1003-00003 · Harrowgate Private Equity Fund IV LP · Correspondence

closing-notice-to-velopay.docx DOCUMENT M&A / Corporate

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CALDERWOOD & HARKNESS LLP 787 Seventh Avenue, 38th Floor New York, New York 10019

Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com

July 18, 2025

Matter Number: 1003-00003

VIA EMAIL AND OVERNIGHT COURIER

VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759

Attention: Nathan Aldridge, Chief Executive Officer

Danielle Moreau, General Counsel

With a copy to:

Whitford Jessup & Crane LLP 600 Congress Avenue, Suite 2400 Austin, Texas 78701

Attention: Rebecca Thornton-Hayes, Partner

James Okoro, Partner

Re: Closing Notice Pursuant to the Agreement and Plan of Merger, dated as of March 18, 2025, among Harrowgate Private Equity Fund IV LP, Harrowgate Velocity Merger Sub Inc., and VeloPay Systems, Inc.

Dear Mr. Aldridge and Ms. Moreau:

We are counsel to Harrowgate Private Equity Fund IV LP, a Delaware limited partnership ("Buyer" or "HPE Fund IV"), and Harrowgate Velocity Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of Buyer ("Merger Sub"), in connection with the Agreement and Plan of Merger, dated as of March 18, 2025 (as the same may have been amended, supplemented, or otherwise modified from time to time, the "Merger Agreement"), among Buyer, Merger Sub, and VeloPay Systems, Inc., a Delaware corporation (the "Company"). Capitalized terms used but not otherwise defined in this letter shall have the meanings ascribed to them in the Merger Agreement.

1. Purpose of Notice

This letter constitutes the formal notice delivered by Buyer pursuant to the Merger Agreement confirming the satisfaction or waiver, as applicable, of all conditions precedent to the obligation of Buyer and Merger Sub to consummate the Closing of the transactions contemplated by the Merger Agreement (the "Merger" and the "Closing," respectively).

Pursuant to the terms of the Merger Agreement, Buyer hereby designates Tuesday, July 22, 2025 as the Closing Date.

The Closing shall take place remotely via the electronic exchange of executed documents and signature pages (with original wet-ink signature pages to follow by overnight courier), and funds shall be wired in accordance with the Funds Flow Memorandum dated July 21, 2025, unless the parties mutually agree in writing to an alternative arrangement. Additional details concerning the logistics of the Closing are set forth in Section 6 below.

2. Satisfaction of Conditions to Buyer's Obligation to Close

Buyer has determined, after due inquiry and based on information available to Buyer as of the date hereof, that each of the conditions to Buyer's and Merger Sub's obligation to effect the Closing set forth in the Merger Agreement has been satisfied or, to the extent applicable, waived by Buyer. Buyer sets forth below, in reasonable detail, the basis for its determination with respect to each such condition.

(a) Accuracy of the Company's Representations and Warranties

Buyer has received confirmation from the Company and its advisors, and Buyer has no reason to believe otherwise, that the representations and warranties of the Company set forth in the Merger Agreement are true and correct in all material respects (or, with respect to those representations and warranties that are qualified by "materiality," "Material Adverse Effect," or words of similar import, true and correct in all respects) as of the date of the Merger Agreement and as of the Closing Date, as though made on and as of the Closing Date. To the extent that any such representations and warranties expressly relate to an earlier date, Buyer has confirmed that such representations and warranties were true and correct as of such earlier date, subject to the materiality qualifiers described in the preceding sentence.

Based on the foregoing and on Buyer's independent due diligence and monitoring activities conducted since the date of the Merger Agreement, Buyer has confirmed that no Material Adverse Effect on the business, financial condition, results of operations, or prospects of the Company and its Subsidiaries, taken as a whole, has occurred since the date of the Merger Agreement. This determination has been made with reference to, among other things, the Company's unaudited financial statements for the fiscal quarters ended March 31, 2025 and June 30, 2025, management reporting data furnished to Buyer through July 14, 2025, and the representations and certifications received from Company management.

At the Closing, Buyer expects to receive the Officer's Certificate of the Company, to be executed by Nathan Aldridge in his capacity as Chief Executive Officer, certifying the accuracy of the Company's representations and warranties in the Merger Agreement and confirming the absence of any Material Adverse Effect, in accordance with the requirements of the Merger Agreement. The delivery of such Officer's Certificate is a condition to the Closing, and Buyer respectfully requests that the Company prepare and execute such certificate for delivery at or prior to the Closing.

(b) Performance of the Company's Covenants

Buyer has determined, based on information available to Buyer as of the date hereof, that the Company has performed and complied in all material respects with all covenants and agreements required to be performed or complied with by the Company under the Merger Agreement at or prior to the Closing. This determination encompasses, without limitation, the Company's compliance with its obligations relating to the conduct of its business in the ordinary course consistent with past practice, the provision of access and information to Buyer and its representatives, cooperation with regulatory filings and financing efforts, and other affirmative and negative covenants set forth in the Merger Agreement.

At the Closing, Buyer expects to receive the Officer's Certificate of the Company, to be executed by Nathan Aldridge, certifying the Company's performance of and compliance with its covenants and agreements under the Merger Agreement in all material respects. Buyer respectfully requests that such Officer's Certificate be prepared and executed for delivery at or prior to the Closing.

The notification and report forms required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), were filed by Buyer and the Company with the United States Department of Justice (the "DOJ") and the Federal Trade Commission (the "FTC") on April 2, 2025. The filing was assigned HSR Transaction Number 25-0198374.

On May 8, 2025, the DOJ issued a Request for Additional Information and Documentary Material (the "Second Request") to Buyer and the Company. Buyer and the Company each devoted substantial resources to responding to the Second Request in a comprehensive and expeditious manner. Buyer certified its substantial compliance with the Second Request on June 27, 2025, and the Company certified its substantial compliance on or about the same date.

Following expiration of the additional waiting period triggered by the parties' substantial compliance certifications, the HSR Act waiting period expired on July 15, 2025 without any action by the DOJ or the FTC to block, challenge, or impose conditions on the consummation of the Merger. Neither the DOJ nor the FTC has issued a complaint, sought injunctive relief, or entered into any consent decree, hold-separate agreement, or other arrangement that would prohibit, restrain, or condition the consummation of the Merger.

Accordingly, the condition to Closing relating to the HSR Act has been satisfied in full.

(d) Regulatory Approvals — Investment Canada Act

In connection with the indirect acquisition of VeloPay Canada Inc., an Ontario corporation and a wholly-owned subsidiary of the Company, Buyer filed a notification under the Investment Canada Act (R.S.C. 1985, c. 28 (1st Supp.)) with Innovation, Science and Economic Development Canada on May 1, 2025.

On June 3, 2025, the Minister of Innovation, Science and Industry confirmed that the Minister was satisfied that the investment is likely to be of net benefit to Canada, and clearance was granted without conditions.

Accordingly, the condition to Closing relating to the Investment Canada Act has been satisfied in full.

(e) Regulatory Approvals — State Money Transmitter Licenses

As of the date hereof, the Company holds money transmitter licenses (or their equivalent) in forty-seven (47) states and the District of Columbia. In connection with the Merger, thirty-one (31) states required either a prior change of control approval or a pre- or post-closing notification in order to permit the transfer of control of the Company's money transmitter licenses.

Buyer and the Company have worked cooperatively with the applicable state regulatory authorities since the execution of the Merger Agreement. As of July 18, 2025, all required change of control approvals have been obtained and all required pre-closing notifications have been timely made. Buyer has reviewed the approvals and notifications and has confirmed that no state regulatory authority has imposed any condition, restriction, or requirement in connection with the change of control that would reasonably be expected to have a Material Adverse Effect on the Company or its Subsidiaries.

Accordingly, the condition to Closing relating to state money transmitter regulatory requirements has been satisfied in full.

(f) No Injunctions or Legal Restraints

Buyer has conducted a review of all publicly available records and has consulted with its advisors regarding pending or threatened litigation, administrative proceedings, and governmental actions relating to the Merger. Based on such review, Buyer has confirmed that, as of the date hereof:

(i) no temporary restraining order, preliminary or permanent injunction, or other order, judgment, or decree has been issued by any court of competent jurisdiction or any other Governmental Authority of the United States, any state thereof, Canada, or any other applicable jurisdiction that prohibits, restrains, or makes illegal the consummation of the Merger or any of the other transactions contemplated by the Merger Agreement; and

(ii) no law, statute, rule, regulation, executive order, or decree has been enacted, entered, promulgated, or enforced by any Governmental Authority that prohibits, restrains, or makes illegal the consummation of the Merger.

Accordingly, the condition to Closing relating to the absence of injunctions and legal restraints has been satisfied.

(g) Stockholder Approval

On March 18, 2025, contemporaneously with the execution of the Merger Agreement and in accordance with the Stockholder Support Agreement, dated as of the same date, among Buyer and certain stockholders of the Company, the holders of approximately 63.1% of the outstanding shares of Company Common Stock delivered a written consent adopting and approving the Merger Agreement and the transactions contemplated thereby. The consenting stockholders comprise:

The Information Statement required by Section 228(e) of the Delaware General Corporation Law (the "DGCL") was mailed to all stockholders of the Company who did not execute the written consent on April 14, 2025. The twenty (20)-calendar-day waiting period following the mailing of the Information Statement, as required by Section 228(e) of the DGCL, expired on May 4, 2025, and the corporate action effected by written consent became effective on such date.

Accordingly, the condition to Closing relating to stockholder approval has been satisfied in full.

(h) No Material Adverse Effect

As noted in Section 2(a) above, Buyer has confirmed, based on all information available to Buyer as of the date hereof — including, without limitation, the Company's financial statements, management reports, compliance certifications, and other data furnished to Buyer and its advisors — that no Material Adverse Effect (as defined in the Merger Agreement) has occurred with respect to the Company or its Subsidiaries since the date of the Merger Agreement. Buyer has conducted a thorough assessment of the Company's business operations, financial performance, regulatory standing, litigation exposure, and key commercial relationships and has not identified any event, occurrence, condition, change, or development that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect.

Accordingly, the condition to Closing relating to the absence of a Material Adverse Effect has been satisfied.

3. Satisfaction of Conditions to the Company's Obligation to Close

Buyer acknowledges that the conditions to the Company's obligation to consummate the Closing are independently assessed by the Company and its Board of Directors and advisors. Nevertheless, Buyer represents and confirms that it is prepared to satisfy all conditions to Closing that are within the control of Buyer and Merger Sub, as set forth below.

(a) Accuracy of Buyer's Representations and Warranties

Buyer and Merger Sub confirm that the representations and warranties of Buyer and Merger Sub set forth in the Merger Agreement are true and correct in all material respects as of the date hereof and will be true and correct in all material respects as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any such representations and warranties expressly relate to an earlier date, in which case as of such earlier date).

At the Closing, Buyer will deliver the Officer's Certificate of HPE Fund IV and Merger Sub, executed by Priya Deshmukh, Managing Partner of Harrowgate Capital Management IV LLC, in her capacity as the duly authorized officer of the general partner of HPE Fund IV and as the sole director and President of Merger Sub, certifying the accuracy of Buyer's and Merger Sub's representations and warranties in the Merger Agreement as of the Closing Date.

(b) Performance of Buyer's Covenants

Buyer and Merger Sub have performed and complied in all material respects with all covenants and agreements required to be performed or complied with by Buyer and Merger Sub under the Merger Agreement at or prior to the Closing, including, without limitation, their obligations with respect to confidentiality, regulatory filings, obtaining required consents, and cooperating with the Company in connection with the transactions contemplated by the Merger Agreement. The Officer's Certificate to be delivered by Priya Deshmukh at Closing will also certify Buyer's and Merger Sub's compliance with their respective covenants and agreements.

Buyer confirms that all financing necessary to consummate the Merger and the other transactions contemplated by the Merger Agreement is available and will be funded at the Closing. The sources of financing are as follows:

(i) Equity Commitment. HPE Fund IV will contribute equity in an aggregate amount of $1,140,000,000 pursuant to the Equity Commitment Letter, dated February 14, 2025, executed by Harrowgate Capital Management IV LLC, the general partner of HPE Fund IV. The equity commitment remains in full force and effect, and no event has occurred that would excuse HPE Fund IV's obligation to fund the equity commitment at the Closing.

(ii) Senior Secured Term Loan. A senior secured term loan facility in an aggregate principal amount of $500,000,000 will be provided by a syndicate of lenders arranged by Tralvendo National Bank, acting as Administrative Agent and Lead Arranger, pursuant to the Debt Commitment Letter, dated February 14, 2025 (Reference No. CRE-2025-SPF-0441). The term loan facility has a seven (7)-year maturity and bears interest at a rate equal to the Secured Overnight Financing Rate ("SOFR") plus 375 basis points per annum, subject to a SOFR floor and other terms and conditions to be set forth in the definitive Credit Agreement.

(iii) Senior Secured Revolving Credit Facility. A senior secured revolving credit facility in an aggregate committed amount of $260,000,000 will be provided by a syndicate of lenders arranged by Prairie State Bank, N.A., acting as Administrative Agent and Co-Arranger, with a five (5)-year maturity, bearing interest at a rate equal to SOFR plus 325 basis points per annum, subject to the terms and conditions of the definitive Credit Agreement. Buyer expects to draw approximately $254,700,000 under the revolving credit facility at the Closing.

(iv) Confirmation of Financing Conditions. Buyer has received written confirmation from each of Tralvendo National Bank and Prairie State Bank, N.A. that all conditions to funding under the Debt Commitment Letter have been satisfied or will be satisfied at or prior to the Closing, and that each such institution remains prepared to fund its respective commitments on the Closing Date in accordance with the terms of the Debt Commitment Letter and the definitive financing documentation.

The aggregate sources of funds described above are sufficient to (A) pay the aggregate Merger Consideration of $1,900,000,000 ($20.00 per share of Company Common Stock on a fully diluted basis) to the holders of Company Common Stock and other equity interests entitled thereto, (B) pay off the Company's existing indebtedness under the credit facility with Meridian Commercial Credit Corp. in an amount of approximately $113,230,000 (including accrued and unpaid interest through the anticipated Closing Date), (C) fund the indemnification escrow deposit of $133,000,000 with Garrison Trust Company, as escrow agent, and (D) pay estimated transaction expenses of the parties of approximately $48,500,000 in the aggregate.

4. Closing Deliverables of Buyer and Merger Sub

In accordance with the Merger Agreement and the Master Closing Checklist circulated to the parties, Buyer and Merger Sub will deliver or cause to be delivered at or prior to the Closing the following documents, instruments, certificates, and other deliverables:

(a) Certificates and Organizational Documents

(i) Officer's Certificate of HPE Fund IV and Merger Sub, executed by Priya Deshmukh, Managing Partner of Harrowgate Capital Management IV LLC, certifying the accuracy of Buyer's and Merger Sub's representations and warranties and the performance of Buyer's and Merger Sub's covenants under the Merger Agreement.

(ii) Secretary's Certificate of HPE Fund IV and Merger Sub, certifying (A) the incumbency and authority of the officers executing the Closing documents on behalf of HPE Fund IV and Merger Sub, (B) copies of the certificates of formation, certificates of incorporation, limited partnership agreements, bylaws, and other organizational documents of HPE Fund IV and Merger Sub, as applicable, (C) copies of the authorizing resolutions of the governing bodies of HPE Fund IV and Merger Sub, and (D) good standing of HPE Fund IV and Merger Sub in their respective jurisdictions of organization.

(iii) Good standing certificates for HPE Fund IV issued by the Secretary of State of the State of Delaware, and for Merger Sub issued by the Secretary of State of the State of Delaware, each dated within five (5) business days of the Closing Date.

(b) Merger and Corporate Filings

(i) Certificate of Merger, in the form required by Section 251 of the DGCL, duly executed by Merger Sub and the Company, for filing with the Secretary of State of the State of Delaware. The applicable filing numbers are as follows: VeloPay Systems, Inc. — Delaware File Number 5748392; Harrowgate Velocity Merger Sub Inc. — Delaware File Number 7291034.

(ii) Amended and Restated Certificate of Incorporation of VeloPay Systems, Inc. (as the Surviving Corporation), in the form attached to the Merger Agreement as Exhibit A, to become effective upon the filing of the Certificate of Merger.

(iii) Amended and Restated Bylaws of VeloPay Systems, Inc. (as the Surviving Corporation), in the form attached to the Merger Agreement as Exhibit B, to become effective upon the Effective Time.

(i) Executed Credit Agreement among VeloPay Systems, Inc. (as Borrower), HPE Fund IV (as Holdings), Tralvendo National Bank (as Administrative Agent for the Senior Secured Term Loan Facility), Prairie State Bank, N.A. (as Administrative Agent for the Senior Secured Revolving Credit Facility), and the Lenders party thereto.

(ii) Executed Guarantee and Collateral Agreement, pursuant to which each of VeloPay Processing LLC, VeloPay Fraud intelligence Inc., and PayStream Gateway LLC (each a domestic Subsidiary of the Company) will guarantee the obligations of the Borrower under the Credit Agreement and grant first-priority security interests in substantially all of their respective assets.

(iii) Executed Intercreditor Agreement between Tralvendo National Bank (in its capacity as Administrative Agent for the Term Loan Lenders) and Prairie State Bank, N.A. (in its capacity as Administrative Agent for the Revolving Credit Lenders), setting forth the relative rights and priorities of the Lenders with respect to the shared collateral.

(iv) Solvency Certificate, to be executed and delivered by Marcus Langford, Chief Financial Officer of VeloPay Systems, Inc., certifying the solvency of the Company and its Subsidiaries after giving effect to the Merger, the incurrence of the indebtedness under the Credit Agreement, and the other transactions contemplated by the Merger Agreement.

(d) Escrow and Paying Agent Arrangements

(i) Executed Escrow Agreement among HPE Fund IV, Nathan Aldridge (in his capacity as Stockholder Representative), and Garrison Trust Company, as escrow agent (Reference No. GT-ESC-2025-07223), providing for the deposit into escrow of $133,000,000 from the aggregate Merger Consideration to serve as security for the indemnification obligations of the Company's stockholders under the Merger Agreement.

(ii) Executed Paying Agent Agreement between VeloPay Systems, Inc. (as the Surviving Corporation) and Keystone Pacific Transfer Services Inc., as paying agent, setting forth the procedures for the payment of the Merger Consideration to the holders of Company Common Stock and other equity interests entitled thereto.

(e) Insurance.

(i) Buyer-side representations and warranties insurance policy issued by Oakbridge Omnivrel Insurance Group (Policy No. OFI-RW-2025-03187), providing coverage in respect of losses arising from breaches of the Company's representations and warranties in the Merger Agreement, with a policy limit of $190,000,000 and a retention (self-insured amount) of $19,000,000. The policy inception date is July 22, 2025, and the total premium of $5,320,000 (inclusive of all taxes and broker fees) has been paid in full.

(ii) Directors' and officers' tail insurance policy issued by Continental Shield Insurance Company (Policy No. CSI-DOT-2025-4821), providing a six (6)-year "tail" or "run-off" period of coverage for the current and former directors and officers of the Company with respect to claims arising from acts or omissions occurring prior to the Effective Time. The total premium for the tail policy is $2,150,000, which has been paid in full. The D&O tail policy was brokered by Greystone Risk Advisors LLC.

(f) Legal Opinions

(i) Legal opinion of Calderwood & Harkness LLP, as counsel to Buyer and Merger Sub, addressed to Tralvendo National Bank and Prairie State Bank, N.A., covering customary matters including the due authorization, execution, and delivery of the financing documents by Buyer and the Surviving Corporation, enforceability of the financing documents, and such other matters as may be required under the Credit Agreement.

(ii) Buyer respectfully requests that the Company cause Whitford Jessup & Crane LLP, as counsel to the Company, to deliver its closing legal opinion in the form previously agreed upon by counsel to the parties, covering customary matters including the due organization and good standing of the Company, the due authorization and approval of the Merger Agreement and the Merger, and such other matters as may be required under the Merger Agreement.

(g) Funds Flow

The Funds Flow Memorandum, dated July 21, 2025, detailing all wire transfers to be executed on the Closing Date — including, without limitation, the payment of the aggregate Merger Consideration, the funding of the escrow deposit, the payoff of indebtedness, the payment of transaction expenses, and the initial borrowings under the Credit Agreement — has been circulated to the Company and its counsel for review and is subject to final confirmation by all parties no later than 5:00 p.m. (Eastern Time) on July 21, 2025. Any discrepancies or required modifications should be communicated to the undersigned promptly.

(h) Other Deliverables

(i) FIRPTA Certificate. A certificate from the Company in the form required by Treasury Regulation § 1.1445-2(c)(3), certifying that the Company is not and has not been a "United States real property holding corporation" within the meaning of Section 897(c)(2) of the Internal Revenue Code of 1986, as amended, at any time during the applicable period specified in Section 897(c)(1)(A)(ii) thereof.

(ii) Payoff Letter. Payoff letter from Meridian Commercial Credit Corp., dated July 18, 2025 (contact person: Brian Castellano), specifying the aggregate payoff amount of approximately $113,230,000 (including principal, accrued and unpaid interest, and any prepayment premiums or breakage costs, if applicable, calculated through the anticipated Closing Date), together with a commitment to deliver lien releases upon receipt of the payoff amount.

(iii) IRS Forms W-9. Properly completed IRS Forms W-9 from the Company and from Nathan Aldridge, in his capacity as Stockholder Representative.

5. Company Deliverables Requested at Closing

In order to ensure a prompt and orderly Closing, Buyer respectfully requests that the Company deliver or cause to be delivered at or prior to the Closing the following documents, instruments, and certificates, to the extent not already delivered as of the date hereof:

(i) Officer's Certificate of VeloPay Systems, Inc., executed by Nathan Aldridge in his capacity as Chief Executive Officer, certifying (A) the accuracy of the Company's representations and warranties in the Merger Agreement as of the Closing Date, (B) the Company's compliance with its covenants and agreements under the Merger Agreement in all material respects, and (C) the absence of any Material Adverse Effect since the date of the Merger Agreement.

(ii) Secretary's Certificate of VeloPay Systems, Inc., executed by Danielle Moreau in her capacity as General Counsel and Secretary, certifying (A) the incumbency and authority of the officers executing Closing documents on behalf of the Company, (B) true and complete copies of the Company's certificate of incorporation and bylaws as in effect immediately prior to the Effective Time, (C) true and complete copies of the resolutions of the Board of Directors and the written consent of the stockholders of the Company authorizing and approving the Merger Agreement and the transactions contemplated thereby, and (D) the good standing of the Company in its jurisdiction of incorporation.

(iii) Good standing and certificates of existence for the Company and each of its Subsidiaries from their respective jurisdictions of organization, as follows:

• VeloPay Systems, Inc. — State of Delaware

• VeloPay Processing LLC — State of Delaware

• VeloPay Canada Inc. — Province of Ontario, Canada

• VeloPay Europe Unipessoal Lda. — Republic of Portugal

• VeloPay Fraud intelligence Inc. — State of Delaware

• PayStream Gateway LLC — State of Delaware

(iv) FIRPTA Certificate, in the form prescribed by Treasury Regulation § 1.1445-2(c)(3), duly executed by an authorized officer of the Company, together with the notice to be delivered to the Internal Revenue Service in accordance with Treasury Regulation § 1.1445-2(c)(3)(ii).

(v) Executed payoff letter and lien release commitment from Meridian Commercial Credit Corp., confirming the aggregate payoff amount (including principal, accrued interest, and any applicable fees or premiums), wire transfer instructions for the payoff, and a commitment to deliver UCC-3 termination statements and other lien release documentation promptly following receipt of the payoff amount.

(vi) All remaining change of control consents or evidence of notification under the Company's material customer contracts, as identified on the Master Closing Checklist, to the extent that any such consents or notifications remain outstanding as of the date hereof.

(vii) Closing legal opinion of Whitford Jessup & Crane LLP, in the form previously agreed upon by counsel to the parties, addressed to Buyer and Merger Sub (and, to the extent required, to Tralvendo National Bank and Prairie State Bank, N.A.).

(viii) Executed signature pages for all Closing documents to which the Company is a party, including, without limitation, the Certificate of Merger, the Credit Agreement, the Guarantee and Collateral Agreement, the Escrow Agreement, the Paying Agent Agreement, and such other documents and instruments as may be identified on the Master Closing Checklist.

6. Designation of Closing Date and Logistics

Pursuant to the applicable provisions of the Merger Agreement, Buyer hereby formally designates Tuesday, July 22, 2025 as the Closing Date. The following timeline and logistical arrangements shall govern the Closing:

(a) Pre-Closing Deliverables. All pre-closing deliverables, including executed signature pages, certificates, opinions, payoff letters, and all other documents required to be delivered at or prior to the Closing, shall be delivered to the undersigned (or to such other persons as may be designated on the Master Closing Checklist) no later than 5:00 p.m. (Eastern Time) on Monday, July 21, 2025.

(b) Remote Closing. The Closing shall be effected remotely via the electronic exchange of executed documents and signature pages. Executed counterparts of all Closing documents may be delivered in PDF format by email. Original wet-ink signature pages shall be sent by overnight courier to the addresses specified on the Master Closing Checklist promptly following the Closing.

(c) Wire Transfers. All wire transfers contemplated by the Funds Flow Memorandum shall be initiated on the morning of July 22, 2025, with target completion by 12:00 p.m. (Eastern Time) on such date, or as soon as practicable thereafter. Each party shall use commercially reasonable efforts to cause its respective banks to process all wire transfers on a same-day, priority basis.

(d) Filing of Certificate of Merger. The Certificate of Merger shall be filed with the Secretary of State of the State of Delaware on July 22, 2025, promptly following confirmation that all wire transfers contemplated by the Funds Flow Memorandum have been completed and all other conditions to the Closing have been satisfied or waived. Counsel to the parties shall coordinate the timing of such filing.

(e) Effective Time. The Effective Time of the Merger shall be the date and time of filing of the Certificate of Merger with the Secretary of State of the State of Delaware, or such later time as may be specified in the Certificate of Merger as agreed by the parties.

7. Reservation of Rights

This notice is delivered by Buyer solely for the purpose of confirming the satisfaction or waiver of the conditions to Closing and designating the Closing Date, and without prejudice to any of Buyer's rights, remedies, or defenses under the Merger Agreement, the Equity Commitment Letter, or applicable law.

Nothing in this notice shall constitute a waiver by Buyer or Merger Sub of any condition to Closing, or of any right, remedy, or defense under the Merger Agreement, at law, in equity, or otherwise, all of which are hereby expressly reserved in full. Without limiting the generality of the foregoing, the delivery of this notice shall not be deemed to constitute a waiver of (a) any condition to Closing that may cease to be satisfied between the date hereof and the Closing Date, (b) any right of Buyer or Merger Sub to terminate the Merger Agreement in accordance with its terms, or (c) any claim for indemnification, damages, or other relief that Buyer, Merger Sub, or the Surviving Corporation may have or may hereafter acquire under the Merger Agreement or applicable law.

Any condition to Closing that is described herein as having been satisfied shall be deemed satisfied solely as of the date of this notice. Buyer expressly reserves the right to assert that any such condition has ceased to be satisfied if circumstances change, or if new information becomes available to Buyer, prior to the Closing. In such event, Buyer's rights and remedies under the Merger Agreement, including the right to decline to consummate the Closing, shall remain fully available.

8. Contact Information

All communications regarding the Closing and the delivery of Closing documents should be directed to the following persons:

Sandra Tung, Partner Calderwood & Harkness LLP 787 Seventh Avenue, 38th Floor New York, New York 10019

Email: stung@calderwoodharkness.com

Telephone: (212) 558-4127

Megan Chu, Associate Calderwood & Harkness LLP 787 Seventh Avenue, 38th Floor New York, New York 10019

Email: mchu@calderwoodharkness.com

Telephone: (212) 558-4309

With a copy (which shall not constitute notice) to:

Priya Deshmukh, Managing Partner Harrowgate Capital Management IV LLC 300 King Street, Suite 4200 Wilmington, Delaware 19801

Email: pdeshmukh@harrowgatecapital.com

Telephone: (302) 427-6100

Thomas Eriksen, Partner Harrowgate Capital Management IV LLC 300 King Street, Suite 4200 Wilmington, Delaware 19801

Email: teriksen@harrowgatecapital.com

Telephone: (302) 427-6115

We appreciate the Company's and its advisors' cooperation in working toward a timely and efficient Closing, and we look forward to completing the transactions contemplated by the Merger Agreement on July 22, 2025. Please do not hesitate to contact the undersigned or any of the individuals identified above with any questions or to coordinate the delivery of Closing documents.

Very truly yours,

CALDERWOOD & HARKNESS LLP

On behalf of Harrowgate Private Equity Fund IV LP and Harrowgate Velocity Merger Sub Inc.

By: ________

Sandra Tung, Partner Calderwood & Harkness LLP

cc (via email):

Priya Deshmukh, Harrowgate Capital Management IV LLC Thomas Eriksen, Harrowgate Capital Management IV LLC Oliver Mackenzie, Calderwood & Harkness LLP Megan Chu, Calderwood & Harkness LLP Derek Okonkwo, Calderwood & Harkness LLP Howard Bellamy, Calderwood & Harkness LLP Leonard Cross, Calderwood & Harkness LLP Rebecca Thornton-Hayes, Whitford Jessup & Crane LLP James Okoro, Whitford Jessup & Crane LLP Andrew Birchfield, Tralvendo National Bank Monica Fuentes, Prairie State Bank, N.A. Gordon Strauss, Maplewood & Strauss LLP David Constantinou, Pendleton Hawkes & Co. Valerie Drummond, Garrison Trust Company Linda Matsumoto, Keystone Pacific Transfer Services Inc.

Stockholder	Shares (Approx. %)
Ridgeline Ventures Fund III LP	22.4%
Apex Growth Partners II LP	16.8%
Nathan Aldridge	14.2%
Sonia Reyes-Watkins	9.7%
Total	63.1%

CALDERWOOD & HARKNESS LLP 787 Seventh Avenue, 38th Floor New York, New York 10019
Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com
July 18, 2025
Matter Number: 1003-00003
VIA EMAIL AND OVERNIGHT COURIER
VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759
Attention: Nathan Aldridge, Chief Executive Officer
Danielle Moreau, General Counsel
With a copy to:
Whitford Jessup & Crane LLP 600 Congress Avenue, Suite 2400 Austin, Texas 78701
Attention: Rebecca Thornton-Hayes, Partner
James Okoro, Partner
Re: Closing Notice Pursuant to the Agreement and Plan of Merger, dated as of March 18, 2025, among Harrowgate Private Equity Fund IV LP, Harrowgate Velocity Merger Sub Inc., and VeloPay Systems, Inc.
Dear Mr. Aldridge and Ms. Moreau:
We are counsel to Harrowgate Private Equity Fund IV LP, a Delaware limited partnership ("Buyer" or "HPE Fund IV"), and Harrowgate Velocity Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of Buyer ("Merger Sub"), in connection with the Agreement and Plan of Merger, dated as of March 18, 2025 (as the same may have been amended, supplemented, or otherwise modified from time to time, the "Merger Agreement"), among Buyer, Merger Sub, and VeloPay Systems, Inc., a Delaware corporation (the "Company"). Capitalized terms used but not otherwise defined in this letter shall have the meanings ascribed to them in the Merger Agreement.
1. Purpose of Notice
This letter constitutes the formal notice delivered by Buyer pursuant to the Merger Agreement confirming the satisfaction or waiver, as applicable, of all conditions precedent to the obligation of Buyer and Merger Sub to consummate the Closing of the transactions contemplated by the Merger Agreement (the "Merger" and the "Closing," respectively).
Pursuant to the terms of the Merger Agreement, Buyer hereby designates Tuesday, July 22, 2025 as the Closing Date.
The Closing shall take place remotely via the electronic exchange of executed documents and signature pages (with original wet-ink signature pages to follow by overnight courier), and funds shall be wired in accordance with the Funds Flow Memorandum dated July 21, 2025, unless the parties mutually agree in writing to an alternative arrangement. Additional details concerning the logistics of the Closing are set forth in Section 6 below.
2. Satisfaction of Conditions to Buyer's Obligation to Close
Buyer has determined, after due inquiry and based on information available to Buyer as of the date hereof, that each of the conditions to Buyer's and Merger Sub's obligation to effect the Closing set forth in the Merger Agreement has been satisfied or, to the extent applicable, waived by Buyer. Buyer sets forth below, in reasonable detail, the basis for its determination with respect to each such condition.
(a) Accuracy of the Company's Representations and Warranties
Buyer has received confirmation from the Company and its advisors, and Buyer has no reason to believe otherwise, that the representations and warranties of the Company set forth in the Merger Agreement are true and correct in all material respects (or, with respect to those representations and warranties that are qualified by "materiality," "Material Adverse Effect," or words of similar import, true and correct in all respects) as of the date of the Merger Agreement and as of the Closing Date, as though made on and as of the Closing Date. To the extent that any such representations and warranties expressly relate to an earlier date, Buyer has confirmed that such representations and warranties were true and correct as of such earlier date, subject to the materiality qualifiers described in the preceding sentence.
Based on the foregoing and on Buyer's independent due diligence and monitoring activities conducted since the date of the Merger Agreement, Buyer has confirmed that no Material Adverse Effect on the business, financial condition, results of operations, or prospects of the Company and its Subsidiaries, taken as a whole, has occurred since the date of the Merger Agreement. This determination has been made with reference to, among other things, the Company's unaudited financial statements for the fiscal quarters ended March 31, 2025 and June 30, 2025, management reporting data furnished to Buyer through July 14, 2025, and the representations and certifications received from Company management.
At the Closing, Buyer expects to receive the Officer's Certificate of the Company, to be executed by Nathan Aldridge in his capacity as Chief Executive Officer, certifying the accuracy of the Company's representations and warranties in the Merger Agreement and confirming the absence of any Material Adverse Effect, in accordance with the requirements of the Merger Agreement. The delivery of such Officer's Certificate is a condition to the Closing, and Buyer respectfully requests that the Company prepare and execute such certificate for delivery at or prior to the Closing.
(b) Performance of the Company's Covenants
Buyer has determined, based on information available to Buyer as of the date hereof, that the Company has performed and complied in all material respects with all covenants and agreements required to be performed or complied with by the Company under the Merger Agreement at or prior to the Closing. This determination encompasses, without limitation, the Company's compliance with its obligations relating to the conduct of its business in the ordinary course consistent with past practice, the provision of access and information to Buyer and its representatives, cooperation with regulatory filings and financing efforts, and other affirmative and negative covenants set forth in the Merger Agreement.
At the Closing, Buyer expects to receive the Officer's Certificate of the Company, to be executed by Nathan Aldridge, certifying the Company's performance of and compliance with its covenants and agreements under the Merger Agreement in all material respects. Buyer respectfully requests that such Officer's Certificate be prepared and executed for delivery at or prior to the Closing.
(c) Regulatory Approvals — HSR Act Clearance
The notification and report forms required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), were filed by Buyer and the Company with the United States Department of Justice (the "DOJ") and the Federal Trade Commission (the "FTC") on April 2, 2025. The filing was assigned HSR Transaction Number 25-0198374.
On May 8, 2025, the DOJ issued a Request for Additional Information and Documentary Material (the "Second Request") to Buyer and the Company. Buyer and the Company each devoted substantial resources to responding to the Second Request in a comprehensive and expeditious manner. Buyer certified its substantial compliance with the Second Request on June 27, 2025, and the Company certified its substantial compliance on or about the same date.
Following expiration of the additional waiting period triggered by the parties' substantial compliance certifications, the HSR Act waiting period expired on July 15, 2025 without any action by the DOJ or the FTC to block, challenge, or impose conditions on the consummation of the Merger. Neither the DOJ nor the FTC has issued a complaint, sought injunctive relief, or entered into any consent decree, hold-separate agreement, or other arrangement that would prohibit, restrain, or condition the consummation of the Merger.
Accordingly, the condition to Closing relating to the HSR Act has been satisfied in full.
(d) Regulatory Approvals — Investment Canada Act
In connection with the indirect acquisition of VeloPay Canada Inc., an Ontario corporation and a wholly-owned subsidiary of the Company, Buyer filed a notification under the Investment Canada Act (R.S.C. 1985, c. 28 (1st Supp.)) with Innovation, Science and Economic Development Canada on May 1, 2025.
On June 3, 2025, the Minister of Innovation, Science and Industry confirmed that the Minister was satisfied that the investment is likely to be of net benefit to Canada, and clearance was granted without conditions.
Accordingly, the condition to Closing relating to the Investment Canada Act has been satisfied in full.
(e) Regulatory Approvals — State Money Transmitter Licenses
As of the date hereof, the Company holds money transmitter licenses (or their equivalent) in forty-seven (47) states and the District of Columbia. In connection with the Merger, thirty-one (31) states required either a prior change of control approval or a pre- or post-closing notification in order to permit the transfer of control of the Company's money transmitter licenses.
Buyer and the Company have worked cooperatively with the applicable state regulatory authorities since the execution of the Merger Agreement. As of July 18, 2025, all required change of control approvals have been obtained and all required pre-closing notifications have been timely made. Buyer has reviewed the approvals and notifications and has confirmed that no state regulatory authority has imposed any condition, restriction, or requirement in connection with the change of control that would reasonably be expected to have a Material Adverse Effect on the Company or its Subsidiaries.
Accordingly, the condition to Closing relating to state money transmitter regulatory requirements has been satisfied in full.
(f) No Injunctions or Legal Restraints
Buyer has conducted a review of all publicly available records and has consulted with its advisors regarding pending or threatened litigation, administrative proceedings, and governmental actions relating to the Merger. Based on such review, Buyer has confirmed that, as of the date hereof:
(i) no temporary restraining order, preliminary or permanent injunction, or other order, judgment, or decree has been issued by any court of competent jurisdiction or any other Governmental Authority of the United States, any state thereof, Canada, or any other applicable jurisdiction that prohibits, restrains, or makes illegal the consummation of the Merger or any of the other transactions contemplated by the Merger Agreement; and
(ii) no law, statute, rule, regulation, executive order, or decree has been enacted, entered, promulgated, or enforced by any Governmental Authority that prohibits, restrains, or makes illegal the consummation of the Merger.
Accordingly, the condition to Closing relating to the absence of injunctions and legal restraints has been satisfied.
(g) Stockholder Approval
On March 18, 2025, contemporaneously with the execution of the Merger Agreement and in accordance with the Stockholder Support Agreement, dated as of the same date, among Buyer and certain stockholders of the Company, the holders of approximately 63.1% of the outstanding shares of Company Common Stock delivered a written consent adopting and approving the Merger Agreement and the transactions contemplated thereby. The consenting stockholders comprise:
The Information Statement required by Section 228(e) of the Delaware General Corporation Law (the "DGCL") was mailed to all stockholders of the Company who did not execute the written consent on April 14, 2025. The twenty (20)-calendar-day waiting period following the mailing of the Information Statement, as required by Section 228(e) of the DGCL, expired on May 4, 2025, and the corporate action effected by written consent became effective on such date.
Accordingly, the condition to Closing relating to stockholder approval has been satisfied in full.
(h) No Material Adverse Effect
As noted in Section 2(a) above, Buyer has confirmed, based on all information available to Buyer as of the date hereof — including, without limitation, the Company's financial statements, management reports, compliance certifications, and other data furnished to Buyer and its advisors — that no Material Adverse Effect (as defined in the Merger Agreement) has occurred with respect to the Company or its Subsidiaries since the date of the Merger Agreement. Buyer has conducted a thorough assessment of the Company's business operations, financial performance, regulatory standing, litigation exposure, and key commercial relationships and has not identified any event, occurrence, condition, change, or development that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect.
Accordingly, the condition to Closing relating to the absence of a Material Adverse Effect has been satisfied.
3. Satisfaction of Conditions to the Company's Obligation to Close
Buyer acknowledges that the conditions to the Company's obligation to consummate the Closing are independently assessed by the Company and its Board of Directors and advisors. Nevertheless, Buyer represents and confirms that it is prepared to satisfy all conditions to Closing that are within the control of Buyer and Merger Sub, as set forth below.
(a) Accuracy of Buyer's Representations and Warranties
Buyer and Merger Sub confirm that the representations and warranties of Buyer and Merger Sub set forth in the Merger Agreement are true and correct in all material respects as of the date hereof and will be true and correct in all material respects as of the Closing Date, as though made on and as of the Closing Date (except to the extent that any such representations and warranties expressly relate to an earlier date, in which case as of such earlier date).
At the Closing, Buyer will deliver the Officer's Certificate of HPE Fund IV and Merger Sub, executed by Priya Deshmukh, Managing Partner of Harrowgate Capital Management IV LLC, in her capacity as the duly authorized officer of the general partner of HPE Fund IV and as the sole director and President of Merger Sub, certifying the accuracy of Buyer's and Merger Sub's representations and warranties in the Merger Agreement as of the Closing Date.
(b) Performance of Buyer's Covenants
Buyer and Merger Sub have performed and complied in all material respects with all covenants and agreements required to be performed or complied with by Buyer and Merger Sub under the Merger Agreement at or prior to the Closing, including, without limitation, their obligations with respect to confidentiality, regulatory filings, obtaining required consents, and cooperating with the Company in connection with the transactions contemplated by the Merger Agreement. The Officer's Certificate to be delivered by Priya Deshmukh at Closing will also certify Buyer's and Merger Sub's compliance with their respective covenants and agreements.
(c) Availability of Financing
Buyer confirms that all financing necessary to consummate the Merger and the other transactions contemplated by the Merger Agreement is available and will be funded at the Closing. The sources of financing are as follows:
(i) Equity Commitment. HPE Fund IV will contribute equity in an aggregate amount of $1,140,000,000 pursuant to the Equity Commitment Letter, dated February 14, 2025, executed by Harrowgate Capital Management IV LLC, the general partner of HPE Fund IV. The equity commitment remains in full force and effect, and no event has occurred that would excuse HPE Fund IV's obligation to fund the equity commitment at the Closing.
(ii) Senior Secured Term Loan. A senior secured term loan facility in an aggregate principal amount of $500,000,000 will be provided by a syndicate of lenders arranged by Tralvendo National Bank, acting as Administrative Agent and Lead Arranger, pursuant to the Debt Commitment Letter, dated February 14, 2025 (Reference No. CRE-2025-SPF-0441). The term loan facility has a seven (7)-year maturity and bears interest at a rate equal to the Secured Overnight Financing Rate ("SOFR") plus 375 basis points per annum, subject to a SOFR floor and other terms and conditions to be set forth in the definitive Credit Agreement.
(iii) Senior Secured Revolving Credit Facility. A senior secured revolving credit facility in an aggregate committed amount of $260,000,000 will be provided by a syndicate of lenders arranged by Prairie State Bank, N.A., acting as Administrative Agent and Co-Arranger, with a five (5)-year maturity, bearing interest at a rate equal to SOFR plus 325 basis points per annum, subject to the terms and conditions of the definitive Credit Agreement. Buyer expects to draw approximately $254,700,000 under the revolving credit facility at the Closing.
(iv) Confirmation of Financing Conditions. Buyer has received written confirmation from each of Tralvendo National Bank and Prairie State Bank, N.A. that all conditions to funding under the Debt Commitment Letter have been satisfied or will be satisfied at or prior to the Closing, and that each such institution remains prepared to fund its respective commitments on the Closing Date in accordance with the terms of the Debt Commitment Letter and the definitive financing documentation.
The aggregate sources of funds described above are sufficient to (A) pay the aggregate Merger Consideration of $1,900,000,000 ($20.00 per share of Company Common Stock on a fully diluted basis) to the holders of Company Common Stock and other equity interests entitled thereto, (B) pay off the Company's existing indebtedness under the credit facility with Meridian Commercial Credit Corp. in an amount of approximately $113,230,000 (including accrued and unpaid interest through the anticipated Closing Date), (C) fund the indemnification escrow deposit of $133,000,000 with Garrison Trust Company, as escrow agent, and (D) pay estimated transaction expenses of the parties of approximately $48,500,000 in the aggregate.
4. Closing Deliverables of Buyer and Merger Sub
In accordance with the Merger Agreement and the Master Closing Checklist circulated to the parties, Buyer and Merger Sub will deliver or cause to be delivered at or prior to the Closing the following documents, instruments, certificates, and other deliverables:
(a) Certificates and Organizational Documents
(i) Officer's Certificate of HPE Fund IV and Merger Sub, executed by Priya Deshmukh, Managing Partner of Harrowgate Capital Management IV LLC, certifying the accuracy of Buyer's and Merger Sub's representations and warranties and the performance of Buyer's and Merger Sub's covenants under the Merger Agreement.
(ii) Secretary's Certificate of HPE Fund IV and Merger Sub, certifying (A) the incumbency and authority of the officers executing the Closing documents on behalf of HPE Fund IV and Merger Sub, (B) copies of the certificates of formation, certificates of incorporation, limited partnership agreements, bylaws, and other organizational documents of HPE Fund IV and Merger Sub, as applicable, (C) copies of the authorizing resolutions of the governing bodies of HPE Fund IV and Merger Sub, and (D) good standing of HPE Fund IV and Merger Sub in their respective jurisdictions of organization.
(iii) Good standing certificates for HPE Fund IV issued by the Secretary of State of the State of Delaware, and for Merger Sub issued by the Secretary of State of the State of Delaware, each dated within five (5) business days of the Closing Date.
(b) Merger and Corporate Filings
(i) Certificate of Merger, in the form required by Section 251 of the DGCL, duly executed by Merger Sub and the Company, for filing with the Secretary of State of the State of Delaware. The applicable filing numbers are as follows: VeloPay Systems, Inc. — Delaware File Number 5748392; Harrowgate Velocity Merger Sub Inc. — Delaware File Number 7291034.
(ii) Amended and Restated Certificate of Incorporation of VeloPay Systems, Inc. (as the Surviving Corporation), in the form attached to the Merger Agreement as Exhibit A, to become effective upon the filing of the Certificate of Merger.
(iii) Amended and Restated Bylaws of VeloPay Systems, Inc. (as the Surviving Corporation), in the form attached to the Merger Agreement as Exhibit B, to become effective upon the Effective Time.
(c) Financing Documents
(i) Executed Credit Agreement among VeloPay Systems, Inc. (as Borrower), HPE Fund IV (as Holdings), Tralvendo National Bank (as Administrative Agent for the Senior Secured Term Loan Facility), Prairie State Bank, N.A. (as Administrative Agent for the Senior Secured Revolving Credit Facility), and the Lenders party thereto.
(ii) Executed Guarantee and Collateral Agreement, pursuant to which each of VeloPay Processing LLC, VeloPay Fraud intelligence Inc., and PayStream Gateway LLC (each a domestic Subsidiary of the Company) will guarantee the obligations of the Borrower under the Credit Agreement and grant first-priority security interests in substantially all of their respective assets.
(iii) Executed Intercreditor Agreement between Tralvendo National Bank (in its capacity as Administrative Agent for the Term Loan Lenders) and Prairie State Bank, N.A. (in its capacity as Administrative Agent for the Revolving Credit Lenders), setting forth the relative rights and priorities of the Lenders with respect to the shared collateral.
(iv) Solvency Certificate, to be executed and delivered by Marcus Langford, Chief Financial Officer of VeloPay Systems, Inc., certifying the solvency of the Company and its Subsidiaries after giving effect to the Merger, the incurrence of the indebtedness under the Credit Agreement, and the other transactions contemplated by the Merger Agreement.
(d) Escrow and Paying Agent Arrangements
(i) Executed Escrow Agreement among HPE Fund IV, Nathan Aldridge (in his capacity as Stockholder Representative), and Garrison Trust Company, as escrow agent (Reference No. GT-ESC-2025-07223), providing for the deposit into escrow of $133,000,000 from the aggregate Merger Consideration to serve as security for the indemnification obligations of the Company's stockholders under the Merger Agreement.
(ii) Executed Paying Agent Agreement between VeloPay Systems, Inc. (as the Surviving Corporation) and Keystone Pacific Transfer Services Inc., as paying agent, setting forth the procedures for the payment of the Merger Consideration to the holders of Company Common Stock and other equity interests entitled thereto.
(e) Insurance.  
(i) Buyer-side representations and warranties insurance policy issued by Oakbridge Omnivrel Insurance Group (Policy No. OFI-RW-2025-03187), providing coverage in respect of losses arising from breaches of the Company's representations and warranties in the Merger Agreement, with a policy limit of $190,000,000 and a retention (self-insured amount) of $19,000,000. The policy inception date is July 22, 2025, and the total premium of $5,320,000 (inclusive of all taxes and broker fees) has been paid in full.
(ii) Directors' and officers' tail insurance policy issued by Continental Shield Insurance Company (Policy No. CSI-DOT-2025-4821), providing a six (6)-year "tail" or "run-off" period of coverage for the current and former directors and officers of the Company with respect to claims arising from acts or omissions occurring prior to the Effective Time. The total premium for the tail policy is $2,150,000, which has been paid in full. The D&O tail policy was brokered by Greystone Risk Advisors LLC.
(f) Legal Opinions
(i) Legal opinion of Calderwood & Harkness LLP, as counsel to Buyer and Merger Sub, addressed to Tralvendo National Bank and Prairie State Bank, N.A., covering customary matters including the due authorization, execution, and delivery of the financing documents by Buyer and the Surviving Corporation, enforceability of the financing documents, and such other matters as may be required under the Credit Agreement.
(ii) Buyer respectfully requests that the Company cause Whitford Jessup & Crane LLP, as counsel to the Company, to deliver its closing legal opinion in the form previously agreed upon by counsel to the parties, covering customary matters including the due organization and good standing of the Company, the due authorization and approval of the Merger Agreement and the Merger, and such other matters as may be required under the Merger Agreement.
(g) Funds Flow
The Funds Flow Memorandum, dated July 21, 2025, detailing all wire transfers to be executed on the Closing Date — including, without limitation, the payment of the aggregate Merger Consideration, the funding of the escrow deposit, the payoff of indebtedness, the payment of transaction expenses, and the initial borrowings under the Credit Agreement — has been circulated to the Company and its counsel for review and is subject to final confirmation by all parties no later than 5:00 p.m. (Eastern Time) on July 21, 2025. Any discrepancies or required modifications should be communicated to the undersigned promptly.
(h) Other Deliverables
(i) FIRPTA Certificate. A certificate from the Company in the form required by Treasury Regulation § 1.1445-2(c)(3), certifying that the Company is not and has not been a "United States real property holding corporation" within the meaning of Section 897(c)(2) of the Internal Revenue Code of 1986, as amended, at any time during the applicable period specified in Section 897(c)(1)(A)(ii) thereof.
(ii) Payoff Letter. Payoff letter from Meridian Commercial Credit Corp., dated July 18, 2025 (contact person: Brian Castellano), specifying the aggregate payoff amount of approximately $113,230,000 (including principal, accrued and unpaid interest, and any prepayment premiums or breakage costs, if applicable, calculated through the anticipated Closing Date), together with a commitment to deliver lien releases upon receipt of the payoff amount.
(iii) IRS Forms W-9. Properly completed IRS Forms W-9 from the Company and from Nathan Aldridge, in his capacity as Stockholder Representative.
5. Company Deliverables Requested at Closing
In order to ensure a prompt and orderly Closing, Buyer respectfully requests that the Company deliver or cause to be delivered at or prior to the Closing the following documents, instruments, and certificates, to the extent not already delivered as of the date hereof:
(i) Officer's Certificate of VeloPay Systems, Inc., executed by Nathan Aldridge in his capacity as Chief Executive Officer, certifying (A) the accuracy of the Company's representations and warranties in the Merger Agreement as of the Closing Date, (B) the Company's compliance with its covenants and agreements under the Merger Agreement in all material respects, and (C) the absence of any Material Adverse Effect since the date of the Merger Agreement.
(ii) Secretary's Certificate of VeloPay Systems, Inc., executed by Danielle Moreau in her capacity as General Counsel and Secretary, certifying (A) the incumbency and authority of the officers executing Closing documents on behalf of the Company, (B) true and complete copies of the Company's certificate of incorporation and bylaws as in effect immediately prior to the Effective Time, (C) true and complete copies of the resolutions of the Board of Directors and the written consent of the stockholders of the Company authorizing and approving the Merger Agreement and the transactions contemplated thereby, and (D) the good standing of the Company in its jurisdiction of incorporation.
(iii) Good standing and certificates of existence for the Company and each of its Subsidiaries from their respective jurisdictions of organization, as follows:
•  VeloPay Systems, Inc. — State of Delaware
•  VeloPay Processing LLC — State of Delaware
•  VeloPay Canada Inc. — Province of Ontario, Canada
•  VeloPay Europe Unipessoal Lda. — Republic of Portugal
•  VeloPay Fraud intelligence Inc. — State of Delaware
•  PayStream Gateway LLC — State of Delaware
(iv) FIRPTA Certificate, in the form prescribed by Treasury Regulation § 1.1445-2(c)(3), duly executed by an authorized officer of the Company, together with the notice to be delivered to the Internal Revenue Service in accordance with Treasury Regulation § 1.1445-2(c)(3)(ii).
(v) Executed payoff letter and lien release commitment from Meridian Commercial Credit Corp., confirming the aggregate payoff amount (including principal, accrued interest, and any applicable fees or premiums), wire transfer instructions for the payoff, and a commitment to deliver UCC-3 termination statements and other lien release documentation promptly following receipt of the payoff amount.
(vi) All remaining change of control consents or evidence of notification under the Company's material customer contracts, as identified on the Master Closing Checklist, to the extent that any such consents or notifications remain outstanding as of the date hereof.
(vii) Closing legal opinion of Whitford Jessup & Crane LLP, in the form previously agreed upon by counsel to the parties, addressed to Buyer and Merger Sub (and, to the extent required, to Tralvendo National Bank and Prairie State Bank, N.A.).
(viii) Executed signature pages for all Closing documents to which the Company is a party, including, without limitation, the Certificate of Merger, the Credit Agreement, the Guarantee and Collateral Agreement, the Escrow Agreement, the Paying Agent Agreement, and such other documents and instruments as may be identified on the Master Closing Checklist.
6. Designation of Closing Date and Logistics
Pursuant to the applicable provisions of the Merger Agreement, Buyer hereby formally designates Tuesday, July 22, 2025 as the Closing Date. The following timeline and logistical arrangements shall govern the Closing:
(a) Pre-Closing Deliverables. All pre-closing deliverables, including executed signature pages, certificates, opinions, payoff letters, and all other documents required to be delivered at or prior to the Closing, shall be delivered to the undersigned (or to such other persons as may be designated on the Master Closing Checklist) no later than 5:00 p.m. (Eastern Time) on Monday, July 21, 2025.
(b) Remote Closing. The Closing shall be effected remotely via the electronic exchange of executed documents and signature pages. Executed counterparts of all Closing documents may be delivered in PDF format by email. Original wet-ink signature pages shall be sent by overnight courier to the addresses specified on the Master Closing Checklist promptly following the Closing.
(c) Wire Transfers. All wire transfers contemplated by the Funds Flow Memorandum shall be initiated on the morning of July 22, 2025, with target completion by 12:00 p.m. (Eastern Time) on such date, or as soon as practicable thereafter. Each party shall use commercially reasonable efforts to cause its respective banks to process all wire transfers on a same-day, priority basis.
(d) Filing of Certificate of Merger. The Certificate of Merger shall be filed with the Secretary of State of the State of Delaware on July 22, 2025, promptly following confirmation that all wire transfers contemplated by the Funds Flow Memorandum have been completed and all other conditions to the Closing have been satisfied or waived. Counsel to the parties shall coordinate the timing of such filing.
(e) Effective Time. The Effective Time of the Merger shall be the date and time of filing of the Certificate of Merger with the Secretary of State of the State of Delaware, or such later time as may be specified in the Certificate of Merger as agreed by the parties.
7. Reservation of Rights
This notice is delivered by Buyer solely for the purpose of confirming the satisfaction or waiver of the conditions to Closing and designating the Closing Date, and without prejudice to any of Buyer's rights, remedies, or defenses under the Merger Agreement, the Equity Commitment Letter, or applicable law.
Nothing in this notice shall constitute a waiver by Buyer or Merger Sub of any condition to Closing, or of any right, remedy, or defense under the Merger Agreement, at law, in equity, or otherwise, all of which are hereby expressly reserved in full. Without limiting the generality of the foregoing, the delivery of this notice shall not be deemed to constitute a waiver of (a) any condition to Closing that may cease to be satisfied between the date hereof and the Closing Date, (b) any right of Buyer or Merger Sub to terminate the Merger Agreement in accordance with its terms, or (c) any claim for indemnification, damages, or other relief that Buyer, Merger Sub, or the Surviving Corporation may have or may hereafter acquire under the Merger Agreement or applicable law.
Any condition to Closing that is described herein as having been satisfied shall be deemed satisfied solely as of the date of this notice. Buyer expressly reserves the right to assert that any such condition has ceased to be satisfied if circumstances change, or if new information becomes available to Buyer, prior to the Closing. In such event, Buyer's rights and remedies under the Merger Agreement, including the right to decline to consummate the Closing, shall remain fully available.
8. Contact Information
All communications regarding the Closing and the delivery of Closing documents should be directed to the following persons:
Sandra Tung, Partner Calderwood & Harkness LLP 787 Seventh Avenue, 38th Floor New York, New York 10019
Email: stung@calderwoodharkness.com
Telephone: (212) 558-4127
Megan Chu, Associate Calderwood & Harkness LLP 787 Seventh Avenue, 38th Floor New York, New York 10019
Email: mchu@calderwoodharkness.com
Telephone: (212) 558-4309
With a copy (which shall not constitute notice) to:
Priya Deshmukh, Managing Partner Harrowgate Capital Management IV LLC 300 King Street, Suite 4200 Wilmington, Delaware 19801
Email: pdeshmukh@harrowgatecapital.com
Telephone: (302) 427-6100
Thomas Eriksen, Partner Harrowgate Capital Management IV LLC 300 King Street, Suite 4200 Wilmington, Delaware 19801
Email: teriksen@harrowgatecapital.com
Telephone: (302) 427-6115
We appreciate the Company's and its advisors' cooperation in working toward a timely and efficient Closing, and we look forward to completing the transactions contemplated by the Merger Agreement on July 22, 2025. Please do not hesitate to contact the undersigned or any of the individuals identified above with any questions or to coordinate the delivery of Closing documents.
Very truly yours,
CALDERWOOD & HARKNESS LLP
On behalf of Harrowgate Private Equity Fund IV LP and Harrowgate Velocity Merger Sub Inc.
By: ________
Sandra Tung, Partner Calderwood & Harkness LLP
cc (via email):
Priya Deshmukh, Harrowgate Capital Management IV LLC Thomas Eriksen, Harrowgate Capital Management IV LLC Oliver Mackenzie, Calderwood & Harkness LLP Megan Chu, Calderwood & Harkness LLP Derek Okonkwo, Calderwood & Harkness LLP Howard Bellamy, Calderwood & Harkness LLP Leonard Cross, Calderwood & Harkness LLP Rebecca Thornton-Hayes, Whitford Jessup & Crane LLP James Okoro, Whitford Jessup & Crane LLP Andrew Birchfield, Tralvendo National Bank Monica Fuentes, Prairie State Bank, N.A. Gordon Strauss, Maplewood & Strauss LLP David Constantinou, Pendleton Hawkes & Co. Valerie Drummond, Garrison Trust Company Linda Matsumoto, Keystone Pacific Transfer Services Inc.
Stockholder | Shares (Approx. %)
Ridgeline Ventures Fund III LP | 22.4%
Apex Growth Partners II LP | 16.8%
Nathan Aldridge | 14.2%
Sonia Reyes-Watkins | 9.7%
Total | 63.1%

CALDERWOOD & HARKNESS LLP 787 Seventh Avenue, 38th Floor New York, New York 10019

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