILING

BALANCE SHEETS

September 30, 2012 and 2011 (unaudited)

	2012		2011
	(Unaudited)		(Unaudited)
ASSETS
Current Assets
Cash	$	328,300	$	463,727
Restricted cash for payroll taxes payable		41,525,520		38,820,603
Accounts Receivable		-		-
Payroll taxes receivable		1,495,139		2,634,557
Other Current Assets		8,935		8,788
Total current assets		43,357,894		41,927,675
Other Assets
Intangibles		202		202
Less: accumulated amortization		-202		-202
		-		-
Total Assets	$	43,357,894	$	41,927,675
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable	$	-	$	-
EIT Withholding		2,032		1,693
Other Withholding		244		190
Accrued Expenses		-		-
Payroll taxes payable		43,020,659		41,455,160
Deferred Revenue		-		-
Total Current Liabilities		43,022,935		41,457,043
Long-Term Liabilities
Due to stockholders		30,000		30,000
Total Liabilities		43,052,935		41,487,043
Stockholders' Equity
Common Stock, 100,000 shares authorized, 3,000 shares issued and outstanding - no par value		3000		3,000
Retained Earnings		301,959		437,632
Total stockholders' equity		304,959		440,632
Total Liabilities and Members' Equity	$	43,357,894	$	41,927,675

F-28

PAYROLL TAX FILING

STATEMENTS OF INCOME

NINE MONTHS ENDING SEPTEMBER 30, 2012 AND 2011 (unaudited)

	2012		2011
	(Unaudited)		(Unaudited)
Revenue
Fee income	$	1,993,217	$	1,907,326
Trust account earnings		199,278		242,523
Interest income		1,958		2,574
Other income		997		344
Total Revenues		2,195,450		2,152,767
Expenses
Salaries and wages	$	540,795	$	486,885
Outside services		912,291		911,509
Professional fees		107,126		18,637
Employee benefits		39,601		31,194
Real estate rental		24,648		24,648
Maintenance and repairs		1,099		997
Office expense		80,829		78,164
Postage and mailing		15,843		15,412
Travel & promotion		800		2,506
Computer program costs		91,410		80,978
Telephone		2,657		2,436
Utilities		5,639		6,366
Payroll taxes		39,862		34,553
Pension		11,469		12,938
Insurance		13,649		4,014
Dues and subscriptions		285		213
Interest		-		-
Taxes		1,971		1,786
Other expenses		3518		1899
Total Expenses		1,893,492		1,715,135
Net income	$	301,958	$	437,632

F-29

PAYROLL TAX FILING

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

NINE MONTHS ENDING SEPTEMBER 30, 2012 AND 2011 (unaudited)

						Total
	Common		Retained			Stockholders'
	Stock		Earnings			Equity
Balance January 1, 2011	$	3,000	$	257,139		$	260,139
Net Income - 2011		-		273,056			273,056
Stockholder distributions		-		49,036	)		(49,036	)
Balance - September 30, 2012	$	3,000	$	481,159		$	484,159
Balance January 1, 2012	$	3,000	$	180,708		$	183,708
Net income - 2012		-		301,958			301,958
Stockholder distributions		-		(45,034	)		(45,034	)
Balance September 30, 2012	$	3,000	$	437,632		$	440,632

F-30

PAYROLL TAX FILING

STATEMENTS OF CASH FLOWS

NINE MONTHS ENDING SEPTEMBER 30, 2012 AND 2011 (unaudited)

	2012			2011
	(Unaudited)			(Unaudited)
Operating Activities
Net income	$	301,958		$	437,632
Adjustments to reconcile net income to net cash provided by operating activities
Change in restricted cash for payroll taxes		2,887,136			(874,870	)
Decrease in accounts receivable		-			-
Change in payroll taxes receivable		4,524,492			498,062
Change in other current assets		660			6,047
Decrease in prepaid expenses		-			-
Decrease in accounts payable and accrued liabilities		-			-
Change in payroll taxes payable		(7,411,628	)		376,808
Change in other current liabilities		(9,497	)		(5,164	)
Net cash provided by operating activities		293,121			438,515
Investing activities
None		-			-
Financing activities
Stockholder distributions		(45,032	)		(49,035	)
Net cash used in financing activities		(45,032	)		(49,035	)
Increase in cash		248,089			389,480
Cash at January 1		80,211			74,247
Cash at September 30	$	328,300			463,727

F-31

Payroll Tax Filing

NOTES TO FINANCIAL STATEMENTS

Note 1 - Summary of Significant Accounting Policies

Nature of Operations

Payroll Tax Filing Services, Inc. (the Company) prepares, processes and files payroll tax deposits and required payroll tax returns for clients of a related payroll processing company from its office in Center Valley, Pennsylvania. The Company provides its services to businesses of all types and sizes located throughout the United States.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Restricted Cash

The Company has entered into a cash management agreement with a financial institution. The agreement provides for the daily collected balance within the restricted trust account to be invested in a repurchase agreement at a variable rate (the Federal Funds Rate less .035%). The repurchase agreement matures daily.

Intangible Assets

Intangible assets consist of organizational costs and are carried at cost. Amortization expense is recorded using the straight-line method over the estimated useful lives of the assets.

Bad Debt Expense

The Company uses the direct write-off method as losses have historically been insignificant to the financial statements. There were no bad debts recorded during the six-months ended September 30, 2012 and 2011.

Income Taxes

The Company, with the consent of its stockholders, has elected to be taxed as an “S” corporation for both Federal and state income tax purposes. Generally under this election, any Federal or state taxable income of the Company is included in the personal income tax returns of the stockholders of the Company. Accordingly, no provision for income taxes has been recorded in the accompanying financial statements.

F-32

Income Taxes – (Continued)

In accordance with the Financial Accounting Standards Board guidance on accounting for uncertainty in income taxes, management evaluated the Company’s tax positions and concluded that the Company had taken no uncertain tax positions that require adjustment to the financial statements to comply with the provisions of this guidance. With few exceptions, the Company is no longer subject to income tax examinations by the U.S. federal, state or local tax authorities for years before 2009.

Cash Flows

For purposes of the Statements of Cash Flows, the Company considers cash on hand and unrestricted demand deposits with financial institutions to be cash and cash equivalents. The Company paid $1,500 of interest during the six-months ended September 30, 2012 and 2011.

Concentration of Credit Risk

The Company maintains deposits in excess of Federally insured limits, which is identified as a concentration of credit risk.

Subsequent Events

The Company has evaluated subsequent events through September 30, 2012, the date that these financial statements were available to be issued, and concluded no events or transactions occurred during that period requiring recognition or disclosure.

Note 2 - Deferred Revenue/Charges

Deferred revenue represents amounts billed to customers in advance for services to be provided by the Company for the year-end tax filings. Deferred charges represent the corresponding expenses related to those services.

Note 3 - Related Party Transactions

The Company is provided all of its clientele from a payroll processing company owned by shareholders who own 50% of the Company. All information necessary to prepare and file the payroll tax deposits and filings are provided by the payroll processing company for which they are paid a fee equal to 45% of all fees collected by the Company for the nine-months ended September 30, 2012 and 2011. The Company recorded $912,251 and $911,509 of expense related to these fees for the nine-months ended September 30, 2012 and 2011, respectively.

F-33

THE JETPAY COMPANIES

COMBINED BALANCE SHEETS

AS OF SEPTEMBER 30, 2012 AND 2011 (unaudited)

	2012			2011
	(Unaudited)			(Unaudited)
ASSETS
Current Assets
Cash and Cash Equivalents	$	690,977		$	847,807
Restricted Cash		101,972			102,344
Accounts Receivable, Trade, net of allowance for doubtful accounts of $225,000 and $0, respectively		1,805,000			1,900,000
Accounts Receivable, Related Parties		75,000			100,000
Due from Employees		2,975			6,200
Prepaid Expenses		16,953			11,594
Total current assets		2,692,877			2,967,945
Property and Equipment, at cost, net of accumulated depreciation of $1,355,739 and $1,286,134, respectively		546,402			376,998
Other Assets - Deposits		2,920,389			2,930,967
Total Assets	$	6,159,668		$	6,275,910
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Note payable, current maturities	$	374,150		$	465,468
Accounts Payable and Accrued Expenses, Trade		1,681,454			1,509,208
Accrued Payroll Liabilities		221,284			226,356
Total Current Liabilities		2,276,888			2,201,032
Long-Term Liabilities
Notes Payable, net of current maturities		7,510,316			7,848,014
ISO Funds, held in reserves		124,177			265,805
Total Long-Term Liabilities		7,634,493			8,113,819
Total Liabilities		9,911,381			10,314,851
Members' Equity		(3,751,713	)		(4,038,941	)
Total Liabilities and Members' Equity	$	6,159,668		$	6,275,910

F-34

THE JETPAY COMPANIES

COMBINED STATEMENTS OF INCOME AND MEMBERS' EQUITY

NINE MONTHS ENDING JUNE 30, 2012 AND 2011 (unaudited)

	2012			2011
	(Unaudited)			(Unaudited)
REVENUES	$	14,082,036		$	13,919,196
COST OF SERVICES		6,944,221			6,683,300
GROSS PROFIT		7,137,815			7,235,896
OPERATING EXPENSES
Clearing and Settlement		623,231			409,361
Customer Service Expense		301,550			357,572
Engineering Expense		1,022,781			884,088
Selling and Administrative Expense		4,633,560			2,143,121
Total Operating Expense		6,581,122			3,794,142
NET INCOME FROM OPERATIONS		556,693			3,441,754
OTHER INCOME/(EXPENSE)
Interest Income		52,282			41,570
Interest Expense		(395,570	)		(256,210	)
State Margin Tax Expense		(81,360	)		(170,203	)
Total Other Income/(Expense)		(424,648	)		(384,843	)
NET INCOME		132,045			3,056,911
MEMBERS' EQUITY, beginning of year		-3,883,758			-5,695,852
Distributions to Members		0			1,400,000
MEMBERS' EQUITY, end of period	$	-3,751,713		$	-4,038,941

F-35

THE JETPAY COMPANIES

COMBINED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDING SEPTEMBER 30, 2012 (unaudited)

	9/30/2012
CASH FLOW FROM OPERATING ACTIVITIES
Net income	$	132,045
Adjustments to reconcile change in net income to net
cash provided by operating activities:
Depreciation		115,027
Change in restricted cash		-
Change in accounts receivable		128,831
Change in employee advances		2,500
Change in prepaid expense		122,630
Change in other assets - deposits		(1,776,128	)
Change in accounts payable & accrued expenses trade		1,160,653
Change in accrued payroll liabilities		(86,100	)
Change in ISO Funds, Held in Reserve		24,438
Net cash provided by operating activities		(176,104	)
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property and equipment		(159,901	)
Loans to related parties		(7,727	)
Net cash used by investing activities		(167,628	)
CASH FLOW FROM FINANCING ACTIVITIES
Principal payments on notes payable		(326,586	)
Contributions from members		-
Distributions to members		(357,000	)
Net cash used by financing activities		(683,586	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		(1,027,318	)
CASH AND CASH EQUIVALENTS, beginning of year		1,718,295
CASH AND CASH EQUIVALENTS, end of period	$	690,977

F-36

Notes to the Combined Financial Statements

Note 1 – Basis of Presentation, General and Business

Organization and Principles of Combination

The JetPay Companies (the Combined Companies or the Companies) are a group of related companies with similar ownership and in a similar line of business. The companies included in these combined statements are JetPay, LLC (a Texas LLC), JetPay Merchant Services LLC (a Texas LLC), and JetPay ISO Services, LLC (a Texas LLC). All intercompany balances and transactions have been eliminated in the combined financial statements.

JetPay, LLC (JP) is a closely-held Texas limited liability company that was organized in 2001. JP is a professional services firm specializing in the processing and forwarding of credit card information from individual user organizations to member banks and processing houses. JP’s operations are conducted primarily from one location in Carrollton, Texas, with a backup data center maintained in Sunnyvale, Texas. JetPay Merchant Services, LLC (JPMS) was organized in 2003 and markets credit and debit card services to merchants. JetPay ISO Services, LLC (JPISO) was organized in 2005 and markets credit and debit card services to Independent Sales Organizations.

JT Holdings is considered a related party to the Combined Companies due to similar ownership. JT Holdings owns the building in Sunnyvale, Texas where the Companies’ backup facility is maintained.

The information in the accompanying interim consolidated financial statements has not been audited or reviewed by independent accountants. These interim consolidated financial statements do not include all the information and disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. The results of operations for such interim periods are not necessarily indicative of results of operations for a full year. These interim consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2011.

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could different from those estimates.

Note 1 of the Notes to Consolidated Financial Statements included in the Company’s Annual Report for the year ended December 31, 2011 contains a description of the Company’s significant accounting policies.

Subsequent Events

On July 9, 2012, the sole member of the combined companies entered into an agreement to sell the company to Universal Business Payment Solutions (UBPS). The agreement requires approval by the stockholders of UBPS and the Securities and Exchange Commission (SEC).

On March 14, 2012, a charter airline merchant of JetPay Merchant Services, LLC suddenly stopped flying and declared bankruptcy. While JetPay and its sponsor Bank have catastrophic insurance on this merchant, the resulting chargebacks from consumers are being funded until such time as the insurance claim can be validated. The insurance has a $250,000 deductible and a $25 million limit. Additional detail regarding this matter can be found in the Summary Financial Statements in this filing.

The Companies have evaluated subsequent events through September 30, 2012, the date which the financial statements were available to be issued.

F-37

EX-3.1

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OF

UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION

I, the undersigned, being the Chief Executive Officer of UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION, a corporation existing under the laws of the State of Delaware (the “Corporation”), hereby certify as follows:

1. The name of the Corporation is “Universal Business Payment Solutions Acquisition Corporation” which is the name under which the Corporation was incorporated.

2. The Corporation’s original Certificate of Incorporation was filed in the office of the Secretary of State of Delaware on November 12, 2010, and the Corporation’s Restated Certificate of Incorporation was filed in the office of the Secretary of State of Delaware on May 11, 2011.

3. This Amended and Restated Certificate of Incorporation restates, integrates and amends the original Certificate of Incorporation, as previously restated.

4. This Amended and Restated Certificate of Incorporation was duly adopted at a meeting of the board of directors of the Corporation and at a special meeting of stockholders of the Corporation in accordance with the applicable provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware.

5. The Certificate of Incorporation of the Corporation is hereby amended and restated to read in full as follows:

ARTICLE I - NAME

The name of the corporation is Universal Business Payment Solutions Acquisition Corporation (the “Corporation”).

ARTICLE II - REGISTERED OFFICE AND AGENT

The address of the Corporation’s registered office in the state of Delaware is to be located at c/o The Corporation Trust Company, 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801. The name of the Corporation’s registered agent at that address is The Corporation Trust Company.

ARTICLE III - PURPOSE

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware, as the same exists or may be amended from time to time (the “DGCL”).

ARTICLE IV - CAPITALIZATION

(a)Authorized Shares. The total number of shares of stock which the Corporation shall have authority to issue is One Hundred and One Million (101,000,000), consisting of One Hundred Million (100,000,000) shares of Common Stock, par value $0.001 per share (“Common Stock”), and One Million (1,000,000) shares of Preferred Stock, par value $0.001 per share (“Preferred Stock”). Such stock may be issued from time to time by the Corporation for such consideration as may be fixed by the board of directors of the Corporation (the “Board of Directors”).

(b)Preferred Stock. Shares of Preferred Stock may be issued in one or more series, from time to time, with each such series to consist of such number of shares and to have such voting powers relative to other classes or series of Preferred Stock, if any, or Common Stock, full or limited or no voting powers, and such designations, preferences and relative, participating, optional or other special rights, and such qualifications, limitations or restrictions thereof, as shall be stated in the resolution or resolutions providing for the issuance of such series adopted by the Board of Directors, and the Board of Directors is hereby expressly vested with the authority, to the full extent now or hereafter provided by applicable law, to adopt any such resolution or resolutions. Except as otherwise provided in this Certificate of Incorporation, no vote of the holders of the Preferred Stock or Common Stock shall be a prerequisite to the designation or issuance of any shares of any series of the Preferred Stock authorized by and complying with the conditions of this Certificate of Incorporation, the right to have such vote being expressly waived by all present and future holders of the capital stock of the Corporation. Any shares of Preferred Stock that are redeemed, purchased or acquired by the Corporation may be reissued except as otherwise provided by law or this Certificate of Incorporation. Different series of Preferred Stock shall not be construed to constitute different classes of shares for the purposes of voting by classes unless expressly provided in the resolution or resolutions providing for the issue of such series adopted by the Board of Directors. The holders of the Preferred Stock shall, in respect of such shares, have no voting rights except as set forth in the applicable certificate of designation as filed with the Secretary of State of the State of Delaware pursuant to Section 151(g) of the DGCL.

(c)Common Stock. Subject to the powers, preferences and rights of any Preferred Stock, including any series thereof, having any preference or priority over, or rights superior to, the Common Stock and except as otherwise provided by law and this Article IV, the holders of Common Stock shall have and possess all powers and voting and other rights pertaining to the stock of the Corporation.

(i)Voting. Each holder of Common Stock, as such, shall be entitled to one vote for each share of Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote; provided, that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate of Incorporation (including, but not limited to, any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation (including, but not limited to, any certificate of designations relating to any series of Preferred Stock) or pursuant to the DGCL. There shall be no cumulative voting.

- 2 -

(ii)Dividends. Dividends may be declared and paid on the Common Stock from funds lawfully available therefor as and when determined by the Board of Directors and subject to any preferential dividend rights of any then outstanding Preferred Stock. Except as otherwise provided by the DGCL or this Certificate of Incorporation, the holders of record of Common Stock shall share ratably in all dividends payable in cash, stock or otherwise and other distributions, whether in respect of liquidation or dissolution (voluntary or involuntary) or otherwise.

(iii)Preemptive Rights. The holders of Common Stock shall have no preemptive rights to subscribe for any shares of any class of stock of the Corporation whether now or hereafter authorized.

(iv)Liquidation Rights. Upon the dissolution or liquidation of the Corporation, whether voluntary or involuntary, holders of Common Stock will be entitled to receive all assets of the Corporation available for distribution to its stockholders, subject to any preferential rights of any then outstanding Preferred Stock. A merger or consolidation of the Corporation with or into any other corporation or other entity or a sale or conveyance of all or any part of the assets of the Corporation, in any such case which shall not in fact result in the liquidation of the Corporation and the distribution of assets to its stockholders, shall not be deemed to be a voluntary or involuntary liquidation or dissolution or winding up of the Corporation within the meaning of this Article IV(c)(iv).

(d)No Class Vote On Changes In Authorized Number of Shares Of Preferred Stock and Common Stock . Subject to the special rights of the holders of any series of Preferred Stock pursuant to the terms of this Certificate of Incorporation, any certificate of designations or any resolution or resolutions providing for the issuance of such series of stock adopted by the Board of Directors, the number of authorized shares of Preferred Stock and Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (the “Voting Stock”), voting together as a single class, irrespective of the provisions of Section 242(b)(2) of the DGCL.

(e)Uncertificated Shares. Nothing in this Certificate of Incorporation limits or will be interpreted to limit the power of the Board of Directors under the DGCL to provide that some or all of any or all classes or series of capital stock of the Corporation shall be uncertificated.

ARTICLE V - BOARD OF DIRECTORS

- 3 -

(a)Number. The number of directors on the Board of Directors shall be fixed from time to time by resolution of the Board of Directors and the number so fixed shall comprise the entire Board of Directors.

(b)Classified Board of Directors. The directors shall be divided into three classes, which shall be nearly equal in number as possible: Class A, Class B and Class C. The directors in Class A shall be elected for a term expiring at the first annual meeting of the stockholders. The directors in Class B shall be elected for a term expiring at the second annual meeting of the stockholders. The directors in Class C shall be elected for a term expiring at the third annual meeting of the stockholders. At each annual meeting of the stockholders following the initial classification of the directors, the respective successors of each class shall serve a term of three (3) years. Each director shall hold office until the next annual meeting of stockholders at which his or her class stands for election or until such director’s earlier resignation, removal from office, death or incapacity.

(c)Vacancies. Vacancies (including, but not limited to, those resulting from death, resignation, retirement, disqualification, removal from office or other cause) and newly-created directorships shall be filled exclusively by vote of a majority of the directors then in office, even if less than a quorum, or by a sole remaining director, except that any vacancy created by the removal of a director by the stockholders for cause shall only be filled, in addition to any other vote otherwise required by law, by vote of holders of at least a majority of the voting power of the Voting Stock, voting together as single class. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. A director elected to fill a vacancy shall be elected for the unexpired term of his or her predecessor in office, and a director chosen to fill a position resulting from an increase in the number of directors shall hold office until the next election of the class for which such director shall have been chosen, subject to the election and qualification of his or her successor and to his or her earlier death, resignation or removal.

ARTICLE VI - LIMITATION OF DIRECTOR LIABILITY

To the fullest extent that the DGCL or any other law of the State of Delaware (as they exist on the date hereof or as they may hereafter be amended) permits the limitation or elimination of the liability of directors, no director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. No amendment to, or modification or repeal of, this Article VI shall adversely affect any right or protection of a director of the Corporation existing hereunder with respect to any state of facts existing or act or omission occurring, or any cause of action, suit or claim that, but for this Article VI, would accrue or arise, prior to such amendment, modification or repeal. If the DGCL is amended after the Effective Time to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.

ARTICLE VII - MEETINGS OF STOCKHOLDERS

(a)No Action by Written Consent. Subject to the special rights of the holders of any series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation pursuant to this Certificate of Incorporation or under applicable law may be effected only with a vote at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by consent in writing.

- 4 -

(b)Special Meetings of Stockholders. Subject to any special rights of the holders of any series of Preferred Stock, and to the requirements of applicable law, special meetings of stockholders of the Corporation may be called only by or at the direction of the Board of Directors pursuant to a written resolution adopted by a majority of the total number of directors which the Corporation would have if there were no vacancies. Any business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

(c)Election of Directors by Written Ballot. Election of directors need not be by written ballot.

ARTICLE VIII - AMENDMENTS TO THE
CERTIFICATE OF INCORPORATION AND BYLAWS

(a)Bylaws. In furtherance and not in limitation of the powers conferred by law, the Board of Directors is expressly authorized to make, alter, amend or repeal the bylaws of the Corporation subject to the power of the stockholders of the Corporation entitled to vote with respect thereto to make, alter, amend or repeal the bylaws; provided, that with respect to the powers of stockholders entitled to vote with respect thereto, to make, alter, amend or repeal the bylaws, in addition to any other vote otherwise required by law, the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the voting power of the voting stock, voting together as a single class, shall be required to make, alter, amend or repeal the bylaws of the Corporation.

(b)Amendments to the Certificate of Incorporation. The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by the DGCL, and all rights conferred upon stockholders herein are granted subject to this reservation. Notwithstanding anything to the contrary contained in this Certificate of Incorporation, and notwithstanding that a lesser percentage may be permitted from time to time by applicable law, no provision of Article V, Article VI, paragraphs (a) and (b) of Article VII, Article VIII, Article X and Article XI may be altered, amended or repealed in any respect, nor may any provision or bylaw inconsistent therewith be adopted, unless in addition to any other vote required by this Certificate of Incorporation or otherwise required by law, such alteration, amendment, repeal or adoption is approved by, in addition to any other vote otherwise required by law, the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the voting power of the Voting Stock, voting together as a single class, at a meeting of the stockholders called for that purpose.

ARTICLE IX - EXCLUSIVE JURISDICTION FOR CERTAIN ACTIONS

The Court of Chancery of the State of Delaware shall, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation arising pursuant to any provision of the DGCL or the Corporation’s Certificate of Incorporation or bylaws or (iv) any action asserting a claim against the Corporation governed by the internal affairs doctrine, in each such case subject to said Court of Chancery having personal jurisdiction over the indispensible parties named as defendants therein. Any person or entity purchasing or otherwise acquiring any interest in the shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article IX.

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ARTICLE X - INDEMNIFICATION

(a)Indemnification. The Corporation shall promptly indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended (but, in the case of an amendment of the DGCL, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), any person (an “Indemnitee”) who was or is made, or is threatened to be made, a party or witness or is otherwise involved in any threatened, pending or completed investigation, action, suit or proceeding, whether civil, criminal, administrative or investigative and whether external or internal to the Corporation (a “Proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or an officer of the Corporation or, while a director or an officer of the Corporation, is or was serving at the request of the Corporation as a director or the like, officer or the like, employee, member, trustee or agent of another corporation or of a partnership, joint venture, trust, nonprofit entity or other enterprise or association (including, but not limited to, service with respect to employee benefit plans) (any such entity, an “Other Entity”), against all liability and loss (including, but not limited to, expenses (including, but not limited to, attorneys’ fees and expenses), judgments, fines and amounts paid in settlement actually and reasonably incurred or suffered by such Indemnitee in connection with such Proceeding). Notwithstanding the preceding sentence, the Corporation shall be required to indemnify an Indemnitee in connection with a Proceeding (or part thereof) commenced by such Indemnitee only if the commencement of such Proceeding (or part thereof) by the Indemnitee (i) was authorized by the Board of Directors of the Corporation, (ii) relates to counterclaims or affirmative defenses asserted by a person seeking indemnification in an action brought against such person, (iii) relates to any proceeding brought by a person seeking indemnification or payment under any directors’ and officers’ liability insurance covering such person or (iv) the Proceeding (or part thereof) relates to the enforcement of the Corporation’s obligations under this Article X.

(b)Advancement of Expenses. The Corporation shall to the fullest extent not prohibited by applicable law (but, in the case of an amendment to the applicable law, only to the extent that such amendment permits the Corporation to provide additional or broader advancement of expenses than said law permitted the Corporation to provide prior to such amendment) pay, on an as-incurred basis, all expenses (including, but not limited to attorneys’ fees and expenses) incurred by an Indemnitee in defending or appearing in or preparing to defend or appear in any Proceeding in advance of its final disposition. Such advancement shall be unconditional, unsecured and interest free and shall be made without regard to Indemnitee’s ability to repay any expenses advanced; provided, however, that, to the extent required by law (but, in the case of an amendment to the applicable law, only to the extent that such amendment permits the Corporation to provide additional or broader advancement of expenses than said law permitted the Corporation to provide prior to such amendment), such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an unsecured undertaking by the Indemnitee to repay all amounts advanced if it should be ultimately determined that the Indemnitee is not entitled to be indemnified under this Article X or otherwise.

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(c)Service for Subsidiaries. Any person serving as a director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture or other enterprise, at least fifty percent of whose equity interests are owned, directly or indirectly, by the Corporation, shall be conclusively presumed to be serving in such capacity at the request of the Corporation.

(d)Claims. If a claim for indemnification (following the final disposition of such proceeding) or advancement of expenses under this Article X is not paid in full within thirty days after a written claim therefor by the Indemnitee has been received by the Corporation, the Indemnitee may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim to the fullest extent permitted by law. In any such action the Corporation shall have the burden of proving that the Indemnitee is not entitled to the requested indemnification or advancement of expenses under applicable law.

(e)Consistent with Fiduciary Duty. The right of indemnification pursuant to this Article X is conferred in order to attract and retain services of highly qualified directors and officers and to encourage them to make corporate decisions without fear of suits and legal harassment. Indemnification pursuant to this Article X is therefore declared to be consistent with the fiduciary duty of the Corporation’s Board of Directors. Except as specifically provided in this Article X, such indemnification shall be made by the Corporation without any requirement that any determination be made or any action be taken by the Board of Directors, shareholders or legal counsel. A failure of the Board of Directors, shareholders or legal counsel to make a determination or take action favorable to the claim of an Indemnitee for indemnification pursuant to this Article X, or the making of a determination or taking of action adverse to such a claim, shall not preclude indemnification under this Article X or create any presumption that the Indemnitee is not entitled to such indemnification.

(f)Insurance. The Corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, trustee, employee, member, trustee or agent of the Corporation, or was serving at the request of the Corporation as a director, officer, trustee, employee or agent of an Other Entity, against any liability asserted against the person and incurred by the person in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article X or the DGCL.

(g)Non-Exclusivity of Rights. The rights conferred on any Indemnitee by this Article X are not exclusive of other rights arising under any bylaw, agreement, vote of directors or stockholders or otherwise, and shall inure to the benefit of the heirs and legal representatives of such Indemnitee.

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(h)Amounts Received from an Other Entity. Subject to Section (i) of this Article X, the Corporation’s obligation, if any, to indemnify or to advance expenses to any Indemnitee who was or is serving at the Corporation’s request as a director, officer, employee or agent of an Other Entity shall be reduced by any amount such Indemnitee may collect as indemnification or advancement of expenses from such Other Entity.

(i)Indemnification Priority. As between the Corporation and any other person (other than an entity directly or indirectly controlled by the Corporation) who provides indemnification to the Indemnitees for their service to, or on behalf of, the Corporation (collectively, the “Secondary Indemnitors”) (i) the Corporation shall be the full indemnitor of first resort in respect of indemnification or advancement of expenses in connection with any Jointly Indemnifiable Claims (as defined below), pursuant to and in accordance with the terms of this Article X, irrespective of any right of indemnification, advancement of expenses or other right of recovery any Indemnitee may have from any Secondary Indemnitor or any right to insurance coverage that Indemnitee may have under any insurance policy issued to any Secondary Indemnitor (i.e., the Corporation’s obligations to such Indemnitees are primary and any obligation of any Secondary Indemnitor, or any insurer of any Secondary Indemnitor, to advance expenses or to provide indemnification or insurance coverage for the same loss or liability incurred by such Indemnitees is secondary to the Corporation’s obligations), (ii) the Corporation shall be required to advance the full amount of expenses incurred by any such Indemnitee and shall be liable for the full amount of all liability and loss suffered by such Indemnitee (including, but not limited to, expenses (including, but not limited to, attorneys’ fees and expenses), judgments, fines and amounts paid in settlement actually and reasonably incurred by such Indemnitee in connection with such Proceeding), without regard to any rights any such Indemnitee may have against any Secondary Indemnitor or against any insurance carrier providing insurance coverage to Indemnitee under any insurance policy issued to a Secondary Indemnitor, and (iii) the Corporation irrevocably waives, relinquishes and releases each Secondary Indemnitor from any and all claims against such Secondary Indemnitor for contribution, subrogation or any other recovery of any kind in respect thereof. The Corporation shall indemnify each Secondary Indemnitor directly for any amounts that such Secondary Indemnitor pays as indemnification or advancement on behalf of any such Indemnitee and for which such Indemnitee may be entitled to indemnification from the Corporation in connection with Jointly Indemnifiable Claims. No right of indemnification, advancement of expenses or other right of recovery that an Indemnitee may have from any Secondary Indemnitor shall reduce or otherwise alter the rights of the Indemnitee or the obligations of the Corporation hereunder. No advancement or payment by any Secondary Indemnitor on behalf of any such Indemnitee with respect to any claim for which such Indemnitee has sought indemnification from the Corporation shall affect the foregoing and the Secondary Indemnitors shall be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Indemnitee against the Corporation. Each Indemnitee shall execute all papers reasonably required and shall do all things that may be reasonably necessary to secure the rights of such Indemnitee’s Secondary Indemnitors under this Article X, including the execution of such documents as may be necessary to enable the Secondary Indemnitors effectively to bring suit to enforce such rights, including in the right of the Corporation. Each of the Secondary Indemnitors shall be third-party beneficiaries with respect to this Section (i), entitled to enforce this Section (i). As used in this Section (i), the term “Jointly Indemnifiable Claims” shall be broadly construed and shall include, without limitation, any action, suit, proceeding or other matter for which an Indemnitee shall be entitled to indemnification, reimbursement, advancement of expenses or insurance coverage from both a Secondary Indemnitor (or an insurance carrier providing insurance coverage to any Secondary Indemnitor) and the Corporation, whether pursuant to Delaware law (or other applicable law in the case of any Secondary Indemnitor), any agreement or certificate of incorporation, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership or other organizational or governing documents of the Corporation or the Secondary Indemnitors or any insurance policy providing insurance coverage to any Secondary Indemnitor, as applicable.

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(j)Amendment or Repeal. Any right to indemnification or to advancement of expenses of any Indemnitee arising hereunder shall not be eliminated or impaired by an amendment to or repeal of this Article X after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit, proceeding or other matter for which indemnification or advancement of expenses is sought.

(k)Other Indemnification and Advancement of Expenses. This Article X shall not limit the right of the Corporation, to the extent and in the manner permitted by law, to indemnify and to advance expenses to persons other than Indemnitees when and as authorized by appropriate corporate action.

(l)Reliance. Indemnitees who after the date of the adoption of this Article X become or remain an Indemnitee described in Section (a) of this Article X will be conclusively presumed to have relied on the rights to indemnity, advancement of expenses and other rights contained in this Article X in entering into or continuing the service. The rights to indemnification and to the advancement of expenses conferred in this Article X will apply to claims made against any Indemnitee described in Section (a) of this Article X arising out of acts or omissions that occurred or occur either before or after the adoption of this Article X in respect of service as a director or officer of the corporation or other service described in Section (a) of this Article X.

(m)Contract Rights. The provisions of this Article X shall be deemed to be a contract right between the Corporation and each Indemnitee who serves in any such capacity at any time while this Article X and the relevant provisions of the DGCL or other applicable law are in effect, and such rights shall continue as to an Indemnitee who has ceased to be a director or officer of the Corporation and shall inure to the benefit of such Indemnitee’s heirs, executors and administrators. Any repeal or modification of this Article X or any such law that adversely affects any right of any Indemnitee, shall be prospective only and shall not affect any rights or obligations then existing with respect to any state of facts or proceeding then existing.

(n)Merger or Consolidation. For the purposes of this Article X, references to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership joint venture, trust or other enterprise, shall stand in the same position under this Article X with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.

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(o)Successful Defense. In the event that any proceeding to which an Indemnitee is a party is resolved in any manner other than by adverse judgment against the Indemnitee (including, without limitation, settlement of such proceeding with or without payment of money or other consideration) it shall be presumed that the Indemnitee has been successful on the merits or otherwise in such proceeding for purposes of Section 145(c) of the DGCL. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

(p)Funding to Meet Indemnification Obligations. The Board of Directors, without approval of the stockholders, shall have the power to borrow money on behalf of the Corporation, including the power to pledge the assets of the Corporation, from time to time to discharge the Corporation’s obligations with respect to indemnification, the advancement and reimbursement of expenses, and the purchase and maintenance of insurance referred to in this Article X. The Corporation may, in lieu of or in addition to the purchase and maintenance of insurance referred to in this Article X, establish and maintain a fund of any nature or otherwise secure or insure in any manner its indemnification obligations, whether arising under or pursuant to this Article X or otherwise.

ARTICLE XI - SEVERABILITY

If any provision or provisions of this Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Certificate of Incorporation (including, without limitation, each portion of any paragraph of this Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible, the provisions of this Certificate of Incorporation (including, without limitation, each such portion of any paragraph of this Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service to or for the benefit of the Corporation to the fullest extent permitted by law.

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IN WITNESS WHEREOF, the undersigned has caused this Amended and Restated Certificate of Incorporation to be executed by the officer below this 28^th day of December, 2012.

UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION
By:	/s/ Bipin C. Shah
	Name: Bipin C. Shah Title: Chief Executive Officer

[Signature Page to Amended and Restated Certificate of Incorporation of

Universal Business Payment Solutions Acquisition Corporation]

EX-10.1

UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION

__________________________________________

SECURED CONVERTIBLE NOTE AGREEMENT

December 28, 2012

__________________________________________

Exhibit A – Schedule of Purchasers
Exhibit B – Form of Secured Convertible Promissory Note

Exhibit C – LLC Interests Collateral
Exhibit D – Form of Registration Rights Agreement

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UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION

SECURED CONVERTIBLE NOTE AGREEMENT

This Secured Convertible Note Agreement (the “Agreement”), is made as of December 28, 2012, by and among Universal Business Payment Solutions Acquisition Corporation, a Delaware corporation (the “Company”), and each of the parties listed on the Schedule of Purchasers attached hereto as Exhibit A (each a “Purchaser” and collectively, the “Purchasers”).

ARTICLE 1

The Notes

1.1Authorization of Notes. The Company has duly authorized the sale and issuance to the Purchasers of Secured Convertible Promissory Notes, in the form attached hereto as Exhibit B (the “Notes”) in the principal amount of up to Ten Million Dollars ($10,000,000), with a maturity date of December 31, 2014. The proceeds from the Notes will be used to facilitate the closings under (a) the Agreement and Plan of Merger, dated as of July 6, 2012, as amended, by and among the Company, JP Merger Sub, LLC, WLES, L.P. and certain other parties thereto and (b) the Agreement and Plan of Merger, dated as of July 6, 2012, as amended, by and among the Company, ADC Merger Sub, Inc., AD Computer Corporation (“ADC”), Payroll Tax Filing Services, Inc., and certain other stockholders party thereto (such agreements collectively, the “Acquisition Agreements”). This Agreement and the Issuance of the Notes, and the parties obligations related thereto, are contingent upon the closing of the transactions contemplated by the Acquisition Agreements.

ARTICLE 2

Closings; Delivery

2.1Closing. At the Closing (as defined below), the Company will issue to each Purchaser, and each Purchaser is obligated to purchase severally, and not jointly, from the Company, Notes in the principal amount set forth opposite such Purchaser’s name in Exhibit A attached hereto (“Purchaser’s Commitment”), or a total principal amount of up to Ten Million Dollars ($10,000,000) for the Purchasers collectively. The closing of such purchase and sale of the Notes hereunder (the “Closing”) shall be held at the offices of Dechert LLP, 2929 Arch Street, Philadelphia, PA 19104 at 10:00 a.m. local time on the date hereof or at such other place or time upon which the Company and the Purchasers mutually agree (the “Closing Date”). The obligations of the Company to issue and the Purchasers to purchase the Notes shall arise immediately prior to the consummation of the transactions contemplated by the Acquisition Agreements.

2.2Delivery. At the Closing, the Company shall deliver to each Purchaser a Note in the principal amount for such Purchaser determined as provided herein, against payment of the purchase price therefor by check payable to the Company or by wire transfer made pursuant to the Company’s instructions.

ARTICLE 3 

Representations, Warranties and Covenants of the Company

In this Agreement, any reference to a “Material Adverse Effect” means any event, change or effect that is materially adverse to the business, operations, assets, liabilities, condition (financial or otherwise) or results of operations of the Company.

The Company represents and warrants to each of the Purchasers at the Closing as follows:

3.1Corporate Organization. The Company is a corporation duly organized and validly existing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as presently conducted and as presently proposed to be conducted by it. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect. JetPay, LLC (“JetPay”) is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Texas and has all requisite limited liability company power and authority to carry on its business as presently conducted and as presently proposed to be conducted by it. JetPay is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect. ADC is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania and has all requisite corporate power and authority to carry on its business as presently conducted and as presently proposed to be conducted by it. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect.

3.2Authorization. The Company has all requisite corporate power and authority to execute and deliver this Agreement, to sell and issue the Notes hereunder, and to carry out and perform its obligations hereunder and thereunder. All corporate action on the part of the Company, its directors and shareholders necessary for the authorization, execution, delivery and performance of this Agreement and the Notes by the Company, the authorization, sale, issuance and delivery of the Notes and the performance of the Company’s obligations hereunder or thereunder has been taken. This Agreement and the Notes, when executed and delivered by the Company, will constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other laws of general application affecting enforcement of creditors’ rights generally and as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

3.3Capitalization. Assuming consummation of the transactions contemplated by the Acquisition Agreements, the Company will own 100% of the issued and outstanding equity interests in JetPay, 50% of which will be unencumbered and free of any Liens.

3.4Government Consents. No consent, approval or authorization of or designation, declaration or filing with any federal, state, local or foreign governmental authority on the part of the Company is required in connection with the valid execution and delivery of this Agreement or the offer, sale or issuance of the Notes or the consummation of any other transaction contemplated hereby or thereby, except filings pursuant to Regulation D of the Securities Act of 1933, as amended (the “Securities Act”) and qualification (or taking such action as may be necessary to secure an exemption from qualification, if available) under the California Corporations Code and other applicable blue sky laws of the offer and sale of the Notes, which filings and qualification, if required, will be accomplished in a timely manner prior to or promptly upon completion of each Closing.

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3.5Offering. Based in part upon the Purchasers’ representations in Article 4 hereof, the offer, and the sale and issuance, of the Notes and the shares of capital stock of the Company issuable upon conversion of the Notes (the “Conversion Stock”) constitute a transaction exempt from the registration requirements of Section 5 of the Securities Act.

3.6Valid Issuance of Securities. The Company shall, prior to the conversion of the Notes, reserve from its authorized but unissued shares of its capital stock for issuance and delivery upon the conversion of the Notes, such number of shares of Conversion Stock, and, from time to time, will take all steps necessary to amend its Certificate of Incorporation to provide sufficient authorized numbers of shares of Conversion Stock issuable upon the conversion of the Notes. All such shares shall be duly authorized, and when issued upon any such conversion, shall be validly issued, fully paid and non-assessable, free and clear of all liens, security interests, charges and other encumbrances or restrictions on sale and free and clear of all preemptive rights, except encumbrances or restrictions arising under federal or state securities laws.

3.7Compliance with Other Instruments. The Company is not in violation or default of any provisions of its Certificate of Incorporation or its bylaws, in each case as amended and currently in effect, or of any provision of any federal, state or local law, statute, rule or regulation applicable to the Company. The execution, delivery and performance of this Agreement and the Notes, and the consummation of the transactions contemplated hereby or thereby, will not result in any such violation or be in conflict with or constitute, with or without the passage of time or the giving of notice, either a default under any such provision, agreement, instrument, judgment, injunction, order or degree or an event which results in the creation of any material lien, charge, pledge, security interest, mortgage or other encumbrance (each a “Lien”) upon any assets or properties of the Company.

ARTICLE 4 

Representations, Warranties and Covenants of the Purchasers

Each Purchaser hereby represents, warrants and covenants, severally and not jointly, to the Company as follows:

4.1Accredited Investor. The Purchaser is an “accredited investor” within the meaning of Regulation D under the Securities Act.

4.2Restricted Securities; Rule 144. The Purchaser understands that the Notes (and the Conversion Stock) are characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, the Notes (and the Conversion Stock) may be resold without registration under the Securities Act only in certain limited circumstances. The Purchaser acknowledges that the Notes (and all capital stock of the Company issuable upon conversion of the Notes) must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available. The Purchaser is aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited resale of shares purchased in a private placement subject to the satisfaction of certain conditions.

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4.3No Public Market. The Purchaser understands that no public market now exists for the Notes and that there can be no assurance that a public market will ever exist for the Notes (or the Conversion Stock).

4.4Further Limitations on Disposition of Conversion Stock. Without in any way limiting the representations set forth above, except with respect to transfers to fund entities affiliated with Purchasers, or in the case of an individual Purchaser, to an entity wholly-owned by such individual Purchaser, the Purchaser agrees not to make any disposition of all or any portion of the Conversion Stock issuable upon conversion of the Notes, unless and until:

(a) there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement;

(b) (i) the Purchaser shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and (ii) such Purchaser shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require, or is exempt from, registration under the Securities Act; or

(c) there is an applicable exemption under the Securities Act, including but not limited to an exemption under Rule 144 of the Securities Act

4.5Registration Rights. At the Closing, the Company and Purchaser shall enter into a Registration Rights Agreement in the form attached hereto as Exhibit D. For the avoidance of doubt, the Company agrees to use its best efforts to file a registration statement with respect to all of the Conversion Stock as soon as practicable following the Closing and to maintain the effectiveness of such registration statement so long as the Conversion Stock is issuable or the Purchaser holds the Conversion Stock. Furthermore, in the event that a registration statement is not declared effective by June 30, 2013, the conversion price shall be reduced by $0.15 per share and then by an additional $0.05 per share for every 30 days after June 30, 2013 that the registration statement has not been declared effective.

4.6Legends. It is understood that each certificate representing the Conversion Stock issuable upon conversion of the Notes and any securities issued in respect thereof or in exchange therefor shall bear a legend in substantially the following form (in addition to any legend required under applicable state securities laws):

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THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS SECURITY UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

The Company hereby agrees to instruct the transfer agent to remove such legend immediately upon the effectiveness of the Company’s registration statement with respect to the Conversion Shares.

4.7No Transfer of Notes. The Purchaser shall not sell, contract to sell, pledge or otherwise transfer or dispose of the Notes, or any economic interest therein, without the prior written consent of the Company, which consent shall not be unreasonably withheld, except to fund entities affiliated with Purchasers, or in the case of an individual Purchaser, to an entity wholly-owned by such individual Purchaser.

4.8Listing. The Company shall use its reasonable best efforts to maintain a listing on a nationally recognized securities exchange market for its shares of common stock.

ARTICLE 5

Covenants

5.1Security Interest. This Agreement constitutes a “security agreement” within the meaning of the UCC. In order to secure payment and performance of the Secured Obligations, the Company hereby grants, assigns, transfers, pledges, for the benefit of the Purchasers hereunder, a security interest in, and a Lien on, all of Company’s right, title, estate, claim and interest in and to any or all of the items listed on Exhibit C to this Agreement whether now owned or hereafter acquired and wherever located (collectively, the “LLC Interests Collateral”).

5.2Financing Statements. The Company will promptly cooperate with the Purchasers in executing such financing statements, continuation statements, assignments, certificates and other documents with respect to the LLC Interests Collateral, pursuant to the applicable Uniform Commercial Code and otherwise, as any Purchaser may reasonably request in order to enable such Purchaser to perfect and from time to time to renew the security interest granted, all in form reasonably satisfactory to such Purchaser, and the Company will pay the costs of filing the same in all public offices where such Purchaser deems such financing to be necessary or desirable.

5.3Return of LLC Interests Collateral. Upon payment in full of the Note and any other amounts due hereunder, or upon the full conversion of the Note into securities of the Company, the security interest in granted herein shall be released.

5.4Further Assurances. The Company agrees that at any time and from time to time, at its expense, the Company will promptly execute and deliver all further instruments and documents, and take all further action that any Purchaser may reasonably request, in order to perfect and protect the security interests granted or purported to be granted hereby and to enable such Purchaser to exercise and enforce its rights and remedies hereunder with respect to any LLC Interests Collateral.

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5.5Company’s Continuing Rights. Notwithstanding the security interest in the LLC Interests Collateral granted to and created in favor of the Purchasers under this Agreement, the Company shall have the right until the occurrence and continuance of an Event of Default, to sell, lease or otherwise dispose of the Assets and to collect the Accounts, in each case only in the ordinary course of the Company’s business.

5.6Limitation on Debt. For so long as any Note (or portion thereof) remains outstanding, the Company will not raise any additional indebtedness ranking pari passu with or senior to the Notes and will be precluded from incurring additional subsidiary level indebtedness such that consolidated debt/EBITDA ratio would exceed 3.0 times EBITDA.

5.7Opinion of Counsel. In connection with the Closing, the Company shall deliver an opinion of Counsel that the membership interests underlying the LLC Interests Collateral constitute the legal valid binding obligation of the obligor and such interests have been validly issued under the Texas Limited Liability Company Act.

5.8Collateral Impairment. To the extent the Purchasers determine in their reasonable discretion that the LLC Interests Collateral has become materially impaired and provide a notice to the Company detailing the analysis underlying such determination, Purchasers shall have the right to demand that the Company replace within a commercially reasonable time such LLC Interests Collateral with replacement collateral of JetPay or the Company; provided, however, that in no event shall the Company be obligated to provide such replacement collateral if the provision of such collateral would cause the Company to breach any existing material contractual obligations then in effect at the time of such request.

5.9Financial Statements. For so long as any Note (or portion thereof) remains outstanding, the Company shall deliver or cause to be delivered upon request of the Payees within 15 business days: (i) a balance sheet for each of the Company, ADC and JetPay as of the last day of the previous calendar month, (ii) a statement of income for each of the Company, ADC and JetPay for the monthly period ending on the last day of the previous calendar month and (iii) a statement of cash flows for each of the Company, ADC and JetPay for the monthly period ending on the last day of the previous calendar month.

5.10No Further Liens. For so long as any Note (or portion thereof) remains outstanding, the Company will maintain good title to, or the right to use, the Assets and the LLC Interests Collateral, as the case may be, free and clear of any Liens or restrictions on the transfer thereof except for (i) the Permitted Liens or (ii) Liens approved by each of the Purchasers.

5.11Definitions. For purposes of this Agreement, each of the following terms has the meaning set forth below:

“Accounts” means all bona fide rights of the Company, now existing or hereafter acquired, to payment for goods sold or leased or for services rendered or for royalty payments or payments under any license, which are not evidenced by an instrument or Chattel Paper, whether or not earned by performance.

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“Assets” means all assets of the Company whether now existing or hererafter arising or acquired, including all proceeds thereof, provided, however, that Assets shall not include the LLC Interests Collateral.

“Chattel Paper” means a writing or writings which evidence both a monetary obligation and a security interest in, or a lease of, specific goods. When a transaction is evidenced both by such a security agreement or a lease and by an instrument or a series of instruments, the group of writings taken together constitutes Chattel Paper.

“EBITDA” means total revenues minus total expenses, plus taxes, depreciation, amortization, and interest expense.

“Permitted Liens” means: (i) Liens for any taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings; (ii) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of custom duties in connection with the importation of goods; (iii) deposits in the ordinary course of business under worker’s compensation, unemployment insurance, social security and other similar laws, or to secure the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure indemnity, performance or other similar bonds for the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure statutory obligations (other than liens arising under ERISA or environmental liens) or surety or appeal bonds, or to secure indemnity, performance or other similar bonds; (iv) leases or subleases and nonexclusive licenses and sublicenses granted to others in the ordinary course of the Company’s business; (v) easements, reservations, rights-of-way, restrictions, minor defects or irregularities in title and other similar charges or encumbrances affecting real property that do not materially adversely impact the Company's ability to utilize such real properties; (vi) Liens of materialmen, mechanics, warehousemen, carriers, artisan’s or other similar Liens arising in the ordinary course of the Company’s business or by operation of law with respect to amounts not yet due and payable and (vii) Liens arising out of the Loan Agreement, dated as of May 31, 201, by and among Ten Lords Ltd, Providence Interactive Capital, LLC, JetPay, JetPay ISO Services, LLC, JetPay Merchant Services, LLC, JT Holdings, L.P., JT Holdings Management, LLC, WLES, Ltd. and Trent Voigt.

“Secured Obligations” means all money, debts, obligations and liabilities which now are or have been or at any time hereafter may be or become due, owing or incurred by the Company to the Purchasers, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, and which, in all instances, arise under, out of, or in connection with this Agreement and the Notes.

“UCC” means the Uniform Commercial Code of the State of Delaware as in effect on the date hereof and as amended from time to time hereafter.

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ARTICLE 6

Miscellaneous

6.1Governing Law. This Agreement shall be governed in all respects by the laws of the State of Delaware, as applied to contracts made and to be fully performed entirely within such State between residents of such State.

6.2Survival. The representations, warranties, covenants and agreements made herein shall survive any investigation made by any Purchaser or the Company and the closing of the transactions contemplated hereby.

6.3Successors and Assigns. Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto. Neither this Agreement nor any term or provision hereof may be assigned to another party without the prior written consent of the other parties hereto; provided, however, that the rights of any Purchaser to purchase the Notes shall be assignable to fund entities affiliated with such Purchaser without the prior written consent of the other parties hereto.

6.4Fees and Expenses. Each party shall bear its own fees and expenses in connection with this Agreement and the transactions contemplated hereby.

6.5Entire Agreement; Amendment. This Agreement and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof. Neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the Company and Purchasers holding a majority of the then outstanding principal amount of the Notes (or if the Notes have been converted, a majority of the shares of Conversion Stock, none of which having been sold to the public) or transferees of such Purchasers.

6.6Notices, etc. All notices, demands, requests or other communications that may be or are required to be given, served or sent by any party permitted herein will be in writing and shall be mailed by first class, registered or certified mail, return receipt requested, postage prepaid, or transmitted by hand delivery, overnight courier or facsimile transmission, addressed as follows: (a) if to the Company, to Universal Business Payment Solutions Acquisition Corporation, Radnor Financial Center, 150 North Radnor-Chester Road, Suite F-200, Radnor PA 19087, Attention: Chief Executive Officer, with a copy to Dechert LLP, 2929 Arch Street, Philadelphia, PA 19104, Attention: James A. Lebovitz, Facsimile (215) 994-2222 and (b) if to a Purchaser, at the address set forth in Exhibit A for such Purchaser, or at such other address or addresses as shall have been furnished in writing to the Company. Each notice or other communication that is mailed, delivered or transmitted in the manner described above shall be deemed sufficiently given, served, sent and received for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, the fax confirmation sheet or the affidavit of messenger being deemed conclusive evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.

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6.7Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any holder of the Notes (and the Conversion Stock) upon any breach or default of the Company under this Agreement, shall impair any such right, power or remedy of such holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any holder of the Notes (and the Conversion Stock) of any breach or default under this Agreement, or any waiver on the part of such holder of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any such holder, shall be cumulative and not alternative.

6.8Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

6.9Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent Jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party.

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IN WITNESS WHEREOF, the parties have executed this Secured Convertible Note Agreement as of the date first written above.

COMPANY:
UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION,
a Delaware Company
By:	/s/ Bipin C. Shah
Name: Bipin C. Shah
Title: Chief Executive Officer

Address:	Radnor Financial Center
	150 North Radnor-Chester Road
	Suite F-200
	Radnor, PA 19087

[Signature Page to Note Purchase Agreement]

PURCHASERS:
MENDOTA INSURANCE COMPANY
By:	/s/ William A. Hickey, Jr.
Name: William A. Hickey, Jr.
Title: President

[Signature Page to Note Purchase Agreement]

PURCHASERS:
IRA LUBERT
By:	/s/ Ira Lubert
Name:
Title:

[Signature Page to Note Purchase Agreement] 

PURCHASERS:
AMERICAN SERVICE INSURANCE COMPANY
By:	/s/ Scott D. Wollney
Name: Scott D. Wollney
Title: President and CEO

[Signature Page to Note Purchase Agreement]

PURCHASERS:
R8 CAPITAL PARTNERS, LLC
By:	/s/ Bruce V. Rauner
Name: Bruce V. Rauner
Title: President

[Signature Page to Note Purchase Agreement]

PURCHASERS:
Special Opportunities Fund, Inc.
By:	/s/ Andrew Dakos
Name: Andrew Dakos
Title: President

[Signature Page to Note Purchase Agreement]

PURCHASERS:
Bulldog Investors General Partnership
By:	/s/ Andrew Dakos
Name: Andrew Dakos
Title: Managing General Partner

[Signature Page to Note Purchase Agreement]

EXHIBIT A

SCHEDULE OF PURCHASERS

Name and Address	Loan Amount
AMERICAN SERVICE INSURANCE COMPANY	1,000,000
MENDOTA INSURANCE COMPANY	2,000,000
SPECIAL OPPORTUNITIES FUND, INC.	234,000
BULLDOG INVESTORS GENERAL PARTNERS	1,766,000
R8 Capital Partners, LLC	3,000,000
IRA LUBERT	2,000,000
Total:	$10,000,000

[Signature Page to Note Purchase Agreement]

EXHIBIT B

FORM OF SECURED CONVERTIBLE PROMISSORY NOTE

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

SECURED CONVERTIBLE PROMISSORY NOTE

[  ] December 28, 2012

FOR VALUE RECEIVED, the undersigned, UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION, a Delaware corporation (the “Company”) with its principal place of business at Radnor Financial Center, Suite F-200, Radnor, PA 19087, promises to pay to the order of Special Opportunities Fund, Inc., or its registered transferees or assigns (the “Payee”), the principal sum of [ ] together with simple interest on the unpaid principal balance from time to time outstanding, computed from the date of original issuance of this Note, at the rate of twelve percent (12%) per annum, on the basis of a 365-day year, until paid in full; provided, however that upon the occurrence and during the continuance of an Event of Default (as defined below), this Note will bear interest at a rate of eighteen percent (18%) per annum as measured from the date of the occurrence of such Event of Default. Interest shall be payable in cash on a quarterly basis in arrears within five (5) business days of the end of each calendar quarter commencing on the completion of the first full calendar quarter following the Closing Date.

1.Notes. This Convertible Promissory Note (the “Note”) is issued as a part of a series of similar notes issued by the Company in the aggregate principal amount of up to Ten Million Dollars ($10,000,000) pursuant to a certain Secured Convertible Note Agreement, dated as of December __, 2012, by and among the Company, the Payee and any other Purchaser named therein (the “Note Agreement”) (together, all such notes sometimes referred to as the “Notes”). The Note Agreement is incorporated by reference herein.

2.Payment and Interest. Subject to earlier conversion or repayment as provided in Sections 3 and 4 below, the outstanding principal amount of the Note, along with any and all accrued but unpaid interest hereunder, shall become due and payable on the earliest to occur of (i) December 31, 2014 (the “Maturity Date”), or (ii) an Event of Default (as defined in Section 4 below). All payments hereunder, whether for principal, interest or otherwise shall be made in immediately available United States funds sent to the Payee at the address set forth for the Payee in the preamble to this Note or such other address furnished in writing to the Company for that purpose or by wire-transfer to an account specified in writing by Payee. Interest hereunder shall accrue on the outstanding principal amount of this Note from the Closing Date until the earlier of (a) the repayment in full of the principal amount hereunder and the payment of all accrued but unpaid interest hereunder or (b) the earlier conversion of the outstanding principal amount hereunder and all accrued but unpaid interest hereunder in accordance with Section 3 below. All payments received by the Payee will be applied first to costs of collection, if any, then to interest, and the balance to principal. Capitalized terms used herein without definition are used herein with the meanings ascribed to such terms in the Note Agreement. The Company shall not prepay without the written consent of holders of 100% of the outstanding principal of the Notes.

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3.      Optional Conversion.

(a) Upon the election of the Payee, (i) following the consummation (the “Closing”) of the transactions contemplated by each of (A) the Agreement and Plan of Merger, dated as of July 6, 2012, as amended, by and among the Company, JP Merger Sub, LLC, WLES, L.P. and certain other parties thereto and (B) the Agreement and Plan of Merger, dated as of July 6, 2012, as amended, by and among the Company, ADC Merger Sub, Inc., AD Computer Corporation, Payroll Tax Filing Services, Inc., and certain other stockholders party thereto and (ii) prior to the Maturity Date, all or any portion, of the unpaid principal and accrued interest under the Note shall convert into a number of shares of Common Stock of the Company, par value $0.001, (the “Financing Stock”) and shall be appropriately adjusted in the event of stock dividends, stock splits, consolidations, reclassifications and combinations. equal to the quotient obtained by dividing (i) the amount of the unpaid principal and accrued interest on the Note that the Purchaser elects to convert, by (ii) $5.15 (subject to any adjustments as set forth herein, including for the avoidance of doubt, Section 4.5 of the Note Agreement), with any resulting fraction of a share being rounded downward to the nearest whole share and with the Company paying the Payee any remaining amount of unpaid principal or interest not converted into such whole number of shares.

(b) If the Payee elects to convert all of the unpaid principal and accrued interest under the Note in accordance with Section 3(a), then the Payee shall, following the Closing and at least ten (10) business days prior to the Maturity Date, deliver a written notice to the Company indicating the Payee’s election to convert this Note pursuant to Section 3(a). In the event of a conversion of this Note pursuant to Section 3(a), the Payee shall (i) surrender this Note to the Company for cancellation and exchange into the Financing Stock, and (ii) execute and deliver all agreements, documents, instruments and certificates, as may be reasonably requested by the Company in connection with the conversion of this Note. At the time of conversion of this Note, the Company will issue to the Payee, or its registered nominee or assigns, certificate(s) for the number of shares of Financing Stock, into which this Note is then convertible, with any resulting fraction of a share being rounded downward to the nearest whole share, and the Company will pay to the Payee cash for the amounts not so converted as a result of the above-referenced downward rounding. The issuance of certificate(s) for shares of the Financing Stock, shall be made without charge to the Payee for any issuance tax in respect thereof or other cost incurred by the Company in connection with such conversion and the related issuance of the Financing Stock. Upon conversion of this Note, the Company shall take all such actions as are necessary in order to ensure that the Financing Stock issuable with respect to such conversion shall be validly issued, fully paid and nonassessable.

(c) (i) If the Company shall at any time or from time to time after the date hereof, effect a split or combination of the Common Stock of the Company affecting the Financing Stock (or pay a stock dividend), then the number of shares of Financing Stock shall be proportionately adjusted. Any such adjustments shall be effective at the close of business on the date the split or combination becomes effective or the date of payment of the dividend, as applicable. 

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 (ii)  Merger Sale, Reclassification, Etc.  In case of any (A) consolidation or merger (including a merger in which the Company is the surviving entity), (B) sale or other disposition of all or substantially all of the Company’s assets or distribution of property to members (other than distributions payable out of earnings or retained earnings), or reclassification, change or conversion of the outstanding securities of the Company or of any reorganization of the Company (or any other company the stock or securities of which are at the time receivable upon the conversion of this Note) or any similar corporate reorganization on or after the date hereof, then and in each such case the Payee of this Note, upon the exercise of the Note, shall be entitled to receive, in lieu of the Financing Stock, the number of shares of Financing Stock to which such Payee would have been entitled upon such consummation if such Payee had exercised this Note immediately prior thereto."

(iii) Share Issuance. If at any time following the delivery of this Note the Company shall have issued shares of Common Stock or securities issuable or convertible into shares of Common Stock at a price below $5.15 per share (which for the avoidance of doubt shall be measured by taking into account any transfers of Common Stock from existing stockholders of the Company to the recipient of such issuances at a price below $5.15 per share), the Conversion Price shall be such lower price and shall be the basis for any further adjustments as set forth herein.

4.      Event of Default. The outstanding principal and accrued interest hereunder shall, at the option of the Payee, become due and payable without notice or demand, upon the happening of any one of the following specified events (each, an “Event of Default”): (a) the Company shall fail to pay any principal or interest hereunder when due; (b) the Company shall fail to perform or observe any other material term, covenant or agreement contained herein or in the Note Agreement on its part to be performed or observed and any such failure remains unremedied for ten (10) business days after the occurrence of such event; (c) material breach of any of the representations or warranties made by the Company in the Note Agreement (d) an Event of Default has occurred and is continuing under any of the Notes after the Company has been provided with ten (10) business days to cure (e) the Company shall (i) admit in writing its inability to pay its debts generally as they become due; (ii) commence a voluntary case under Title 11 of the United States Code as from time to time in effect; (iii) file an answer or other pleading admitting or failing to deny the material allegations of a petition filed against it commencing an involuntary case under said Title 11, or seek, consent to or acquiesce in the relief therein provided, or fail to controvert timely the material allegations of any such petition; (iv) have a petition filed commencing involuntary bankruptcy proceedings against the Company in any involuntary case commenced under said Title 11; (v) seek relief as a debtor under any applicable law, other than said Title 11, of any jurisdiction relating to the liquidation or reorganization of debtors or to the modification or alteration of the rights of creditors, or consent to or acquiesce in such relief; (vi) have an order entered against the Company by a court of competent jurisdiction (A) finding it to be bankrupt or insolvent, (B) ordering or approving its liquidation, reorganization or any modification or alteration of the rights of its creditors, or (C) assuming custody of, or appointing a receiver or other custodian for, all or a substantial part of its property; or (vii) make a general assignment for the benefit of its creditors, or appoint or consent to the appointment of a receiver or other custodian for all or a substantial part of its property. Notwithstanding anything to the contrary contained herein, an Event of Default occurring with respect to any Note issued pursuant to the Note Agreement shall constitute an Event of Default hereunder.

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5.      Security. This Note is secured pursuant to the Note Agreement. Reference is hereby made to the Note Agreement for a description of the nature and the extent of the security for this Note and the rights with respect to such security of the Payee.

6.      Suits for Enforcement. Upon the occurrence of any one or more Events of Default, the Payee may proceed to protect and enforce its rights by suit in equity, action at law or by other appropriate proceeding, whether for the specific performance of any covenant or agreement contained in this Note or the Note Agreement, or in aid of the exercise of any power granted in this Note or the Note Agreement, or may proceed to enforce the payment of this Note, or to enforce any other legal or equitable right of the Payee. The Payee may direct the time, method and place of conducting any proceeding for any remedy available to it. In case of any Event of Default under this Note, the Company will pay to the Payee such amount as shall be sufficient to cover the reasonable costs and expenses of such Payee due to such Event of Default or in enforcing or collecting this Note.

7.      Notices. All notices, demands, requests or other communications that may be or are required to be given, served or sent by any party pursuant to this Note will be in writing, will reference this Note and shall be mailed by first class, registered or certified mail, return receipt requested, postage prepaid, or transmitted by hand delivery, overnight courier or facsimile transmission, addressed as follows: (a) if to the Company, to Universal Business Payment Solutions Acquisition Corporation, Radnor Financial Center, 150 North Radnor-Chester Road, Suite F-200, Radnor PA 19087, Attention: Chief Executive Officer, with a copy to Dechert LLP, 2929 Arch Street, Philadelphia, PA 19104, Attention: James A. Lebovitz, Facsimile (215) 994-22220 and (b) if to the Payee, at the address set forth for the Payee in the preamble to this Note, or at such other address or addresses as shall have been furnished in writing by such party to the others, Attention: General Counsel. Each notice or other communication that is mailed, delivered or transmitted in the manner described above shall be deemed sufficiently given, served, sent and received for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, the fax confirmation sheet or the affidavit of messenger being deemed conclusive evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.

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8.      General. No remedy herein conferred upon the Payee is intended to be exclusive of any other remedy and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise. No course of dealing between the Company and the Payee or any delay on the part of the Payee in exercising any rights hereunder shall operate as a waiver of any right. To the extent permitted by law, the Company hereby expressly waives presentment, demand, and protest, notice of demand, dishonor and nonpayment of this Note, and all other notices or demands of any kind in connection with the delivery, acceptance, performance, default or enforcement hereof, and hereby consents to any delays, extensions of time, renewals, waivers or modifications that may be granted or consented to by the Payee with respect to the time of payment. This Note may not be amended or modified, and no provisions hereof may be waived, without the written consent of the Company and the holders of all outstanding principal under the Notes at the time such modification or amendment shall become effective. Notwithstanding the foregoing, the Payee may make any waiver to any action hereunder as to its own rights without a similar action being taken by the holders of the other Notes, provided that such waiver is in writing. If any provision of this Note shall be declared void or unenforceable by any judicial or administrative authority, the validity of any other provision and of the entire Note shall not be affected thereby. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of the Note, the Company will issue a new Note, of like tenor and amount and dated the date to which interest has been paid, in lieu of such lost, stolen, destroyed or mutilated Note. This Note shall be binding upon and inure to the benefit of Payee and its successors and assigns. This Note and the rights and obligations herein may not be assigned by the Payee, except to fund entities affiliated with Payee or in the case of an individual Payee to an entity wholly-owned by such individual Payee, without the prior written consent of the Company.

9.      Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

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IN WITNESS WHEREOF, the Company has executed this Note as an instrument under seal as of the day and year first above written.

UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION

By: __________________
Name: Bipin C. Shah

Title: Chief Executive Officer

[INVESTOR]

By: __________________
Name: ________________

Title:_________________

EXHIBIT C

LLC INTERESTS COLLATERAL

“All of the LLC Interests of JetPay, LLC owned free and clear of liens by the Company, which consists of 50% of the issued and outstanding LLC interests of JetPay, LLC”

EXHIBIT D

Form of Registration Rights Agreement

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as December 28, 2012, by and among Universal Business Payment Solutions Acquisition Corporation, a Delaware corporation (the “Company”), and the undersigned party whose name appears listed under the heading “Stockholder” on the signature page hereto.

1.Definitions.

“Common Stock” means (i) shares of the Common Stock, par value $0.001 per share, of the Company and (ii) any shares of capital stock of the Company issued or issuable with respect to securities referred to in clause (i) above by way of a stock dividend or distribution payable thereon or stock split, reverse stock split, recapitalization, reclassification, reorganization, exchange, subdivision or combination thereof.

“Damages” has the meaning set forth in Section 6(a) hereof.

“Demand Registration” has the meaning set forth in Section 4(a) hereof.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

“Incidental Registration” has the meaning set forth in Section 3(a) hereof.

“Prospectus” means the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference in such Prospectus.

“Registration Expenses” means (i) all registration and filing fees, (ii) fees and expenses of compliance with any securities or blue sky laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the securities registered), (iii) printing expenses, (iv) internal expenses of the Company (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), (v) reasonable fees and disbursements of counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company (including the expenses relating to any comfort letters or costs associated with the delivery by independent certified public accountants of a comfort letter or comfort letters requested pursuant to Section 5(g) hereof), (vi) reasonable fees and expenses of any special experts retained by the Company in connection with such registration, (vii) reasonable fees and expenses of one counsel for all of the holders of Registrable Securities participating in the offering selected (A) by the Stockholders, or (B) in any other case, by the holders of the majority of Registrable Securities to be sold for the account of all holders of Registrable Securities in the offering, (viii) fees and expenses in connection with any review of underwriting arrangements by the Financial Industry Regulatory Authority (“FINRA”) including fees and expenses of any “qualified independent underwriter” and (ix) fees and disbursements of underwriters customarily paid by issuers or sellers of securities, but shall not include any underwriting fees, discounts or commissions attributable to the sale of Registrable Securities, or any out-of-pocket expenses (except as set forth in clause (vii) above) of the holders of Registrable Securities to be sold in the offering (or the agents who manage their accounts) or any fees and expenses of underwriter’s counsel.

“Registration Statement” means any registration statement of the Company which covers any of the Registrable Securities pursuant to the terms hereof, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

“Registrable Securities” has the meaning set forth in Section 2 hereof.

“Special Registration Statement” means (i) a registration statement on Forms S-8 or S-4 or any similar or successor form or any other registration statement relating to an exchange offer or an offering of securities solely to the Company’s security holders, employees, directors, consultants or other business associates or (ii) a registration statement registering a Unit Offering.

“Underwritten Registration” or “Underwritten Offering” means a registration in which securities of the Company are sold to an underwriter for reoffering to the public.

2.Registrable Securities. The securities entitled to the benefits set forth herein are the Registrable Securities. As used herein, “Registrable Securities” means the shares of Common Stock that are issued (or issuable) and outstanding as a result of the Stockholder’s conversion rights under that certain Secured Convertible Promissory Note, dated as of December 28, 2012, executed by the Company in favor of the Stockholder; provided, however, that each share of Common Stock shall cease to be a Registrable Security when (i) it has been effectively registered under the Securities Act and disposed of in accordance with the registration statement covering it; (ii) it is distributed to the public pursuant to Rule 144 (or any similar provisions then in force) under the Securities Act or all shares of Common Stock held by an Investor or its Affiliates are then distributable at one time under Rule 144 (or any similar provisions then in force) under the Securities Act; or (iii) it has otherwise been transferred and a new certificate or other evidence of ownership for it not bearing or requiring a legend and not subject to any stop transfer order has been delivered by or on behalf of the Company and no other restriction on transfer exists under the Securities Act.

3.Incidental Registration.

(a)Right to Include Common Stock. If at any time or from time to time following the date the Company proposes to register any of its Common Stock under the Securities Act (other than on a Special Registration Statement), whether or not for sale for its own account, it will each such time, as promptly as practicable following the date of filing with the Commission or other applicable regulatory authority of a registration statement or similar document with respect to such registration, give written notice (the “Incidental Registration Notice”) to all holders of Registrable Securities of its intention to register its Common Stock under the Securities Act, and of such holders’ rights under this Section 3. Upon the written request of any such holders of Registrable Securities made within five business (5) days of the date of the Incidental Registration Notice (which request shall specify the aggregate number of the Registrable Securities to be registered and will also specify the intended method of disposition thereof), the Company will effect the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the holders thereof (an “Incidental Registration”), to the extent required to permit the public disposition (in accordance with such intended methods thereof) of the Registrable Securities to be so registered; provided, however, that (i) if, at any time after giving written notice of its intention to register shares of Common Stock and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register the Company’s Common Stock, the Company shall give written notice of such determination to each holder of Registrable Securities and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay the Registration Expenses in connection therewith); (ii) if a registration requested pursuant to this Section 3 shall involve an underwritten public offering, any holder of Registrable Securities requesting to be included in such registration may elect, in writing at least five (5) days prior to the effective date of the registration statement filed in connection with such registration, not to register such securities in connection with such registration; and (iii) if, at any time after the 180-day or shorter period specified in Section 3(b), the sale of the securities has not been completed, the Company may withdraw from the registration the Registrable Securities which the Company has been requested to register and which have not been sold.

(b)Priority in Incidental Registrations. If a registration pursuant to Section 3(a) involves an Underwritten Offering and the managing underwriter advises the Company in writing that, in its opinion, the total number of shares of Common Stock to be included in such registration, including the Registrable Securities requested to be included pursuant to this Section 3, exceeds the maximum number of shares of Common Stock specified by the managing underwriter that may be distributed without adversely affecting the price, timing or distribution of such shares of Common Stock, then the Company shall include in such registration only such maximum number of Registrable Securities which, in the reasonable opinion of such underwriter or underwriters, can be sold in the following order of priority: (i) first, all of the shares of Common Stock that the Company proposes to sell for its own account, if any, (ii) second, all of the shares of Common Stock being registered by holder(s) of Registrable Securities pursuant to a Demand Registration (as hereinafter defined), and (iii) third, the Registrable Securities of the holder(s) of Registrable Securities requested to be included in such Incidental Registration. To the extent that shares of Common Stock to be included in the Incidental Registration must be allocated among the holder(s) of Registrable Securities pursuant to clause (iii) above, such shares shall be allocated pro rata among the holder(s) of Registrable Securities based on the number of shares of Common Stock that such holder(s) of Registrable Securities shall have requested to be included therein. Notwithstanding the foregoing, if an Incidental Registration is an Underwritten Offering, the managing underwriter or underwriters may select shares for inclusion, or exclude shares completely, in such Incidental Registration on a basis other than a pro rata basis if, in the reasonable opinion of such underwriter or underwriters, selection on such other basis, or inclusion of such shares, would be material to the success of the offering.

(c)Expenses. The Company will pay all Registration Expenses in connection with any registration of Registrable Securities requested pursuant to this Section 3.

(d)Liability for Delay. The Company shall not be held responsible for any delay in the filing or processing of a registration statement which includes any Registrable Securities due to requests by holders of Registrable Securities pursuant to this Section 3 nor for any delay in requesting the effectiveness of such registration statement.

(e)Participation in Underwritten Registrations. No holder of Registrable Securities may participate in any Underwritten Registration hereunder unless such holder (i) agrees to sell such holder’s Common Stock on the basis provided in any underwriting arrangements approved by the persons who have selected the underwriter and (ii) accurately completes in a timely manner and executes all questionnaires, powers of attorney, escrow agreements, underwriting agreements and other documents customarily required under the terms of such underwriting arrangements.

4.Demand Registration.

(a)Right to Demand Registration. Subject to Section 4(b) below, the Stockholder shall be entitled to make a written request (“Demand Registration Request”) to the Company for registration with the Commission under and in accordance with the provisions of the Securities Act of all or part of the Registrable Securities owned by it (a “Demand Registration”) (which Demand Registration Request shall specify the intended number of Registrable Securities to be disposed of by such holder and the intended method of disposition thereof); provided, however, that (i) the Company may, if the Board of Directors so determines in the exercise of its reasonable judgment that due to a pending or contemplated acquisition or disposition or public offering it would be inadvisable to effect such Demand Registration at such time, defer such Demand Registration for a single period not to exceed ninety (90) days but, if requested by the party requesting such Demand Registration, the Company shall prepare for such Demand Registration so that it will be in a position to file for such Demand Registration promptly following the expiration of such period; provided, however, that the Company may not defer Demand Registrations more than once in any 365-day period, and (ii) if the Company elects not to effect the Demand Registration pursuant to the terms of this sentence, no Demand Registration shall be deemed to have occurred for purposes hereof. Promptly after receipt of the Demand Registration Request, the Company will serve written notice (the “Demand Notice”) of such Demand Registration Request to all holders of Registrable Securities and, subject to paragraph (c) below, the Company will include in such registration all Registrable Securities of such holders with respect to which the Company has received written requests for inclusion therein from such holders within five (5) business days after the receipt by the applicable holder of the Demand Notice. All requests made pursuant to this Section 4(a) will specify the aggregate number of the Registrable Securities to be registered and will also specify the intended methods of disposition thereof.

(b)Number of Demand Registrations. The Stockholder shall be entitled to make up to three (3) Demand Registration Requests at any time. A Demand Registration shall not be counted as a Demand Registration hereunder until such Demand Registration has been declared effective and maintained continuously effective for a period of at least six (6) months or such shorter period when all Registrable Securities included therein have been sold in accordance with such Demand Registration.

(c)Priority on Demand Registration. If any of the Registrable Securities proposed to be registered pursuant to a Demand Registration are to be sold in a firm commitment Underwritten Offering and the managing underwriter or underwriters of a Demand Registration advise the Company and the holders of such Registrable Securities in writing that in its or their reasonable opinion the number of shares of Common Stock proposed to be sold in such Demand Registration exceeds the maximum number of shares specified by the managing underwriter that may be distributed without adversely affecting the price, timing or distribution of the Common Stock, the Company shall include in such registration only such maximum number of Registrable Securities which, in the reasonable opinion of such underwriter or underwriters can be sold in the following order of priority: (i) first, the Registrable Securities requested to be included in such Demand Registration held by the party requesting such Demand Registration and such party’s Permitted Transferees; (ii) second, shares of Common Stock to be offered by the Company in such Demand Registration; and (iii) third, shares of Common Stock requested to be included in such Demand Registration held by all other holders of Common Stock, provided that such amount shall be allocated among such other holders as provided in Section 3(b).

(d)Expenses. The Company will pay all Registration Expenses in connection with any registration of Registrable Securities requested pursuant to this Section 4.

5.Registration Procedures. If and whenever the Company is required to effect or cause the registration of any Registrable Securities under the Securities Act as provided herein, the Company will, as expeditiously as possible:

(a)prepare and file with the Commission a registration statement with respect to such Registrable Securities, and use its best efforts to cause such registration statement to become effective; provided, however, that the Company may discontinue any registration of its securities which is being effected pursuant to Sections 3 or 4 herein at any time prior to the effective date of the registration statement relating thereto, provided, however, that any such discontinuance is conducted in accordance with all other applicable provisions hereof;

(b)prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period of not less than 180 days or such shorter period which will terminate when all Registrable Securities covered by such registration statement have been sold (but not before the expiration of the applicable period referred to in Section 4(3) of the Securities Act and Rule 174 thereunder, if applicable) and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement;

(c)furnish to each seller of such Registrable Securities such number of copies of such registration statement and of each such amendment and supplement thereof (in each case including all exhibits), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and summary prospectus), in conformity with the requirements of the Securities Act, and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities by such seller;

(d)use its best efforts to register or qualify such Registrable Securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as each seller shall request, and do any and all other acts and things which may be necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or subject itself to general taxation in any jurisdiction where it is not then so subject;

(e)immediately notify each seller of any Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Act within the appropriate period mentioned in clause (b) of this Section 5, of the Company becoming aware that the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and within ten (10) days prepare and furnish to all sellers a reasonable number of copies of an amended or supplemental prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;

(f)The Company will have the right, in its sole discretion, to select an underwriter or underwriters. In connection with any Public Offering, the Company will enter into customary agreements (including an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities in any such Public Offering, including the engagement of a “qualified independent underwriter” in connection with the qualification of the underwriting arrangements with the FINRA;

(g)if such Registrable Securities are not already listed or quoted and if such listing is then permitted under the rules of an exchange on which the Common Stock is then listed, use its best efforts to list such Registrable Securities on any securities exchange on which the Common Stock is then listed, and provide an independent transfer agent and registrar for such Registrable Securities covered by such registration statement not later than the effective date of such registration statement;

(h)furnish to each seller of Registrable Securities covered by such registration statement a signed counterpart, addressed to such seller (and the underwriters, if any) of:

(i) an opinion of counsel for the Company, dated the effective date of such registration statement (or, if such registration involves an underwritten public offering, dated the date of the closing under the underwriting agreement), reasonably satisfactory in form and substance to the sellers of not less than fifty percent (50%) of such Registrable Securities (and the managing underwriter, if any); and

(ii) a “comfort” letter, dated the effective date of such registration statement (and, if such registration involves an underwritten public offering, dated the date of the closing under the underwriting agreement), signed by the independent public accountants who have certified the Company’s financial statements included in such registration statement, covering such matters with respect to such registration statement as are customarily covered in accountants’ letters delivered to the underwriters in underwritten offerings of securities as may reasonably be requested by the sellers of not less than fifty percent (50%) of such Registrable Securities (and the managing underwriter, if any);

(i)make available for inspection by any seller of such Registrable Securities covered by such registration statement, by any underwriter participating in any disposition to be effected pursuant to such registration statement and by any attorney, accountant or other agent retained by any such seller or any such underwriter (individually, an “Inspector” and collectively, the “Inspectors”), all pertinent financial and other records, pertinent corporate documents and properties of the Company as shall be reasonably necessary to enable them to exercise their due diligence responsibility (collectively, the “Records”), and cause all of the Company’s officers, directors and employees to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement; provided, however, that any Records that are designated by the Company in writing as confidential shall be kept confidential by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such registration statement or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction or by any regulatory authority having jurisdiction. Each Investor agrees that non-public information obtained by it as a result of such Inspections shall be deemed confidential and acknowledges its obligations under the Federal securities laws not to trade any securities of the Company on the basis of material non-public information; and

(j)cause appropriate officers of the Company to (i) prepare and make presentations at any “road shows” and before analysts and rating agencies, as the case may be, (ii) take other actions to obtain ratings for any Registrable Securities and (iii) otherwise use their reasonable best efforts to cooperate as reasonably requested by the underwriters in the offering, marketing or selling of the Registrable Securities.

(k)The Company may require each seller of Registrable Securities as to which any registration is being effected promptly to furnish to the Company such information regarding the distribution of such Registrable Securities as may be legally required. Such information shall be furnished in writing and shall state that it is being furnished for use in the registration statement.

(l)Each holder of Registrable Securities agrees by acquisition of such Registrable Securities that, upon receipt of any notice from the Company of the happening of any event of the kind described in clause (e) of this Section 5, such holder will forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such holder’s receipt of the copies of the supplemented or amended prospectus contemplated by clause (e) of this Section 5, and, if so directed by the Company, such holder will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of the Company’s notice. In the event the Company shall give any such notice, the period mentioned in clause (b) of this Section 5 shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to clause (e) of this Section 5 and including the date when each seller of Registrable Securities covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by clause (e) of this Section 5.

6.Indemnification.

(a)Indemnification by the Company. The Company hereby agrees to indemnify and hold harmless each holder of Registrable Securities which shall have been registered under the Securities Act, and such holder’s officers, directors and agents and each other Person, if any, who controls such holder within the meaning of the Securities Act and each other Person (including underwriters) who participates in the offering of such Registrable Securities against any losses, claims, damages, liabilities, reasonable attorneys’ fees, costs or expenses (collectively, the “Damages”), joint or several, to which such holder or controlling Person or participating Person may become subject under the Securities Act or otherwise, insofar as such Damages (or proceedings in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact made by the Company or its agents contained in any registration statement under which such Registrable Securities are registered under the Securities Act, in any preliminary prospectus or final prospectus contained therein, or in any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse such holder of Registrable Securities or such controlling Person or participating Person in connection with investigating or defending any such Damages or proceeding; provided, however, that the Company will not be liable in any such case to the extent that any such Damages arise out of or are based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, such preliminary or final prospectus or such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such holder or such controlling or participating Person, as the case may be, specifically for inclusion in any such document; or (ii) an untrue statement or alleged untrue statement, omission or alleged omission in a prospectus if such untrue statement or alleged untrue statement, omission or alleged omission is corrected in an amendment or supplement to the prospectus which amendment or supplement is delivered to such holder in a timely manner and such holder thereafter fails to deliver such prospectus as so amended or supplemented prior to or concurrently with the sale of such Registrable Securities to the Person asserting such Damages and such Damages would have been avoided if such holder had so delivered such prospectus as so amended or supplemented.

(b)Indemnification by the Holders of Registrable Securities Which Are Registered. It shall be a condition of the Company’s obligations herein to effect any registration under the Securities Act that there shall have been delivered to the Company an agreement or agreements duly executed by each holder of Registrable Securities to be so registered, whereby such holder agrees to indemnify and hold harmless the Company, its directors, officers and agents and each other Person, if any, which controls the Company within the meaning of the Securities Act against any Damages, joint or several, to which the Company, or such other Person or such Person controlling the Company may become subject under the Securities Act or otherwise, but only to the extent that such Damages (or proceedings in respect thereof) arise out of or are based upon any untrue statements or alleged untrue statement of any material fact contained, on the effective date thereof, in any registration statement under which such Registrable Securities are registered under the Securities Act, in any preliminary prospectus or final prospectus contained therein or in any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, which, in each such case, has been made in or omitted from such registration statement, such preliminary or final prospectus or such amendment or supplement in reliance upon, and in conformity with, written information furnished to the Company by such holder of Registrable Securities specifically for inclusion in such document. The Company shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above, with respect to information furnished in writing by such Persons specifically for inclusion in any prospectus or registration statement.

(c)Conduct of Indemnification Proceedings. Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of the commencement of any action or proceeding involving a claim referred to in the preceding Sections 6(a) and 6(b); and (ii) unless the indemnified party has been advised by its counsel that a conflict of interest exists between such indemnified and indemnifying parties with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. Whether or not such defense is assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld). No indemnifying party will consent to the entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation; provided, however, that no indemnifying party will consent to the entry of any judgment or enter into any settlement (other than for the payment of money only) without the consent of the indemnified party (which consent will not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of the claim, will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the fees and expenses of such additional counsel or counsels.

(d)Contribution. If for any reason the indemnification provided for in the preceding Sections 6(a) or 6(b) is unavailable to an indemnified party in respect of any Damages referred to therein, the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such Damages in such proportion as is appropriate to reflect not only the relative benefits received by the indemnified party and the indemnifying party, but also the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified parties shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or indemnified parties, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that in no event shall the liability of any selling holder of Registrable Securities hereunder be greater in amount than the difference between the dollar amount of the proceeds received by such holder upon the sale of the Registrable Securities giving rise to such contribution obligation and all amounts previously contributed by such holder with respect to such Damages. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of fraudulent misrepresentation.

6.10.

7.Liquidated Damages. In the event that a Registration Statement is not declared effective by June 30, 2013, the conversion price as set forth in the Secured Convertible Note pursuant to the Note Agreement shall be reduced by $0.15 per share and then by an additional $0.05 per share for every 30 days after June 30, 2013 that the Registration Statement has not been declared effective

8.Hold-Back Agreements.

(a)Restrictions on Public Sale by Company and Holders of Common Stock. The Company and each holder of Common Stock whose Common Stock is eligible for inclusion in a Registration Statement filed pursuant to Sections 3 or 4, if requested by the managing underwriter or underwriters in an Underwritten Offering of any Registrable Securities, agrees not to, directly or indirectly (except with respect to the Company in connection with a Special Registration Statement), (i) offer for sale, sell, pledge or otherwise dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future of) any Common Stock (including, without limitation, Common Stock that may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Commission and Common Stock that may be issued upon exercise of any option or warrant) or securities convertible into or exchangeable for Common Stock , or (ii) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of such Common Stock , whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise, during the ten (10) day period prior to, and for a period of 180 days after, the effective date of the Registration Statement, to the extent timely notified in writing by the managing underwriter, or, with respect to each such holder of Common Stock, the Company. Additionally, the Company agrees to use reasonable efforts to cause each holder of Common Stock purchased from the Company at any time after the date of the Agreement (other than in a registered public offering) to agree to the provisions of this Section 7(a).

(b)Certain Holders of Registrable Securities Excepted. The provisions of Section 7(a) shall not apply to any holder of Registrable Securities if such holder is prevented by applicable statute or regulation from entering into any such agreement; provided, however, that any such holder shall undertake, in its request to participate in any such Underwritten Offering, not to effect any public sale or distribution of Registrable Securities (except as part of such Underwritten Registration) during such period unless it has provided forty-five (45) days prior written notice of such sale or distribution to the managing underwriter or underwriter.

9.Underwritten Registration. If any of the Registrable Securities covered by any Incidental Registration or a Demand Registration are to be sold in an Underwritten Offering, the investment banker or investment bankers and manager or managers that will administer the offering will be selected by the Company. Notwithstanding anything herein to the contrary, no Person may participate in any Underwritten Registration hereunder unless such Person (a) agrees to sell such Person’s securities on the basis provided in any underwritten arrangements approved by the Persons entitled hereunder to approve such arrangement and (b) accurately completes and executes all questionnaires, powers of attorney, indemnities, custody agreements, underwriting agreements and other documents required under the terms of such underwriting arrangements.

* * * * *

IN WITNESS WHEREOF, each Stockholder and the Company has caused its signature page to this Registration Rights Agreement to be duly executed as of the date first written above.

COMPANY:

UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION

By:_____________________________________

Name:  Bipin C. Shah

Title:    Chairman and Chief Executive Officer

STOCKHOLDER:

By:_____________________________________

Name:

Address:
Facsimile:

EX-10.2

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as December 28, 2012, by and among Universal Business Payment Solutions Acquisition Corporation, a Delaware corporation (the “Company”), and the undersigned party whose name appears listed under the heading “Stockholder” on the signature page hereto.

1.Definitions.

“Common Stock” means (i) shares of the Common Stock, par value $0.001 per share, of the Company and (ii) any shares of capital stock of the Company issued or issuable with respect to securities referred to in clause (i) above by way of a stock dividend or distribution payable thereon or stock split, reverse stock split, recapitalization, reclassification, reorganization, exchange, subdivision or combination thereof.

“Damages” has the meaning set forth in Section 6(a) hereof.

“Demand Registration” has the meaning set forth in Section 4(a) hereof.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

“Incidental Registration” has the meaning set forth in Section 3(a) hereof.

“Prospectus” means the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference in such Prospectus.

“Registration Expenses” means (i) all registration and filing fees, (ii) fees and expenses of compliance with any securities or blue sky laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the securities registered), (iii) printing expenses, (iv) internal expenses of the Company (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), (v) reasonable fees and disbursements of counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company (including the expenses relating to any comfort letters or costs associated with the delivery by independent certified public accountants of a comfort letter or comfort letters requested pursuant to Section 5(g) hereof), (vi) reasonable fees and expenses of any special experts retained by the Company in connection with such registration, (vii) reasonable fees and expenses of one counsel for all of the holders of Registrable Securities participating in the offering selected (A) by the Stockholders, or (B) in any other case, by the holders of the majority of Registrable Securities to be sold for the account of all holders of Registrable Securities in the offering, (viii) fees and expenses in connection with any review of underwriting arrangements by the Financial Industry Regulatory Authority (“FINRA”) including fees and expenses of any “qualified independent underwriter” and (ix) fees and disbursements of underwriters customarily paid by issuers or sellers of securities, but shall not include any underwriting fees, discounts or commissions attributable to the sale of Registrable Securities, or any out-of-pocket expenses (except as set forth in clause (vii) above) of the holders of Registrable Securities to be sold in the offering (or the agents who manage their accounts) or any fees and expenses of underwriter’s counsel.

“Registration Statement” means any registration statement of the Company which covers any of the Registrable Securities pursuant to the terms hereof, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

“Registrable Securities” has the meaning set forth in Section 2 hereof.

“Special Registration Statement” means (i) a registration statement on Forms S-8 or S-4 or any similar or successor form or any other registration statement relating to an exchange offer or an offering of securities solely to the Company’s security holders, employees, directors, consultants or other business associates or (ii) a registration statement registering a Unit Offering.

“Underwritten Registration” or “Underwritten Offering” means a registration in which securities of the Company are sold to an underwriter for reoffering to the public.

2.Registrable Securities. The securities entitled to the benefits set forth herein are the Registrable Securities. As used herein, “Registrable Securities” means the shares of Common Stock that are issued (or issuable) and outstanding as a result of the Stockholder’s rights under that certain Share Purchase Agreement, dated as of December 28, 2012, by and among the Company and the Stockholders; provided, however, that each share of Common Stock shall cease to be a Registrable Security when (i) it has been effectively registered under the Securities Act and disposed of in accordance with the registration statement covering it; (ii) it is distributed to the public pursuant to Rule 144 (or any similar provisions then in force) under the Securities Act or all shares of Common Stock held by an Investor or its Affiliates are then distributable at one time under Rule 144 (or any similar provisions then in force) under the Securities Act; or (iii) it has otherwise been transferred and a new certificate or other evidence of ownership for it not bearing or requiring a legend and not subject to any stop transfer order has been delivered by or on behalf of the Company and no other restriction on transfer exists under the Securities Act.

3.Incidental Registration.

(a)Right to Include Common Stock. If at any time or from time to time following the date the Company proposes to register any of its Common Stock under the Securities Act (other than on a Special Registration Statement), whether or not for sale for its own account, it will each such time, as promptly as practicable following the date of filing with the Commission or other applicable regulatory authority of a registration statement or similar document with respect to such registration, give written notice (the “Incidental Registration Notice”) to all holders of Registrable Securities of its intention to register its Common Stock under the Securities Act, and of such holders’ rights under this Section 3. Upon the written request of any such holders of Registrable Securities made within five business (5) days of the date of the Incidental Registration Notice (which request shall specify the aggregate number of the Registrable Securities to be registered and will also specify the intended method of disposition thereof), the Company will effect the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the holders thereof (an “Incidental Registration”), to the extent required to permit the public disposition (in accordance with such intended methods thereof) of the Registrable Securities to be so registered; provided, however, that (i) if, at any time after giving written notice of its intention to register shares of Common Stock and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register the Company’s Common Stock, the Company shall give written notice of such determination to each holder of Registrable Securities and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay the Registration Expenses in connection therewith); (ii) if a registration requested pursuant to this Section 3 shall involve an underwritten public offering, any holder of Registrable Securities requesting to be included in such registration may elect, in writing at least five (5) days prior to the effective date of the registration statement filed in connection with such registration, not to register such securities in connection with such registration; and (iii) if, at any time after the 180-day or shorter period specified in Section 3(b), the sale of the securities has not been completed, the Company may withdraw from the registration the Registrable Securities which the Company has been requested to register and which have not been sold.

(b)Priority in Incidental Registrations. If a registration pursuant to Section 3(a) involves an Underwritten Offering and the managing underwriter advises the Company in writing that, in its opinion, the total number of shares of Common Stock to be included in such registration, including the Registrable Securities requested to be included pursuant to this Section 3, exceeds the maximum number of shares of Common Stock specified by the managing underwriter that may be distributed without adversely affecting the price, timing or distribution of such shares of Common Stock, then the Company shall include in such registration only such maximum number of Registrable Securities which, in the reasonable opinion of such underwriter or underwriters, can be sold in the following order of priority: (i) first, all of the shares of Common Stock that the Company proposes to sell for its own account, if any, (ii) second, all of the shares of Common Stock being registered by holder(s) of Registrable Securities pursuant to a Demand Registration (as hereinafter defined), and (iii) third, the Registrable Securities of the holder(s) of Registrable Securities requested to be included in such Incidental Registration. To the extent that shares of Common Stock to be included in the Incidental Registration must be allocated among the holder(s) of Registrable Securities pursuant to clause (iii) above, such shares shall be allocated pro rata among the holder(s) of Registrable Securities based on the number of shares of Common Stock that such holder(s) of Registrable Securities shall have requested to be included therein. Notwithstanding the foregoing, if an Incidental Registration is an Underwritten Offering, the managing underwriter or underwriters may select shares for inclusion, or exclude shares completely, in such Incidental Registration on a basis other than a pro rata basis if, in the reasonable opinion of such underwriter or underwriters, selection on such other basis, or inclusion of such shares, would be material to the success of the offering.

(c)Expenses. The Company will pay all Registration Expenses in connection with any registration of Registrable Securities requested pursuant to this Section 3.

(d)Liability for Delay. The Company shall not be held responsible for any delay in the filing or processing of a registration statement which includes any Registrable Securities due to requests by holders of Registrable Securities pursuant to this Section 3 nor for any delay in requesting the effectiveness of such registration statement.

(e)Participation in Underwritten Registrations. No holder of Registrable Securities may participate in any Underwritten Registration hereunder unless such holder (i) agrees to sell such holder’s Common Stock on the basis provided in any underwriting arrangements approved by the persons who have selected the underwriter and (ii) accurately completes in a timely manner and executes all questionnaires, powers of attorney, escrow agreements, underwriting agreements and other documents customarily required under the terms of such underwriting arrangements.

4.Demand Registration.

(a)Right to Demand Registration. Subject to Section 4(b) below, the Stockholder shall be entitled to make a written request (“Demand Registration Request”) to the Company for registration with the Commission under and in accordance with the provisions of the Securities Act of all or part of the Registrable Securities owned by it (a “Demand Registration”) (which Demand Registration Request shall specify the intended number of Registrable Securities to be disposed of by such holder and the intended method of disposition thereof); provided, however, that (i) the Company may, if the Board of Directors so determines in the exercise of its reasonable judgment that due to a pending or contemplated acquisition or disposition or public offering it would be inadvisable to effect such Demand Registration at such time, defer such Demand Registration for a single period not to exceed ninety (90) days but, if requested by the party requesting such Demand Registration, the Company shall prepare for such Demand Registration so that it will be in a position to file for such Demand Registration promptly following the expiration of such period; provided, however, that the Company may not defer Demand Registrations more than once in any 365-day period, and (ii) if the Company elects not to effect the Demand Registration pursuant to the terms of this sentence, no Demand Registration shall be deemed to have occurred for purposes hereof. Promptly after receipt of the Demand Registration Request, the Company will serve written notice (the “Demand Notice”) of such Demand Registration Request to all holders of Registrable Securities and, subject to paragraph (c) below, the Company will include in such registration all Registrable Securities of such holders with respect to which the Company has received written requests for inclusion therein from such holders within five (5) business days after the receipt by the applicable holder of the Demand Notice. All requests made pursuant to this Section 4(a) will specify the aggregate number of the Registrable Securities to be registered and will also specify the intended methods of disposition thereof.

(b)Number of Demand Registrations. The Stockholder shall be entitled to make up to three (3) Demand Registration Requests at any time. A Demand Registration shall not be counted as a Demand Registration hereunder until such Demand Registration has been declared effective and maintained continuously effective for a period of at least six (6) months or such shorter period when all Registrable Securities included therein have been sold in accordance with such Demand Registration.

(c)Priority on Demand Registration. If any of the Registrable Securities proposed to be registered pursuant to a Demand Registration are to be sold in a firm commitment Underwritten Offering and the managing underwriter or underwriters of a Demand Registration advise the Company and the holders of such Registrable Securities in writing that in its or their reasonable opinion the number of shares of Common Stock proposed to be sold in such Demand Registration exceeds the maximum number of shares specified by the managing underwriter that may be distributed without adversely affecting the price, timing or distribution of the Common Stock, the Company shall include in such registration only such maximum number of Registrable Securities which, in the reasonable opinion of such underwriter or underwriters can be sold in the following order of priority: (i) first, the Registrable Securities requested to be included in such Demand Registration held by the party requesting such Demand Registration and such party’s Permitted Transferees; (ii) second, shares of Common Stock to be offered by the Company in such Demand Registration; and (iii) third, shares of Common Stock requested to be included in such Demand Registration held by all other holders of Common Stock, provided that such amount shall be allocated among such other holders as provided in Section 3(b).

(d)Expenses. The Company will pay all Registration Expenses in connection with any registration of Registrable Securities requested pursuant to this Section 4.

5.Registration Procedures. If and whenever the Company is required to effect or cause the registration of any Registrable Securities under the Securities Act as provided herein, the Company will, as expeditiously as possible:

(a)prepare and file with the Commission a registration statement with respect to such Registrable Securities, and use its best efforts to cause such registration statement to become effective; provided, however, that the Company may discontinue any registration of its securities which is being effected pursuant to Sections 3 or 4 herein at any time prior to the effective date of the registration statement relating thereto, provided, however, that any such discontinuance is conducted in accordance with all other applicable provisions hereof;

(b)prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period of not less than 180 days or such shorter period which will terminate when all Registrable Securities covered by such registration statement have been sold (but not before the expiration of the applicable period referred to in Section 4(3) of the Securities Act and Rule 174 thereunder, if applicable) and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement;

(c)furnish to each seller of such Registrable Securities such number of copies of such registration statement and of each such amendment and supplement thereof (in each case including all exhibits), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and summary prospectus), in conformity with the requirements of the Securities Act, and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities by such seller;

(d)use its best efforts to register or qualify such Registrable Securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as each seller shall request, and do any and all other acts and things which may be necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or subject itself to general taxation in any jurisdiction where it is not then so subject;

(e)immediately notify each seller of any Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Act within the appropriate period mentioned in clause (b) of this Section 5, of the Company becoming aware that the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and within ten (10) days prepare and furnish to all sellers a reasonable number of copies of an amended or supplemental prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;

(f)The Company will have the right, in its sole discretion, to select an underwriter or underwriters. In connection with any Public Offering, the Company will enter into customary agreements (including an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities in any such Public Offering, including the engagement of a “qualified independent underwriter” in connection with the qualification of the underwriting arrangements with the FINRA;

(g)if such Registrable Securities are not already listed or quoted and if such listing is then permitted under the rules of an exchange on which the Common Stock is then listed, use its best efforts to list such Registrable Securities on any securities exchange on which the Common Stock is then listed, and provide an independent transfer agent and registrar for such Registrable Securities covered by such registration statement not later than the effective date of such registration statement;

(h)furnish to each seller of Registrable Securities covered by such registration statement a signed counterpart, addressed to such seller (and the underwriters, if any) of:

 (i) an opinion of counsel for the Company, dated the effective date of such registration statement (or, if such registration involves an underwritten public offering, dated the date of the closing under the underwriting agreement), reasonably satisfactory in form and substance to the sellers of not less than fifty percent (50%) of such Registrable Securities (and the managing underwriter, if any); and

(ii) a “comfort” letter, dated the effective date of such registration statement (and, if such registration involves an underwritten public offering, dated the date of the closing under the underwriting agreement), signed by the independent public accountants who have certified the Company’s financial statements included in such registration statement, covering such matters with respect to such registration statement as are customarily covered in accountants’ letters delivered to the underwriters in underwritten offerings of securities as may reasonably be requested by the sellers of not less than fifty percent (50%) of such Registrable Securities (and the managing underwriter, if any);

(i)make available for inspection by any seller of such Registrable Securities covered by such registration statement, by any underwriter participating in any disposition to be effected pursuant to such registration statement and by any attorney, accountant or other agent retained by any such seller or any such underwriter (individually, an “Inspector” and collectively, the “Inspectors”), all pertinent financial and other records, pertinent corporate documents and properties of the Company as shall be reasonably necessary to enable them to exercise their due diligence responsibility (collectively, the “Records”), and cause all of the Company’s officers, directors and employees to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement; provided, however, that any Records that are designated by the Company in writing as confidential shall be kept confidential by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such registration statement or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction or by any regulatory authority having jurisdiction. Each Investor agrees that non-public information obtained by it as a result of such Inspections shall be deemed confidential and acknowledges its obligations under the Federal securities laws not to trade any securities of the Company on the basis of material non-public information; and

(j)cause appropriate officers of the Company to (i) prepare and make presentations at any “road shows” and before analysts and rating agencies, as the case may be, (ii) take other actions to obtain ratings for any Registrable Securities and (iii) otherwise use their reasonable best efforts to cooperate as reasonably requested by the underwriters in the offering, marketing or selling of the Registrable Securities.

(k)The Company may require each seller of Registrable Securities as to which any registration is being effected promptly to furnish to the Company such information regarding the distribution of such Registrable Securities as may be legally required. Such information shall be furnished in writing and shall state that it is being furnished for use in the registration statement.

(l)Each holder of Registrable Securities agrees by acquisition of such Registrable Securities that, upon receipt of any notice from the Company of the happening of any event of the kind described in clause (e) of this Section 5, such holder will forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such holder’s receipt of the copies of the supplemented or amended prospectus contemplated by clause (e) of this Section 5, and, if so directed by the Company, such holder will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of the Company’s notice. In the event the Company shall give any such notice, the period mentioned in clause (b) of this Section 5 shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to clause (e) of this Section 5 and including the date when each seller of Registrable Securities covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by clause (e) of this Section 5.

6.Indemnification.

(a)Indemnification by the Company. The Company hereby agrees to indemnify and hold harmless each holder of Registrable Securities which shall have been registered under the Securities Act, and such holder’s officers, directors and agents and each other Person, if any, who controls such holder within the meaning of the Securities Act and each other Person (including underwriters) who participates in the offering of such Registrable Securities against any losses, claims, damages, liabilities, reasonable attorneys’ fees, costs or expenses (collectively, the “Damages”), joint or several, to which such holder or controlling Person or participating Person may become subject under the Securities Act or otherwise, insofar as such Damages (or proceedings in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact made by the Company or its agents contained in any registration statement under which such Registrable Securities are registered under the Securities Act, in any preliminary prospectus or final prospectus contained therein, or in any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse such holder of Registrable Securities or such controlling Person or participating Person in connection with investigating or defending any such Damages or proceeding; provided, however, that the Company will not be liable in any such case to the extent that any such Damages arise out of or are based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, such preliminary or final prospectus or such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such holder or such controlling or participating Person, as the case may be, specifically for inclusion in any such document; or (ii) an untrue statement or alleged untrue statement, omission or alleged omission in a prospectus if such untrue statement or alleged untrue statement, omission or alleged omission is corrected in an amendment or supplement to the prospectus which amendment or supplement is delivered to such holder in a timely manner and such holder thereafter fails to deliver such prospectus as so amended or supplemented prior to or concurrently with the sale of such Registrable Securities to the Person asserting such Damages and such Damages would have been avoided if such holder had so delivered such prospectus as so amended or supplemented.

(b)Indemnification by the Holders of Registrable Securities Which Are Registered. It shall be a condition of the Company’s obligations herein to effect any registration under the Securities Act that there shall have been delivered to the Company an agreement or agreements duly executed by each holder of Registrable Securities to be so registered, whereby such holder agrees to indemnify and hold harmless the Company, its directors, officers and agents and each other Person, if any, which controls the Company within the meaning of the Securities Act against any Damages, joint or several, to which the Company, or such other Person or such Person controlling the Company may become subject under the Securities Act or otherwise, but only to the extent that such Damages (or proceedings in respect thereof) arise out of or are based upon any untrue statements or alleged untrue statement of any material fact contained, on the effective date thereof, in any registration statement under which such Registrable Securities are registered under the Securities Act, in any preliminary prospectus or final prospectus contained therein or in any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, which, in each such case, has been made in or omitted from such registration statement, such preliminary or final prospectus or such amendment or supplement in reliance upon, and in conformity with, written information furnished to the Company by such holder of Registrable Securities specifically for inclusion in such document. The Company shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above, with respect to information furnished in writing by such Persons specifically for inclusion in any prospectus or registration statement.

(c)Conduct of Indemnification Proceedings. Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of the commencement of any action or proceeding involving a claim referred to in the preceding Sections 6(a) and 6(b); and (ii) unless the indemnified party has been advised by its counsel that a conflict of interest exists between such indemnified and indemnifying parties with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. Whether or not such defense is assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld). No indemnifying party will consent to the entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation; provided, however, that no indemnifying party will consent to the entry of any judgment or enter into any settlement (other than for the payment of money only) without the consent of the indemnified party (which consent will not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of the claim, will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the fees and expenses of such additional counsel or counsels.

(d)Contribution. If for any reason the indemnification provided for in the preceding Sections 6(a) or 6(b) is unavailable to an indemnified party in respect of any Damages referred to therein, the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such Damages in such proportion as is appropriate to reflect not only the relative benefits received by the indemnified party and the indemnifying party, but also the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified parties shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or indemnified parties, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that in no event shall the liability of any selling holder of Registrable Securities hereunder be greater in amount than the difference between the dollar amount of the proceeds received by such holder upon the sale of the Registrable Securities giving rise to such contribution obligation and all amounts previously contributed by such holder with respect to such Damages. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of fraudulent misrepresentation.

7.Hold-Back Agreements.

(a)Restrictions on Public Sale by Company and Holders of Common Stock. The Company and each holder of Common Stock whose Common Stock is eligible for inclusion in a Registration Statement filed pursuant to Sections 3 or 4, if requested by the managing underwriter or underwriters in an Underwritten Offering of any Registrable Securities, agrees not to, directly or indirectly (except with respect to the Company in connection with a Special Registration Statement), (i) offer for sale, sell, pledge or otherwise dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future of) any Common Stock (including, without limitation, Common Stock that may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Commission and Common Stock that may be issued upon exercise of any option or warrant) or securities convertible into or exchangeable for Common Stock , or (ii) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of such Common Stock , whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise, during the ten (10) day period prior to, and for a period of 180 days after, the effective date of the Registration Statement, to the extent timely notified in writing by the managing underwriter, or, with respect to each such holder of Common Stock, the Company. Additionally, the Company agrees to use reasonable efforts to cause each holder of Common Stock purchased from the Company at any time after the date of the Agreement (other than in a registered public offering) to agree to the provisions of this Section 7(a).

(b)Certain Holders of Registrable Securities Excepted. The provisions of Section 7(a) shall not apply to any holder of Registrable Securities if such holder is prevented by applicable statute or regulation from entering into any such agreement; provided, however, that any such holder shall undertake, in its request to participate in any such Underwritten Offering, not to effect any public sale or distribution of Registrable Securities (except as part of such Underwritten Registration) during such period unless it has provided forty-five (45) days prior written notice of such sale or distribution to the managing underwriter or underwriter.

8.Underwritten Registration. If any of the Registrable Securities covered by any Incidental Registration or a Demand Registration are to be sold in an Underwritten Offering, the investment banker or investment bankers and manager or managers that will administer the offering will be selected by the Company. Notwithstanding anything herein to the contrary, no Person may participate in any Underwritten Registration hereunder unless such Person (a) agrees to sell such Person’s securities on the basis provided in any underwritten arrangements approved by the Persons entitled hereunder to approve such arrangement and (b) accurately completes and executes all questionnaires, powers of attorney, indemnities, custody agreements, underwriting agreements and other documents required under the terms of such underwriting arrangements.

* * * * *

IN WITNESS WHEREOF, each Stockholder and the Company has caused its signature page to this Registration Rights Agreement to be duly executed as of the date first written above.

COMPANY:

UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION

By:                                                                          

Name:  Bipin C. Shah

Title:    Chairman and Chief Executive Officer

STOCKHOLDER:

By:                                                                           

Name: 

Address:

Facsimile:

EX-10.3

TERMINATION AGREEMENT

This TERMINATION AGREEMENT, dated as of December 28, 2012 (this “Agreement”), by and among UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION., a Delaware corporation (“Company”), the undersigned individual whose name appears listed under the heading “Initial Stockholder” on the signature page hereto (the “Initial Stockholder”) and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York corporation (“Escrow Agent”).

WHEREAS, the Company, the Initial Stockholder and the Escrow Agent entered into a Stock Escrow Agreement, dated as of May 13, 2011 (the “Escrow Agreement”).

WHEREAS, pursuant to section 6.2 of the Escrow Agreement, EarlyBirdCapital, Inc. (“EBC”) must provide its prior written consent to any modifications or changes to the Escrow Agreement.

WHEREAS, the parties thereto desire to terminate the Escrow Agreement as it relates to the Initial Stockholder on the terms and conditions set forth in this Agreement.

IT IS AGREED:

1.Definitions. Capitalized terms used herein without definition are used herein with the meanings ascribed to such terms in the Escrow Agreement.

2.Release of Escrow Shares. The certificates representing the Initial Stockholder’s Escrow Shares are hereby released and shall be returned by the Escrow Agent to the Initial Stockholder.

3.Deposit of Escrow Shares. The Escrow Agreement is hereby terminated in its entirety and shall be of no further force or effect, provided, that, the provisions of Section 5 of the Escrow Agreement shall remain in full force and effect.

4.Miscellaneous.

4.1.Governing Law. This Agreement shall for all purposes be deemed to be made under and shall be construed in accordance with the laws of the State of New York. The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the U.S. District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenience forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 4.5 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim.

4.2.Entire Agreement. This Agreement contains the entire agreement of the parties hereto with respect to the subject matter hereof and, except as expressly provided herein, may not be changed or modified except by an instrument in writing signed by the party to the charged. It may be executed in several original or facsimile counterparts, each one of which shall constitute an original, and together shall constitute but one instrument

4.3.Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation thereof.

4.4.Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their legal representatives, successors and assigns.

4.5.Notices. Any notice or other communication required or which may be given hereunder shall be in writing and either be delivered personally or be mailed, certified or registered mail, or by private national courier service, return receipt requested, postage prepaid, and shall be deemed given when so delivered personally or, if mailed, two days after the date of mailing, as follows:

If to the Company, to:

Universal Business Payment Solutions Acquisition Corporation

c/o UBPS Services, LLC

Radnor Financial Center

150 North Radnor-Chester Road, Suite F-200

Radnor, Pennsylvania 19087

Attn: Bipin C. Shah

If to a Stockholder, to the address set forth in Exhibit A.

and if to the Escrow Agent, to:

Continental Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004

Attn: Chairman

A copy of any notice sent hereunder shall be sent to:

Dechert LLP

2929 Arch Street

Philadelphia, PA 19104

Attn: James A. Lebovitz

and:

EarlyBirdCapital, Inc.

275 Madison Avenue

27^th Floor

New York, NY 10016

Attn: Steve Levine

The parties may change the persons and addresses to which the notices or other communications are to be sent by giving written notice to any such change in the manner provided herein for giving notice.

2

WITNESS the execution of this Agreement as of the date first above written.

UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION
By:	/s/ Bipin C. Shah
	Name: Bipin C. Shah
	Title: Chief Executive Officer
INITIAL STOCKHOLDER:
By:	/s/ Ira Lubert
	Name: Ira Lubert
CONTINENTAL STOCK TRANSFER &
TRUST COMPANY
By:	/s/ John W. Comer, Jr.
	Name: John W. Comer, Jr.
	Title:

The undersigned hereby consents to the terms and conditions of this Agreement as required pursuant to section 6.2 of the Escrow Agreement.

EARLYBIRDCAPITAL,INC.

By: /s/ Steven Levine                 

Name: Steven Levine                  

Title: President                             

3

EXHIBIT A

Name and Address of
Initial Stockholder

Ira Lubert

2929 Arch St., 13^th Floor, Philadelphia, PA 19104

4

EX-10.4

AGREEMENT

This Agreement is dated as of December [ ], 2012 (the “Agreement”) is entered into between Universal Business Payment Solutions Acquisition Corporation, a Delaware corporation (“UBPS”), and Continental Stock Transfer & Trust Company, an New York corporation (“Warrant Agent”).

WHEREAS, UBPS and Seller are parties to that certain Warrant Agreement (the “Warrant Agreement”), dated May 13, 2011, by and between UBPS and Warrant Agent;

WHEREAS, on December 11, 2012, a majority of the issued and outstanding holders of the Warrants voted in favor of a proposal terminate the Warrant Agreement at a special meeting of the warrantholders duly called, evidence of which is attached as Exhibit A hereto; and

WHEREAS, in accordance with Section 9.8 of the Warrant Agreement, UBPS and Warrant Agent desire to terminate the Merger Agreement.

NOW, THEREFORE, in consideration of the mutual agreements contained 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 hereto agree as follows:

1. UBPS and Warrant Agent hereby terminate the Warrant Agreement in accordance with 9 8 thereof.

2. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York.

3. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

4. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which together shall be deemed to be one and the same instrument.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, and intending to be legally bound, the undersigned have signed this Amendment as of the date first written above.

Universal business payment solutions acquisition corporation

By: /s/ Bipin C. Shah                                            
Name: Bipin C. Shah
Title: Chief Executive Officer

CONTINENTAL STOCK TRANSFER & TRUST COmpany

By: /s/ John W. Comer                                         
Name: John W. Comer
Title: Vice President

EX-10.5

Execution Version

Amendment, Guarantee and Waiver Agreement

This Amendment, Guarantee and Waiver Agreement (this “Agreement”) is made by each of Universal Business Payment Solutions Acquisition Corporation, (“Parent”), Ten Lords, Ltd (“Ten Lords”) and JetPay, LLC (“JetPay”) as of December 28, 2012. Reference is made to that certain Loan Agreement, dated as of May 31, 2010 (the “Loan Agreement”) by and among Ten Lords, Providence Interactive Capital, LLC, JetPay, JetPay ISO Services, LLC, JetPay Merchant Services, LLC, JT Holdings, L.P., JT Holdings Management, LLC (together with JetPay, JetPay ISO Services, LLC, JetPay Merchant Services, LLC and JT Holdings, L.P., the “JetPay Companies”), WLES, Ltd. and Trent Voigt. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Loan Agreement.

WHEREAS, JetPay has agreed to an acquisition by a wholly-owned subsidiary of Parent of all of JetPay’s outstanding equity interests (the “JetPay Sale”), pursuant to an Agreement and Plan of Merger by and among Parent, JP Merger Sub, LLC, JetPay, WLES, L.P.., and Trent Voigt (the “Merger Agreement”);

WHEREAS, in order to induce the Paine Companies to consent to transactions contemplated by the Merger Agreement, the parties to the Loan Agreement desire to modify certain provisions of the Loan Agreement, the Redemption Note, the Pledge Agreement and the Security Agreement (collectively, the “Loan Documents”), and Parent desires to guarantee certain of JetPay’s obligations under the Loan Documents;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Adjustment to Balance Due; Tax Gross-Up Payment.

(a) The parties acknowledge that as of the date of this Agreement, but before giving effect to the transactions contemplated in this Agreement, the balance of principal and accrued, unpaid interest due under the Redemption Note (the “Note Balance”) is $8,331,368.69. Contingent and effective upon consummation of the Merger Agreement, the Note Balance shall be immediately and automatically increased by $10,000 to reimburse attorneys’ fees the Paine Companies have incurred and reasonably anticipate incurring in connection with the transactions contemplated in this Agreement.

(b ) In addition, JetPay shall cause a cash payment to be made, on or before April 15 of each calendar year following a calendar year in which payments are made on the Redemption Note, in the amount, calculated on a grossed up after-tax basis and determined separately for each separate taxpayer, of any increase in actual tax liability of the owners of Ten Lords, Ltd. and Providence Interactive Capital, LLC (collectively, the “Payees”) resulting from (a) any increase in the capital gains tax rate over 15%, (b) the 3.8% surtax on investment income and gains imposed by Internal Revenue Code Section 1411, and (c) any other increase in taxes or similar obligations the owners of the Payees will be required to pay as a result of the Redemption Note being paid after December 31, 2012. Prior to or on the date such tax payments are made, the Payees shall provide reasonable documentation to JetPay evidencing such increases in actual tax liability. A written or emailed statement signed by an accountant, attorney or another professional tax advisor familiar with the Payees’ owners’ tax filings and stating the amount of the increase in the Payees’ owners’ actual tax liability as a result of the matters discussed in this paragraph shall be sufficient for this purpose. The purpose of this provision of this Section 1 is to put the owners of the Payees in the same after-tax economic position they would have been in if the Redemption Note was paid and taxed under 15% capital gains rates and income tax rates applicable under the tax law on or before December 31, 2012.

2. Minimum Payment Amount. Contingent and effective upon consummation of the Merger Agreement, the JetPay Companies shall pay to the Payees, as a partial payment of the Note Balance, an amount equal to the greater of:

(a)the portion of the Note Balance, as adjusted pursuant to Section 1(a) above, that exceeds $6,000,000; or

(b)the Note Balance, as adjusted pursuant to Section 1(a) above, minus the product of $6.08 multiplied by the Excess Redemption Amount. The “Excess Redemption Amount” shall be equal to the number of shares of Parent common stock in excess of 6,385,482 shares that are to be redeemed for pro rata shares of the funds being held in a trust account established in connection with Parent’s initial public offering.

3. Consent and Waiver. Notwithstanding the provisions of Article 8 of the Loan Agreement, contingent and effective upon consummation of the Merger Agreement the Paine Companies hereby consent to the JetPay Sale, the entry by JetPay into the Merger Agreement and the performance of any of the transactions contemplated thereby, and the Paine Companies hereby waive compliance with the Loan Agreement to the extent the JetPay Sale, the entry by JetPay into the Merger Agreement and the performance of any of the transactions contemplated thereby are inconsistent with the Loan Agreement.

4. Limited Guarantee.

(a) Contingent and effective upon consummation of the Merger Agreement, Parent unconditionally and irrevocably, as a primary obligor and not only a surety, guarantees the due and punctual payment, performance and discharge of each of the JetPay Companies’ obligations under the Loan Documents and under this Agreement (the “Obligations”). In no event shall Parent be deemed to be obligated to pay any amounts in excess of the amounts currently outstanding under the Redemption Note (as modified pursuant to Section 1 above) plus any accrued but unpaid interest thereon. This is an absolute, unconditional, present, primary and continuing guarantee of payment and not only of collectability.

(b) In the event that any payment to Ten Lords in respect of any Obligations is rescinded or must otherwise be returned for any reason whatsoever, Parent shall remain liable hereunder with respect to such Obligations as if such payment had not been made.

(c) Such guarantee will remain in full force and effect until such time as the Obligations have been satisfied in full.

5. Amendment. Contingent and effective upon consummation of the Merger Agreement, the Redemption Note shall be modified as follows:

(a)Interest shall accrue on the Redemption Note at a rate of 9.5% per annum for the first 180 days after consummation of the transactions contemplated in this Agreement, and 13.5% per annum for so long thereafter as any amounts remain outstanding (subject to other provisions of the Redemption Note imposing a “Past Due Rate”).

(b)The Redemption Note shall be due and payable in full on the first anniversary of the date of this Agreement. The JetPay Companies shall use commercially reasonable efforts to cause all amounts due and payable under the Redemption Note to be repaid as soon as commercially practicable.

6. Conversion Option. The Payees may, at their option by one or more written notices (each a “Conversion Notice”) delivered to Parent at any time or times before repayment of the Redemption Note in full, elect to convert the then-existing Note Balance into shares of common stock of Parent. Each Conversion Notice shall state the portion of the Redemption Note the Payees wish to convert (the “Conversion Amount”). Upon receipt of a Conversion Notice, (a) the Note Balance shall be deemed immediately and automatically reduced by the Conversion Amount and (b) Parent shall immediately issue or cause to be issued to the Payees or their designee a number of shares of common stock of Parent equal to the quotient of the Conversion Amount divided by the Conversion Price. The “Conversion Price” shall be equal to $6.00 per share unless an Event of Default (as that term is defined in the Loan Agreement) has occurred and has not been cured, in which case the Conversion Price shall be equal to the lower of: (i) $6.00 per share and (ii) such lower price per share as was the average closing price of shares of Parent common stock on any national stock exchange on which such shares trade for the previous ten trading days prior to the date Payees deliver a Conversion Notice. Parent shall grant the Payees certain registration rights as set forth on Exhibit A attached hereto.

7. Conflict with the Loan Documents. Except as set forth herein, all other provisions of the Loan Documents shall remain in full force and effect. To the extent any provision of this Agreement is inconsistent with the Loan Documents, this Agreement will govern and control.

8. Binding Effect. Except as otherwise provided in this Agreement to the contrary, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

9. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas.

10. Counterparts. This Agreement may be executed in two or more counterparts for the convenience of the parties hereto, each of which shall be deemed an original and all of which together will constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format shall be effective as delivery of a mutually executed counterpart to this Agreement.

11. Attorneys’ Fees. In the event of any dispute among the parties to this Agreement regarding its interpretation or a claim brought by a party to enforce its rights under this Agreement, the losing party in any such dispute or claim shall be responsible for the reasonable attorneys’ fees incurred by the prevailing party in connection with such dispute or claim.

[THE REST OF THIS PAGE IS LEFT INTENTIONALLY BLANK]

IN WITNESS WHEREOF, and intending to be legally bound, the undersigned have signed this Agreement as of the date first written above.

Universal business payment solutions acquisition corporation

By: /s/ Bipin C. Shah                                                           
Name: Bipin C. Shah
Title: Chief Executive Officer

JEtpay, llc

By: /s/ Trent Voigt                                                                  
Name: Trent Voigt
Title: CEO

TEN LORds LTD

By: /s/ John Paine                                                                  
Name: John Paine
Title: President

Exhibit A

REGISTRATION RIGHTS

Definitions.

“Common Stock” means (i) shares of the Common Stock, par value $0.001 per share, of the Company and (ii) any shares of capital stock of the Company issued or issuable with respect to securities referred to in clause (i) above by way of a stock dividend or distribution payable thereon or stock split, reverse stock split, recapitalization, reclassification, reorganization, exchange, subdivision or combination thereof.

“Company” means Universal Business Payment Solutions Acquisition Corporation, a Delaware corporation.

“Damages” has the meaning set forth in Section 6(a) hereof.

“Demand Registration” has the meaning set forth in Section 4(a) hereof.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

“Incidental Registration” has the meaning set forth in Section 3(a) hereof.

“Investor” means a holder of Registrable Securities who is not an “affiliate” of the Company, as the term “affiliate” is defined under Rule 144 (or any similar provisions then in force) under the Securities Act.

“Prospectus” means the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference in such Prospectus.

“Registration Expenses” means (i) all registration and filing fees, (ii) fees and expenses of compliance with any securities or blue sky laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the securities registered), (iii) printing expenses, (iv) internal expenses of the Company (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), (v) reasonable fees and disbursements of counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company (including the expenses relating to any comfort letters or costs associated with the delivery by independent certified public accountants of a comfort letter or comfort letters requested pursuant to Section 5(g) hereof), (vi) reasonable fees and expenses of any special experts retained by the Stockholder in connection with such registration, (vii) reasonable fees and expenses of one counsel for all of the holders of Registrable Securities participating in the offering selected by the holders of the majority of Registrable Securities to be sold for the account of all holders of Registrable Securities in the offering, (viii) fees and expenses in connection with any review of underwriting arrangements by the Financial Industry Regulatory Authority (“FINRA”) including fees and expenses of any “qualified independent underwriter” and (ix) fees and disbursements of underwriters customarily paid by issuers or sellers of securities, but shall not include any underwriting fees, discounts or commissions attributable to the sale of Registrable Securities, or any out-of-pocket expenses (except as set forth in clause (vii) above) of the holders of Registrable Securities to be sold in the offering (or the agents who manage their accounts) or any fees and expenses of underwriter’s counsel.

“Registration Statement” means any registration statement of the Company which covers any of the Registrable Securities pursuant to the terms hereof, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

“Registrable Securities” has the meaning set forth in Section 2 hereof.

“Special Registration Statement” means (i) a registration statement on Forms S-8 or S-4 or any similar or successor form or any other registration statement relating to an exchange offer or an offering of securities solely to the Company’s security holders, employees, directors, consultants or other business associates or (ii) a registration statement registering a Unit Offering.

“Stockholder” means one or both of the Payees (as that term is defined in the Amendment, Guarantee and Waiver Agreement to which this Registration Rights exhibit is attached), or the other person(s) or entity(ies) designated by such Payees to be issued shares of Common Stock pursuant to Section 6 of said Amendment, Guarantee and Waiver Agreement.

“Underwritten Registration” or “Underwritten Offering” means a registration in which securities of the Company are sold to an underwriter for reoffering to the public.

Registrable Securities. The securities entitled to the benefits set forth herein are the Registrable Securities. As used herein, “Registrable Securities” means the shares of Common Stock that are issued (or issuable) and outstanding as a result of the Stockholder’s conversion rights under that certain Amendment, Guarantee and Waiver Agreement by each of the Company, Ten Lords, Ltd and JetPay, LLC , dated as of December 28, 2012; provided, however, that each share of Common Stock shall cease to be a Registrable Security when (i) it has been effectively registered under the Securities Act and disposed of in accordance with the registration statement covering it; (ii) it is distributed to the public pursuant to Rule 144 (or any similar provisions then in force) under the Securities Act or all shares of Common Stock held by an Investor or its Affiliates are then distributable at one time under Rule 144 (or any similar provisions then in force) under the Securities Act; or (iii) it has otherwise been transferred and a new certificate or other evidence of ownership for it not bearing or requiring a legend and not subject to any stop transfer order has been delivered by or on behalf of the Company and no other restriction on transfer exists under the Securities Act.

Incidental Registration.

Right to Include Common Stock. If at any time or from time to time following the date the Company has consummated an Initial Public Offering the Company at any time proposes to register any of its Common Stock under the Securities Act (other than in connection with the Initial Public Offering and other than on a Special Registration Statement), whether or not for sale for its own account, it will each such time, as promptly as practicable following the date of filing with the Commission or other applicable regulatory authority of a registration statement or similar document with respect to such registration, give written notice (the “Incidental Registration Notice”) to all holders of Registrable Securities of its intention to register its Common Stock under the Securities Act, and of such holders’ rights under this Section 3. Upon the written request of any such holders of Registrable Securities made within five (5) days of the date of the Incidental Registration Notice (which request shall specify the aggregate number of the Registrable Securities to be registered and will also specify the intended method of disposition thereof), the Company will effect the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the holders thereof (an “Incidental Registration”), to the extent required to permit the public disposition (in accordance with such intended methods thereof) of the Registrable Securities to be so registered; provided, however, that (i) if, at any time after giving written notice of its intention to register shares of Common Stock and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register the Company’s Common Stock, the Company shall give written notice of such determination to each holder of Registrable Securities and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay the Registration Expenses in connection therewith); (ii) if a registration requested pursuant to this Section 3 shall involve an underwritten public offering, any holder of Registrable Securities requesting to be included in such registration may elect, in writing at least five (5) days prior to the effective date of the registration statement filed in connection with such registration, not to register such securities in connection with such registration; and (iii) if, at any time after the 180-day or shorter period specified in Section 3(b), the sale of the securities has not been completed, the Company may withdraw from the registration the Registrable Securities which the Company has been requested to register and which have not been sold.

Priority in Incidental Registrations. If a registration pursuant to Section 3(a) involves an Underwritten Offering and the managing underwriter advises the Company in writing that, in its opinion, the total number of shares of Common Stock to be included in such registration, including the Registrable Securities requested to be included pursuant to this Section 3, exceeds the maximum number of shares of Common Stock specified by the managing underwriter that may be distributed without adversely affecting the price, timing or distribution of such shares of Common Stock, then the Company shall include in such registration only such maximum number of Registrable Securities which, in the reasonable opinion of such underwriter or underwriters, can be sold in the following order of priority: (i) first, all of the shares of Common Stock that the Company proposes to sell for its own account, if any, (ii) second, all of the shares of Common Stock being registered by holder(s) of Registrable Securities pursuant to a Demand Registration (as hereinafter defined), and (iii) third, the Registrable Securities of the holder(s) of Registrable Securities requested to be included in such Incidental Registration. To the extent that shares of Common Stock to be included in the Incidental Registration must be allocated among the holder(s) of Registrable Securities pursuant to clause (iii) above, such shares shall be allocated pro rata among the holder(s) of Registrable Securities based on the number of shares of Common Stock that such holder(s) of Registrable Securities shall have requested to be included therein. Notwithstanding the foregoing, if an Incidental Registration is an Underwritten Offering, the managing underwriter or underwriters may select shares for inclusion, or exclude shares completely, in such Incidental Registration on a basis other than a pro rata basis if, in the reasonable opinion of such underwriter or underwriters, selection on such other basis, or inclusion of such shares, would be material to the success of the offering.

Expenses. The Company will pay all Registration Expenses in connection with any registration of Registrable Securities requested pursuant to this Section 3.

Liability for Delay. The Company shall not be held responsible for any delay in the filing or processing of a registration statement which includes any Registrable Securities due to requests by holders of Registrable Securities pursuant to this Section 3 nor for any delay in requesting the effectiveness of such registration statement.

Participation in Underwritten Registrations. No holder of Registrable Securities may participate in any Underwritten Registration hereunder unless such holder (i) agrees to sell such holder’s Common Stock on the basis provided in any underwriting arrangements approved by the persons who have selected the underwriter and (ii) accurately completes in a timely manner and executes all questionnaires, powers of attorney, escrow agreements, underwriting agreements and other documents customarily required under the terms of such underwriting arrangements.

Demand Registration.

Right to Demand Registration. Subject to Section 4(b) below, the Stockholder shall be entitled to make ua written request (“Demand Registration Request”) to the Company for registration with the Commission under and in accordance with the provisions of the Securities Act of all or part of the Registrable Securities owned by it (a “Demand Registration”) (which Demand Registration Request shall specify the intended number of Registrable Securities to be disposed of by such holder and the intended method of disposition thereof); provided, however, that (i) the Company may, if the Board of Directors so determines in the exercise of its reasonable judgment that due to a pending or contemplated acquisition or disposition or public offering it would be inadvisable to effect such Demand Registration at such time, defer such Demand Registration for a single period not to exceed ninety (90) days but, if requested by the party requesting such Demand Registration, the Company shall prepare for such Demand Registration so that it will be in a position to file for such Demand Registration promptly following the expiration of such period; provided, however, that the Company may not defer Demand Registrations more than once in any 365-day period, and (ii) if the Company elects not to effect the Demand Registration pursuant to the terms of this sentence, no Demand Registration shall be deemed to have occurred for purposes hereof. Promptly after receipt of the Demand Registration Request, the Company will serve written notice (the “Demand Notice”) of such Demand Registration Request to all holders of Registrable Securities and, subject to paragraph (c) below, the Company will include in such registration all Registrable Securities of such holders with respect to which the Company has received written requests for inclusion therein from such holders within five (5) business days after the receipt by the applicable holder of the Demand Notice. All requests made pursuant to this Section 4(a) will specify the aggregate number of the Registrable Securities to be registered and will also specify the intended methods of disposition thereof.

Number of Demand Registrations. The Stockhodler shall be entitled to make up to three (3) Demand Registration Requests at any time. A Demand Registration shall not be counted as a Demand Registration hereunder until such Demand Registration has been declared effective and maintained continuously effective for a period of at least six (6) months or such shorter period when all Registrable Securities included therein have been sold in accordance with such Demand Registration.

Priority on Demand Registration. If any of the Registrable Securities proposed to be registered pursuant to a Demand Registration are to be sold in a firm commitment Underwritten Offering and the managing underwriter or underwriters of a Demand Registration advise the Company and the holders of such Registrable Securities in writing that in its or their reasonable opinion the number of shares of Common Stock proposed to be sold in such Demand Registration exceeds the maximum number of shares specified by the managing underwriter that may be distributed without adversely affecting the price, timing or distribution of the Common Stock, the Company shall include in such registration only such maximum number of Registrable Securities which, in the reasonable opinion of such underwriter or underwriters can be sold in the following order of priority: (i) first, the Registrable Securities requested to be included in such Demand Registration held by the party requesting such Demand Registration and such party’s Permitted Transferees; (ii) second, shares of Common Stock to be offered by the Company in such Demand Registration; and (iii) third, shares of Common Stock requested to be included in such Demand Registration held by all other holders of Common Stock, provided that such amount shall be allocated among such other holders as provided in Section 3(b).

Expenses. The Company will pay all Registration Expenses in connection with any registration of Registrable Securities requested pursuant to this Section 4.

Registration Procedures. If and whenever the Company is required to effect or cause the registration of any Registrable Securities under the Securities Act as provided herein, the Company will, as expeditiously as possible:

prepare and file with the Commission a registration statement with respect to such Registrable Securities, and use its best efforts to cause such registration statement to become effective; provided, however, that the Company may discontinue any registration of its securities which is being effected pursuant to Sections 3 or 4 herein at any time prior to the effective date of the registration statement relating thereto, provided, however, that any such discontinuance is conducted in accordance with all other applicable provisions hereof;

prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period of not less than 180 days or such shorter period which will terminate when all Registrable Securities covered by such registration statement have been sold (but not before the expiration of the applicable period referred to in Section 4(3) of the Securities Act and Rule 174 thereunder, if applicable) and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement;

furnish to each seller of such Registrable Securities such number of copies of such registration statement and of each such amendment and supplement thereof (in each case including all exhibits), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and summary prospectus), in conformity with the requirements of the Securities Act, and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities by such seller;

use its best efforts to register or qualify such Registrable Securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as each seller shall request, and do any and all other acts and things which may be necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or subject itself to general taxation in any jurisdiction where it is not then so subject;

immediately notify each seller of any Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Act within the appropriate period mentioned in clause (b) of this Section 5, of the Company becoming aware that the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and within ten (10) days prepare and furnish to all sellers a reasonable number of copies of an amended or supplemental prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;

The Company will have the right, in its sole discretion, to select an underwriter or underwriters. In connection with any Public Offering, the Company will enter into customary agreements (including an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities in any such Public Offering, including the engagement of a “qualified independent underwriter” in connection with the qualification of the underwriting arrangements with the FINRA;

if such Registrable Securities are not already listed or quoted and if such listing is then permitted under the rules of an exchange on which the Common Stock is then listed, use its best efforts to list such Registrable Securities on any securities exchange on which the Common Stock is then listed, and provide an independent transfer agent and registrar for such Registrable Securities covered by such registration statement not later than the effective date of such registration statement;

furnish to each seller of Registrable Securities covered by such registration statement a signed counterpart, addressed to such seller (and the underwriters, if any) of:

(i) an opinion of counsel for the Company, dated the effective date of such registration statement (or, if such registration involves an underwritten public offering, dated the date of the closing under the underwriting agreement), reasonably satisfactory in form and substance to the sellers of not less than fifty percent (50%) of such Registrable Securities (and the managing underwriter, if any); and

(ii) a “comfort” letter, dated the effective date of such registration statement (and, if such registration involves an underwritten public offering, dated the date of the closing under the underwriting agreement), signed by the independent public accountants who have certified the Company’s financial statements included in such registration statement, covering such matters with respect to such registration statement as are customarily covered in accountants’ letters delivered to the underwriters in underwritten offerings of securities as may reasonably be requested by the sellers of not less than fifty percent (50%) of such Registrable Securities (and the managing underwriter, if any);

make available for inspection by any seller of such Registrable Securities covered by such registration statement, by any underwriter participating in any disposition to be effected pursuant to such registration statement and by any attorney, accountant or other agent retained by any such seller or any such underwriter (individually, an “Inspector” and collectively, the “Inspectors”), all pertinent financial and other records, pertinent corporate documents and properties of the Company as shall be reasonably necessary to enable them to exercise their due diligence responsibility (collectively, the “Records”), and cause all of the Company’s officers, directors and employees to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement; provided, however, that any Records that are designated by the Company in writing as confidential shall be kept confidential by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such registration statement or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction or by any regulatory authority having jurisdiction. Each Investor agrees that non-public information obtained by it as a result of such Inspections shall be deemed confidential and acknowledges its obligations under the Federal securities laws not to trade any securities of the Company on the basis of material non-public information; and

cause appropriate officers of the Company to (i) prepare and make presentations at any “road shows” and before analysts and rating agencies, as the case may be, (ii) take other actions to obtain ratings for any Registrable Securities and (iii) otherwise use their reasonable best efforts to cooperate as reasonably requested by the underwriters in the offering, marketing or selling of the Registrable Securities.

The Company may require each seller of Registrable Securities as to which any registration is being effected promptly to furnish to the Company such information regarding the distribution of such Registrable Securities as may be legally required. Such information shall be furnished in writing and shall state that it is being furnished for use in the registration statement.

Each holder of Registrable Securities agrees by acquisition of such Registrable Securities that, upon receipt of any notice from the Company of the happening of any event of the kind described in clause (e) of this Section 5, such holder will forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such holder’s receipt of the copies of the supplemented or amended prospectus contemplated by clause (e) of this Section 5, and, if so directed by the Company, such holder will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of the Company’s notice. In the event the Company shall give any such notice, the period mentioned in clause (b) of this Section 5 shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to clause (e) of this Section 5 and including the date when each seller of Registrable Securities covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by clause (e) of this Section 5.

Indemnification.

Indemnification by the Company. The Company hereby agrees to indemnify and hold harmless each holder of Registrable Securities which shall have been registered under the Securities Act, and such holder’s officers, directors and agents and each other Person, if any, who controls such holder within the meaning of the Securities Act and each other Person (including underwriters) who participates in the offering of such Registrable Securities against any losses, claims, damages, liabilities, reasonable attorneys’ fees, costs or expenses (collectively, the “Damages”), joint or several, to which such holder or controlling Person or participating Person may become subject under the Securities Act or otherwise, insofar as such Damages (or proceedings in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact made by the Company or its agents contained in any registration statement under which such Registrable Securities are registered under the Securities Act, in any preliminary prospectus or final prospectus contained therein, or in any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse such holder of Registrable Securities or such controlling Person or participating Person in connection with investigating or defending any such Damages or proceeding; provided, however, that the Company will not be liable in any such case to the extent that any such Damages arise out of or are based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, such preliminary or final prospectus or such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such holder or such controlling or participating Person, as the case may be, specifically for inclusion in any such document; or (ii) an untrue statement or alleged untrue statement, omission or alleged omission in a prospectus if such untrue statement or alleged untrue statement, omission or alleged omission is corrected in an amendment or supplement to the prospectus which amendment or supplement is delivered to such holder in a timely manner and such holder thereafter fails to deliver such prospectus as so amended or supplemented prior to or concurrently with the sale of such Registrable Securities to the Person asserting such Damages and such Damages would have been avoided if such holder had so delivered such prospectus as so amended or supplemented.

Indemnification by the Holders of Registrable Securities Which Are Registered. It shall be a condition of the Company’s obligations herein to effect any registration under the Securities Act that there shall have been delivered to the Company an agreement or agreements duly executed by each holder of Registrable Securities to be so registered, whereby such holder agrees to indemnify and hold harmless the Company, its directors, officers and agents and each other Person, if any, which controls the Company within the meaning of the Securities Act against any Damages, joint or several, to which the Company, or such other Person or such Person controlling the Company may become subject under the Securities Act or otherwise, but only to the extent that such Damages (or proceedings in respect thereof) arise out of or are based upon any untrue statements or alleged untrue statement of any material fact contained, on the effective date thereof, in any registration statement under which such Registrable Securities are registered under the Securities Act, in any preliminary prospectus or final prospectus contained therein or in any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, which, in each such case, has been made in or omitted from such registration statement, such preliminary or final prospectus or such amendment or supplement in reliance upon, and in conformity with, written information furnished to the Company by such holder of Registrable Securities specifically for inclusion in such document. The Company shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above, with respect to information furnished in writing by such Persons specifically for inclusion in any prospectus or registration statement.

Conduct of Indemnification Proceedings. Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of the commencement of any action or proceeding involving a claim referred to in the preceding Sections 6(a) and 6(b); and (ii) unless the indemnified party has been advised by its counsel that a conflict of interest exists between such indemnified and indemnifying parties with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. Whether or not such defense is assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld). No indemnifying party will consent to the entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation; provided, however, that no indemnifying party will consent to the entry of any judgment or enter into any settlement (other than for the payment of money only) without the consent of the indemnified party (which consent will not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of the claim, will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the fees and expenses of such additional counsel or counsels.

Contribution. If for any reason the indemnification provided for in the preceding Sections 6(a) or 6(b) is unavailable to an indemnified party in respect of any Damages referred to therein, the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such Damages in such proportion as is appropriate to reflect not only the relative benefits received by the indemnified party and the indemnifying party, but also the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified parties shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or indemnified parties, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that in no event shall the liability of any selling holder of Registrable Securities hereunder be greater in amount than the difference between the dollar amount of the proceeds received by such holder upon the sale of the Registrable Securities giving rise to such contribution obligation and all amounts previously contributed by such holder with respect to such Damages. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of fraudulent misrepresentation.

Hold-Back Agreements.

Restrictions on Public Sale by Company and Holders of Common Stock. The Company and each holder of Common Stock whose Common Stock is eligible for inclusion in a Registration Statement filed pursuant to Sections 3 or 4, if requested by the managing underwriter or underwriters in an Underwritten Offering of any Registrable Securities, agrees not to, directly or indirectly (except with respect to the Company in connection with a Special Registration Statement), (i) offer for sale, sell, pledge or otherwise dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future of) any Common Stock (including, without limitation, Common Stock that may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Commission and Common Stock that may be issued upon exercise of any option or warrant) or securities convertible into or exchangeable for Common Stock , or (ii) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of such Common Stock , whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise, during the ten (10) day period prior to, and for a period of 180 days after, the effective date of the Registration Statement, to the extent timely notified in writing by the managing underwriter, or, with respect to each such holder of Common Stock, the Company. Additionally, the Company agrees to use reasonable efforts to cause each holder of Common Stock purchased from the Company at any time after the date of the Agreement (other than in a registered public offering) to agree to the provisions of this Section 7(a).

Certain Holders of Registrable Securities Excepted. The provisions of Section 7(a) shall not apply to any holder of Registrable Securities if such holder is prevented by applicable statute or regulation from entering into any such agreement; provided, however, that any such holder shall undertake, in its request to participate in any such Underwritten Offering, not to effect any public sale or distribution of Registrable Securities (except as part of such Underwritten Registration) during such period unless it has provided forty-five (45) days prior written notice of such sale or distribution to the managing underwriter or underwriter.

Underwritten Registration. If any of the Registrable Securities covered by any Incidental Registration or Demand Registration are to be sold in an Underwritten Offering, the investment banker or investment bankers and manager or managers that will administer the offering will be selected by the Company. Notwithstanding anything herein to the contrary, no Person may participate in any Underwritten Registration hereunder unless such Person (a) agrees to sell such Person’s securities on the basis provided in any underwritten arrangements approved by the Persons entitled hereunder to approve such arrangement and (b) accurately completes and executes all questionnaires, powers of attorney, indemnities, custody agreements, underwriting agreements and other documents required under the terms of such underwriting arrangements.

* * * * *

EX-10.6

LOAN AND SECURITY AGREEMENT

AD COMPUTER CORPORATION,

PAYROLL TAX FILING SERVICES, INC.

AND

ALL OTHER PERSONS JOINED HERETO AS A

BORROWER FROM TIME TO TIME, as Borrowers

WITH

UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION, as Guarantor

AND

METRO BANK, as Lender

Dated as of December 28, 2012

Table of Contents

Page

SECTION I. DEFINITIONS AND INTERPRETATION 1

1.1.	Terms Defined	1
1.2.	Accounting Principles	14
1.3.	Construction	14

SECTION II. THE LOAN 14

2.1.	Term Loan:	14
2.2.	Advances and Payments:	15
2.3.	Interest	15
2.4.	Additional Interest Provisions	15
2.5.	Fees and Charges	16
2.6.	Voluntary and Mandatory Prepayments	16
2.7.	Use of Proceeds	18
2.8.	Capital Adequacy	18
2.9.	Joint and Several Liability	18

SECTION III. COLLATERAL 19

3.1.	Collateral	19
3.2.	Lien Documents	20
3.3.	Other Actions	21
3.4.	Searches, Certificates:	21
3.5.	Landlord’s and Warehouseman’s Waivers; Access Agreements	22
3.6.	Filing Security Agreement	22
3.7.	Power of Attorney	22

SECTION IV. CLOSING AND CONDITIONS PRECEDENT TO ADVANCES 22

4.1.	Resolutions, Opinions, and Other Documents	22
4.2.	Absence of Certain Events	23
4.3.	Warranties and Representations at Closing	24
4.4.	Compliance with this Agreement	24
4.5.	Officers’ Certificate	24
4.6.	Closing	24
4.7.	Waiver of Rights	24

SECTION V. REPRESENTATIONS AND WARRANTIES 24

5.1.	Organization and Validity	24
5.2.	Places of Business	25
5.3.	Pending Litigation	25
5.4.	Title to Properties	25
5.5.	Consent	25
5.6.	Taxes	25
5.7.	Financial Statements and Projections	26
5.8.	Full Disclosure	26
5.9.	Subsidiaries	27

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5.10.	Investments, Guarantees, Contracts, etc.	27
5.11.	Government Regulations, ERISA, etc.	27
5.12.	Business Interruptions	28
5.13.	Names and Intellectual Property	29
5.14.	Other Associations	29
5.15.	Environmental Matters	29
5.16.	Investment Company Act	30
5.17.	Capital Stock	30
5.18.	Solvency	30
5.19.	Perfection and Priority	30
5.20.	Commercial Tort Claims	31
5.21.	Letter of Credit Rights	31
5.22.	Deposit Accounts	31
5.23.	Anti-Terrorism Laws	31
5.24.	Delivery of Acquisition Documents	31
5.25.	Management Agreements	32

SECTION VI. AFFIRMATIVE COVENANTS 32

6.1.	Payment of Taxes and Claims	32
6.2.	Maintenance of Properties and Corporate Existence	32
6.3.	Business Conducted	33
6.4.	Litigation Notices	33
6.5.	Issue Taxes	34
6.6.	Bank Accounts	34
6.7.	ERISA Notices	34
6.8.	Financial Covenants	34
6.9.	Financial and Business Information	35
6.10.	Officers’ Certificates	37
6.11.	Audits and Inspection; Appraisals	37
6.12.	Reserved	37
6.13.	Material Adverse Developments	37
6.14.	Places of Business	38
6.15.	Commercial Tort Claims	38
6.16.	Letter of Credit Rights	38
6.17.	Lockbox	38
6.18.	Evidence of Merger	38

SECTION VII. NEGATIVE COVENANTS: 38

7.1.	Merger, Consolidation, Dissolution or Liquidation	38
7.2.	Acquisitions	39
7.3.	Liens and Encumbrances	39
7.4.	Transactions With Affiliates or Subsidiaries	39
7.5.	Guarantees	39
7.6.	Other Indebtedness	40
7.7.	Loans and Investments	40
7.8.	Use of Lenders’ Name	40
7.9.	Miscellaneous Covenants	40
7.10.	Jurisdiction of Organization	40

ii

7.11.	Distributions	40
7.12.	Material Agreement	40
7.13.	Management Arrangements	40
7.14.	Tax Consolidation	41
7.15.	Compliance with ERISA	41

SECTION VIII. DEFAULT 42

8.1.	Events of Default	42
8.2.	Cure	44
8.3.	Rights and Remedies on Default	45
8.4.	Nature of Remedies	46
8.5.	Set-Off	46

SECTION IX. MISCELLANEOUS 46

9.1.	Governing Law	46
9.2.	Integrated Agreement	46
9.3.	Waiver	46
9.4.	Indemnity	47
9.5.	Time	47
9.6.	Expenses of Lender	47
9.7.	Brokerage	48
9.8.	Notices	48
9.9.	Headings	49
9.10.	Survival	49
9.11.	Successors and Assigns	49
9.12.	Duplicate Originals	50
9.13.	Modification	50
9.14.	Signatories	50
9.15.	Third Parties	50
9.16.	Discharge of Taxes, Borrower’s Obligations, Etc.	50
9.17.	Consent to Jurisdiction	50
9.18.	Additional Documentation	50
9.19.	Advertisement	51
9.20.	Waiver of Jury Trial	51
9.21.	Consequential Damages, etc.	51
9.22.	Nonliability of Lender	51
9.23.	Confidentiality	51
9.24.	Patriot Act Notice	52

iii

LOAN AND SECURITY AGREEMENT

This Loan and Security Agreement (“Agreement”) is dated this 28th day of December, 2012, by and among AD Computer Corporation, a Pennsylvania corporation (“ADC”), Payroll Tax Filing Services, Inc., a Pennsylvania corporation(“Payroll”), each other Person joined hereto as a borrower from time to time (ADC, Payroll and each other Person so joined hereto, each a “Borrower” and collectively, “Borrowers”), UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION (“Parent”), and METRO BANK, a Pennsylvania bank (“Lender”).

BACKGROUND

A. Borrowers desire to establish financing arrangements with Lender and Lender is willing to make loans and extensions of credit to Borrowers under the terms and provisions hereinafter set forth.

B. The parties desire to define the terms and conditions of their relationship in writing.

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

SECTION I. DEFINITIONS AND INTERPRETATION

1.1. Terms Defined: As used in this Agreement, the following terms have the following respective meanings:

Account - All of the “accounts” (as that term is defined in the UCC) of each Borrower, whether now existing or hereafter arising.

Account Debtor - Any Person obligated on any Account owing to a Borrower.

Accumulated Funding Deficiency - Any accumulated funding deficiency as defined in Section 302(a) of ERISA.

Acquisition – The purchase of all of the outstanding Capital Stock of ADC and Payroll by Parent pursuant to the Merger Agreement by (i) ADC’s acquisition of all of the outstanding Capital Stock of Payroll and (ii) merger of ADC Merger Sub, Inc. with and into ADC, with ADC surviving such merger.

Affiliate– With respect to any Person, (a) any Person which, directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such Person, or (b) any Person who is a director or officer (i) of such Person, (ii) of any Subsidiary of such Person, or (iii) any Person described in clause (a) above. For purposes of this definition, control of a Person shall mean the power, direct or indirect, (x) to vote 10% or more of the Capital Stock having ordinary voting power for the election of directors (or comparable equivalent) of such Person, or (y) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise. Control may be by ownership, contract, or otherwise.

Anti-Terrorism Laws– Any statute, treaty, law (including common law), ordinance, regulation, rule, order, opinion, release, injunction, writ, decree or award of any Governmental Authority relating to terrorism or money laundering, including Executive Order No. 13224 and the USA Patriot Act.

Approved Management Fees – For each Loan Party, a payment on a quarterly basis of the management fee set forth in Section 3(a) of the Management Agreement as in effect on the Closing Date; provided, however, that payment of such Approved Management Fees shall, at all times, be subject to the terms of the Management Fee Subordination Agreement and that the aggregate amount of such management fees shall not exceed $90,000 per fiscal quarter.

Asset Sale - The sale, transfer, lease, license or other disposition (whether voluntary or involuntary), by Borrower, to any Person other than a Borrower, of any Property now owned, or hereafter acquired, of any nature whatsoever in any transaction or series of related transactions. An Asset Sale includes, but is not limited to, a merger, consolidation, division, conversion, dissolution or liquidation.

Authorized Officer - Any officer of any Borrower authorized by specific written resolution of such Borrower to execute Compliance Certificates.

Bank Affiliate– With respect to Lender, any Person which, directly or indirectly, is in control of, is controlled by, or is under common control with Lender. For purposes of this definition, control of a Person shall mean the power, direct or indirect, (x) to vote 25% or more of any class of Capital Stock having ordinary voting power for the election of directors of such Person or other Persons performing similar functions for any such Person, or (y) to direct or cause the direction of the management and policies of such Person whether by ownership of Capital Stock, contract or otherwise.

Bankruptcy Code – Title 11 of the United States Code entitled “Bankruptcy”, as now or hereinafter in effect, or any successor statute.

Blocked Person– Section 5.23.

Borrowing Agent – ADC.

Business Day - A day other than Saturday or Sunday when Lender is open for business in Harrisburg, Pennsylvania.

Capital Expenditures – For any period, the aggregate of all expenditures (including that portion of Capitalized Lease Obligations attributable to that period) made in respect of the purchase, construction or rehabilitation of fixed or capital assets, determined in accordance with GAAP.

Capital Stock - Any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all other ownership interests in a Person (other than a corporation) and any and all warrants or options to purchase any of the foregoing.

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Capitalized Lease Obligations - Any Indebtedness represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP, consistently applied but excluding lease obligations which would be classified as operating lease obligations in accordance with GAAP as in effect on the date hereof.

Change of Control–The occurrence of any event which results in Parent ceasing to beneficially own, directly or indirectly, 95% of the total outstanding Capital Stock of each other Loan Party and their respective Subsidiaries.

Closing - Section 4.6.

Closing Date- Section 4.6.

Closing Fee - Section 2.5(a).

COBRA - The group health plan continuation coverage requirements of Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA.

Code – The Internal Revenue Code of 1986, as amended, or its predecessor or successor, as applicable, and any United States Treasury regulations, revenue rulings or technical information releases issued thereunder.

Collateral - All of the Property and interests in Property described in Section 3.1 of this Agreement and all other Property and interests in Property that now or hereafter secure payment of the Obligations and satisfaction by Borrowers of all covenants and undertakings contained in this Agreement and the other Loan Documents.

Collateral Assignment – That certain Collateral Assignment of Agreements dated as of the date hereof by Parent in favor of Lender, in form and substance satisfactory to Lender.

Compliance Certificate - Section 6.10.

Consolidated Amortization Expense - For any period, the aggregate consolidated amount of amortization expenses of Borrowers as determined in accordance with GAAP.

Consolidated Depreciation Expense - For any period, the aggregate, consolidated amount of depreciation expenses of Borrowers, as determined in accordance with GAAP.

Consolidated EBITDA - For any period, the Consolidated Net Income(or deficit) of Borrowers plus the sum of the following to the extent deducted in calculating Consolidated Net Income for such period (i) Consolidated Interest Expense, plus(ii) Consolidated Tax Expense, plus (iii) Consolidated Depreciation Expense, plus (iv)Consolidated Amortization Expense, plus (v) other non-cash charges (excluding reserves for future cash charges) for such period minus (vi) non-cash charges previously added back to Consolidated Net Income in determining Consolidated EBITDA to the extent such non-cash charges have become cash charges during such period minus (vii) to the extent included in calculating Consolidated Net Income, any other non-recurring cash or non-cash gains during such period, all as determined in accordance with GAAP.

3

Consolidated Interest Expense - For any period (without duplication), the aggregate, consolidated amount of interest expense required to be paid or accrued during such period on all Indebtedness of Borrowers outstanding during all or any part of such period, as determined in accordance with GAAP.

Consolidated Net Income - For any period, aggregate consolidated net income after taxes of Borrowers(excluding extraordinary losses and gains and all non-cash income, interest income and tax credits, rebates and other benefits), all as determined in accordance with GAAP.

Consolidated Tax Expense - For any period, the aggregate consolidated amount of income tax expenses of Borrowers, as determined in accordance with GAAP

Consolidated Total Debt – At any time, the aggregate consolidated Indebtedness of Borrowers, as determined in accordance with GAAP.

Debt Coverage Ratio - For any period, the ratio of (i) the sum of Consolidated Net Income for such period plus Consolidated Interest Expense for such period plus Consolidated Depreciation Expense for such period plus Consolidated Amortization Expense for such period minus Distributions made during such period to (ii) without duplication, the sum of scheduled principal payments on account of long term Indebtedness of Borrowers (excluding the Deferred Acquisition Compensation)made during such period plus the sum of scheduled lease payments on account of Capitalized Lease Obligations made during such period plus Consolidated Interest Expense for such period, all as determined in accordance with GAAP.

Default - Any event, act, condition or occurrence which with notice, or lapse of time or both, would constitute an Event of Default hereunder.

Default Rate – Section 2.4(b).

Deferred Acquisition Compensation–The amount of $2,000,000 to be paid to the Stockholders (as defined in the Merger Agreement) on December 28, 2014 pursuant to the Merger Agreement.

Disqualified Stock - Any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event (i) matures or is mandatorily redeemable for any reason, (ii) is convertible or exchangeable for Indebtedness or Capital Stock that meets the requirements of clauses (i) and (ii), or (iii) is redeemable at the option of the holder thereof, in whole or in part, in each case on or prior to the date that is ninety-one (91) days after the Term Loan Maturity Date.

Distribution-

a. Cash dividends or other cash distributions (including tax distributions) on any now or hereafter outstanding Capital Stock of any Loan Party;

b. The redemption, repurchase, defeasance or acquisition of such Capital Stock or of warrants, rights or other options to purchase such Capital Stock; and

4

c. Any loans or advances (other than salaries), to any shareholder or other holder of Capital Stock of any Loan Party.

DOL – United States Department of Labor, or any governmental agency or instrumentality succeeding to the functions thereof.

Dollar, Dollars and U.S. Dollars and the Symbol $ - Lawful money of the United States of America.

Earn Out Payments – Cash payments made by a Borrower pursuant to earn out liabilities incurred in connection with the acquisition of all or a substantial part of the assets or Capital Stock of a Person.

Employee Pension Plan– Any Plan which is subject to Part 3 of Subtitle B of the Title 1 of ERISA.

Employment Agreements – Collectively, the Key Employment Agreements, as defined in the Merger Agreement as in effect on the date hereof.

Environmental Laws– Any and all Federal, foreign, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees and any and all common law requirements, rules and bases of liability regulating, relating to or imposing liability or standards of conduct concerning pollution, protection of the environment, or the impact of pollutants, contaminants or toxic or hazardous substances on human health or the environment, as now or may at any time hereafter be in effect from time to time.

ERISA– The Employee Retirement Income Security Act of 1974, as amended, and any regulations issued thereunder by the DOL or PBGC.

ERISA Affiliate– (i) Any corporation included with any Loan Party in a controlled group of corporations within the meaning of Section 414(b) of the Code, (ii) any trade or business (whether or not incorporated) which is under common control with any Loan Party within the meaning of Section 414(c) of the Code; or (iii) any member of an affiliated service group of which any Loan Party is a member within the meaning of Section 414(m) of the Code.

Event of Default– Section 8.1.

Excess Cash Flow - means, as of the last day of any fiscal year, (i) Consolidated Net Income plus Consolidated Depreciation Expense plus Consolidated Amortization Expense, minus(ii) solely to the extent not deducted in computing Consolidated Net Income, Permitted Tax Distribution, minus(iii) the sum of mandatory prepayments under Section 2.6(c), (d) or (e) plus scheduled payments of principal on Indebtedness paid in cash, minus (iv) any net increase in working capital during such period, minus (v) an amount equal to the amount of all non-cash credits included in arriving at such Consolidated Net Income, minus (vi) the amount of unfinanced capital expenditures made in cash during such fiscal year, minus (vii) the aggregate amount of unfinanced cash consideration paid by the Borrowers in connection with investments (including acquisitions) made during such fiscal year, plus (viii) any net decrease in working capital during such period, in each case for such fiscal year, all as determined in accordance with GAAP.

5

Excluded Equity Issuance – Any issuance of (or capital contribution to any Loan Party in respect of any such issuance) (i) Capital Stock (other than Disqualified Stock) by a Borrower to management, employees, directors or other service providers of such Borrower under any employee stock option or stock purchase plan or agreement or other employee benefits plan (including, without limitation, the repayment of any loan made to such management or employee in connection with such issuance), or (ii) Capital Stock by a Loan Party to a Loan Party; provided that no issuance of Capital Stock that gives rise to a Change of Control shall be included in the definition of Excluded Equity Issuance.

Excluded Property – With respect to a Borrower, (i) any “intent-to-use” trademark until such time as such Borrower begins to use such trademark, (ii) any Property now or hereafter held by such Borrower to the extent (but only to the extent) such item is subject to an agreement which contains a term or is subject to a rule of law, statute or regulation that restricts, prohibits, or requires a consent (that has not been obtained) of a Person (other than any Loan Party) to, the creation, attachment or perfection of the security interest granted herein, and in each case solely to the extent that such restriction, prohibition and/or requirement of consent is effective and enforceable under applicable law and is not rendered ineffective by applicable law (including, without limitation, pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC), and (iii) any Trust Account; provided, however that (x) Excluded Property shall not include any proceeds of any such item, and (y) any item of Excluded Property that at any time ceases to satisfy the criteria for Excluded Property (whether as a result of the applicable Loan Party obtaining any necessary consent, any change in any rule of law, statute or regulation, or otherwise), shall no longer be Excluded Property.

Executive Order No. 13224 - The Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced and as may be in effect from time to time.

Expenses - Section 9.6.

GAAP- Generally accepted accounting principles as in effect on the Closing Date applied in a manner consistent with the most recent audited financial statements of Borrowers furnished to Lender and described in Section 5.7 herein.

General Intangibles – All “general intangibles” as defined in the UCC, and without limitation of the foregoing, also all designs, patents, patent rights and applications therefor, trademarks and registrations and applications therefor, trade names, inventions, copyrights and all registrations and applications therefor, license right, trade secrets, methods, know how, specifications, customer lists, franchises, tax refunds and unearned insurance premiums.

Governmental Authority - Any federal, state or local government or political subdivision, or any agency, authority, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury, or arbitration.

Guarantor– Collectively, Parent and any other Person who may hereafter guaranty, as surety, all of the Obligations.

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Hazardous Substances - Any substances defined or designated as hazardous or toxic waste, hazardous or toxic material, hazardous or toxic substance or similar term, under any Environmental Law.

Hedging Agreements - Any Interest Hedging Instrument or any other interest rate protection agreement, foreign currency exchange agreement, commodity purchase or option agreement, or any other interest rate hedging device or swap agreement (as defined in 11 U.S.C. § 101 et. seq.).

Indebtedness - Of any Person at any date, without duplication, (i) all indebtedness of such Person for borrowed money (including with respect to Borrowers, the Obligations) or for the deferred purchase price of property or services (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), including without limitation the Deferred Acquisition Compensation, (ii) any other indebtedness of such Person which is evidenced by a note, bond, debenture or similar instrument, (iii) all Capitalized Lease Obligations of such Person, (iv) the face amount of all letters of credit issued for the account of such Person and all drafts drawn thereunder, (v) all obligations of other Persons which such Person has guaranteed, (vi) Disqualified Stock, (vii) all net obligations of such Person under Hedging Agreements, (viii) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof and (ix) all obligations to make Earn Out Payments to the extent such obligation is required to be included as a liability on the balance sheet of such Person in accordance with GAAP.

Intellectual Property - Property constituting under any applicable law a patent, patent application, copyright, trademark, service mark, trade name, mask work, trade secret or license or other right to use any of the foregoing.

Interest Hedging Instrument - Any documentation evidencing any interest rate swap, interest “cap” or “collar” or any other interest rate hedging device or swap agreement (as defined in 11 U.S.C. § 101 et. seq.) between any Borrower and Lender (or any Affiliate of Lender).

Inventory– All of the “inventory” (as that term is defined in the UCC) of each Borrower, whether now existing or hereafter acquired or created.

IRS - Internal Revenue Service.

Jet Pay Documents – That certain Amendment, Guarantee and Waiver Agreement made by each of Parent, Ten Lords, Ltd and JetPay, LLC as of December 28, 2012.

Lien- Any interest of any kind or nature in property securing an obligation owed to, or a claim of any kind or nature in property by, a Person other than the owner of the Property, whether such interest is based on the common law, statute, regulation or contract, and including, but not limited to, a security interest or lien arising from a mortgage, encumbrance, pledge, conditional sale or trust receipt, a lease, consignment or bailment for security purposes, a trust, or an assignment. For the purposes of this Agreement, each Borrower shall be deemed to be the owner of any Property which it has acquired or holds subject to a conditional sale agreement or other arrangement pursuant to which title to the Property has been retained by or vested in some other Person for security purposes.

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LIBOR — The rate of interest per annum in Dollars (rounded upwards, if necessary, at Lender’s option, to the next 100^th of one percent) equal to (i) the British Bankers Association LIBOR Rate (“BBA LIBOR”), for an interest period of one year as published by Bloomberg (or such other commercially available source providing quotations of BBA LIBOR as designated by Lender from time to time) at approximately 11:00 A.M. (London time) 2 London Banking Days prior to the date of determination for a term of one year; provided however, if more than one BBA LIBOR Rate is specified, the applicable rate shall be the arithmetic mean of all such rates and provided further, that if such BBA LIBOR is not available, the rate shall be the average rate of interest per annum at which deposits in Dollars are offered for such one year period to major banks in London, England at approximately 11:00 A.M. (London time) 2 London Banking Days prior to the first day of such LIBOR Interest Period for a term comparable to such LIBOR Interest Period, as determined by the Lender, divided by (ii)1.00 minus the percentage (expressed as a decimal) which is in effect from time to time under Regulation D, as such regulation may be amended from time to time or any successor regulation, as the maximum reserve requirement (including, without limitation, any basic, supplemental, emergency, special, or marginal reserves) applicable with respect to Eurocurrency liabilities as that term is defined in Regulation D.

Loan Parties – Collectively, Guarantors and Borrowers.

Loan Documents – Collectively, this Agreement, the Term Loan Note, the Surety and Guaranty Agreements, the Perfection Certificate, the Management Fee Subordination Agreement, the Pledge Agreement, the Collateral Assignment, the Trademark Security Agreement and all agreements, instruments and documents executed and/or delivered in connection therewith, all as may be supplemented, restated, superseded, amended or replaced from time to time.

London Banking Days — Any day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits) in London, England.

Management Agreement – That certain Advisory Agreement dated as of the date hereof between Parent and ADC, a true and correct copy of which is attached hereto as Exhibit “B”.

Management Fee Subordination Agreement – That certain Management Fee Subordination Agreement executed by Parent in favor of Lender, in form and substance satisfactory to Lender, on or prior to the Closing Date.

Material Adverse Effect - A material adverse effect with respect to (a) the business, assets, properties, financial condition, stockholders’ equity, contingent liabilities, material agreements or results of operations of Borrowers on a consolidated basis, or (b) Borrowers’ ability (on a consolidated basis) to pay the Obligations in accordance with the terms hereof, or (c) the validity or enforceability of this Agreement or any of the other Loan Documents or the rights and remedies of Lender hereunder or thereunder or (d) the validity, perfection, priority or enforceability of the Liens granted to Lender in respect of the Collateral.

Merger Agreement – That certain Agreement dated as of July 6, 2012, by and among Parent, ADC Merger Sub, Inc., ADC, Payroll, Carol and C. Nicholas Antich as Joint Tenants, C. Nicholas Antich, Carol Antich, Eric Antich, Lynn McCausland, the B N McCausland Trust, Joel E. Serfass and C. Nicholas Antich, as representative, as amended to the date hereof.

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Multiemployer Plan– A “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which any Loan Party, any Loan Party’s Subsidiaries or any ERISA Affiliate is required to contribute.

Net Proceeds – With respect to (a) an Asset Sale, the cash proceeds of such sale less (i) the reasonable direct cost relating to such (including sales commissions and legal, accounting and investment banking fees, commissions and expenses and taxes paid); (b) an issuance of Capital Stock of any Loan Party or a Subsidiary thereof, the aggregate amount received in cash in connection with such issuance minus the reasonable and customary fees, commissions and other out-of-pocket expenses incurred by Loan Parties in connection with such issuance; (c) property or casualty insurance proceeds or condemnation award proceeds, the amount of such proceeds minus the reasonable and customary fees and other out-of-pocket expenses and taxes paid incurred by the Loan Parties in connection with recovering such proceeds; and (d) the issuance or incurrence of additional Indebtedness, the aggregate amount received in cash in connection with such issuance or incurrence minus the reasonable and customary fees, commissions and other out-of-pocket expenses incurred by Loan Parties in connection with such issuance.

Obligations - All existing and future debts, liabilities and obligations of every kind or nature at any time owing by any Loan Party to Lender or any other subsidiary of Lender or Bank Affiliate, whether under this Agreement, or any other existing or future instrument, document or agreement, between a Loan Party and Lender or any other subsidiary of Lender or Bank Affiliate, whether joint or several, related or unrelated, primary or secondary, matured or contingent, due or to become due (including debts, liabilities and obligations obtained by assignment), and whether principal, interest, fees, indemnification obligations hereunder or Expenses (specifically including interest accruing after the commencement of any bankruptcy, insolvency or similar proceeding with respect to any Loan Party, whether or not a claim for such post-commencement interest is allowed), including, without limitation, debts, liabilities and obligations in respect of the Term Loan and any extensions, modifications, substitutions, increases and renewals thereof; any amount payable by any Loan Party or any Subsidiary of any Loan Party pursuant to an Interest Hedging Instrument; the payment of all amounts advanced by Lender or any other subsidiary of Lender or Bank Affiliate to preserve, protect and enforce rights hereunder and in the Collateral; and all Expenses incurred by Lender or any other subsidiary of Lender or Bank Affiliate. Without limiting the generality of the foregoing, Obligations shall include any other debts, liabilities or obligations owing to Lender or any other subsidiary of Lender or Bank Affiliate in connection with any lockbox, cash management, or other services (including electronic funds transfers or automated clearing house transactions) provided by Lender or any other subsidiary of Lender or Bank Affiliate to any Loan Party, as well as any other loan, advances or extension of credit, under any existing or future loan agreement, promissory note, or other instrument, document or agreement between a Loan Party and Lender or any other subsidiary of Lender or Bank Affiliate.

Organizational Documents – With respect to any Person (other than an individual) the documents by which such Person was organized (such as a certificate of incorporation or organization) and which relate to the internal governance of such Person (such as bylaws, partnership agreement or an operating or limited liability agreement).

Parent – As defined in the recitals.

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PBGC - Pension Benefit Guaranty Corporation, or any governmental agency or instrumentality succeeding to the functions thereof.

Perfection Certificate - The Perfection Certificate provided by Borrowers to Lender on or prior to the Closing Date in form and substance satisfactory to Lender.

Permitted Indebtedness – (i) Indebtedness to Lender in connection with Term Loan or otherwise pursuant to the Loan Documents; (ii) Indebtedness under Hedging Agreements entered into for the sole purpose of hedging in the normal course of business and not for speculative purposes; (iii) purchase money Indebtedness (including Capitalized Lease Obligations) hereafter incurred by any Borrower to finance the purchase of fixed assets; provided that, (a) such Indebtedness incurred in any fiscal year shall not exceed in the aggregate $250,000, (b) such Indebtedness shall not exceed the purchase price of the assets funded and (c) no such Indebtedness may be refinanced for a principal amount in excess of the principal amount outstanding at the time of such refinancing, (iv) Indebtedness existing on the Closing Date that is identified and described on Schedule “1.1(a)” attached hereto and made part hereof, including refinancing, replacement and renewals of such Indebtedness, provided that any refinancing shall not exceed the amount then outstanding, (v) Indebtedness incurred in the ordinary course of business for surety bonds and performance bonds obtained in connection with workers’ compensation, unemployment insurance and other social security legislation, (vi) Indebtedness representing deferred compensation or reimbursable expenses owed to officers, directors, employees or agents of any Borrower in the ordinary course of business, and (vii) other unsecured Indebtedness, of a type not described above, not to exceed $500,000 in the aggregate at any time outstanding.

Permitted Investments - (i) investments and advances existing on the Closing Date that are disclosed on Schedule “5.10(a)”; (ii) cash and cash equivalent investments, and Accounts and trade credit created in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; (iii) bank deposits in the ordinary courts of business; (iv) investments in securities of Account Debtors received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such Account Debtors or acquired in connection with the settlement of delinquent Accounts in the ordinary courts of business; (v) deposits, prepayments and other credits to suppliers and deposits in connection with lease obligations, taxes, insurance and similar items, in each case made in the ordinary course of business and securing contractual obligations of a Loan Party; (vi) investments in prepaid expenses, utility and workers’ compensation, performance and other similar deposits, each as entered into in the ordinary course of business; (vii) Hedging Agreements entered into for the sole purpose of hedging in the normal course of business and not for speculative purposes; (viii) obligations issued or guaranteed by the United States of America or any agency thereof; (ix) commercial paper with maturities of not more than 180 days and a published rating of not less than A-1 or P-1 (or the equivalent rating) by a nationally recognized investment rating agency; (x) certificates of time deposit and bankers’ acceptances having maturities of not more than 180 days and repurchase agreements backed by United States government securities of Lender or another commercial bank if (A) such bank has a combined capital and surplus of at least $500,000,000, or (B) its debt obligations, or those of a holding company of which it is a Subsidiary, are rated not less than A (or the equivalent rating) by a nationally recognized investment rating agency; (xi) U.S. money market funds that invest solely in obligations issued or guaranteed by the United States of America or an agency thereof; (xii) loans and advances to employees not to exceed $100,000 in the aggregate outstanding at any time; (xiii) investments consisting of loans or advances made to another Loan Party or a Subsidiary thereof in an aggregate amount not to exceed $250,000 in the aggregate outstanding at any time; (xiv) other Investments, which together with any investments described in clause (xiii) of this definition, shall not exceed $300,000 in the aggregate outstanding at any time; and (xv) the Proceeds Loan.

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Permitted Liens - (i) Liens securing taxes, assessments or governmental charges or levies for amounts that are not yet due and payable, (ii) Liens of suppliers, carriers, materialmen, warehousemen, workmen or mechanics and other similar Liens, in each case imposed by law or arising in the ordinary course of business and for amounts that are not yet due and payable; (iii) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance, social security and other like laws (excluding Liens arising under ERISA); (iv) pledges or cash deposits made in the ordinary course of business (a) to secure the performance of bids, tenders, leases, sales or other trade contracts (other than for the repayment of borrowed money or the payment of a deferred purchase price for property or services,) or (b) made in lieu of, or to secure the performance of, surety, customs, reclamation or performance bonds (in each case not related to judgments or litigation); (v) Liens of landlords and mortgagees of landlords (a) with respect to any landlord, solely arising by statute or, with respect to any mortgagee arising by statute or under any contractual obligations entered into in the ordinary course of business, (b) on fixtures and movable tangible property located on the real property leased or subleased from such landlord, (c) for amounts not yet due or that are being contested in good faith by appropriate proceedings diligently conducted and (d) for which adequate reserves or other appropriate provisions are maintained on the books of such Person in accordance with GAAP; (vi) non-exclusive Intellectual Property licenses granted in the ordinary course of business; (vii) Liens in favor of collecting banks arising under Section 4-210 of the UCC and other banker’s liens arising by operation of law; (viii) Liens on fixed assets securing purchase money Indebtedness permitted under Section 7.6; provided that, (a) such Lien attached to such assets concurrently, or within 20 days of the acquisition thereof, and only to the assets so acquired, and (b) a description of the asset acquired is furnished to Lender; (ix) Liens existing on the Closing Date and shown on Schedule “1.1(b)” attached hereto and made part hereof; (x) Liens in favor of Lender securing the Obligations; and (xi) Liens securing appeal bonds and judgments with respect to judgments that do not otherwise result in or cause an Event of Default.

Permitted Parent Distributions –Distributions from ADC to Parent that meet each of the following conditions: (i) commencing with the fiscal year ending December 31, 2013 and continuing for each fiscal year thereafter, such Distribution is made no less than 10 Business Days nor more than 90 days after delivery to Lender of the audited financial statements for such fiscal year (the “Parent Distribution Period”), (ii) the Debt Coverage Ratio for such fiscal year is greater than 1.30 to 1.00, (iii) no Default or Event of Default exists at the time such Distribution is made, or after giving pro forma effect to such Distribution as if it had been made on the last day of such fiscal year, (iv) Loan Parties shall have delivered to Lender at least 10 Business Days prior to such Distribution a written calculation, in form and substance reasonably satisfactory to Lender, demonstrating pro forma compliance with this Agreement after giving effect to such Distribution and the financial details underlying such calculation, and (v) such Distribution, in the aggregate with all other Distributions made by ADC to Parent during the Parent Distribution Period for such fiscal year, does not exceed (I) twenty-five percent (25%) of Borrowers’ Excess Cash Flow for such fiscal year for the fiscal years ending December 31, 2013 and December 31, 2014, or (II) provided that the Deferred Acquisition Compensation has been paid in accordance with the Merger Agreement, forty percent (40%) of Borrowers’ Excess Cash Flow for such fiscal year for the fiscal year ending December 31, 2015 and thereafter. Excess Cash Flow shall be determined for any fiscal year using the figures set forth in the audited financial statements and the Compliance Certificate delivered by Borrowers pursuant to Section 6.9 for such fiscal year.

Permitted Tax Distributions – Distributions from ADC to Parent that meet each of the following conditions: (i) the amount of such Distributions for each fiscal quarter, and for each fiscal year on an aggregate basis, shall not exceed (without duplication) the lesser of (A) the aggregate income tax liability for the applicable period of an affiliated, combined, consolidated or unitary group that includes Parent, ADC or any Subsidiary of ADC (or both ADC and one of more such Subsidiaries) and (B) the aggregate income tax liability that would be determined for the applicable period if ADC filed tax returns as the common parent of an affiliated, combined, consolidated or unitary group that included only ADC and its Subsidiaries, provided, however that reasonable estimates of such amounts in (A) or (B) for each fiscal quarter with respect to estimated income taxes shall not violate this clause (i), (ii) Borrowers have not made any payment directly to the applicable Government Authority Person attributable to or in connection with the income tax liability to be paid by the proceeds of such Distributions, (iii) Parent shall actually use such Distributions to pay the income tax liabilities of an affiliated, combined, consolidated or unitary group that includes Parent and one or more of the Borrowers within five (5) Business Days of receipt, and (iv) Parent shall promptly, but in no event more than five (5) Business Days of determining than an excess exists, refund to ADC the excess of the amount of Distributions made for each such fiscal quarter and fiscal year on aggregate basis over the income tax liability that would have been determined for each such period it Parent had filed tax returns as the common parent of an affiliated, combined, consolidated or unitary group that included only Parent and Borrowers.

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Person- An individual, partnership, corporation, trust, limited liability company, limited liability partnership, unincorporated association or organization, joint venture or any other entity.

Plan-An “Employee Pension Benefit Plan” (as defined in Section 3(2) of ERISA), a “voluntary employees’ beneficiary association” (within the meaning of Section 501(a)(9) of the Code, or a “welfare benefit fund” (within the meaning of Section 419 of the Code), which is maintained, or to which contributions are, or are required to be, made, by any Loan Party, any Loan Party’s Subsidiaries or any ERISA Affiliate, except a Multiemployer Plan.

Pledge Agreement – That certain collateral pledge agreement executed by Parent and Borrowers in favor of Lender on or prior to the Closing Date, in form and substance satisfactory to Lender.

Proceeds Loan– Section 2.7.

Prohibited Transaction- The meaning given to such term in Section 406 of ERISA, Section 4975(c) of the Code and any Treasury regulations issued thereunder.

Property- Any interest of any Loan Party in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

Regulation D- Regulation D of the Board of Governors of the Federal Reserve System comprising Part 204 of Title 12, Code of Federal Regulations, as in effect from time to time, and any successor thereto.

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Related Party – With respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

Reorganization- Any reorganization as defined in Section 4241(a) of ERISA.

Reportable Event- With respect to any Employee Pension Plan, as event described in Section 4043(c) of ERISA.

Requirement of Law – Collectively, all international, foreign, federal, state and local laws, statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

Subsidiary- With respect to any Person at any time, (i) any corporation more than fifty percent (50%) of whose voting stock is legally and beneficially owned by such Person or owned by a corporation more than fifty percent (50%) of whose voting stock is legally and beneficially owned by such Person; (ii) any trust of which a majority of the beneficial interest is at such time owned directly or indirectly, beneficially or of record, by such Person or one or more Subsidiaries of such Person; and (iii) any partnership, joint venture, limited liability company or other entity of which ownership interests having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions are at such time owned directly or indirectly, beneficially or of record, by, or which is otherwise controlled directly, indirectly or through one or more intermediaries by, such Person or one or more Subsidiaries of such Person.

Surety and Guaranty Agreement- That certain surety and guaranty agreement to be executed by each Guarantor in favor of Lender, in form and substance satisfactory to Lender, on or prior to the Closing Date.

Term Loan- Section 2.1(a).

Term Loan Maturity Date – December 28, 2019.

Term Loan Note - Section 2.1(b).

Total Leverage Ratio- The ratio of Borrowers’ (i) Consolidated Total Indebtedness as of the date of determination, to (ii) Consolidated EBITDA for the preceding four (4) fiscal quarters.

Trademark Security Agreement – That certain trademark security agreement to be executed by each Borrower in favor of Lender, in form and substance satisfactory to Lender, on or prior to the Closing Date.

Trust Account – Those certain accounts established from time to time for the benefit of a Borrowers’ customers for the payment of payroll tax and other employment tax obligations of such customers.

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UCC- The Uniform Commercial Code as adopted in the Commonwealth of Pennsylvania, as in effect from time to time.

Unfunded Capital Expenditures – Capital Expenditures that are not financed through interest bearing Indebtedness.

Withdrawal Liability- Any withdrawal liability as defined in Section 4201 of ERISA.

Other Capitalized Terms- Any other capitalized terms used without further definition herein shall have the respective meaning set forth in the UCC.

1.2. Accounting Principles: Where the character or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to be made for the purposes of this Agreement, this shall be done in accordance with GAAP as in effect on the Closing Date, to the extent applicable, except as otherwise expressly provided in this Agreement. If there are any changes in GAAP after the Closing Date that would affect the computation of the financial covenants in Section 6.8, such changes shall only be followed, with respect to such financial covenants, from and after the date this Agreement shall have been amended to take into account any such changes.

1.3. Construction: No doctrine of construction of ambiguities in agreements or instruments against the interests of the party controlling the drafting shall apply to any Loan Documents.

SECTION II. THE LOAN

2.1. Term Loan:

a. Lender hereby agrees to advance to Borrowers, subject to the terms and conditions of this Agreement, the sum of Nine Million Dollars ($9,000,000) (“Term Loan”).

b. At Closing, Borrowers shall execute and deliver a promissory note to Lender in the original principal amount of the Term Loan (“Term Loan Note”). The Term Loan Note shall evidence Borrowers’ joint and several, unconditional obligation to repay to Lender the Term Loan with interest as herein provided. The Term Loan Note shall be in form and substance reasonably satisfactory to Lender.

c. The principal balance of the Term Loan shall be paid in equal monthly installments of $107,142.86, commencing on January 31, 2013, and continuing on the last day of each calendar month thereafter. A final installment of all unpaid principal and all accrued and unpaid interest outstanding under the Term Loan shall be due and payable on the Term Loan Maturity Date.

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2.2. Advances and Payments:

a. Except to the extent otherwise set forth in this Agreement (or in the case of an Interest Hedging Instrument under the applicable agreements), all payments of principal and of interest on the Term Loan and all Expenses, fees, indemnification obligations and all other charges and any other Obligations of Borrowers, shall be made to Lender at its banking office at 3801 Paxton Street, Harrisburg, PA 17111, or such other office as Lender may designate in writing, in United States dollars, in immediately available funds. Each Borrower hereby authorizes Lender and further agrees that Lender shall have the unconditional right and discretion (and each Borrower hereby authorizes Lender) to automatically deduct from any of such Borrower’s checking, operating and/or deposit accounts (but excluding any Trust Account) with Lender all of such Borrower’s Obligations as they become due from time to time under this Agreement including, without limitation, interest, principal, fees, indemnification obligations and reimbursement of Expenses. Each Borrower acknowledges that such Borrower’s failure to maintain sufficient funds in any checking, operating or deposit account for payment of any of the Obligations, or Lender’s failure to charge any such account shall not relieve Borrowers of any payment obligation under this Agreement or any other Loan Document. Any payments received prior to 2:00 p.m. Eastern time on any Business Day shall be deemed received on such Business Day. Any payments (including any payment in full of the Obligations), received after 2:00 p.m. Eastern time on any Business Day shall be deemed received on the immediately following Business Day.

2.3. Interest:

a. The unpaid principal balance of the Term Loan shall bear interest, subject to the terms hereof, at four percent (4.00%) per annum.

b. Interest shall be payable monthly, in arrears, on the first day of each month beginning on the first day of the first full calendar month after the Closing Date, and on the Term Loan Maturity Date.

2.4. Additional Interest Provisions:

a. All computations of interest on the Term Loan shall be made on the basis of a three hundred sixty (360) day year and the actual number of days elapsed.

b. After the occurrence and during the continuance of an Event of Default hereunder, the per annum effective rate of interest on all outstanding principal under the Term Loan, shall at the option of Lender, be equal to seven percent (7%) per annum (“Default Rate”). All such increases may be applied retroactively to the date of the occurrence of the Event of Default. Borrowers agree that the Default Rate payable to Lender is a reasonable estimate of Lender’s damages and is not a penalty and that interest accruing at the Default Rate is payable on demand.

c. All contractual rates of interest chargeable on outstanding principal under the Term Loan shall continue to accrue and be paid even after Default, an Event of Default, maturity, acceleration, judgment, bankruptcy, insolvency proceedings of any kind or the happening of any event or occurrence similar or dissimilar.

d. Borrowers shall not be obligated to pay and Lender shall not collect interest at a rate higher than the maximum permitted by law or the maximum that will not subject Lender to any civil or criminal penalties. If, because of the acceleration of maturity the payment of interest in advance or any other reason, Borrowers are required, under the provisions of any Loan Document or otherwise, to pay interest at a rate in excess of such maximum rate, the rate of interest under such provisions shall immediately and automatically be reduced to such maximum rate and any payment made in excess of such maximum rate, together with interest thereon at the rate provided herein from the date of such payment, shall be immediately and automatically applied to the reduction of the unpaid principal balance of the Term Loan as of the date on which such excess payment was made. If the amount to be so applied to reduction of the unpaid principal balance exceeds the unpaid principal balance, the amount of such excess shall be refunded by Lender to Borrowers.

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2.5. Fees and Charges:

a. At Closing, Lender shall have fully earned and Borrowers shall be unconditionally obligated to pay to Lender, a non-refundable fee (“Closing Fee”) with respect to the Term Loan in the amount of Twenty Two Thousand Five Hundred Dollars ($22,500), due and payable in full on the Closing Date.

b. Borrowers shall unconditionally pay to Lender a late charge equal to three percent (3%) of any and all payments of principal or interest on the Term Loan that are not paid within fifteen (15) days of the due date. Such late charge shall be due and payable regardless of whether Lender has accelerated the Obligations. Borrowers agree that any late fee payable to Lender is a reasonable estimate of Lender’s damages and is not a penalty. The imposition of such late fee shall not be deemed a waiver of any Event of Default.

2.6. Voluntary and Mandatory Prepayments:

a. Borrowers may prepay the Term Loan in whole or in part at any time or from time to time, provided that any prepayment shall be accompanied by all accrued and unpaid interest. Each Borrower hereby agrees that promptly upon demand (and in any event within ten (10) Business Days of such demand) by Lender (which demand shall be accompanied by a statement setting forth the basis for the amount being claimed), Borrowers will, jointly and severally, indemnify Lender against any net loss or expense which Lender may sustain or incur as a result of any such prepayment, including any net loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by Lender to fund or maintain the Term Loan, as reasonably determined by Lender. For the purposes of this Section, all determinations of Lender’s net loss or expense shall be made as if Lender had actually funded and maintained the Term Loan based on the one-year LIBOR in effect on the Closing Date through the purchase of deposits having a maturity corresponding to the repayment period for the Term Loan and bearing an interest rate equal to the one-year LIBOR in effect on the Closing Date. For clarity, the indemnity under this Section 2.6(a) shall only be due and payable if one-year LIBOR at the time of such prepayment is lower than one-year LIBOR as in effect on the Closing Date.

b. Upon any Asset Sale by any Borrower(other than the sale of Inventory in the ordinary course of business), Borrowers shall prepay the Term Loan in an amount equal to the Net Proceeds upon any Loan Party’s receipt thereof; provided, however, that no such prepayment shall be required to be made if (i) no Event of Default exists and the Net Proceeds from such Asset Sale are less than $100,000 in the aggregate or (ii) (A) no Event of Default then exists, (B) Borrowers reinvest such Net Proceeds prior to the date that is one hundred and eighty (180) days after the receipt of such Net Proceeds in assets of comparable or superior quality and value to those sold and used or useful in the business of Borrowers within one hundred and eighty (180) days following the receipt of such Net Proceeds, and (C) the Net Proceeds from such Asset Sale are less than $100,000 in the aggregate with the Net Proceeds from all other Asset Sales which were not applied as a prepayment pursuant to this Section 2.6(b) during the applicable fiscal year of Borrowers. The provisions of this Section 2.6(b) shall not be deemed to be implied consent to any such disposition otherwise prohibited by the terms and conditions of this Agreement.

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c. Upon the incurrence by any Borrower of any Indebtedness (other than Permitted Indebtedness), Borrowers shall prepay the outstanding principal amount of the Term Loan in an amount equal to 100% of the Net Proceeds received by such Person in connection with such incurrence within five (5) Business Days of the date of such receipt. The provisions of this Section 2.6(c) shall not be deemed to be implied consent to any such incurrence otherwise prohibited by the terms and conditions of this Agreement.

d. If any Borrower or any Subsidiary thereof issues any Capital Stock (other than Excluded Equity Issuances), Borrowers shall prepay the Term Loan in an amount equal to the Net Proceeds of such issuance within five (5) Business Days of receipt thereof.

e. Upon the receipt by any Borrower of any property or casualty insurance proceeds or condemnation award proceeds, Borrowers shall prepay the Term Loan in an amount equal to the Net Proceeds of such proceeds within five (5) Business Days of receipt; provided, however, that no such repayment shall be required if, and to the extent that, (i) no Event of Default then exists, and (ii)  Borrowers reinvest such Net Proceeds for the repair, replacement or restoration of the damaged or condemned property within one hundred and eighty (180) days following the receipt of such proceeds.

f. Upon the receipt by any Loan Party of any purchase price adjustment (other than a working capital adjustment), including any indemnity payment, received pursuant to the Merger Agreement, if an Event of Default has occurred and is continuing, Borrowers shall prepay the outstanding principal amount of the Term Loan in an amount equal to 100% of such amounts received, as applicable, net of (without duplication) any reasonable expenses incurred in collecting such purchase price adjustment, within five (5) Business Days of the date of any such receipt.

g. Commencing with the fiscal year ending December 31, 2013, for each fiscal year for which Borrowers’ Debt Coverage Ratio is greater than 1.30 to 1.00, Borrowers shall prepay the Loans by paying to Lender in immediately available funds an amount equal to twenty-five percent (25%) of Borrowers’ Excess Cash Flow for such fiscal year. Excess Cash Flow shall be determined for any fiscal year using the figures set forth in the audited financial statements and the Compliance Certificate delivered by Borrowers pursuant to Section 6.9 for such fiscal year. Payments pursuant to this Section 2.6(f) shall be made within two (2) Business Days after delivery to Lender of such audited financial statements, but in no event later than one hundred twenty (120) days after the end of the applicable fiscal year. In the event that the financial statements are not so delivered, then a calculation based upon estimated amounts shall be made by Lender upon which calculation Borrowers shall make the prepayment required by this Section 2.6(g), subject to adjustment when the financial statements are delivered to Lender as required hereby. Such calculation made by Lender and payment delivered by Borrowers shall not be deemed a waiver of any rights Lender may have as a result of the failure by Borrowers to deliver such financial statement.

h. Any prepayments on account of the Term Loan pursuant to this Section 2.6 shall first be applied to accrued and unpaid interest on the Term Loan and then to the principal balance of the Term Loan in the inverse order of maturity.

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i. Any prepayments on account of the Term Loan (whether voluntary or mandatory) shall not affect any Borrower’s obligation to continue making payments under any Interest Hedging Instrument, which obligations shall remain in full force and effect notwithstanding such prepayment, subject to the terms of such Interest Hedging Instrument.

2.7. Use of Proceeds: The extensions of credit under and proceeds of the Term Loan shall be used solely to pay a portion of the purchase price of the Acquisition, which shall occur as follows: (i) ADC shall receive the Term Loan proceeds from Lender, (ii) ADC shall loan the Term Loan proceeds to Parent on the Closing Date (the “Proceeds Loan”) and (iii) the Parent shall use the proceeds of the Proceeds Loan to pay the purchase price set forth in the Merger Agreement on the Closing Date.

2.8. Capital Adequacy: If, after the date hereof, Lender reasonably determines that (a) the adoption of or change in any law, rule, regulation or guidelines regarding capital requirements for banks or bank holding companies, or any change in the interpretation or application thereof by any Governmental Authority charged with the administration thereof, or (b) compliance by Lender or its parent bank holding company with any guideline, request, or directive of any such entity regarding capital adequacy (whether or not having the force of law), the effect of reducing the return on Lender’s or such holding company’s capital as a consequence of the Lender’s commitments hereunder to a level below that which Lender or such holding company could have achieved but for such adoption, change, or compliance (taking into consideration Lender’s or such holding company’s then existing policies with respect to capital adequacy and assuming the full utilization of such entity’s capital) by any amount deemed by Lender to be material, then Lender may notify Borrowers thereof, so long as such amounts have accrued on or after the day which is 180 days prior to the date on which Lender first made demand therefor; provided, that if the event giving rise to such costs or reductions has retroactive effect, such 180 day period shall be extended to include the period of retroactive effect. Following receipt of such notice, Borrowers agree to pay Lender on demand the amount of such reduction of return of capital as and when such reduction is determined, payable within ninety (90) days after presentation by Lender of a statement in the amount and setting forth in reasonable detail Lender’s calculation thereof and the assumption upon which such calculation was based (which statement shall be deemed true and correct absent manifest error). In determining such amount, Lender may use any reasonable averaging and attribution methods. Any rules, regulations, policies, guidelines, directives or similar requirements adopted, promulgated or implemented in connection with (a) the Dodd-Frank Wall Street Reform and Consumer Protection Act and (b) the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or any United States Governmental Authority, in each case pursuant to Basel III, shall in all events are deemed to have been imposed, introduced and adopted after the date of this Agreement.

2.9. Joint and Several Liability.

a. Each Borrower hereby irrevocably designates Borrowing Agent to be its attorney and agent and in such capacity to borrow, sign and endorse notes, and execute and deliver all instruments, documents, writings and further assurances now or hereafter required hereunder, on behalf of such Borrower or Borrowers, and hereby authorizes Lender to pay over or credit all loan proceeds hereunder in accordance with the request of Borrowing Agent.

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b. The handling of this credit facility as a co-borrowing facility with a borrowing agent in the manner set forth in this Agreement is solely as an accommodation to Borrowers and at their request. Lender shall not incur liability to Borrowers as a result thereof. To induce Lender to do so and in consideration thereof, each Borrower hereby indemnifies Lender and holds Lender harmless from and against any and all liabilities, expenses, losses, damages and claims of damage or injury asserted against Lender by any Person arising from or incurred by reason of the handling of the financing arrangements of Borrowers as provided herein, reliance by Lender on any request or instruction from Borrowing Agent or any other action taken by Lender with respect to this Section 2.9 except due to willful misconduct or gross negligence by the indemnified party (as determined by a court of competent jurisdiction in a final and non-appealable judgment).

c. All Obligations shall be joint and several, and each Borrower shall make payment upon the maturity of the Obligations by acceleration or otherwise, and such obligation and liability on the part of each Borrower shall in no way be affected by any extensions, renewals and forbearance granted by Lender to any Borrower, failure of Lender to give any Borrower notice of borrowing or any other notice, any failure of Lender to pursue or preserve its rights against any Borrower, the release by Lender of any Collateral now or thereafter acquired from any Borrower, and such agreement by each Borrower to pay upon any notice issued pursuant thereto is unconditional and unaffected by prior recourse by Lender to the other Borrowers or any Collateral for such Borrower’s Obligations or the lack thereof. Each Borrower waives all suretyship defenses.

d. Each Borrower expressly waives any and all rights of subrogation, reimbursement, indemnity, exoneration, contribution of any other claim which such Borrower may now or hereafter have against the other Borrowers or other Person directly or contingently liable for the Obligations hereunder, or against or with respect to the other Borrowers’ Property (including, without limitation, any property which is Collateral for the Obligations), arising from the existence or performance of this Agreement, until termination of this Agreement and repayment in full of the Obligations.

SECTION III. COLLATERAL

3.1. Collateral: As security for the payment of the Obligations, and satisfaction by each Borrower of all covenants and undertakings contained in this Agreement and the other Loan Documents:

a. Personal Property: Each Borrower hereby assigns and grants to Lender, a continuing Lien on and security interest in, upon and to all assets of such Borrower, including but not limited to the following Property, all whether now owned or hereafter acquired, created or arising and wherever located:

(i) Accounts - All Accounts;

(ii) Chattel Paper - All Chattel Paper;

(iii) Documents - All Documents;

(iv) Instruments - All Instruments;

(v) Inventory - All Inventory;

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(vi) General Intangibles- All General Intangibles;

(vii) Equipment- All Equipment,

(viii) Fixtures - All Fixtures;

(ix) Deposit Accounts - All Deposit Accounts (including any Permitted Investments that constitute Deposit Accounts, but excluding any Trust Accounts);

(x) Goods - All Goods;

(xi) Letter of Credit Rights – All Letter of Credit Rights;

(xii) Supporting Obligations – All Supporting Obligations;

(xiii) Investment Property - All Investment Property (including any Permitted Investments that constitute Investment Property);

(xiv) Commercial Tort Claims – All Commercial Tort Claims identified and described on Schedule “5.20” (as amended or supplemented from time to time);

(xv) Property in Lender’s Possession- All Property of such Borrower, now or hereafter in Lender’s possession;

(xvi) Books and Records-All of Borrower’s present and future business records and information, including, but not limited to, manual records, computer runs, print outs, tapes, disks, software, programs, source codes and any other computer prepared information and equipment of any kind; and

(xvii) Proceeds–All products of and Accessions to any of the foregoing and all Proceeds (including, without limitation, insurance policies and proceeds), whether cash or non-cash, of all of the foregoing property described in clauses (i) through (xvi); provided, however, that the Collateral shall not include any Excluded Property.

b. Collateral Assignments. Borrowers shall execute and deliver or cause the execution and delivery of the Collateral Assignment.

3.2. Lien Documents: At Closing and thereafter as Lender deems necessary, each Loan Party shall execute and/or deliver to Lender, or have executed and delivered (all in form and substance satisfactory to Lender and its counsel):

a. Financing statements pursuant to the UCC, which Lender may file in the jurisdiction where such Loan Party is organized and in any other jurisdiction that Lender deems appropriate;

b. Any certificates evidencing the Capital Stock pledged to Lender pursuant to the Pledge Agreement, duly indorsed in blank; and

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c. Any other agreements, documents, instruments and writings, including, without limitation, intellectual property security agreements, required by Lender to evidence, perfect or protect the Liens and security interests in the Collateral or as Lender may reasonably request from time to time.

3.3. Other Actions:

a. In addition to the foregoing, each Borrower shall do anything further that may be reasonably required by Lender to secure Lender and effectuate the granting and perfection of Liens under this Agreement, including, without limitation, the execution and delivery of security agreements, contracts and any other documents required hereunder and the delivery of motor titles with Lender’s lien noted thereon. At Lender’s reasonable request, each Borrower shall also promptly deliver (with execution by such Borrower of all necessary documents or forms to reflect, implement or enforce the Liens described herein), or cause to be delivered to Lender all items for which Lender must receive possession to obtain a perfected security interest, including without limitation, all notes, stock powers, letters of credit, certificates and documents of title, Chattel Paper, Warehouse Receipts, Instruments, and any other similar instruments constituting Collateral.

b. Lender is hereby authorized to file financing statements and amendments to financing statements without any Borrower’s signature, in accordance with the UCC. Each Borrower hereby authorizes Lender to file all such financing statements and amendments to financing statements describing the Collateral in any filing office as Lender, in its sole discretion may determine, including financing statements listing “All Assets” in the collateral description therein. Each Borrower agrees to comply with the requests of Lender in order for Lender to have and maintain a valid and perfected first security interest in the Collateral including, without limitation, executing and using commercially reasonable efforts to cause any other Person to execute such documents as Lender may require to obtain Control (as defined in the UCC) over all Deposit Accounts (other than Trust Accounts), Letter of Credit Rights and Investment Property.

3.4. Searches, Certificates:

a. Lender shall, prior to or at Closing, and thereafter as Lender may reasonably determine from time to time, at Borrowers’ expense, obtain the following searches (the results of which are to be consistent with the warranties made by Loan Parties in this Agreement):

(i) UCC searches with the Secretary of State and local filing office of each state where each Loan Party is organized, maintains its executive office, a place of business, or assets; and

(ii) Judgment, state and federal tax lien and corporate tax lien searches, in all applicable filing offices of each state searched under subparagraph (i) above.

b. Each Loan Party shall, prior to or at Closing and at its expense, obtain and deliver to Lender good standing certificates showing such Loan Party to be in good standing in its state of organization and in each other state in which it is doing and presently intends to do business for which qualification is required.

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3.5. Landlord’s and Warehouseman’s Waivers; Access Agreements: Each Borrower will use its commercially reasonable efforts to cause each owner of any premises occupied by such Borrower or to be occupied by such Borrower and each warehouseman of any warehouse, where, in either case Collateral is held, to execute and deliver to Lender an instrument, in form and substance satisfactory to Lender, under which such owner(s) or warehouseman subordinates its/his/their interests in and waives its/his/their right to distrain on or foreclose against the Collateral and agrees to allow Lender to enter into and remain on such premises to dispose of or deal with any Collateral located thereon.

3.6. Filing Security Agreement: A carbon, photographic or other reproduction or other copy of this Agreement or of a financing statement is sufficient as and may be filed in lieu of a financing statement.

3.7. Power of Attorney: Each of the officers of Lender is hereby irrevocably made, constituted and appointed the true and lawful attorney for each Borrower (without requiring any of them to act as such) with full power of substitution to do the following: (a) endorse the name of such Borrower upon any and all checks, drafts, money orders and other instruments for the payment of monies that are payable to such Borrower and constitute collections on such Borrower’s Accounts or proceeds of other Collateral; (b) execute and/or file in the name of each Borrower any financing statements, schedules, assignments, instruments, documents and statements that such Borrower is obligated to give Lender hereunder or is necessary to perfect (or continue or evidence the perfection of such security interest or Lien) Lender’s security interest or Lien in the Collateral including without limitation, the notification of Account Debtors of Lender’s security interest in any such Collateral; and (c) upon the occurrence of an Event of Default which is continuing do such other and further acts and deeds in the name of each Borrower that Lender may reasonably deem necessary or desirable to enforce any Account or other Collateral.

SECTION IV. CLOSING AND CONDITIONS PRECEDENT TO ADVANCES

Closing under this Agreement is subject to the following conditions precedent (all instruments, documents and agreements to be in form and substance satisfactory to Lender and Lender’s counsel):

4.1. Resolutions, Opinions, and Other Documents: Each Loan Party shall have delivered, or caused to be delivered to Lender the following:

a. this Agreement, the Term Loan Note and each of the other Loan Documents to be executed and/or delivered by each Borrower or any other Person pursuant to this Agreement, all properly executed;

b. financing statements, certificates evidencing the Capital Stock pledged to Lender under the Pledge Agreement, duly indorsed in blank, and each of the other Loan Documents;

c. the landlord’s and warehouseman’s waivers required under Section 3.5;

d. certified copies of (i) resolutions of each Loan Party’s board of directors, authorizing the execution, delivery and performance of this Agreement, the Term Loan Note to be issued hereunder and each of the other Loan Documents required to be delivered by any Section hereof and (ii) each Loan Party’s Organizational Documents (certified by the applicable secretary of state), as applicable;

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e. an incumbency certificate for each Loan Party identifying all Authorized Officers, with specimen signatures;

f. a written opinion of each Loan Party’s independent counsel addressed to Lender and opinions of such other counsel as Lender deems reasonably necessary;

g. such financial statements, reports, certifications and other operational information as Lender may reasonably require, satisfactory in all respects to Lender;

h. certification by an Authorized Officer of the Borrowers that there has not occurred any material adverse change in the operations and condition (financial or otherwise) of the Borrowers, taken as a whole, since December 31, 2011;

i. certification by an Authorized Officer of Parent that there has not occurred any material adverse change in the operations and condition (financial or otherwise) of Parent since September 30, 2011;

j. payment by Borrowers of all fees including, without limitation, the Closing Fee, and all Expenses associated with the Term Loan required to be paid hereunder;

k. searches and certificates required under Section 3.4;

l. insurance certificates and policies as required under Section 6.2;

m. copies of the (i) Merger Agreement and (ii) Management Agreement, all certified as true and correct by an Authorized Officer of Borrowing Agent;

n. evidence that the Acquisition has been consummated in accordance with the terms of the Merger Agreement;

o. all required due diligence reports relating to the Acquisition, including but not limited to a review of the historical and interim financial statements, which Lender shall have reviewed to its reasonable satisfaction;

p. copies of the Employment Agreements, which Lender shall have reviewed to its reasonable satisfaction;

q. copies of Borrowers’ material contracts with their Affiliates, which Lender shall have reviewed to its satisfaction;

r. the Management Fee Subordination Agreement, duly executed by all parties thereto;

s. such other documents reasonably required by Lender.

4.2. Absence of Certain Events: At the Closing Date, no Default or Event of Default hereunder shall have occurred and be continuing.

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4.3. Warranties and Representations at Closing: The warranties and representations contained in Section 5 as well as any other Section of this Agreement shall be true and correct in all respects on the Closing Date with the same effect as though made on and as of that date, except to the extent such warranties and representations relate to an earlier date, in which case such warranties and representations shall be true and correct in all respects as of such earlier date. No Loan Party shall have taken any action or permitted any condition to exist which would have been prohibited by any Section hereof.

4.4. Compliance with this Agreement: Each Loan Party shall have performed and complied with all agreements, covenants and conditions contained herein including, without limitation, the provisions of Sections 6 and 7 hereof, which are required to be performed or complied with by the Loan Parties before or at the Closing Date.

4.5. Officers’ Certificate: Lender shall have received a certificate dated the Closing Date and signed by the chief financial officer of each Loan Party certifying that all of the conditions specified in this Section 4 have been fulfilled.

4.6. Closing: Subject to the conditions of this Section, the Term Loan shall be made available on such date (the “Closing Date”) and at such time as may be mutually agreeable to the parties contemporaneously with the execution hereof (“Closing”) at such place as may be mutually agreeable to the parties.

4.7. Waiver of Rights: By completing the Closing hereunder, Lender does not thereby waive a breach of any warranty or representation made by any Loan Party hereunder or under any agreement, document, or instrument delivered to Lender or otherwise referred to herein, and any claims and rights of Lender resulting from any breach or misrepresentation by any Loan Party are specifically reserved by Lender.

SECTION V. REPRESENTATIONS AND WARRANTIES

To induce Lender to complete the Closing and make the Term Loan to Borrowers, each Loan Party warrants and represents to Lender that:

5.1. Organization and Validity:

a. Each Loan Party (i) is a corporation, duly organized and validly existing under the laws of the state of its organization, (ii) has the appropriate power and authority to operate its business and to own its Property and (iii) is duly qualified, is validly existing and in good standing and has lawful power and authority to engage in the business it conducts in each state where the nature and extent of its business requires qualification, except where the failure to so qualify does not and could not have a Material Adverse Effect. A list of all states and other jurisdictions where each Loan Party is qualified to do business on the Closing Date is shown on Schedule “5.1” attached hereto and made part hereof.

b. The making and performance of this Agreement and the other Loan Documents and consummation of the Acquisition will not (i) violate any Requirement of Law or decree, award, injunction, judgment by which such Loan Party is bound, (ii) violate the Organizational Documents of any Loan Party, (iii) cause or result in the imposition or creation of any lien upon any property of any Loan Party, (iv) or violate or result in a default or breach (immediately or with the passage of time) under any contract, agreement, indenture or instrument to which such Loan Party is a party, or by which such Loan Party is bound, including the Material Agreements. No Loan Party is in violation of any term of any contract, agreement, indenture or instrument to which it is a party or by which it may be bound which violation has or could have a Material Adverse Effect, or of its Organizational Documents.

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c. Each Loan Party has all requisite power and authority to enter into and perform this Agreement and each other Loan Document to which it is party and to incur the obligations herein and therein provided for, and has taken all proper and necessary action to authorize the execution, delivery and performance of this Agreement, and the other Loan Documents as applicable.

d. This Agreement, the Term Loan Note to be issued hereunder, and all of the other Loan Documents, when delivered, will be valid and binding upon each Loan Party, as applicable, and enforceable in accordance with their respective terms except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles.

5.2. Places of Business: The only places of business of each Borrower, and the places where such Borrower keeps and intends to keep its Property as of the Closing Date, are at the addresses shown on Schedule “5.2” attached hereto and made part hereof.

5.3. Pending Litigation: There are no suits, claims, judgments or judicial or administrative orders or proceedings pending, or to the knowledge of any Loan Party, threatened, against any Loan Party in any court or before any Governmental Authority which (i) individually or in the aggregate could reasonably be expected to result in a Material Adverse Effect, (ii) individually or in the aggregate could reasonably be expected to prevent consummation of the Acquisition or (iii) allege the invalidity of or dispute any of the terms of this Agreement or any Loan Document. No Loan Party is in violation of any order, writ, injunction or decree of any Governmental Authority. To the knowledge of each Loan Party, there are no investigations (civil or criminal) pending or threatened against such Loan Party in any court or before any Governmental Authority.

5.4. Title to Properties: Each Borrower has good and marketable title in fee simple (or its equivalent under applicable law) to all the Property it purports to own, free from Liens and free from the claims of any other Person, except for Permitted Liens.

5.5. Consent: No consent, approval, license or authorization of any Person, or recording, registration or filing with any Person is required by any Requirement of Law or any agreement in connection with any Loan Party’s execution, delivery and performance of this Agreement or any other Loan Documents or consummation of the Acquisition, other than (a) the filings and other actions required to be taken by the terms of the Loan Documents to perfect the Liens created by the Loan Documents, (b) filing of the Certificate of Merger with the Delaware Secretary of State, and (c) the filings to be made by Parent with the Securities and Exchange Commission pursuant to applicable securities laws.

5.6. Taxes: All tax returns required to be filed by any Loan Party in any jurisdiction have been filed. All taxes, assessments, fees and other governmental charges upon any Loan Party, or upon any of its Property, income or franchises, which are shown to be due and payable on such returns have been paid, except for those taxes being contested in good faith with due diligence by appropriate proceedings for which appropriate reserves have been maintained under GAAP and as to which no Lien has been entered. As of the Closing Date, no Loan Party is aware of any proposed additional tax assessment or tax to be assessed against or applicable to any Loan Party.

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5.7. Financial Statements and Projections: a. The annual audited balance sheet of each Borrower as of December 31, 2011, and the related statements of profit and loss, stockholder’s equity and cash flow as of such date accompanied by reports thereon from such Borrower’s independent certified public accountants (complete copies of which have been delivered to Lender), and the interim reviewed balance sheet of each Borrower as of June 30, 2012, and the related statements of profit and loss, stockholder’s equity and cash flow as of such date have been prepared in accordance with GAAP and present fairly the financial position of each Borrower as of such date and the results of its operations for such periods, subject to lack of footnotes and year-end adjustments for interim financial statements.

b. The annual audited balance sheet of Parent as of September 30, 2011, and the related statements of profit and loss, stockholder’s equity and cash flow as of such date accompanied by reports thereon from such Borrower’s independent certified public accountants (complete copies of which have been delivered to Lender), and the interim internally prepared balance sheet of Parent as of June 30, 2012, and the related statements of profit and loss, stockholder’s equity and cash flow as of such date have been prepared in accordance with GAAP and present fairly the financial position of Parent as of such date and the results of its operations for such periods, subject to lack of footnotes and year-end adjustments for interim financial statements.

c. The fiscal year for each Borrower currently ends on December 31. The fiscal year for Parent currently ends on September 30. Each Loan Party’s federal tax identification number and each Borrower’s state organizational identification number for UCC purposes are as shown on Schedule “5.7” attached hereto and made part hereof.

d. As of the Closing Date, no Loan Party has any material liabilities, contingent or otherwise, other than as disclosed in the financial statements referred to in Section 5.7(a)and (b) or set forth on Schedule “5.7” and there are not now and not anticipated any material unrealized losses of any Loan Party.

e. The operating projections that have been previously submitted to Lender and that will be submitted to Lender pursuant to Section 6.9, present, to each Loan Party’s knowledge and belief based on the assumptions set forth in such projections, the expected results of operations and sources and uses of cash of Borrowers for the periods covered by such projections (it being recognized by Lender that any projections and forecasts provided by the Loan Parties are based on estimates and assumptions believed by the Loan Parties to be reasonable as of the date of the projections or assumptions and that actual results during the period or periods covered by any such projections and forecasts may differ from projected or forecasted results).

5.8. Full Disclosure: The financial statements referred to in Section 5.7 of this Agreement do not, nor does any other written statement of any Loan Party to Lender in connection with the negotiation of the Term Loan, contain any untrue statement of a material fact in light of the circumstances under which such statements were made as of the time when such statements were made. Such statements, taken as a whole, do not omit a material fact, the omission of which would make the statements contained therein misleading in light of the circumstances under which such statements were made as of the time when such statements were made. As of the Closing Date, there is no fact known to any Loan Party which has not been disclosed in writing to Lender which has or could have a Material Adverse Effect.

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5.9. Subsidiaries: As of the Closing Date, no Borrower has any Subsidiaries or Affiliates, except as shown on Schedule “5.9” attached hereto and made part hereof, which Schedule shows such Subsidiary’s or Affiliate’s name, jurisdiction of organization, classes of Capital Stock and the holders of such Capital Stock.

5.10. Investments, Guarantees, Contracts, etc.:

a. As of the Closing Date, no Loan Party owns or holds equity or long term debt investments in, or has any outstanding advances to, any other Person, except as shown on Schedule “5.10(a),” attached hereto and made part hereof.

b. As of the Closing Date, no Borrower has entered into any leases for real or personal Property (whether as landlord or tenant or lessor or lessee), except as shown on Schedule “5.10(b),” attached hereto and made part hereof.

c. As of the Closing Date, no Loan Party is a party to any contract or agreement, or subject to any restriction under any Organizational Document, which, assuming compliance with such contract, agreement or restriction, has or could reasonably be expected to have a Material Adverse Effect.

d. Except as otherwise specifically provided in this Agreement, no Loan Party has agreed or consented to, or is party to any agreement, restricting, directly or indirectly, the granting of a Lien with respect to any Loan Party’s Property.

5.11. Government Regulations, ERISA, etc.:

a. The use of the proceeds of the Term Loan will not directly or indirectly violate or result in a violation of Section 7 of the Securities Exchange Act of 1934, as amended, or any regulations issued pursuant thereto, including, without limitation, Regulations U, T and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. No Borrower owns or intends to carry or purchase any “margin stock” within the meaning of said Regulation U.

b. Each Loan Party has obtained all licenses, permits, franchises or other governmental authorizations necessary for the ownership of its Property and for the conduct of its business.

c. (i) No Loan Party, no Subsidiary of any Loan Party and no ERISA Affiliate maintains or contributes to any Employee Pension Plan or Multiemployer Plan, except as disclosed on Schedule 5.11(c) attached hereto. Each Loan Party has furnished to Lender a copy of the most recent actuarial report for each Employee Pension Plan that is a defined benefit plan as defined in Section 3(35) of ERISA, and for any Plan that is a funded employee welfare benefit plan, and each such report is accurate in all material respects.

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(ii) Each Plan, which is intended to be qualified within the meaning of Section 401(a) of the Code, has received a favorable determination, opinion or advisory letter from the IRS with respect to all plan document qualification requirements for which the remedial amendment period under Section 401(b) of the Code has closed, any plan document amendments required by such determination letter were made as and when required by such determination letter, and nothing has occurred, whether by action or failure to act, since the date of such letter which would reasonably be expected to prevent any such plan from remaining so qualified.

(iii) Each Plan has been operated in all material respects in compliance with the requirements of the Code and ERISA and the terms of each Plan.

(iv) Except as specifically disclosed on Schedule 5.11(c): Except as specifically disclosed on Schedule 5.11(c): (a) with respect to any Plan, there has been no transaction in connection with which any Loan Party, its Subsidiaries or their respective ERISA Affiliates could be subject to either a material civil penalty assessed pursuant to Section 502(i) of ERISA or a material tax penalty imposed pursuant to Section 4975 of the Code; (b) there has been no failure by any Employee Pension Plan to satisfy the Minimum Funding Standards applicable to such Employee Pension Plan, whether or not waived, or an unfulfilled obligation to contribute to any Multiemployer Plan; (c) no liability to the PBGC has been or is reasonably expected to be incurred with respect to any Employee Pension Plan except for required premium payments to the PBGC; (d) there has been (1) no Reportable Event with respect to any Employee Pension Plan, and (2) no event or condition which presents a material risk of termination of any Employee Pension Plan by the PBGC, in either case involving conditions which could result in any liability to the PBGC; (e) neither any Loan Party, its Subsidiaries nor any ERISA Affiliate (1) has incurred or reasonably expects to incur Withdrawal Liability with respect to any Multiemployer Plan, (2) has received any notification that a Multiemployer Plan is in Reorganization, or (3) reasonably expects any Multiemployer Plan to be in Reorganization; (f) there is no material liability, and no circumstances exist pursuant to which any such material liability could reasonably be imposed on any Loan Party, any of its Subsidiaries or any ERISA Affiliate under Sections 4980B, 4980D or 5000 of the Code or Sections 409 and 502(l) of ERISA, with respect to any Plan; (g) there is no Plan (that is an “employee welfare benefit plan,” as defined in Section 3(1) of ERISA) (1) providing for retiree health and/or life insurance or death benefits, other than for continuation coverage described under COBRA (or similar state law) or (2) having unfunded liabilities; (h) neither any Loan Party, its Subsidiaries nor any ERISA Affiliate is subject to the Early Warning Program of the PBGC (as described in PBGC Technical Update 00-3) or has been contacted by the PBGC in connection with the PBGC’s Early Warning Program; and (i) there is no outstanding material liability attributable to any Employee Pension Plan subject to Title IV of ERISA or any Multiemployer Plan which was previously maintained by or to which contributions were made or required to be made by any Loan Party, any of its Subsidiaries or any ERISA Affiliate, or any entity that heretofore was an ERISA Affiliate.

d. No Loan Party is in violation of, or in receipt of written notice that it is in violation of, any Requirement of Law (including, without limitation, Environmental Laws), a violation of which causes or could reasonably be expected to cause a Material Adverse Effect.

5.12. Business Interruptions: Within five (5) years prior to the date hereof, none of the business, Property or operations of any Borrower has been materially and adversely affected in any way by any casualty, strike, lockout, combination of workers, order of the United States of America, or any state or local government, or any political subdivision or agency thereof, directed against such Borrower. There are no pending or, to any Loan Party’s knowledge, threatened labor disputes, strikes, lockouts or similar occurrences or grievances affecting any Borrower. No labor contract of any Borrower is scheduled to expire prior to the Term Loan Maturity Date.

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5.13. Names and Intellectual Property:

a. Within five (5) years prior to the Closing Date, no Borrower has conducted business under or used any other name (whether corporate or assumed) except for the names shown on Schedule “5.13(a)” attached hereto and made part hereof. Each Borrower is the sole owner of all names listed on such Schedule “5.13(a)” and any and all business done and all invoices issued in such trade names are such Borrower’s sales, business and invoices. Each trade name of each Borrower represents a division or trading style of such Borrower and not a separate Subsidiary or Affiliate or independent entity.

b. All trademarks, service marks, patents or copyrights which each Borrower uses, plans to use or has a right to use as of the Closing Date are shown on Schedule “5.13(b)” attached hereto and made part hereof and such Borrower is the sole owner of such Property except to the extent any other Person has claims or rights in such Property, as such claims and rights are shown on Schedule “5.13(b)”. All material copyrights have been registered with the United States Copyright Office. No Borrower is in violation of any rights of any other Person with respect to such Property.

c. Except as shown on Schedule “5.13(c)” attached hereto and made part hereof, (i) no Borrower requires any copyrights, patents, trademarks or other intellectual property, or any license(s) to use any patents, trademarks or other intellectual property in order to provide services to its customers in the ordinary course of business; and (ii) Lender will not require any copyrights, patents, trademarks or other intellectual property or any licenses to use the same in order to provide such services after the occurrence of an Event of Default.

5.14. Other Associations: As of the Closing Date, no Loan Party is engaged and has any interest in any joint venture or partnership with any other Person except as shown on Schedule “5.14,” attached hereto and made part hereof.

5.15. Environmental Matters: Except as shown on Schedule “5.15,” attached hereto and made part hereof:

a. To the best of each Loan Party’s knowledge after due inquiry, no Property presently owned, leased or operated by any Borrower contains, or has previously contained, any Hazardous Substances in amounts or concentrations which (i) constitute or constituted a violation of, or (ii) could give rise to liability under, any Environmental Law.

b. To the best of each Loan Party’s knowledge after due inquiry, each Loan Party is in compliance, and, for the duration of all applicable statutes of limitations periods, has been in compliance with all applicable Environmental Laws, and there is no contamination at, under or about any properties presently owned, leased, or operated by any Borrower or violation of any Environmental Law with respect to such properties which could reasonably be expected to interfere with any of their continued operations or reasonably be expected to impair the fair saleable value thereof.

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c. No Loan Party has received any notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance assessment with Environmental Laws and no Loan Party has any knowledge that any such notice will be received or is being threatened.

d. Hazardous Substances have not been transported or disposed of in a manner or to a location which are reasonably likely to give rise to liability of any Borrower under any Environmental Law.

e. No judicial proceeding or governmental or administrative action is pending, or to the knowledge of any Loan Party, threatened under any Environmental Law to which any Borrower is, or to any Loan Party’s knowledge will be, named as a party, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding, the implementation of which is reasonably likely to have a Material Adverse Effect on any natural resources or on any Borrower’s business, financial condition, Property or prospects under any Environmental Law.

5.16. Investment Company Act: No Loan Party is an “investment company” or a company “controlled by an investment company” within the meaning of the Investment Company Act of 1940.

5.17. Capital Stock: The authorized and outstanding Capital Stock of each Borrower as of the Closing Date is as shown on Schedule “5.17” attached hereto and made part hereof. All of the Capital Stock of each Loan Party has been duly and validly authorized and issued and is fully paid and non-assessable and has been sold and delivered to the holders thereof in compliance with, or under valid exemption from, all Federal and state laws and the rules and regulations of all Governmental Authorities governing the sale and delivery of securities. There are no subscriptions, warrants, options, calls, commitments, rights or agreements by which any Borrower or any of the shareholders of any Borrower is bound relating to the issuance, transfer, voting or redemption of shares of its Capital Stock or any pre-emptive rights held by any Person with respect to the shares of Capital Stock of such Loan Party. No Borrower has issued any securities convertible into or exchangeable for shares of its Capital Stock or any options, warrants or other rights to acquire such shares or securities convertible into or exchangeable for such shares.

5.18. Solvency: After giving effect to the transactions contemplated under this Agreement (including consummation of the Acquisition), each Loan Party is solvent, is able to pay its debts as they become due, and has capital sufficient to carry on its business and all businesses in which it is about to engage, and now owns Property having a value both at fair valuation and at present fair salable value greater than the amount required to pay such Loan Party’s debts. No Loan Party will be rendered insolvent by the execution and delivery of this Agreement or any of the other Loan Documents executed in connection with this Agreement or by the transactions contemplated hereunder or thereunder.

5.19. Perfection and Priority: This Agreement and the other Loan Documents are effective to create in favor of Lender legal, valid and enforceable Liens in all right, title and interest of each Loan Party in the Collateral, and when financing statements have been filed in the offices of the jurisdictions shown on Schedule “5.19,” attached hereto and made part hereof under such Loan Party’s name and control is taken with respect to such Collateral where control is necessary to perfect such security interest, such Loan Party will have granted to Lender, and Lender will have perfected first priority Liens (subject to Permitted Liens) in the Collateral, to the extent a security interest therein can be perfected by filing a financing statement or obtaining control, superior in right to any and all other Liens, existing or future other than Permitted Liens.

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5.20. Commercial Tort Claims: As of the Closing Date, no Borrower is a party to any Commercial Tort Claims, except as shown on Schedule “5.20” attached hereto and made part hereof.

5.21. Letter of Credit Rights: As of the Closing Date, no Borrower has any Letter of Credit Rights, except as shown on Schedule “5.21,” attached hereto and made part hereof.

5.22. Deposit Accounts: As of the Closing Date, all Deposit Accounts (excluding all Trust Accounts) of each Borrower are shown on Schedule “5.22,” attached hereto and made part hereof.

5.23. Anti-Terrorism Laws:

a. General. No Loan Party nor any Subsidiary of a Loan Party is in violation of any Anti-Terrorism Law or engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

b. Executive Order No. 13224. Neither any Loan Party nor any Subsidiary of a Loan Party, or to any Loan Party’s knowledge, any of its respective agents acting or benefiting in any capacity in connection with the Term Loan or other transactions hereunder, is any of the following (each a “Blocked Person”):

(i) a Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224;

(ii) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224;

(iii) a Person with which Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;

(iv) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order No. 13224;

(v) a Person that is named as a “specially designated national” on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official website or any replacement website or other replacement official publication of such list; or

(vi) a Person who is affiliated with a Person listed above.

5.24. Delivery of Acquisition Documents: Lender has received complete copies of the Merger Agreement and each of the other instruments, documents and agreements related thereto, and all amendments thereto, waivers relating thereto and other side letters or agreements affecting the terms thereof. The Merger Agreement has not been amended or supplemented, nor have any of the provisions thereof been waived, except pursuant to a written agreement or instrument which has heretofore been delivered to, and approved by, Lender. All of the transactions contemplated to occur under the Merger Agreement on or before the Closing Date have been consummated pursuant to the terms thereof, no party to the Merger Agreement has waived the fulfillment of any material condition precedent set forth therein, without Lender’s written consent, and no party has failed to perform any of its material obligations thereunder.

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5.25. Management Agreements: Except for the Management Agreement, no Borrower is a party to any management, employment, consulting or other similar agreement or arrangement (whether oral or written) respecting the management of their respective businesses except for the Employment Agreements and other usual and customary employment agreements.

SECTION VI. AFFIRMATIVE COVENANTS

Each Loan Party covenants that until all of the Obligations are paid and satisfied in full (excluding contingent indemnification and expense reimbursement obligations to the extent no claim giving rise thereto has been asserted), that:

6.1. Payment of Taxes and Claims: Each Loan Party shall pay, before they become delinquent, all federal and other material taxes, assessments and governmental charges, or levies imposed upon it, or upon such Loan Party’s Property, and all claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other Persons, entitled to the benefit of statutory or common law Liens which, in any case, if unpaid, would result in the imposition of a Lien upon its Property; provided however, that each Loan Party shall not be required to pay any such tax, assessment, charge, levy, claim or demand if the amount, applicability or validity thereof, shall at the time, be contested in good faith and by appropriate proceedings by such Loan Party, and if such Loan Party shall have set aside on its books adequate reserves in respect thereof, if so required in accordance with GAAP; which deferment of payment is permissible so long as no Lien other than a Permitted Lien has been entered and such Loan Party’s title to, and its right to use, its Property are not materially adversely affected thereby.

6.2. Maintenance of Properties and Corporate Existence:

a. Property – Each Borrower shall maintain its Property in good condition (normal wear and tear excepted), make all necessary renewals, replacements, additions, betterments and improvements thereto and will pay and discharge when due the cost of repairs and maintenance to its Property, and will pay all rentals when due for all real estate leased by such Loan Party.

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b. Property Insurance, Public and Products Liability Insurance – Each Borrower shall maintain insurance (i) on all insurable tangible Property against fire, flood, casualty and such other hazards (including, without limitation, extended coverage, workmen’s compensation, boiler and machinery, with inflation coverage by endorsement) and (ii) against public liability, product liability and business interruption, in each case in such amounts, with such deductibles and with such insurers as are customarily used by companies operating in the same industry as such Loan Party. At or prior to Closing, each Borrower shall furnish Lender with duplicate original policies of insurance or such other evidence of insurance as Lender may require, and any certificates of insurance shall be issued on Acord Form-27. In the event any Borrower fails to procure or cause to be procured any such insurance or to timely pay or cause to be paid the premium(s) on any such insurance, Lender may do so for such Borrower but such Borrower shall continue to be liable for the same. The policies of all such casualty insurance shall contain standard Lender’s Loss Payable Clauses (and, with respect to liability and interruption insurance, additional insured clauses) issued in favor of Lender under which all losses thereunder shall be paid to Lender as Lender’s interest may appear. Such policies shall expressly provide that the requisite insurance cannot be altered or canceled without thirty (30) days prior written notice to Lender and shall insure Lender notwithstanding the act or neglect of any Loan Party. Each Borrower hereby appoints Lender as such Borrower’s attorney-in-fact, exercisable at Lender’s option to endorse any check which may be payable to such Borrower in order to collect the proceeds of such insurance and any amount or amounts collected by Lender pursuant to the provisions of this Section may be applied by Lender, in its sole discretion, to any Obligations or to repair, reconstruct or replace the loss of or damage to Collateral as Lender in its discretion may from time to time determine; provided that so long as no Event of Default shall have occurred and be continuing, Borrower’s consent shall be required prior to any repair, reconstruction or replacement by Lender. Each Borrower further covenants that all insurance premiums owing under its current policies have been paid. Each Borrower shall notify Lender, immediately, upon such Loan Party’s receipt of a notice of termination, cancellation, or non-renewal from its insurance company of any such policy.

c. Financial Records – Each Loan Party shall keep current and accurate books of records and accounts in which full and correct entries will be made of all of its business transactions, and will reflect in its financial statements adequate accruals and appropriations to reserves, all in accordance with GAAP. No Loan Party shall change its fiscal year end date without the prior written consent of Lender.

d. Corporate Existence and Rights – Each Loan Party shall do (or cause to be done) all things necessary to preserve and keep in full force and effect its existence, good standing, rights and franchises. Each Loan Party shall obtain and maintain any and all licenses, permits, franchises or other governmental authorizations necessary to the ownership of its Property or the conduct of its businesses.

e. Compliance with Laws – Each Loan Party shall be in compliance in all material respects with any and all Requirements of Law to which it is subject, including without limitation, Environmental Laws. Each Loan Party shall timely satisfy all assessments, fines, costs and penalties imposed (after exhaustion of all appeals, provided a stay has been put in effect during such appeal) by any Governmental Authority against Loan Party or any Property of such Loan Party.

6.3. Business Conducted: Each Borrower shall continue in the business presently operated by it using its commercially reasonable efforts to maintain its customers and goodwill. No Borrower shall engage, directly or indirectly, in any material respect in any line of business substantially different from the businesses conducted by such Borrower immediately prior to the Closing Date. Parent shall not engage, directly or indirectly, in any material respect in any line of business that is not either related, ancillary or complementary to the business of Parent as of the Closing Date, or to the businesses conducted by Borrowers.

6.4. Litigation Notices: Each Loan Party shall give prompt notice to Lender of any litigation claiming in excess of One Hundred Thousand Dollars($100,000) from such Loan Party, or which may otherwise have a Material Adverse Effect.

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6.5. Issue Taxes: Each Loan Party shall pay all taxes (other than taxes based upon or measured by any Lender’s income or revenues or any personal property tax), if any, in connection with the issuance of the Term Loan Note and the recording of any lien documents. The obligations of each Loan Party hereunder shall survive the payment of Loan Party’s Obligations hereunder and the termination of this Agreement.

6.6. Bank Accounts: Each Borrower shall maintain its primary depository accounts(excluding Trust Accounts) and cash management relationship with Lender, and Parent shall maintain its primary operating account with Lender.

6.7. ERISA Notices: Each Loan Party shall deliver to Lender (i) promptly, and in any event within ten (10) Business Days, after the receipt thereof, copies of all reports and notices which any Loan Party, any of its Subsidiaries or any ERISA Affiliate receives from PBGC, IRS or the DOL, and at the request of Lender, copies of all annual reports for Employee Pension Plans filed with the DOL or IRS, and (ii) as soon as possible and in any event within ten (10) Business Days after any Loan Party knows or has reason to know that (A) any Reportable Event has occurred or is reasonably expected to occur with respect to any Employee Pension Plan, (B) an Accumulated Funding Deficiency has been incurred or an application has been made to the Secretary of the United States Treasury for a waiver or modification of the minimum funding standard or an extension of any amortization period under Section 412 of the Code with respect to an Employee Pension Plan, (C) proceedings have been instituted or are reasonably expected to be instituted under Title IV of ERISA to terminate any Employee Pension Plan, (D) any Withdrawal Liability from a Multiemployer Plan has been or will be incurred by any Loan Party, any of its Subsidiaries or any ERISA Affiliate, (E) any Multiemployer Plan is or is reasonably expected to be in Reorganization, terminated, partitioned or declared insolvent, (F) an action has been instituted pursuant to Section 515 of ERISA to collect a delinquent contribution to a Multiemployer Plan, (G) any event, transaction or condition has occurred or will occur that could reasonably be expected to result in the imposition of a lien under Part 3 of Subtitle B of Title I of ERISA or Title IV of ERISA, (H) any Prohibited Transaction or other transaction, event or condition has occurred or will occur with respect to a Plan that could reasonably be expected to result in any Loan Party, any of its Subsidiaries or any ERISA Affiliate incurring a material liability or becoming subject to a material penalty or excise tax, or (I) the PBGC has contacted any Loan Party, any of its Subsidiaries or any ERISA Affiliate with respect to the PBGC’s Early Warning Program, a certificate of an Authorized Officer of Borrowing Agent setting forth the details as to such event, transaction or condition and the action any Loan Party has taken, is taking or proposes to take with respect thereto and with respect to (A) and (B) above, with copies of any notices and applications.

6.8. Financial Covenants: Borrowers shall maintain and comply with, and cause to be maintained and complied with, the following financial covenants:

a. Debt Coverage Ratio – Borrowers shall maintain a Debt Coverage Ratio of not less than 1.30 to 1.0. The Debt Coverage Ratio shall be measured annually as of each fiscal year end, on a fiscal year basis.

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b. Total Leverage Ratio. Borrowers shall maintain a Total Leverage Ratio as of each fiscal year end of not greater than the applicable ratio set forth below opposite the applicable period:

Fiscal Year Ending	Ratio
December 31, 2012	3.25 to 1.00
December 31, 2013	3.00 to 1.00
December 31, 2014	2.75 to 1.00
December 31, 2015	2.50 to 1.00

6.9. Financial and Business Information: Each Loan Party shall deliver or cause to be delivered to Lender the following:

a. Financial Statements and Collateral Reports: such data, reports, statements and information, financial or otherwise, as Lender may reasonably request, including, without limitation:

(i) within twenty-five (25) days after the end of each calendar month of Borrowers, the consolidated and consolidating income and cash flow statements of each Borrower and its Subsidiaries for such month and for the expired portion of the fiscal year ending with the end of such month prepared in accordance with GAAP (without footnotes and subject to year-end adjustments and setting forth in comparative form the corresponding figures for the corresponding periods of the previous fiscal year, and the consolidated and consolidating balance sheet of each Borrower and its Subsidiaries as at the end of such month, setting forth in comparative form the corresponding figures as at the end of the corresponding periods of the previous fiscal year, all prepared in accordance with GAAP (without footnotes and subject to year-end adjustments) and in reasonable detail and certified by Borrowing Agent’s chief financial officer to have been prepared from the books and records of Borrowers;

(ii) within forty-five (45) days after the end of each fiscal quarter of Borrowers, the consolidated and consolidating income and cash flow statements of each Borrower and its Subsidiaries for such quarter and for the expired portion of the fiscal year ending with the end of such quarter, prepared in accordance with GAAP (without footnotes and subject to year-end adjustments and setting forth in comparative form the corresponding figures for the corresponding periods of the previous fiscal year, and the consolidated and consolidating balance sheet of each Borrower and its Subsidiaries as at the end of such quarter, setting forth in comparative form the corresponding figures as at the end of the corresponding periods of the previous fiscal year, all prepared in accordance with GAAP (without footnotes and subject to year-end adjustments) and in reasonable detail and certified by Borrowing Agent’s chief financial officer to have been prepared from the books and records of Borrowers;

(iii) within one hundred twenty (120) days after the end of each fiscal year of each Borrower, the consolidated and consolidating income and cash flow statements of each Borrower and its Subsidiaries for such year, and the consolidated and consolidating (if applicable) balance sheet of each Borrower and its Subsidiaries as at the end of such fiscal year, setting forth in each case in comparative form the corresponding figures as at the end of and for the previous fiscal year, all in reasonable detail, including all supporting schedules, and audited by Marcum LLP or another independent public accounting firm reasonably acceptable to Lender, and unqualifiedly certified to have been prepared in accordance with GAAP, and such independent public accountants shall also unqualifiedly certify that in making the examinations necessary to their certification mentioned above they have reviewed the terms of this Agreement and the accounts and conditions of Borrowers during the accounting period covered by the certificate and that such review did not disclose the existence of any condition or event which constitutes a Default or an Event of Default (or if such conditions or events existed, describing them) together with copies of any management letters provided by such accountants to management of Borrowers and all regular schedulers to be provided by such independent public accountants as part of the audit of Parent;

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(iv) within one hundred twenty (120) days after the end of each fiscal year of Parent, the consolidated and consolidating income and cash flow statements of Parent and its Subsidiaries for such year, and the consolidated and consolidating (if applicable) balance sheet of Parent and its Subsidiaries as at the end of such fiscal year, setting forth in each case in comparative form the corresponding figures as at the end of and for the previous fiscal year, all in reasonable detail, including all supporting schedules, and audited by Marcum LLP or another independent public accounting firm acceptable to Lender, and unqualifiedly certified to have been prepared in accordance with GAAP, together with copies of any management letters provided by such accountants to management of Parent;

(v) no later than sixty (60) days after the commencement of each fiscal year, Borrowers’ annual consolidated and consolidating financial statement projections for the upcoming fiscal year and including, without limitation, a balance sheet, income statement and cash flow statement, all shown on a fiscal quarter basis. Such projections shall be consistent in format with the historical financial statements and shall include disclosure of all significant assumptions used in preparing the projections; and

(vi) Promptly after filing with the Internal Revenue Service but in any event within one hundred twenty (120) days after the end of each fiscal year, the federal income tax returns of Borrowers and Guarantor.

b. Notice of Event of Default- promptly upon becoming aware of the existence of any condition or event which constitutes a Default or an Event of Default under this Agreement, a written notice specifying the nature and period of existence thereof and what action Loan Parties are taking (and propose to take) with respect thereto, and

c. Notice of Claimed Default- promptly upon receipt by any Loan Party, notice of default, oral or written, given to any Borrower by any creditor for Indebtedness of any Borrower in excess of One Hundred Thousand Dollars ($100,000).

d. Notice of Breach of Merger Agreement – promptly after any Loan Party learns of facts or circumstances which could reasonably be expected to constitute the basis of a material claim against the sellers thereunder for indemnity or otherwise under the Merger Agreement, or which would otherwise constitute any material breach of the representations, warranties, covenants, or other obligations of the sellers thereunder, a written notice specifying the nature thereof and what action Loan Parties are taking (and propose to take) with respect thereto.

e. Notice of Breach of Governmental Order – promptly upon any Loan Party’s violation of any order, writ, injunction or decree of any Governmental Authority applicable to it, a written notice specifying the nature thereof and what action Loan Parties are taking (and propose to take) with respect thereto.

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f. Notice of Deposit Account. Notice of any Borrower’s establishment of a new Deposit Account (other than a Trust Account), to be delivered not later than ten (10) Business Days prior to establishment of such Deposit Account.

6.10. Officers’ Certificates: Along with the set of financial statements delivered to Lender at the end of each fiscal quarter pursuant to Section 6.9(a)(ii) hereof and the annual financial statements delivered pursuant to Section 6.9(a)(iii) hereof, Borrowers shall deliver to Lender a certificate (“Compliance Certificate”) (in the form of Exhibit “A,” attached hereto and made part hereof) from the chief financial officer, chief executive officer or president of Borrowing Agent (and as to certificates accompanying the annual financial statements of Borrowers:

a. Event of Default- that the signer has reviewed the relevant terms of this Agreement, and has made (or caused to be made under his/her supervision) a review of the transactions and conditions of each Borrower from the beginning of the accounting period covered by the financial statements being delivered therewith to the date of the certificate, and that such review has not disclosed the existence during such period of any condition or event which constitutes a Default or an Event of Default or, if any such condition or event exists, specifying the nature and period of existence thereof and what action Borrowers have taken or propose to take with respect thereto.

b. Covenant Compliance - the information (including detailed calculations) required in order to establish that Borrowers are in compliance with the requirements of Section 6.8 of this Agreement, as of the end of the period covered by the financial statements delivered.

6.11. Audits and Inspection; Appraisals: Loan Parties shall permit any of Lender’s officers or other representatives to visit and inspect upon reasonable notice during business hours any of the locations of Borrowers (provided that, while an Event of Default exists, Lender may make such visits and inspections at any time without prior notice) to examine and audit all of Borrowers’ Collateral, books of account, records, reports and other papers, to make copies and extracts therefrom and to discuss its affairs, finances and accounts with its officers, employees and independent certified public accountants. Lender may also conduct, at Borrowers’ expense at the standard rates charged by Lender for such activities, plus Lender’s reasonable out-of-pocket expenses (all of which amounts shall be Expenses) field examinations with respect to the Collateral; provided that, Lender shall not, unless an Event of Default occurs, conduct more than two (2)field examinations per year.

6.12. Reserved.

6.13. Material Adverse Developments: Each Loan Party agrees that promptly upon becoming aware of any development or other information outside the ordinary course of business and excluding matters of a general economic, financial or political nature which would reasonably be expected to have a Material Adverse Effect it shall give to Lender telephonic notice specifying the nature of such development or information and such anticipated effect. In addition, such verbal communication shall be confirmed by written notice thereof to Lender on the same day such verbal communication is made or the next Business Day thereafter.

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6.14. Places of Business: Each Borrower shall give thirty (30) days prior written notice to Lender of any changes in the location of any of its respective places of business, of the places where records concerning its Accounts or where its Inventory are kept, or the establishment of any new, or the discontinuance of any existing place of business; provided that no Borrower may establish any place of business outside of the United States.

6.15. Commercial Tort Claims: Each Borrower will promptly notify Lender in writing in the event that any Borrower becomes a party to or obtains any rights with respect to any Commercial Tort Claim. Such notification shall include information sufficient to describe such Commercial Tort Claim, including, but not limited to, the parties to the claim, the court in which the claim was commenced, the docket number assigned to such claim, if any, and a detailed explanation of the events that gave rise to the claim. Each Borrower shall execute and deliver to Lender all documents and/or agreements necessary to grant Lender a security interest in such Commercial Tort Claim to secure the Obligations. Each Borrower authorizes Lender to file (without such Borrower’s signature) initial financing statements or amendments, as Lender deems necessary to perfect its security interest in the Commercial Tort Claim.

6.16. Letter of Credit Rights: Each Borrower shall provide Lender with written notice of any letters of credit for which such Borrower is the beneficiary. Each Borrower shall execute and deliver (or cause to be executed or delivered) to Lender, all documents and agreements as Lender may require in order to obtain and perfect its security interest in such Letter of Credit Rights.

6.17. Lockbox: Upon Lender’s request, each Borrower shall establish a lockbox with Lender through which each Borrower shall instruct all Account Debtors to make payment on Accounts. Each Borrower shall execute such agreements as Lender may require to establish the lockbox.

6.18. Evidence of Merger.Loan Parties shall deliver to Lender a filed Certificate of Merger evidencing consummation of the merger of ADC Merger Sub, Inc. with and into ADC within one (1) Business Day after Closing.

6.19. Parent Good Standing. Parent shall within 15 days of Closing pay all share taxes due to the State of Delaware and take any and all other actions to establish good standing in the State of Delaware, and shall deliver to Lender no later than 15 days after Closing a good standing certificate issued by the State of Delaware regarding Parent’s status.

SECTION VII. NEGATIVE COVENANTS:

Each Loan Party covenants that until all of the Obligations are paid and satisfied in full (excluding contingent indemnification and expense reimbursement obligations to the extent no claim giving rise thereto has been asserted), that:

7.1. Merger, Consolidation, Dissolution or Liquidation:

a. No Borrower shall engage in any Asset Sale other than (i) the sale of Inventory in the ordinary course of business, (ii) equipment that is replaced by other equipment of comparable or superior quality and value within ninety (90) days of such Asset Sale, (iii) licenses, sublicenses, leases or subleases of Property granted to third parties in the ordinary course of business and not interfering with the business of the Loan Parties; (iv) sales, forgiveness or discounting, on a non-recourse basis and in the ordinary course of business, of past due accounts in connection with the collection or compromise thereof or the settlement of delinquent accounts or in connection with the bankruptcy or reorganization of suppliers or customers; (v) disposition of obsolete equipment; (vi) disposition of cash and cash equivalents; (vii) dispositions to another Borrower; (viii) issuances of capital stock to Parent; and (ix) dispositions resulting from any casualty events, provided the proceeds thereof are applied in accordance with the terms of this Agreement.

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b. No Loan Party shall merge or consolidate with any other Person or commence a dissolution or liquidation, other than (i) the merger of a Subsidiary of a Borrower into such Borrower (where such Borrower is the surviving Person) or (ii) the merger of one Borrower with another.

7.2. Acquisitions: No Borrower shall acquire all or a material portion of the Capital Stock or assets of any Person in any transaction or in any series of related transactions or enter into any sale and leaseback transaction.

7.3. Liens and Encumbrances: No Borrower shall: (a) execute a negative pledge agreement with any Person covering any of its Property other than property subject to purchase money indebtedness permitted hereunder, or (b) cause or permit or agree or consent to cause or permit in the future (upon the happening of a contingency or otherwise), its Property (including, without limitation, the Collateral), whether now owned or hereafter acquired, to be subject to a Lien except for Permitted Liens.

7.4. Transactions With Affiliates or Subsidiaries:

a. No Borrower shall enter into any transaction with any Subsidiary or other Affiliate, including, without limitation, the purchase, sale, or exchange of Property, or the loaning or giving of funds to any Affiliate or any Subsidiary unless: (i) the transaction is in the ordinary course of and pursuant to the reasonable requirements of such Loan Party’s business and upon terms substantially the same and no less favorable to such Loan Party as it would obtain in a comparable arm’s length transactions with any Person not an Affiliate or a Subsidiary, and so long as such transaction is not prohibited hereunder; (ii) such transaction is intended for incidental administrative purposes; (iii) pursuant to the Management Agreement; or (iv) pursuant to the making of the Proceeds Loan to Parent or receipt of payments of the Proceeds Loan.

b. No Borrower shall create any Subsidiary unless (i) such Subsidiary becomes a borrower party to this Agreement and the Loan Documents pursuant to documents in form and substance satisfactory to Lender, including the granting by such Subsidiary of security interests in all of its assets, subject to no Lien other than Permitted Liens, (ii) the Capital Stock of such Subsidiary is pledged to Lender and (iii) copies of such Subsidiary’s Organizational Documents are delivered to Lender together with such other proof as to the incumbency of officers and corporate actions as Lender may reasonably require.

7.5. Guarantees: Excepting the endorsement in the ordinary course of business of negotiable instruments for deposit or collection, no Borrower shall become or be liable, directly or indirectly, primary or secondary, matured or contingent, in any manner, whether as guarantor, surety, accommodation maker, or otherwise, for the existing or future Indebtedness of any kind of any Person, except for Permitted Indebtedness of another Borrower.

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7.6. Other Indebtedness: No Borrower shall: (a) hereafter incur, become liable for, or permit to exist any Indebtedness other than Permitted Indebtedness; or (b) make any prepayments on any existing or future Indebtedness (other than the Obligations).

7.7. Loans and Investments: No Borrower shall make or have outstanding loans, advances, extensions of credit or capital contributions to, or investments in, any Person other than Permitted Investments.

7.8. Use of Lenders’ Name: No Loan Party shall use Lender’s name in connection with any of its business operations. Nothing contained in this Agreement is intended to permit or authorize any Loan Party to make any contract on behalf of Lender.

7.9. Miscellaneous Covenants:

a. No Loan Party shall become or be a party to any contract or agreement which at the time of becoming a party to such contract or agreement materially impairs such Loan Party’s ability to perform under this Agreement.

b. No Loan Party shall carry or purchase any “margin stock” within the meaning of Regulations U, T or X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II.

7.10. Jurisdiction of Organization: No Loan Party shall change its jurisdiction of organization or, without thirty (30) days prior written notice to Lender, change its name. No Loan Party shall amend its Organizational Documents in a manner adverse to Lender.

7.11. Distributions:

a. No Borrower shall declare, pay or make, any Distributions other than (i) Permitted Parent Distributions, (ii) Permitted Tax Distributions and (iii) Distributions from a Borrower to another Borrower.

b. No Borrower shall declare or pay any bonus compensation to its officers if an Event of Default exists or would result from the payment thereof.

7.12. Material Agreement: No Loan Party shall amend or modify the terms of the (i) Management Agreement, or(ii) Merger Agreement in a manner that would be adverse to Lender.

7.13. Management Arrangements:

a. No Borrower shall pay any management, monitoring, consulting, advisory fees or other similar fees except for Approved Management Fees.

b. No Borrower shall enter into or remain bound by any management, employment or consulting agreement with any Person that gives such Person the right to manage its business, except for the Management Agreement, the Employment Agreements, and usual and customary employment agreements and consulting agreements consistent with past practice.

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7.14. Tax Consolidation:

a. Other than as required by Requirements of Law, no Loan Party shall elect to file any income tax return on behalf of an affiliated, combined, consolidated or unitary group that includes a Borrower, except that Parent may elect to file a consolidated federal income tax return that includes the Borrowers.

b. No Loan Party shall, and will not permit any of its Subsidiaries to, enter into any agreement with any Person which would cause any Borrower or any of Borrowers’ Subsidiaries to bear more than the amount of taxes to which such Person would have been subject had it separately filed (or filed as part of an affiliated, combined, consolidated or unitary tax return solely among Borrowers and their eligible Subsidiaries under federal, state or local law), except for agreements entered into in the ordinary course of business with Persons that are not Affiliates that include provisions relating to the underlying transaction for the sharing or allocation of taxes that are not based on the net income or net profits of either party to the agreement. If any Borrower enters into any tax sharing or tax allocation agreement, Loan Parties shall promptly deliver a copy of such agreement to Lender

c. If the IRS seeks to collect any taxes or otherwise impose any tax liability on any Borrower as a result of the Loan Parties’ filing affiliated, combined, consolidated or unitary income tax returns with such Borrower in excess of the income tax liability that such Borrower would have if it had filed tax returns as the common parent of an affiliated, combined, consolidated or unitary group that included only such Borrower and its Subsidiaries (an “Excess Tax Liability”), Parent shall use reasonable good faith efforts to contest such collection or imposition and cause such Excess Tax Liability to be paid by Parent or by a Subsidiary of Parent that is not a Loan Party. In any case, Parent shall, and cause its Subsidiaries that are not Loan Parties to defend, indemnify and hold harmless each Borrower for the full amount of any such Excess Tax Liability. Further, in the event that any Borrower ceases to be a member of the consolidated federal income tax group with respect to which collection of an Excess Tax Liability is being sought, Parent (or its successor in interest) shall cooperate with such Borrower in requesting the IRS to exercise its discretion under Treasury Regulation Section 1.1502-6(b) to assess and collect from the Borrower only such Borrower’s allocable portion of any federal income tax deficiency that is imposed on the consolidated federal income tax group; provided, that the requirements of this sentence shall expire upon the payment of the Obligations.

7.15. Compliance with ERISA: Each Loan Party shall not, and shall not permit any of its Subsidiaries or any of its ERISA Affiliates to, take, or fail to take, any of the following actions or permit any of the following events to occur if such action or event individually or together with all other actions or events would subject any Loan Party, any of its Subsidiaries or any of its ERISA Affiliates to any material tax, penalty, or other liabilities:

a. engage in or knowingly consent to any “party in interest” or any “disqualified person,” as such terms are defined in Section 3(14) of ERISA and Section 4975(e)(2) of the Code respectively, engaging in any Prohibited Transaction in connection with which any Loan Party, any of its Subsidiaries or any ERISA Affiliate could be subject to either a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code;

b. terminate any Employee Pension Plan in a manner, or take any other action, which could result in any material liability of any Loan Party, any of its Subsidiaries or any ERISA Affiliate to the PBGC;

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c. fail to make full payment when due of all amounts which, under the provisions of any Plan or any Multiemployer Plan, any Loan Party, any of its Subsidiaries or any ERISA Affiliate is required to pay as contributions thereto, or fail to satisfy the Minimum Funding Standards, whether or not waived, with respect to any Employee Pension Plan or fail to pay PBGC premiums when due;

d. permit the current value of all vested accrued benefits under all Employee Pension Plans which are subject to Title IV of ERISA to exceed the current value of the assets of such plans allocable to such vested accrued benefits, except as may be permitted under actuarial funding standards adopted in accordance with Section 412 of the Code;

e. withdraw from any Multiemployer Plan, if such withdrawal would result in the imposition of Withdrawal Liability;

f. fail to comply in all material respects with the requirements of COBRA regarding continued health coverage, of the Health Insurance Portability and Accountability Act of 1996, and of Section 1862(b) of the Social Security Act, with respect to any Plans subject to the requirements thereof; or

g. fail to comply in all other material respects with the provisions of ERISA and the Code with respect to any Plan.

As used in this Section 7.15, the term “accrued benefit” has the meaning specified in Section 3(23) of ERISA and the term “current value” has the meaning specified in Section 4001(a)(18)(B) of ERISA.

SECTION VIII. DEFAULT

8.1. Events of Default: Each of the following events shall constitute an event of default (“Event of Default”):

a. Payments- if any Borrower fails to make any payment of principal or interest under the Obligations on the date such payment is due and payable; or

b. Other Charges- if any Borrower fails to pay any other charges, fees, Expenses or other monetary obligations owing to Lender arising out of or incurred in connection with this Agreement within five (5) days of the date such payment is due and payable; or

c. Particular Covenant Defaults- if any Loan Party fails to perform, comply with or observe any covenant or undertaking contained in this Agreement and (other than with respect to the covenants contained in Sections 6.2(b), 6.2(d) (solely with regard to existence), 6.8, 6.9, 6.10, 6.11, 6.18 and 6.19, and Section 7 for which no cure period shall exist), such failure continues for thirty (30) days after the occurrence thereof; or

d. Financial Information- if any statement, report, financial statement, or certificate made or delivered by any Loan Party or any of its officers, employees or agents, to Lender is not true and correct, in all material respects, when made; or

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e. Uninsured Loss- if there shall occur any uninsured damage to or loss, theft, or destruction in excess of Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate with respect to any portion of any Property of any Borrower; or

f. Warranties or Representations- if any warranty, representation or other statement by or on behalf of any Loan Party contained in or pursuant to this Agreement, the other Loan Documents or in any certificate, document, agreement or instrument furnished in compliance with, relating to, or in reference to this Agreement, is false, erroneous, or misleading in any material respect when made; or

g. Agreements with Others- (i) if any Loan Party shall default beyond any grace period in the payment of principal or interest of any Indebtedness of any Loan Party in excess of Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate; or (ii) if any Loan Party otherwise defaults under the terms of any such Indebtedness if the effect of such default is to enable the holder of such Indebtedness to accelerate the payment of any Loan Party’s obligations, which are the subject thereof, prior to the maturity date or prior to the regularly scheduled date of payment or (iii) any “Event of Default” occurs under and as defined in the Citizens Documents or Jet Pay Documents and as a result thereof demand is made on Parent Jet Pay Documents;

h. Other Agreements with Lender – if any Loan Party breaches or violates the terms of, or if a default (and expiration of any applicable cure period), or an Event of Default, occurs under, any Interest Hedging Instrument or any other existing or future agreement (related or unrelated) (including, without limitation, the other Loan Documents) between any Loan Party and Lender; or

i. Judgments- if any final judgment for the payment of money in excess of Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate (i) which is not fully and unconditionally covered by insurance or (ii) for which any Loan Party has not established a cash or cash equivalent reserve in the full amount of such judgment, shall be rendered by a court of record against any Loan Party and such judgment shall continue unsatisfied and in effect for a period of thirty (30) consecutive days without being vacated, discharged, satisfied or bonded pending appeal; or

j. Assignment for Benefit of Creditors, etc. - if any Loan Party makes or proposes in writing, an assignment for the benefit of creditors generally, offers a composition or extension to creditors, or makes or sends notice of an intended bulk sale of any business or assets now or hereafter owned or conducted by any Loan Party; or

k. Bankruptcy, Dissolution, etc.- upon the commencement of any action for the dissolution or liquidation of any Loan Party, or the commencement of any proceeding to avoid any transaction entered into by any Loan Party, or the commencement of any case or proceeding for reorganization or liquidation of any Loan Party’s debts under the Bankruptcy Code or any other state or federal law, now or hereafter enacted for the relief of debtors, whether instituted by or against any Loan Party; provided however, that any Loan Party shall have thirty (30) days to obtain the dismissal or discharge of involuntary proceedings filed against it, it being understood that during such thirty (30) day period, Lender may seek adequate protection in any bankruptcy proceeding; or

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l. Receiver - upon the appointment of a receiver, liquidator, custodian, trustee or similar official or fiduciary for any Loan Party or for any Loan Party’s Property; or

m. Execution Process, etc.- the issuance of any execution or distraint process against any Property of any Loan Party; or

n. Termination of Business- if any Loan Party ceases any material portion of its business operations as presently conducted; or

o. Pension Benefits, etc.- if any Loan Party fails to comply with ERISA so that proceedings are commenced to appoint a trustee under ERISA to administer any Loan Party’s employee plans or the PBGC institutes proceedings to appoint a trustee to administer such plan(s), or a Lien is entered to secure any deficiency or claim under Sections 303(k) or 4068 of ERISA, or a Reportable Event occurs (where such event could reasonably be expected to result in a loss to Loan Parties in excess of $100,000 or

p. Investigations - any evidence is received by Lender that Lender reasonably determines in good faith is evidence that any Loan Party may have directly or indirectly been engaged in any type of activity which would be reasonably likely to result in the forfeiture of any material property of any Loan Party to any Governmental Authority; or

q. Change of Control - if there shall occur a Change of Control; or

r. Surety and Guaranty Agreement – if any breach or default occurs under any Surety and Guaranty Agreement, or if the Surety and Guaranty Agreement, or any obligation to perform thereunder is terminated; or

s. Liens - if any Lien in favor of Lender shall cease to be valid, enforceable and perfected and prior to all other Liens other than Permitted Liens (except solely as a result of any action or inaction of Lender) or if any Loan Party or any Governmental Authority shall assert any of the foregoing; or

t. Material Adverse Effect – if there is any change in any Borrower's financial condition which, in Lender's reasonable opinion, has or would be reasonably likely to have a Material Adverse Effect, or

u. Other Loan Documents - if any other Person (other than Lender) party to a Loan Document, breaches or violates any term, provision or condition of such Loan Document.

8.2. Cure: Nothing contained in this Agreement or the Loan Documents shall be deemed to compel Lender to accept a cure of any Event of Default hereunder.

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8.3. Rights and Remedies on Default:

a. In addition to all other rights, options and remedies granted or available to Lender under this Agreement or the Loan Documents (each of which is also then exercisable by Lender), or otherwise available at law or in equity, upon or at any time after the occurrence and during the continuance of an Event of Default Lender may, in its discretion, declare the Obligations (other than any Obligations arising under an Interest Hedging Instrument) immediately due and payable, all without demand, notice, presentment or protest or further action of any kind (it also being understood that the occurrence of any of the events or conditions set forth in Sections 8.1(j),(k) or (l) shall automatically cause an acceleration of the Obligations (other than any Obligations arising under an Interest Hedging Instrument). Nothing contained herein shall limit the rights of Lender under the terms of any Interest Hedging Instrument.

b. In addition to all other rights, options and remedies granted or available to Lender under this Agreement or the Loan Documents (each of which is also then exercisable by Lender), or otherwise available at law or in equity, upon or at any time after the acceleration of the Obligations following the occurrence of an Event of Default (other than the rights with respect to clause (iv) below which Lender may exercise at any time after an Event of Default and regardless of whether there is an acceleration), Lender may, in its discretion, exercise all rights under the UCC and any other applicable law or in equity, and under all Loan Documents permitted to be exercised after the occurrence of an Event of Default, including the following rights and remedies (which list is given by way of example and is not intended to be an exhaustive list of all such rights and remedies):

(i) The right to take possession of, send notices regarding and collect directly the Collateral, with or without judicial process (including without limitation the right to notify the United States postal authorities to redirect mail addressed to any Borrower to an address designated by Lender); or

(ii) By its own means or with judicial assistance, enter any Borrower’s premises and take possession of the Collateral, or render it unusable, or dispose of the Collateral on such premises in compliance with subsection (e) below, without any liability for rent, storage, utilities or other sums, and such Borrower shall not resist or interfere with such action; or

(iii) Require each Borrower at such Borrower’s expense to assemble all or any part of the Collateral (other than real estate or fixtures) and make it available to Lender at any place designated by Lender; or

(iv) The right to enjoin any violation of Section 7.1, it being agreed that Lender’s remedies at law are inadequate.

c. Each Borrower hereby agrees that a notice received by it at least seven (7) days before the time of any intended public sale or of the time after which any private sale or other disposition of the Collateral is to be made, shall be deemed to be reasonable notice of such sale or other disposition. If permitted by applicable law, any perishable inventory or Collateral which threatens to speedily decline in value or which is sold on a recognized market may be sold immediately by Lender without prior notice to such Borrower. Each Loan Party covenants and agrees not to interfere with or impose any obstacle to Lender’s exercise of its rights and remedies with respect to the Collateral, after the occurrence of an Event of Default hereunder. Lender shall have no obligation to clean up or prepare the Collateral for sale. If Lender sells any of the Collateral upon credit, each Loan Party will only be credited with payments actually made by the purchaser thereof, that are received by Lender. Lender may, in connection with any sale of the Collateral specifically disclaim any warranties of title or the like.

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8.4. Nature of Remedies: All rights and remedies granted Lender hereunder and under the Loan Documents, or otherwise available at law or in equity, shall be deemed concurrent and cumulative, and not alternative remedies, and Lender may proceed with any number of remedies at the same time until all Obligations are satisfied in full. The exercise of any one right or remedy shall not be deemed a waiver or release of any other right or remedy, and Lender, upon or at any time after the occurrence and during the continuance of an Event of Default, may proceed against each Loan Party, at any time, under any agreement, with any available remedy and in any order.

8.5. Set-Off: In addition to all other rights, options and remedies granted or available to Lender under this Agreement or the Loan Documents (each of which is also then exercisable by Lender), upon or at any time after the occurrence and during the continuance of an Event of Default, Lender (and any participant) shall have and be deemed to have, without notice to any Loan Party, the immediate right of set-off against any bank account of any Loan Party with Lender, or of any Borrower with any other subsidiary of Lender or Bank Affiliate or any participant and may apply the funds or amount thus set-off against any Obligations hereunder. Each Loan Party specifically waives any right to require Lender to exercise other rights, options and remedies prior to exercising any such set-off rights. If any bank account of any Loan Party with Lender, any other subsidiary of Lender or Bank Affiliate or any participant is attached or otherwise liened or levied upon by any third party, Lender (and such participant) shall have and be deemed to have, without notice to any Loan Party, the immediate right of set-off and may apply the funds or amount thus set-off against any Obligations hereunder.

SECTION IX. MISCELLANEOUS

9.1. Governing Law: THIS AGREEMENT, AND ALL MATTERS ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND ALL RELATED AGREEMENTS AND DOCUMENTS, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA. THE PROVISIONS OF THIS AGREEMENT AND ALL OTHER AGREEMENTS AND DOCUMENTS REFERRED TO HEREIN ARE TO BE DEEMED SEVERABLE, AND THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION SHALL NOT AFFECT OR IMPAIR THE REMAINING PROVISIONS WHICH SHALL CONTINUE IN FULL FORCE AND EFFECT.

9.2. Integrated Agreement: The Term Loan Note, the other Loan Documents, all related agreements, and this Agreement shall be construed as integrated and complementary of each other, and as augmenting and not restricting Lender’s rights and remedies. If, after applying the foregoing, an inconsistency still exists, the provisions of this Agreement shall constitute an amendment thereto and shall control.

9.3. Waiver: No omission or delay by Lender in exercising any right or power under this Agreement or any related agreements and documents will impair such right or power or be construed to be a waiver of any Default, or Event of Default or an acquiescence therein, and any single or partial exercise of any such right or power will not preclude other or further exercise thereof or the exercise of any other right, and as to any Loan Party no waiver will be valid unless in writing and signed by Lender and then only to the extent specified.

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9.4. Indemnity:

a. Each Loan Party releases and shall indemnify, defend and hold harmless Lender and each Related Party (each, an “Indemnitee”) of and from any and all claims, demands, liabilities, losses, damages and costs and expenses (including, without limitation, reasonable legal fees), penalties and fines resulting from (i) the execution, delivery and performance of this Agreement or any other Loan Document or any acts or conduct of any Loan Party under, pursuant or related to this Agreement and the other Loan Documents, (ii) any Loan Party’s breach or violation of any representation, warranty, covenant or undertaking contained in this Agreement or the other Loan Documents, (iii) any Loan Party’s failure to comply with any Requirement of Law (including, without limitation, Environmental Laws), and (iv) any claim by any other creditor of any Loan Party against Lender arising out of any transaction whether hereunder or in any way related to the Loan Documents; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such claims, demands, liabilities, losses, damages, costs, expenses, penalties and fines are determined by a court of competent jurisdiction by final nonappealable judgment to have resulted from acts or conduct of such Indemnitee constituting willful misconduct or gross negligence.

b. Promptly after receipt by an indemnified party under subsection (a) above of notice of the commencement of any action by a third party, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof. The omission so to notify the indemnifying party shall relieve the indemnifying party from any liability which it may have to any indemnified party under such subsection only if the indemnifying party is unable to defend such actions as a result of such failure to so notify. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnified party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation.

9.5. Time: Whenever any Loan Party shall be required to make any payment, or perform any act, on a day which is not a Business Day, such payment may be made, or such act may be performed, on the next succeeding Business Day. Time is of the essence in each Loan Party’s performance under all provisions of this Agreement and all related agreements and documents.

9.6. Expenses of Lender: At Closing and from time to time thereafter, each Loan Party will pay upon demand of Lender all reasonable and documented out-of-pocket costs, fees and expenses of Lender in connection with (i) the analysis, negotiation, preparation, execution, administration, delivery and termination of this Agreement, and other Loan Documents and the documents and instruments referred to herein and therein, and any amendment, amendment and restatement, supplement, waiver or consent relating hereto or thereto, whether or not any such amendment, amendment and restatement, supplement, waiver or consent is executed or becomes effective, search costs, the reasonable and documented out-of-pocket fees, expenses and disbursements of outside counsel for Lender, any reasonable and documented out-of-pocket fees or expenses incurred by Lender under Section 6.11 for which each Loan Party is obligated thereunder, and reasonable charges of any expert consultant to Lender, (ii) the enforcement of Lender’s rights hereunder, or the collection of any payments owing from, each Loan Party under this Agreement and/or the other Loan Documents or the protection, preservation or defense of the rights of Lender hereunder and under the other Loan Documents, and (iii) any refinancing or restructuring of the credit arrangements provided under this Agreement and other Loan Documents in the nature of a “work-out” or of any insolvency or bankruptcy proceedings, or otherwise (including in all cases the reasonable fees and disbursements of counsel for Lender and reasonable allocated costs of internal counsel) (collectively, the “Expenses”).

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9.7. Brokerage: Each Loan Party represents that it has not committed Lender to the payment of any brokerage fee, commission or charge in connection with this transaction. If any such claim is made on Lender by any broker, finder or agent or other person, each Loan Party hereby indemnifies, defends and saves such party harmless against such claim and further will defend, with counsel satisfactory to Lender, any action or actions to recover on such claim, at such Loan Party’s own cost and expense, including such party’s reasonable counsel fees. Loan Party further agrees that until any such claim or demand is adjudicated in such party’s favor, the amount demanded shall be deemed an Obligation of each Loan Party under this Agreement.

9.8. Notices:

a. Any notices or consents required or permitted by this Agreement shall be in writing and shall be deemed given if delivered in person to the person listed below or if sent by first class mail, telecopy or by nationally recognized overnight courier, as follows, unless such address is changed by written notice hereunder:

If to Lender to:	Metro Bank
	3801 Paxton Street
	Harrisburg, PA  17111
	Attention: Harry G. Hayman, III
	Telecopy No.:  717-901-0436
With copies to:	Ballard Spahr LLP
	1735 Market Street, 51st Floor
	Philadelphia, PA  19103
	Attention: Steven M. Miller
	Telecopy No.:  215-864-8999
If to any Loan Party to:	AD Computer Corporation
	3939 West Drive
	Center Valley, PA 18034
	Attention:  C. Nicholas Antich
	Telecopy No.:  610-797-9520

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With copies to:	Dechert LLP
	Cira Center
	2929 Arch Street
	Philadelphia, PA 19104
	Attention:  James A. Lebovitz
	Telecopy No.:  (215) 994-4000
	Universal Business Payment Solutions Acquisition Corporation
	Radnor Financial Center
	150 North Radnor Chester Road, Suite F-200,
	Radnor, PA 19087
	Attention:  Chief Executive Officer
	Telecopy No.:  877-861-8488

b. Any notice sent by Lender, or any Loan Party by any of the above methods shall be deemed to be given when so received.

c. Lender shall be fully entitled to rely upon any telecopy or electronic mail transmission or other writing purported to be sent by any Authorized Officer as being genuine and authorized.

9.9. Headings: The headings of any paragraph or Section of this Agreement are for convenience only and shall not be used to interpret any provision of this Agreement.

9.10. Survival: All warranties, representations, and covenants made by any Loan Party herein, or in any agreement referred to herein or on any certificate, document or other instrument delivered by it or on its behalf under this Agreement, shall be considered to have been relied upon by Lender, and shall survive the delivery to Lender of the Term Loan Note, regardless of any investigation made by Lender or on its behalf. All statements in any such certificate or other instrument prepared and/or delivered for the benefit of Lender shall constitute warranties and representations by any Loan Party hereunder. Except as otherwise expressly provided herein, all covenants made by any Loan Party hereunder or under any other agreement or instrument shall be deemed continuing until all Obligations are satisfied in full. All indemnification obligations under this Agreement, including under Section 6.5, 9.4 and 9.7, shall survive the termination of this Agreement and payment of the Obligations for a period of two (2) years.

9.11. Successors and Assigns: This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties. No Loan Party may transfer, assign or delegate any of its duties or obligations hereunder. Each Loan Party acknowledges and agrees that Lender may at any time, and from time to time, (a) sell participating interests in the Term Loan, and Lender’s rights hereunder to other financial institutions, and (b) sell, transfer, or assign the Term Loan and Lender’s rights hereunder, to any one or more additional banks or financial institutions, subject (as to Lender’s rights under this clause (b)) to each Loan Party’s written consent, which consent shall not be unreasonably withheld; provided that, no consent under this clause (b) shall be required if an Event of Default exists at the time of such sale, transfer or assignment; provided, that in effecting any sale, transfer or assignment hereunder, the Lender shall maintain the status of the Term Loan and the Term Loan Note as an obligation in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code. Lender may, without the consent of any Loan Party, at any time, pledge, endorse, assign or transfer all or any portion of its rights under the Loan Documents to any of the twelve (12) Federal Reserve Banks organized under the Federal Reserve Act 12 U.S.C. §341. No such pledge or enforcement thereof shall release Lender from its obligations hereunder. Subject to Section 9.23, Lender may divulge to any participant, assignee or co-lender or prospective participant, assignee or co-lender it may obtain in the Term Loan or any portion thereof, all information, and furnish to such Person copies of any reports, financial statements, certificates, and documents obtained under any provision of this Agreement, or related agreements and documents.

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9.12. Duplicate Originals: Two or more duplicate originals of this Agreement may be signed by the parties, including in counterparts, each of which shall be an original but all of which together shall constitute one and the same instrument.

9.13. Modification: No modification hereof or any agreement referred to herein shall be binding or enforceable unless in writing and signed by each Loan Party party thereto and Lender.

9.14. Signatories: Each individual signatory hereto represents and warrants that he is duly authorized to execute this Agreement on behalf of his principal and that he executes the Agreement in such capacity and not as a party.

9.15. Third Parties: No rights are intended to be created hereunder, or under any related agreements or documents for the benefit of any third party donee, creditor or incidental beneficiary of any Loan Party. Nothing contained in this Agreement shall be construed as a delegation to Lender of any Loan Party’s duty of performance, including, without limitation, any Loan Party’s duties under any account or contract with any other Person.

9.16. Discharge of Taxes, Borrower’s Obligations, Etc.: Lender, in its sole discretion, shall have the right at any time, and from time to time, with at least ten (10) days prior notice to Borrowing Agent if any Borrower fails to do so, to: (a) pay for the performance of any Borrower’s obligations hereunder, and (b) discharge taxes or Liens, at any time levied or placed on any Borrower’s Property in violation of this Agreement unless such Borrower is in good faith with due diligence by appropriate proceedings contesting such taxes or Liens and maintaining proper reserves therefor in accordance with GAAP. Expenses and advances shall bear interest at the rate applicable to the Term Loan, until reimbursed to Lender. Such payments and advances made by Lender shall not be construed as a waiver by Lender of a Default or Event of Default under this Agreement.

9.17. Consent to Jurisdiction: Each Loan Party and Lender each hereby irrevocably consent to the non-exclusive jurisdiction of the Courts of the Commonwealth of Pennsylvania or the United States District Court for the Eastern District of Pennsylvania in any and all actions and proceedings whether arising hereunder or under any other agreement or undertaking. Each Loan Party waives any objection which such Loan Party may have based upon lack of personal jurisdiction, improper venue or forum non conveniens. Each Loan Party irrevocably agrees to service of process by certified mail, return receipt requested to the address of the appropriate party set forth herein.

9.18. Additional Documentation: Each Loan Party shall execute and/or re-execute, and cause any other Person party to any Loan Document, to execute and/or re-execute and to deliver to Lender or Lender’s counsel, as may be deemed appropriate, any document or instrument signed in connection with this Agreement which was incorrectly drafted and/or signed, as well as any document or instrument which should have been signed at or prior to the Closing, but which was not so signed and delivered. Each Loan Party agrees to comply with any written request by Lender within ten (10) days after receipt by such Loan Party of such request.

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9.19. Advertisement: Lender, in its sole discretion, shall have the right to announce and publicize the financing established hereunder, as it deems appropriate, by means and media selected by Lender.

9.20. Waiver of Jury Trial: EACH LOAN PARTY AND LENDER EACH HEREBY WAIVE ANY AND ALL RIGHTS IT MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION, PROCEEDING OR COUNTERCLAIM ARISING WITH RESPECT TO RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO OR UNDER THE LOAN DOCUMENTS OR WITH RESPECT TO ANY CLAIMS ARISING OUT OF ANY DISCUSSIONS, NEGOTIATIONS OR COMMUNICATIONS INVOLVING OR RELATED TO ANY PROPOSED RENEWAL, EXTENSION, AMENDMENT, MODIFICATION, RESTRUCTURE, FORBEARANCE, WORKOUT, OR ENFORCEMENT OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS.

9.21. Consequential Damages, etc.: Neither Lender nor agent or attorney of Lender, shall be liable for any special, indirect, exemplary, punitive or consequential damages arising from any breach of contract, tort or other wrong relating to the establishment, administration or collection of the Obligations.

9.22. Nonliability of Lender: The relationship between Borrowers on the one hand and Lender on the other hand shall be solely that of borrower and lender. Lender shall have no fiduciary relationship with, or fiduciary responsibility to, any Loan Party.

9.23. Confidentiality: Lender agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to Lender’s and Lender’s Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any Interest Hedging Instrument with any of Lender’s Affiliates or any action or proceeding relating to this Agreement or any other Loan Document or any Interest Hedging Instrument with any of Lender’s Affiliates or the enforcement of rights hereunder or thereunder, (f) with the consent of Borrowing Agent or (g) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to Lender or any of Lender’s respective Affiliates on a nonconfidential basis from a source other than a Loan Party. Notwithstanding the foregoing, Lender may disclose Information, without notice to a Loan Party, to Governmental Authorities in connection with any regulatory examination of Lender or in accordance with Lender’s regulatory compliance policy. For purposes of this Section 9.24, “Information” means all information received from any Loan Party relating to any Loan Party or any Loan Party’s respective businesses, other than any such information that is available to Lender on a non-confidential basis prior to disclosure by any Loan Party. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

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9.24. Patriot Act Notice: To help fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each Person who opens an account. For purposes of this Section 9.24, account shall be understood to include loan accounts.

[SIGNATURES TO FOLLOW ON SEPARATE PAGE]

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WITNESS the due execution of this Agreement as a document under seal as of the date first written above.

AD COMPUTER CORPORATION
By:	/s/ C. Nicholos Antich
Name:	C. Nicholos Antich
Title:	President
PAYROLL TAX FILING SERVICES, INC.
By:	/s/ C. Nicholos Antich
Name:	C. Nicholos Antich
Title:	President
UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION
By:	/s/ Bipin C. Shah
Name:	Bipin C. Shah
Title:	Chairman and CEO
METRO BANK
By:	/s/ Harry G. Hayman, III
Name:	Harry G. Hayman, III
Title:	Senior Vice President

(Signature Page to Loan and Security Agreement)

EXHIBIT “A”

COMPLIANCE CERTIFICATE

Metro Bank _____________, 201__

_________________

_________________

Attention: ___________________

The undersigned, the _______ of ______ and _______ (collectively “Borrowers”), gives this certificate to Metro Bank(“Lender”), in accordance with the requirements of Section 6.10 of that certain Loan and Security Agreement dated December 28, 2012, by and among Borrowers, Universal Business Payment Solutions Acquisition Corporation and Lender (“Loan Agreement”). Capitalized terms used in this Certificate, unless otherwise defined herein, shall have the meanings ascribed to them in the Loan Agreement.

1. Based upon my review of the consolidated balance sheets and statements of income of Borrowers for the fiscal period ending __________________, 201_, copies of which are attached hereto, I hereby certify that:

a. The Debt Coverage Ratio is ___________________;

b. The Total Leverage Ratio is ___________; and

c. The Excess Cash Flow is _______________.

Attached as Schedule “A” are the details underlying such financial covenant calculations.

2. No Default exists on the date hereof, other than: ____________________ [if none, so state]; and

3. No Event of Default exists on the date hereof, other than: __________________ [if none, so state].

Very truly yours,

By:

Name:

Title:

EXHIBIT “B”

MANAGEMENT AGREEMENT

EX-10.7

ADVISORY AGREEMENT

This Advisory Agreement (this “Agreement”) is made and entered into as of December 28, 2012 by and among AD Computer Corporation, a Pennsylvania corporation (the “Company,” and together with all of the direct and indirect subsidiaries of the Company, the “Company Group”), and Universal Business Payment Solutions Acquisition Corporation, a Delaware Corporation (“Advisor”).

WHEREAS, pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of the date hereof, by and among the Advisor, ADC Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent, the Company Group, Carol and C. Nicholas Antich as joint tenants, C. Nicholas Antich, Carol Antich, Eric Antich, Lynn McCausland, the B N McCausland Trust and Joel E. Serfass, and C. Nicholas Antich as representative of the stockholders.;

WHEREAS, the Company, on behalf of the Company Group, desires to retain Advisor and Advisor desires to perform for the Company and/or the Company Group certain services.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and intending to be legally bound hereby, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, effective as of the closing of the transactions contemplated by the Purchase Agreement (the “Effective Time”) and without any further action required by any party hereto, hereby agree as follows:

1. Term. This Agreement shall be in effect for an initial term of ten (10) years commencing at the Effective Time (the “Term”), and shall be automatically extended thereafter on a year to year basis unless the Company or Advisor provides written notice of its desire to terminate this Agreement to the other party ninety (90) days prior to the expiration of the Term or any extension thereof.

2. Services. Advisor shall perform or cause to be performed such services for the Company and/or members of the Company Group as directed by the Company’s board of directors, which may include, without limitation, the following:

(a) support and analysis of financing alternatives, including, without limitation, in connection with acquisitions, capital expenditures and refinancing of existing indebtedness;

(b) finance functions, including assistance in the preparation of financial projections, and monitoring of compliance with financing agreements;

(c) human resource functions, including searching for and hiring executives; and

(d) other services for the Company or its subsidiaries upon which the Company’s board of directors and Advisor agree.

3. Advisory Fees.

(a) Annual Fee. Subject to the terms and conditions herein, payment for services rendered by Advisor and/or its affiliates pursuant to this Agreement (all such fees, the “Management Fees”) will equal $90,000 per quarter. The Management Fees shall be payable to Advisor or its designee by the Company in advance on first business day of each quarter.

(b) Payment; Subordination.

(i) Any fees or expenses payable to Advisor or its designees pursuant to this Section 3 shall be paid by wire transfer to an account designated in writing by Advisor. Notwithstanding anything to the contrary in this Section 3, the Company shall not be required to pay the fees under Section 3(a) and Section 3(b) hereof if and to the extent such payment is expressly prohibited by (x) the Loan and Security Agreement, dated as of the date hereof, by and among the Company, Payroll Tax Filing Services, Inc., a Pennsylvania corporation, Advisor, as guarantor, and Metro Bank (the “Credit Facility”), in each case, so long as it has not been terminated and remains in full force and effect and Advisor shall promptly turnover and return any such payment received in violation of the Credit Facility to the Company. Any payments otherwise owed hereunder which are not made due to the prohibition in this Section 3(b) shall not be cancelled but rather accrue and bear interest at the Base Rate under and as defined in the Credit Facility, and shall be payable by the Company promptly when, and to the extent, that the Company and the other members of the Company Group are no longer prohibited from making such payments by the Credit Facility.

(ii) No provision of this Section 3 may be amended or otherwise modified without the prior written consent of the requisite holders of indebtedness evidenced by the Credit Facility.

4. Personnel. Advisor shall provide and devote to the performance of this Agreement such partners, employees and agents of Advisor as Advisor shall deem appropriate to the furnishing of the services required.

5. Liability. Neither Advisor nor any other Indemnitee (as defined in Section 6 below) shall be liable to the Company or any of its subsidiaries or affiliates for any loss, liability, damage or expense arising out of or in connection with the performance of services contemplated by this Agreement, unless such loss, liability, damage or expense shall be proven to result directly from gross negligence, willful misconduct, breach of fiduciary duty (it being understood Advisor disclaims any fiduciary duties to the Company) or bad faith on the part of an Indemnitee acting within the scope of such person’s employment or authority. Advisor makes no representations or warranties, express or implied, in respect of the services to be provided by Advisor or any of the other Indemnitees. Except as Advisor may otherwise agree in writing after the date hereof: (i) Advisor shall have the right to, and shall have no duty (contractual or otherwise) not to, directly or indirectly: (A) engage in the same or similar business activities or lines of business as the Company or any of its subsidiaries, including those competing with the Company or any of its subsidiaries and (B) do business with any client or customer of the Company or any of its subsidiaries; (ii) neither Advisor nor any officer, director, employee, partner, affiliate or associated entity thereof shall be liable to the Company or any of its subsidiaries or affiliates for breach of any duty (contractual or otherwise) by reason of any such activities of such person or of such person’s participation therein; and (iii) in the event that Advisor acquires knowledge of a potential transaction or matter that may be a corporate opportunity for the Company or any of its subsidiaries, on the one hand, and Advisor, on the other hand, or any other person, Advisor shall have no duty (contractual or otherwise) to communicate or present such corporate opportunity to the Company or any of its subsidiaries and, notwithstanding any provision of this Agreement to the contrary, shall not be liable to the Company Group or any of their affiliates for breach of any duty (contractual or otherwise) by reason of the fact that Advisor directly or indirectly pursues or acquires such opportunity for itself, directs such opportunity to another person, or does not present such opportunity to the Company Group. In no event will any of the parties hereto be liable to any other party hereto for any indirect, special, incidental or consequential damages, including lost profits or savings, whether or not such damages are foreseeable, or in respect of any liabilities relating to any third party claims (whether based in contract, tort or otherwise) other than the Claims (as defined in Section 6 below) relating to the services to be provided by Advisor hereunder.

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6. Indemnity. Each member of the Company Group shall defend, indemnify and hold harmless each of Advisor, its affiliates, members, partners, employees and agents (collectively, the “Indemnitees”) from and against any and all loss, liability, damage or expenses arising from any claim by any person with respect to, or in any way related to, the performance of services contemplated by this Agreement (including attorneys’ fees) (collectively, “Claims”) resulting from any act or omission of any of the Indemnitees, other than for Claims which shall be proven to be the direct result of gross negligence, bad faith, breach of fiduciary duty (it being understood Advisor disclaims any fiduciary duties to the Company) or willful misconduct by an Indemnitee. Each of the Company and its subsidiaries shall defend at its own cost and expense any and all suits or actions (just or unjust) which may be brought against the Company, any of its subsidiaries or any of the Indemnitees or in which any of the Indemnitees may be impleaded with others upon any Claims, or upon any matter, directly or indirectly, related to or arising out of this Agreement or the performance hereof by any of the Indemnitees, except that if such damage shall be proven to be the direct result of gross negligence, bad faith, breach of fiduciary duty or willful misconduct by an Indemnitee, then Advisor shall reimburse the Company and its subsidiaries for the costs of defense and other costs incurred by the Company and its subsidiaries to the extent due to such gross negligence, bad faith, breach of fiduciary duty or willful misconduct by an Indemnitee.

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7. Notices. All notices hereunder shall be in writing and shall be delivered personally or mailed by United States mail, postage prepaid, addressed to the parties as follows:

To the Company or the Company Group:

AD Computer Corporation

3939 West Drive

Center Valley, PA 18034

Attention: C. Nicholas Antich

To Advisor:

Universal Business Payment Solutions Corporation
Radnor Financial Center
150 North Radnor-Chester Road, Suite F-200
Radnor, PA 19087
Attn: Bipin C. Shah

with a copy to:

Dechert LLP

Cira Centre

2929 Arch Street

Philadelphia, PA 19104

Attention: James A. Lebovitz

8. Assignment. Neither the Company nor any member of the Company Group may assign any obligations hereunder to any other party without the prior written consent of Advisor (which consent shall not be unreasonably withheld).

9. Successors. This Agreement and all the obligations and benefits hereunder shall inure to the successors and assigns of the parties.

10. Counterparts. This Agreement may be executed and delivered by each party hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original and all of which taken together shall constitute but one and the same agreement.

11. Entire Agreement; Modification; Governing Law. The terms and conditions hereof constitute the entire agreement between the parties hereto with respect to the subject matter of this Agreement and supersede all previous communications, either oral or written, representations or warranties of any kind whatsoever, except as expressly set forth herein. No modifications of this Agreement nor waiver of the terms or conditions thereof shall be binding upon either party unless approved in writing by an authorized representative of such party. All issues concerning this Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of New York.

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12. Effective Time. This Agreement shall be effective as of the Effective Time without further action required on the part of any party hereto. If the Effective Time does not occur and the Purchase Agreement is terminated, this Agreement shall have no force or effect and shall be deemed void ab initio.

13. Basis for Fees; Expenses. The parties hereto acknowledge and agree that the fees payable under this Agreement reflect Advisor's significant overhead costs, and, in the case of Transaction Fees, are success-based fees that are contingent on completed transactions. The parties hereto further agree that the fees payable hereunder are not based on hourly or per diem rates and Advisor shall not be required to account for its services on an hourly, per diem or similar basis. The Company agrees that, in addition to the fees payable under this Agreement, it shall reimburse Advisor and its affiliates for their reasonable out-of-pocket expenses (excluding normal overhead costs) incurred in performing the services contemplated by this Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties have executed this Advisory Agreement as of the date first written above.

UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION
By:	/s/ Bipin C. Shah
	Name: Bipin C. Shah Title: CEO and Secretary

AD COMPUTER CORPORATION
By:	/s/ C. Nicholos Antich
	Name: C. Nicholos Antich Title: President

[Signature page to Advisory Agreement]

EX-10.8

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OF THE SECURITIES OR “BLUE SKY” LAWS OF ANY JURISDICTION AND, ACCORDINGLY, MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IF REGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES ACT OR IF AN EXEMPTION FROM REGISTRATION IS AVAILABLE, EXCEPT UNDER CIRCUMSTANCES WHERE NEITHER SUCH REGISTRATION NOR SUCH AN EXEMPTION IS REQUIRED BY LAW. NOTWITHSTANDING THE ABOVE, NO TRANSFER MAY BE MADE IN ANY JURISDICTION EXCEPT IN COMPLIANCE WITH APPLICABLE LAWS IN SUCH JURISDICTION.

PROMISSORY NOTE

$9,000,000 Dated: December 28, 2012

WHEREAS, AD Computer Corporation (“Lender”) is a borrower and party to that certain Loan and Security Agreement, dated as of December 28, 2012, by and among Lender, Payroll Tax Filing Services, Inc., each other Person joined hereto as a borrower from time to time, Universal Business Payment Solutions Acquisition Corporation (“Borrower”), and Metro Bank.

WHEREAS, Lender desires to make a loan to Borrower in the original principal amount of NINE MILLION DOLLARS ($9,000,000);

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower and, by its acceptance hereof, Lender hereby agree as follows:

The terms, provisions and obligations set forth in the Original Promissory Note are hereby amended and restated in their entirety to read as follows:

FOR VALUE Borrower, HEREBY PROMISES TO PAY to the order of LENDER the principal amount of $9,000,000 in full upon notice from the Lender to the Borrower.

I. PAYMENT TERMS

The Borrower promises to pay interest on the unpaid principal amount hereof on the day on which the principal amount is paid in full, at an interest rate equal to the short-term Applicable Federal Rate as required by Section 7872(f)(2)(B) of the Internal Revenue Code, compounded semiannually; provided, however, that any overdue amount of principal, interest or other amounts payable hereunder shall bear interest, payable on demand, at the same such interest rate as described above. Interest shall accrue from the date hereof until the date of payment in full of the principal amount hereof and all interest and other amounts payable hereunder (to the extent permitted by applicable law) and shall be computed on the basis of a 360-day year of twelve 30-day months. Interest is to be paid in cash.

II. REPAYMENT TERMS

This Promissory Note shall be prepayable at any time without penalty. The full balance of this Promissory Note and all accrued interest thereunder shall be due and payable on December 28, 2020.

III.
OPTIONAL PAYMENTS

This Promissory Note is prepayable by the Borrower at any time in whole or in part without any premium or penalty. The amount of any such optional payment shall be applied first to accrued but unpaid interest outstanding under this Agreement and then to principal.

IV. GENERAL

This Agreement embodies the entire agreement between the Borrower and Lender. Any amendments to this Agreement must be executed by all parties hereto.

The Agreement may not be transferred, sold, assigned, pledged, or otherwise encumbered or disposed of, and no lien, charge or other encumbrance may be created or permitted to be created thereon without the prior written consent of Lender.

The Borrower expressly waives presentment, demand, protest or any notice of any kind whatsoever. No delay or omission by the Lender in exercising any of its rights hereunder or otherwise shall operate as a waiver of any such right or of any other right of the Lender, nor shall any waiver by the Lender of any such right on one occasion be deemed a bar to or waiver of such right or any other right on any other occasion.

This Agreement shall be deemed to have been made under, and shall be governed by, and construed in accordance with, the laws of the State of New York.

REMAINDER OF PAGE LEFT BLANK INTENTIONALLY

IN WITNESS WHEREOF the parties have executed and delivered this Agreement on the date first written above.

UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION

Borrower

By: /s/ Peter Davidson                                    

Name: Peter Davidson

Title: Chief Administrative Officer

AD COMPUTER CORPORATION

Lender

By: /s/ C. Nicholos Antich                                          

Name: C. Nicholos Antich

Title: President

[Signature Page to Promissory Note]

EX-10.9

This Agreement is among Universal Business Payment Solutions Acquisition Corporation, JP Merger Sub, LLC, JetPay, LLC, WLES, L.P. and Trent Voigt regarding that certain Agreement and Plan of Merger among them dated as of July 6, 2012, as amended (the “Merger Agreement”). Capitalized terms used herein but not defined herein shall have the meaning assigned to them in the Merger Agreement.

The parties agree and acknowledge that the “Cash Merger Consideration” shall include a promissory note from Parent to the Member in the amount of $2,331,368.68 instead of cash in that amount. The promissory note shall be in the form attached hereto as Exhibit A. The parties further agree and acknowledge that, as consideration for the modification of the Cash Merger Consideration, the Seller Agreement Parties shall have no indemnification obligations to any Parent Indemnified Parties, under Article IX of the Merger Agreement or otherwise, for any of the matters set forth on Exhibit B hereto.

The remainder of the Merger Agreement, as previously amended, shall remain unchanged by this Agreement.

Dated to be effective as of the 28^th day of December 2012.

UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION
By:	/s/ Bipin C. Shah
Name:	Bipin C. Shah
Title:	Chief Executive Officer
JP MERGER SUB, LLC
By:	/s/ Bipin C. Shah
Name:	Bipin C. Shah
Title:	CEO and Secretary
JETPAY, LLC
By:	/s/ Trent Voigt
Name:	Trent Voigt
Title:	CEO
WLES, LP
By: Transaction Guy and the Triumphant Ones, LLC, General Partner
By:	/s/ Trent Voigt
Name:	Trent Voigt
Title:	General Partner
/s/ Trent Voigt
Trent Voigt

Exhibit A

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

PROMISSORY NOTE

$2,331,368.68 December  28, 2012

FOR VALUE RECEIVED, the undersigned, UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION, a Delaware corporation (the “Company”) with its principal place of business at Radnor Financial Center, Suite F-200, Radnor, PA 19087, promises to pay to the order of WLES, LP, or its registered transferees or assigns (the “Payee”), the principal sum of Two Million Three Hundred Thirty-One Thousand, Three Hundred Sixty-Eight and Sixty-Eight Hundreths Dollars ($2,331,368.68) together with simple interest on the unpaid principal balance from time to time outstanding, computed from the date of original issuance of this Promissory Note (this “Note”), at the rate of five percent (5%) per annum, on the basis of a 365-day year, until paid in full; provided, however that upon the occurrence and during the continuance of an Event of Default (as defined below), this Note will bear interest at a rate of eight percent (8%) per annum as measured from the date of the occurrence of such Event of Default. Interest only shall be payable in cash on a quarterly basis in arrears within five (5) business days of the end of each calendar quarter commencing on the completion of the first full calendar quarter following the Closing Date.

1.          Payment and Interest. Subject to earlier repayment as provided in Section 2 below, the outstanding principal amount of this Note, along with any and all accrued but unpaid interest hereunder, shall become due and payable on the earliest to occur of (i) December 31, 2017 (the “Maturity Date”), or (ii) an Event of Default (as defined in Section 2 below). All payments hereunder, whether for principal, interest or otherwise shall be made in immediately available United States funds sent to the Payee at the address set forth on the signature page hereto or such other address furnished in writing to the Company for that purpose or by wire-transfer to an account specified in writing by Payee. Interest hereunder shall accrue on the outstanding principal amount of this Note from the date hereof until the repayment in full of the principal amount hereunder and the payment of all accrued but unpaid interest hereunder. All payments received by the Payee will be applied first to costs of collection, if any, then to interest, and the balance to principal. The Company may prepay without penalty this Note in part or in whole at any time and from time to time.

2.          Event of Default. The outstanding principal and accrued interest hereunder shall, at the option of the Payee, become due and payable without notice or demand, upon the happening of any one of the following specified events (each, an “Event of Default”): (a) the Company shall fail to pay any principal or interest hereunder when due; or (b) the Company shall (i) admit in writing its inability to pay its debts generally as they become due; (ii) commence a voluntary case under Title 11 of the United States Code as from time to time in effect; (iii) file an answer or other pleading admitting or failing to deny the material allegations of a petition filed against it commencing an involuntary case under said Title 11, or seek, consent to or acquiesce in the relief therein provided, or fail to controvert timely the material allegations of any such petition; (iv) have a petition filed commencing involuntary bankruptcy proceedings against the Company in any involuntary case commenced under said Title 11; (v) seek relief as a debtor under any applicable law, other than said Title 11, of any jurisdiction relating to the liquidation or reorganization of debtors or to the modification or alteration of the rights of creditors, or consent to or acquiesce in such relief; (vi) have an order entered against the Company by a court of competent jurisdiction (A) finding it to be bankrupt or insolvent, (B) ordering or approving its liquidation, reorganization or any modification or alteration of the rights of its creditors, or (C) assuming custody of, or appointing a receiver or other custodian for, all or a substantial part of its property; or (vii) make a general assignment for the benefit of its creditors, or appoint or consent to the appointment of a receiver or other custodian for all or a substantial part of its property.

5.          Security. This Note is unsecured.

6.          Suits for Enforcement. Upon the occurrence of any one or more Events of Default, the Payee may proceed to protect and enforce its rights by suit in equity, action at law or by other appropriate proceeding, whether for the specific performance of any covenant or agreement contained in this Note, or in aid of the exercise of any power granted in this Note, or may proceed to enforce the payment of this Note, or to enforce any other legal or equitable right of the Payee. The Payee may direct the time, method and place of conducting any proceeding for any remedy available to it. In case of any Event of Default under this Note, the Company will pay to the Payee such amount as shall be sufficient to cover the reasonable costs and expenses of such Payee due to such Event of Default or in enforcing or collecting this Note.

7.          Notices. All notices, demands, requests or other communications that may be or are required to be given, served or sent by any party pursuant to this Note will be in writing, will reference this Note and shall be mailed by first class, registered or certified mail, return receipt requested, postage prepaid, or transmitted by hand delivery, overnight courier or facsimile transmission, addressed as follows: (a) if to the Company, to Universal Business Payment Solutions Acquisition Corporation, Radnor Financial Center, 150 North Radnor-Chester Road, Suite F-200, Radnor PA 19087, Attention: Chief Executive Officer, with a copy to Dechert LLP, 2929 Arch Street, Philadelphia, PA 19104, Attention: James A. Lebovitz, Facsimile (215) 994-22220 and (b) if to the Payee, at the address set forth on the signature page hereto, or at such other address or addresses as shall have been furnished in writing by such party to the Company. Each notice or other communication that is mailed, delivered or transmitted in the manner described above shall be deemed sufficiently given, served, sent and received for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, the fax confirmation sheet or the affidavit of messenger being deemed conclusive evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.

8.          General. No remedy herein conferred upon the Payee is intended to be exclusive of any other remedy and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise. No course of dealing between the Company and the Payee or any delay on the part of the Payee in exercising any rights hereunder shall operate as a waiver of any right. To the extent permitted by law, the Company hereby expressly waives presentment, demand, and protest, notice of demand, dishonor and nonpayment of this Note, and all other notices or demands of any kind in connection with the delivery, acceptance, performance, default or enforcement hereof, and hereby consents to any delays, extensions of time, renewals, waivers or modifications that may be granted or consented to by the Payee with respect to the time of payment. This Note may not be amended or modified, and no provisions hereof may be waived, without the written consent of the Company and the Payee. If any provision of this Note shall be declared void or unenforceable by any judicial or administrative authority, the validity of any other provision and of the entire Note shall not be affected thereby. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, the Company will issue a new Note, of like tenor and amount and dated the date to which interest has been paid, in lieu of such lost, stolen, destroyed or mutilated Note. This Note shall be binding upon and inure to the benefit of Payee and its successors and assigns. This Note and the rights and obligations herein may not be assigned by the Payee, except to fund entities affiliated with Payee or in the case of an individual Payee to an entity wholly-owned by such individual Payee, without the prior written consent of the Company.

9.          Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

IN WITNESS WHEREOF, the Company has executed this Note as an instrument under seal as of the day and year first above written.

UNIVERSAL BUSINESS PAYMENT SOLUTIONS ACQUISITION CORPORATION
By:	/s/ Bipin C. Shah
Name:	Bipin C. Shah
Title:	Chief Executive Officer
WLES, LP
By:	/s/ Trent Voigt
Name:	/s/ Trent Voigt
Title:

SIGNATURE PAGE TO UNSECURED CONVERTIBLE PROMISSORY NOTE

EXHIBIT B

Claims brought by:

BCC Merchant Solutions, Inc.

M&A Ventures

Pinnacle Processing Group