Contract analysis

I. INTRODUCTION AND OVERVIEW 1.1 Purpose of Submission Calderwood & Harkness LLP ("Calderwood & Harkness" or "Counsel"), acting as outside legal counsel to Harrowgate Private Equity Fund IV LP ("HPE Fund IV" or the "Buyer"), respectfully submits this named representations and warranties insurance application to Oakbridge Omnivrel Insurance Group ("Oakbridge" or the "Insurer") in connection with the Buyer's proposed a

II. TRANSACTION SUMMARY 2.1 Transaction Structure The proposed transaction will be structured as a reverse triangular merger pursuant to Section 251 of the Delaware General Corporation Law (the "DGCL"). In the merger, Harrowgate Velocity Merger Sub Inc. ("Merger Sub"), a newly formed Delaware corporation and wholly-owned subsidiary of HPE Fund IV, will merge with and into VeloPay Systems, Inc. At the effective time o

III. TARVEX FINANCIAL OVERVIEW 3.1 Audited Financial Summary (FY2024) The following table summarizes VeloPay's key financial metrics for the fiscal year ended December 31, 2024, as reported in the audited consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and audited by Vance Thornbury & Co. LLP: VeloPay's revenue of $412,300,000 represents growth driv

IV. PROPOSED MERGER AGREEMENT — KEY PROVISIONS 4.1 Status of Merger Agreement The initial draft of the Agreement and Plan of Merger was prepared by Calderwood & Harkness LLP on behalf of the Buyer and circulated to VeloPay's counsel, Whitford Jessup & Crane LLP, on January 17, 2025. As of the date of this submission, negotiations on the Merger Agreement are ongoing between Calderwood & Harkness and Whitford Jessup &

V. DUE DILIGENCE SCOPE AND METHODOLOGY 5.1 Overall Diligence Process The Buyer's due diligence process for the proposed acquisition of VeloPay commenced in early October 2024 and has continued through the date of this submission. The overall timeline and key milestones for the diligence process are as follows: • October 7, 2024: Calderwood & Harkness LLP formally engaged by HPE Fund IV as outside legal counsel for th

1. Corporate Organization and Governance. Review of VeloPay's and each subsidiary's organizational documents (certificates of incorporation, bylaws, operating agreements, articles of association), board and stockholder minutes, capitalization records, option plan documentation, warrant agreements, foreign qualifications, and good standing certificates.

2. Material Contracts. Review of VeloPay's top twenty-five (25) customer agreements by revenue, key vendor contracts, technology licensing agreements, partnership and channel arrangements, co-marketing agreements, and other material commercial contracts, with particular focus on change of control provisions, exclusivity obligations, non-compete restrictions, termination rights, and assignability. 3. intellectual Prop

4. Regulatory and Licensing. Review of VeloPay's money transmitter licenses across forty-seven (47) states and the District of Columbia, including license terms, renewal schedules, surety bond requirements, and change of control notification and approval requirements. Review of PCI-DSS Level 1 compliance documentation and most recent compliance assessment. Assessment of Canadian regulatory requirements applicable to

5. Litigation and Contingent Liabilities. Review of all pending, threatened, or reasonably anticipated litigation, arbitration, or administrative proceedings involving VeloPay and its subsidiaries. Assessment of contingent liability exposure.

6. Employment and Benefits. Review of executive employment agreements (for Nathan Aldridge, Sonia Reyes-Watkins, Marcus Langford, and Danielle Moreau), equity compensation plans (stock option plan, RSU plan), ERISA compliance for VeloPay's 401(k) plan and health and welfare benefit plans, and Section 280G parachute payment exposure analysis.

7. Tax. Review of VeloPay's federal, state, and international tax positions, including the accuracy and completeness of tax returns, assessment of net operating loss ("NOL") carryforwards and potential Section 382 limitations arising from the change of ownership, analysis of intercompany transfer pricing arrangements between VeloPay's U.S. entities and VeloPay Canada Inc. and VeloPay Europe, Unipessoal Lda., and eval

8. Real Property. Review of VeloPay's lease agreements for its office spaces in Austin, Texas; Denver, Colorado; Toronto, Ontario, Canada; and Lisbon, Portugal. VeloPay does not own any real property.

9. Insurance. Review of VeloPay's insurance program, including general liability, directors' and officers' liability, cyber liability, errors and omissions, and property insurance policies.

10. Environmental. Assessment of environmental compliance matters. Given that VeloPay is a technology company that leases all of its office space and does not engage in manufacturing or industrial activities, environmental exposure is minimal.

11. Data Privacy and Cybersecurity. Review of VeloPay's data privacy policies, data processing agreements with merchants and third parties, cybersecurity infrastructure (at a high level), CCPA compliance, state privacy law compliance, Canadian PIPEDA compliance, and PCI-DSS compliance documentation.

12. Anti-Corruption and FCPA. Review of VeloPay's anti-corruption compliance program and FCPA policies, with particular attention to VeloPay's international operations in Canada and Portugal. Sanctions screening of key counterparties and principals. 5.3 Third-Party Reports Reviewed In connection with the due diligence process, the Buyer and its advisors have reviewed the following third-party reports and assessments:

VI. KEY DUE DILIGENCE FINDINGS AND RISK AREAS This Section VI summarizes the key findings and risk areas identified through the due diligence process described in Section V above. Calderwood & Harkness has prepared detailed due diligence memoranda for each workstream, which are cross-referenced in the summary of key due diligence findings attached as Exhibit F to this submission. The following discussion is intended

Section 280G Parachute Payment Analysis. A Section 280G parachute payment analysis is in progress, conducted by Calderwood & Harkness's tax group in consultation with the Buyer's tax advisors. Preliminary analysis indicates that the change of control payments and benefits payable to certain key executives — including the combination of accelerated equity vesting, severance payments, and other change of control benefi