Contract analysis

I. Executive Summary and Purpose This memorandum summarizes the material contractual relationships of VeloPay Systems, Inc. ("VeloPay" or the "Company") and its subsidiaries, as reviewed in connection with the proposed acquisition of VeloPay by Harrowgate Private Equity Fund IV LP ("HPE Fund IV" or the "Sponsor") for an aggregate enterprise value of approximately $1.9 billion (the "Transaction"). The Transaction is s

II. Methodology and Sources A. Data Room Review All contracts reviewed in connection with this memorandum were obtained from VeloPay's virtual data room hosted on Thackeray Solutions (Project Neptune), which was opened on December 12, 2024. As of the date of this memorandum, the data room contains approximately 3,400 documents organized into the following folders relevant to this analysis: • Folder 3.1: Customer Agre

III. Summary of Key Findings and Risk Items Based on our review of VeloPay's material contracts, the following key findings and risk items have been identified. Each is discussed in greater detail in the relevant section of this memorandum.

1. Change of Control Provisions — 14 Material Customer Contracts. Fourteen of the top 25 customer agreements contain change of control provisions that will be triggered by the Merger. These provisions variously require prior written consent from the counterparty, notification to the counterparty within a specified period, or provide the counterparty with a right to terminate the agreement upon a change of control. Th

2. Anti-Assignment Provisions. Three customer agreements within the top 25 contain anti-assignment provisions without express change of control clauses. Because the reverse triangular merger does not result in a transfer or assignment of VeloPay's contractual rights (VeloPay remains the surviving entity and continues as the party to each contract), the Merger should not constitute an "assignment" under these provisio

3. Vendor Exclusivity Restrictions. Two vendor contracts contain exclusivity provisions that restrict VeloPay's ability to engage alternative providers for certain services during the term of the agreement. These exclusivity obligations should be evaluated in the context of post-acquisition integration planning, particularly if HPE Fund IV intends to rationalize VeloPay's vendor relationships or consolidate services

4. Cloud Infrastructure Agreement — Favorable Terms. VeloPay's primary cloud infrastructure agreement with Stratosphere Cloud Services, Inc. has a remaining term of approximately 3 years, includes favorable pricing with predictable annual escalators, and does not contain a change of control termination right. This is a favorable finding, given that the Stratosphere relationship underpins VeloPay's entire payment proc

5. Meridian Commercial Credit Corp. — Mandatory Prepayment. VeloPay's existing senior secured term loan with Meridian Commercial Credit Corp. ($112 million outstanding principal) contains a mandatory prepayment trigger upon a change of control of VeloPay. The Merger will trigger this provision. The credit facility will be paid off in full at the closing of the Transaction, with an estimated payoff amount of approxima

6. Technology License Anti-Assignment Language. Several of VeloPay's third-party technology licenses contain restrictions on sublicensing or assignment that could, depending on their drafting, be interpreted to encompass a change of control. Two licenses in particular — the Irongate Software, Inc. database license and the CipherVault Technologies, Inc. tokenization license — contain language that warrants careful rev

7. PayStream Gateway LLC — No Outstanding Obligations. The 2021 acquisition agreement for PayStream Gateway LLC ($45 million purchase price) contains surviving representations and an earnout provision that has been fully earned and paid. The standard survival period for representations and warranties has expired. There are no outstanding contingent payment obligations or indemnification claims. The PayStream technolo

8. BIN Sponsorship and Settlement Banking — Critical Consent Requirements. The BIN sponsorship agreement with Trident Merchant Bank, N.A. and the settlement banking agreement with Commonwealth Settlement Bank, N.A. both require change of control consent. These agreements are operationally critical — VeloPay cannot process card transactions without a BIN sponsor, and merchant settlement cannot occur without the settle

IV. Top 25 Customer Agreements A. Overview. VeloPay serves more than 14,000 merchants across multiple verticals, including retail, e-commerce, hospitality, healthcare, financial services, digital media, and education. Revenue is concentrated among enterprise and upper-mid-market customers. The top 25 customers by revenue contribution represent approximately 58% of VeloPay's FY2024 audited revenue, or approximately $2

V. Key Vendor and Supplier Contracts A. Overview. VeloPay's operations depend on approximately 40 significant vendor relationships across multiple service categories, including cloud infrastructure and hosting, card network sponsorship and processing, banking and settlement, telecommunications and network services, fraud detection and data analytics, and professional services and consulting. VeloPay's total annual ve