Contract analysis

I. EXECUTIVE SUMMARY On May 8, 2025, the Antitrust Division of the United States Department of Justice (the "DOJ" or the "Division") issued a Second Request for additional information and documentary material pursuant to Section 7A of the Clayton Act, 15 U.S.C. § 18a (the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the "HSR Act"), in connection with the proposed acquisition of VeloPay Systems, I

II. BACKGROUND ON THE TRANSACTION AND COMPETITIVE LANDSCAPE A. Transaction Overview HPE Fund IV is acquiring 100% of the outstanding equity interests of VeloPay for an aggregate consideration of approximately $1.9 billion in cash, representing $20.00 per fully diluted share of VeloPay common stock. The transaction is structured as a reverse triangular merger in which Merger Sub will merge with and into VeloPay, with

1. VeloPay Processing LLC — a Delaware limited liability company that serves as the primary operating entity for VeloPay's domestic payments processing and merchant acquiring business;

2. VeloPay Canada Inc. — a British Columbia corporation that operates VeloPay's Canadian payments processing business;

3. VeloPay Europe Unipessoal Lda. — a Portuguese limited liability company (sociedade unipessoal por quotas) that serves as VeloPay's European operational hub, processing transactions for merchants in the European Economic Area;

4. VeloPay Fraud intelligence Inc. — a Delaware corporation that develops and markets VeloPay's proprietary fraud detection and risk analytics platform, marketed under the brand name "VeloShield"; and

5. PayStream Gateway LLC — a Delaware limited liability company that operates VeloPay's payment gateway infrastructure, facilitating the routing of card-present and card-not-present transactions between merchants, issuing banks, and card networks. Pendleton Hawkes & Co. LLC ("Pendleton Hawkes") served as HPE Fund IV's exclusive financial advisor in connection with the acquisition. David Constantinou, Managing Directo

1. Clearpoint Ledger Solutions, Inc. ("Clearpoint") — Clearpoint is a provider of back-office reconciliation and ledger management software for community banks and credit unions. Clearpoint's platform enables financial institutions to automate the reconciliation of interbank payment flows, manage general ledger postings related to payment transactions, and generate regulatory compliance reports. Clearpoint serves app

2. Fortis Data Systems LLC ("Fortis") — Fortis is a data analytics and business intelligence platform serving the insurance and financial advisory industries. Fortis's core product is a suite of data warehousing and visualization tools that enable insurance carriers, managing general agents, and registered investment advisors to analyze policy performance, claims trends, and client portfolio analytics. Fortis does no

3. Bridgewell Compliance Technologies, Inc. ("Bridgewell") — Bridgewell provides regulatory compliance technology and managed compliance services to banks, fintech companies, and money services businesses. Bridgewell's platform assists clients with anti-money laundering (AML) compliance, know-your-customer (KYC) verification, and sanctions screening. While Bridgewell's customer base includes certain payments companie

III. SCOPE OF THE SECOND REQUEST — ANALYSIS OF SPECIFICATIONS A. Overview of the Second Request's Terms The Second Request issued on May 8, 2025 follows the standard DOJ format and includes three principal components: (i) document requests organized by specification number; (ii) interrogatories requiring narrative responses; and (iii) requests for structured data and information. The document requests consist of 22 s

IV. CUSTODIAN IDENTIFICATION AND PRIORITIZATION A. HPE Fund IV / Harrowgate Capital Management IV LLC Custodians We have organized the proposed custodians into three tiers based on the expected volume and relevance of their documents, as well as the priority of collection: Tier 1 — Primary Custodians (Immediate Collection):

1. Richard Harrowgate — Founder & Chairman, HCM IV. Mr. Harrowgate sits on HPE Fund IV's investment committee and would have received and reviewed investment committee memoranda and presentations relating to the VeloPay acquisition. His document volume is expected to be moderate, as his involvement is primarily at the approval and oversight level.

2. Priya Deshmukh — Managing Partner, Fund IV. Ms. Deshmukh is the senior partner responsible for Fund IV's investments and would have been involved in the strategic decision to pursue the VeloPay acquisition, the approval of the investment thesis, and discussions regarding the competitive landscape of the payments processing sector. Her document volume is expected to be moderate to significant.

3. Thomas Eriksen — Partner, Head of Financial Technology. Mr. Eriksen served as the primary deal lead for the VeloPay acquisition and is expected to have the largest volume of responsive documents among all custodians. His files will include deal evaluation materials, financial models, due diligence analyses, communications with Pendleton Hawkes & Co. and Calderwood & Harkness, investment committee memoranda, compet

4. Raj Mehta — Vice President, Financial Technology. Mr. Mehta served as the deal team associate on the VeloPay transaction, working directly under Mr. Eriksen. He is expected to have a significant volume of responsive documents, including drafts of financial models, due diligence workstream materials, and communications with third-party diligence providers.

5. Catherine Lam — Principal, Financial Technology. Ms. Lam participated in the VeloPay deal evaluation and due diligence process, with particular responsibility for the technology and product diligence workstream. Her documents will include diligence notes, product assessments, and competitive analyses. Tier 2 — Secondary Custodians:

6. Jonathan Sperling — Operating Partner, HCM IV. Mr. Sperling provides operational oversight across HPE Fund IV's financial technology portfolio and reviewed VeloPay materials in connection with the investment committee process. His document volume is expected to be low to moderate.

7. Diana Kozlov — Partner, Head of Capital Markets. Ms. Kozlov led the debt financing workstream for the VeloPay acquisition and may have documents relating to the financial structure and competitive rationale for the transaction, including materials shared with financing sources.

8. Michael Chen — CEO, Bridgewell Compliance Technologies, Inc. As the chief executive of the portfolio company with the closest adjacency to VeloPay's market, Mr. Chen may have documents discussing the payments processing industry, Bridgewell's relationships with payments companies, or any discussions with HPE Fund IV regarding VeloPay or competitive dynamics.

9. Elaine Rourke — CEO, Clearpoint Ledger Solutions, Inc. Ms. Rourke may have documents relating to Clearpoint's position in the financial institution software market and any discussions of the payments processing industry. We expect her document volume to be low.

10. Other Harrowgate investment professionals who participated in the VeloPay deal evaluation, due diligence, or investment committee process. We will confirm the full list with Thomas Eriksen and Priya Deshmukh and add any additional names as warranted. Tier 3 — If Required After DOJ Negotiation:

11. Administrative or support personnel at HCM IV who managed the due diligence data room or coordinated communications (e.g., executive assistants, deal operations staff). We do not anticipate that collection from these individuals will be necessary but will preserve their documents in case DOJ insists.

12. External advisors — specifically, personnel at Pendleton Hawkes & Co. (including David Constantinou). We note that DOJ may direct a separate third-party subpoena to Pendleton Hawkes; accordingly, we will preserve HPE Fund IV's communications with Pendleton Hawkes but will coordinate with Pendleton Hawkes's counsel before producing any Pendleton Hawkes-originated materials. B. Data Sources and Repositories The fol

V. DOCUMENT COLLECTION AND PROCESSING PROTOCOL A. Litigation Hold and Preservation Notices Preservation notices were issued to all relevant HPE Fund IV and HCM IV personnel at the time of the initial HSR filing on April 2, 2025. These notices instructed recipients to preserve all documents and electronically stored information ("ESI") relating to VeloPay, the payments processing industry, and the proposed acquisition

1. Supplemental Preservation Notices: Issue updated and expanded preservation notices to all Tier 1 and Tier 2 custodians identified above, including portfolio company personnel (Michael Chen at Bridgewell, Elaine Rourke at Clearpoint). The supplemental notices should specifically reference the Second Request, identify the relevant time period (January 1, 2021 to present), and provide clear instructions regarding the

2. Messaging Application Preservation: Issue specific instructions to all custodians regarding the preservation of communications on encrypted messaging applications, including Signal, Meridian Services Inc., and any other non-email communication platforms. Custodians should be instructed not to delete, disable auto-delete features for, or otherwise destroy any such communications pending completion of the Second Req

3. IT and Systems Preservation: Coordinate with HCM IV's IT department to ensure that no automated deletion policies (e.g., email retention policies, backup tape rotation) result in the destruction of potentially responsive ESI during the pendency of the Second Request response.

4. Portfolio Company Preservation: Coordinate with Bridgewell and Clearpoint legal/compliance teams to ensure that preservation notices are issued to relevant personnel at those entities and that document retention policies are suspended for relevant custodians and data sources. All supplemental preservation notices should be issued no later than May 14, 2025. B. Collection Methodology We recommend the following coll

VI. PRIVILEGE REVIEW PROTOCOL A. Attorney-Client Privilege and Work Product Doctrine A robust privilege review is essential to ensure that privileged communications and attorney work product are identified and withheld from production. We have identified the following categories of potentially privileged materials:

1. Calderwood & Harkness communications with HPE Fund IV. All communications between Calderwood & Harkness LLP personnel (including Sandra Tung, Oliver Mackenzie, Megan Chu, Derek Okonkwo, Leonard Cross, and Howard Bellamy, as well as any associates and support staff working on the matter) and HPE Fund IV or HCM IV personnel are protected by the attorney-client privilege. This includes emails, memoranda, phone call n

2. Communications with Pendleton Hawkes & Co. reflecting legal advice. Communications between HPE Fund IV and its financial advisor, Pendleton Hawkes & Co., that reflect, reference, or were prepared at the direction of counsel are potentially subject to the attorney-client privilege and/or the work product doctrine. However, the scope of privilege protection for communications with financial advisors is narrower and

3. Internal Calderwood & Harkness work product. All internal Calderwood & Harkness memoranda, analyses, draft documents, and research materials prepared in connection with the VeloPay transaction are protected by the work product doctrine. This includes due diligence memoranda, antitrust assessment memoranda (including this memorandum), draft HSR filings, and any analyses of competitive effects.

4. Prior antitrust counsel communications. If HPE Fund IV or HCM IV engaged prior antitrust counsel before retaining Calderwood & Harkness for the HSR process, any communications with such prior counsel may also be privileged. We will confirm with Thomas Eriksen whether any prior antitrust advice was obtained.

5. Portfolio company counsel communications. To the extent that Bridgewell, Clearpoint, or other portfolio companies have in-house or outside counsel who provided legal advice that is captured in the document collection, such communications may be subject to the attorney-client privilege of the portfolio company. We will need to coordinate with each portfolio company's counsel to ensure that privilege is appropriatel

VII. TIMING CONSIDERATIONS AND COMPLIANCE CERTIFICATION TARGET A. Merger Agreement Timeline Pressures The Merger Agreement was signed on March 18, 2025, and contemplates a closing as soon as practicable following the satisfaction or waiver of all conditions to closing. The receipt of HSR clearance — specifically, the expiration or termination of the HSR waiting period — is a condition to each party's obligation to cl