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

paying-agent-funding-instructions-letter.docx DOCUMENT M&A / Corporate

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VELOPAY SYSTEMS, INC. (as the Surviving Corporation) 1455 Innovation Parkway, Suite 800 Austin, Texas 78759

July 21, 2025

Keystone Pacific Transfer Services Inc. 250 Royall Street, Suite 100 Canton, Massachusetts 02021

Attention: Linda Matsumoto, Vice President, Corporate Actions

Re: Paying Agent Funding Instructions Pursuant to that certain Paying Agent Agreement, dated as of July 22, 2025 (the "Paying Agent Agreement"), by and between VeloPay Systems, Inc. (the "Surviving Corporation") and Keystone Pacific Transfer Services Inc. (the "Paying Agent"), and in connection with the Agreement and Plan of Merger, dated as of March 18, 2025 (the "Merger Agreement"), by and among Harrowgate Private Equity Fund IV LP ("Parent"), Harrowgate Velocity Merger Sub Inc. ("Merger Sub"), and VeloPay Systems, Inc. (the "Company")

Dear Ms. Matsumoto:

1. Introduction and Authorization

This letter (this "Funding Instruction Letter") constitutes the formal direction and instruction from VeloPay Systems, Inc., as the Surviving Corporation, to Keystone Pacific Transfer Services Inc., as the Paying Agent, regarding the deposit of the merger consideration and the procedures for disbursement of such merger consideration to the former holders of shares of common stock, par value $0.001 per share, of the Company ("Company Common Stock"), stock options granted under the Company's 2018 Equity Incentive Plan and 2022 Equity Incentive Plan (collectively, the "Company Stock Options"), restricted stock units granted under the Company's equity incentive plans ("Company RSUs"), and warrants to purchase shares of Company Common Stock ("Company Warrants," and, together with the Company Stock Options and Company RSUs, the "Company Equity Awards"), all as contemplated by the Paying Agent Agreement and the Merger Agreement.

Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Paying Agent Agreement or, if not defined therein, in the Merger Agreement. In the event of any conflict between the terms of this Funding Instruction Letter and the terms of the Paying Agent Agreement, the Paying Agent Agreement shall govern and control.

As you are aware, on March 18, 2025, Parent, Merger Sub, and the Company entered into the Merger Agreement, pursuant to which Merger Sub will merge with and into the Company (the "Merger"), with the Company continuing as the surviving corporation and a wholly-owned subsidiary of Parent. The stockholders of the Company approved the Merger Agreement and the transactions contemplated thereby at a Special Meeting of Stockholders held on June 27, 2025, at which approximately 91.3% of the outstanding shares of Company Common Stock entitled to vote were voted in favor of adoption of the Merger Agreement.

The Merger is expected to become effective upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware on July 22, 2025, at or about 9:00 a.m. Eastern Time (the "Effective Time"), pursuant to Section 251 of the Delaware General Corporation Law. At the Effective Time, Merger Sub will merge with and into the Company, the separate corporate existence of Merger Sub will cease, and the Company will continue as the surviving corporation under the name "VeloPay Systems, Inc." as a wholly-owned subsidiary of Harrowgate Private Equity Fund IV LP. Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than shares held in treasury by the Company and shares owned by Parent or Merger Sub, which shall be cancelled) will be converted into the right to receive the Per Share Merger Consideration (as defined below), subject to the terms and conditions set forth in the Merger Agreement, including the pro rata escrow holdback described in Section 4 below.

This Funding Instruction Letter is being delivered to the Paying Agent in advance of the Effective Time to ensure that all necessary arrangements are in place for the timely deposit of the Payment Fund and the commencement of the disbursement process immediately following the closing of the Merger.

2. Deposit of Merger Consideration — Payment Fund

2.1 Aggregate Merger Consideration

Pursuant to Article II of the Merger Agreement, the aggregate merger consideration payable to all holders of Company securities (including holders of Company Common Stock, Company Stock Options, Company RSUs, and Company Warrants) in connection with the Merger is $1,900,000,000.00 (One Billion Nine Hundred Million Dollars and No Cents) (the "Aggregate Merger Consideration").

The per-share merger consideration payable to each holder of Company Common Stock for each share of Company Common Stock outstanding immediately prior to the Effective Time is $20.00 per share (the "Per Share Merger Consideration"), payable in cash, without interest, on a fully diluted, as-converted basis.

The fully diluted share count upon which the Aggregate Merger Consideration is calculated is 95,000,000 shares, consisting of the following:

The foregoing share counts have been confirmed by the Company's transfer agent records, the Company's equity plan administrator (Tidewater Software), and the Company's independent registered public accounting firm, Severin Beck CPAs LLP, and are set forth in greater detail in the Closing Certificate delivered by the Company pursuant to Section 7.02(e) of the Merger Agreement.

2.2 Amount to Be Deposited with the Paying Agent

On or prior to the Effective Time on July 22, 2025, the Surviving Corporation shall cause to be deposited with the Paying Agent, by wire transfer of immediately available funds, the aggregate amount of the merger consideration payable to stockholders and holders of Company Equity Awards, net of amounts required to be deposited separately with the Escrow Agent as described below.

Escrow Holdback. Pursuant to Section 2.12 of the Merger Agreement and Section 3 of the Escrow Agreement, dated as of July 22, 2025, by and among the Surviving Corporation, Garrison Trust Company, as escrow agent (the "Escrow Agent"), and Nathan Aldridge, as the Stockholder Representative (the "Escrow Agreement"), an amount equal to $133,000,000.00 (One Hundred Thirty-Three Million Dollars and No Cents) (the "Escrow Amount"), representing seven percent (7%) of the Aggregate Merger Consideration, shall be deposited separately with the Escrow Agent at or promptly following the Effective Time. The Escrow Amount shall be deposited with Garrison Trust Company pursuant to Reference Number GT-ESC-2025-07223 and shall be held and disbursed in accordance with the terms and conditions of the Escrow Agreement. The Escrow Amount secures the indemnification obligations of the former stockholders of the Company under Article IX of the Merger Agreement.

Net Amount to Be Deposited with the Paying Agent. The net amount to be deposited with the Paying Agent (the "Payment Fund") shall be the Aggregate Merger Consideration minus the Escrow Amount, calculated as follows:

The net amount to be deposited with the Paying Agent is therefore $1,767,000,000.00 (One Billion Seven Hundred Sixty-Seven Million Dollars and No Cents), subject to adjustment as may be necessary to account for the amounts payable to holders of Company Stock Options (net spread payments), Company RSUs (accelerated payout), and Company Warrants (net spread payments), as described in Section 2.3 below. This amount shall constitute the "Payment Fund" as defined in Section 1.1 of the Paying Agent Agreement. The Payment Fund shall be held in trust by the Paying Agent for the benefit of the former holders of Company securities entitled to receive a portion of the merger consideration, and shall be disbursed in accordance with the procedures set forth in this Funding Instruction Letter and the Paying Agent Agreement.

For the avoidance of doubt, the Payment Fund includes amounts payable to holders of Company Common Stock, as well as amounts payable to holders of Company Stock Options, Company RSUs, and Company Warrants, to the extent such payments are to be made by the Paying Agent (rather than through the Surviving Corporation's payroll system) as specified in Section 3.5 below.

2.3 Component Calculations — Equity Award Payments

The following sets forth the calculation of the merger consideration payable with respect to each category of Company Equity Awards:

Vested Stock Options. At the Effective Time, each outstanding Company Stock Option that is vested and exercisable as of immediately prior to the Effective Time (each, a "Vested Option") shall be cancelled and converted into the right to receive a cash payment equal to (i) $20.00 minus the per-share exercise price of such Vested Option, multiplied by (ii) the number of shares of Company Common Stock subject to such Vested Option (the "Option Net Spread Amount"). No payment shall be made with respect to any Vested Option that has a per-share exercise price equal to or greater than $20.00 (i.e., any "out-of-the-money" option). The aggregate exercise prices vary by grant, as set forth in the option cancellation schedule attached hereto as Exhibit A. The Paying Agent is instructed to disburse the applicable Option Net Spread Amounts to the holders of Vested Options in accordance with the option cancellation schedule attached as Exhibit A, subject to the applicable tax withholding described in Section 3.4 below and subject to the pro rata escrow holdback described in Section 4 below.

Unvested Stock Options. At the Effective Time, each outstanding Company Stock Option that is unvested as of immediately prior to the Effective Time (each, an "Unvested Option") shall be treated as follows:

(a) Accelerated Portion (50%). Fifty percent (50%) of the shares of Company Common Stock subject to each Unvested Option shall accelerate and become fully vested as of the Effective Time. The holder of each such accelerated Unvested Option shall be entitled to receive a cash payment equal to (i) $20.00 minus the per-share exercise price of such Unvested Option, multiplied by (ii) the number of shares of Company Common Stock subject to the accelerated portion of such Unvested Option, subject to applicable tax withholding and the pro rata escrow holdback. Such payments shall be disbursed through the Paying Agent or the Surviving Corporation's payroll system, as specified in Exhibit A.

(b) Replacement Award Portion (50%). The remaining fifty percent (50%) of the shares of Company Common Stock subject to each Unvested Option shall be converted into replacement equity awards of Parent (or an affiliate thereof) in accordance with Section 2.08(b) of the Merger Agreement. No cash payment shall be made by the Paying Agent with respect to the replacement award portion of any Unvested Option. The Surviving Corporation's human resources department shall administer the issuance of replacement awards separately from the Payment Fund.

Restricted Stock Units. At the Effective Time, all 3,200,000 outstanding Company RSUs (whether vested or unvested) shall be fully accelerated, cancelled, and converted into the right to receive a cash payment equal to $20.00 per RSU, for an aggregate payment amount of:

3,200,000 RSUs × $20.00 = $64,000,000.00

Such payments shall be made through the Paying Agent or the Surviving Corporation's payroll system, as applicable, subject to applicable employment tax withholding and the pro rata escrow holdback. The RSU cancellation schedule is included in Exhibit A.

Warrants. At the Effective Time, all 1,800,000 outstanding Company Warrants shall be cancelled and converted into the right to receive a cash payment equal to $20.00 minus the exercise price of $8.50 per warrant, for a per-warrant payment of $11.50, resulting in an aggregate warrant cancellation payment of:

1,800,000 warrants × $11.50 = $20,700,000.00

Such payments shall be made through the Paying Agent, subject to applicable tax withholding and the pro rata escrow holdback. The warrant cancellation schedule is included in Exhibit A.

2.4 Wire Transfer Instructions

The Surviving Corporation will cause the Payment Fund to be wired to the Paying Agent's designated account on the morning of July 22, 2025, no later than 10:00 a.m. Eastern Time. The Payment Fund shall be transmitted by federal wire transfer of immediately available funds to the following account of the Paying Agent:

Bank Name: [Paying Agent's designated depository bank — to be confirmed by Keystone Pacific and set forth in Exhibit C]

ABA Routing Number: [To be confirmed by Keystone Pacific and set forth in Exhibit C]

Account Name: Keystone Pacific Transfer Services Inc. — VeloPay Merger Consideration Trust Account

Account Number: [To be confirmed by Keystone Pacific and set forth in Exhibit C]

Reference: VeloPay Systems, Inc. — Merger Consideration / Paying Agent Agreement dated July 22, 2025

The Paying Agent is requested to provide its complete wire transfer instructions, including any additional intermediary bank information, by completing and returning Exhibit C attached hereto no later than 5:00 p.m. Eastern Time on July 21, 2025, to allow sufficient time for the Surviving Corporation to arrange the wire transfer.

Upon receipt of the Payment Fund, the Paying Agent is instructed to hold the Payment Fund in a segregated trust account for the sole benefit of the former holders of Company securities who are entitled to receive a portion of the merger consideration, pending disbursement in accordance with the Paying Agent Agreement and this Funding Instruction Letter. The Payment Fund shall not be commingled with any other funds of the Paying Agent or any other person, and shall be maintained in a separate account clearly identified as being held for the benefit of the former stockholders and equity award holders of the Company.

The Surviving Corporation shall provide the Paying Agent with prompt written confirmation of the wire transfer, including the Federal Reserve wire reference number, upon completion of the transfer on July 22, 2025.

3. Procedures for Disbursement to Stockholders

3.1 Letters of Transmittal

As promptly as practicable after the Effective Time, and in any event within five (5) business days following the Effective Time (i.e., no later than July 29, 2025), the Paying Agent shall mail to each holder of record of Company Common Stock as of immediately prior to the Effective Time:

(a) A Letter of Transmittal, substantially in the form attached as Exhibit B to the Paying Agent Agreement (the form of which was prepared by Calderwood & Harkness LLP, counsel to Parent, and has been approved by Drummond & Ames LLP, counsel to the Company), together with any additional enclosures or inserts as may be directed by the Surviving Corporation; and

(b) Written instructions advising each holder of the procedures for surrendering stock certificates (or, in the case of book-entry shares, effecting book-entry transfers through the Depository Trust Company ("DTC") or otherwise) in exchange for the Per Share Merger Consideration of $20.00 per share, less the pro rata escrow holdback described in Section 4 below and any applicable withholding taxes.

The Letter of Transmittal shall include, among other things, a certification by the holder under penalty of perjury as to such holder's taxpayer identification number (or a claim of exemption from backup withholding), an election as to the form of payment (check or wire transfer), and, for non-U.S. holders, appropriate certifications regarding FIRPTA and treaty benefits, as applicable.

The Paying Agent shall also post the Letter of Transmittal and related instructions on a dedicated web portal accessible to stockholders, the URL and access credentials for which shall be included in the mailing. The Paying Agent shall maintain a toll-free telephone number dedicated to handling stockholder inquiries relating to the Letter of Transmittal process, which number shall be included in the mailing materials.

The Paying Agent acknowledges that it has been provided with a complete and accurate list of all holders of record of Company Common Stock as of immediately prior to the Effective Time, as reflected on the stock transfer records of the Company maintained by the Paying Agent in its capacity as transfer agent for the Company.

3.2 Surrender of Certificates / Book-Entry Shares

Upon receipt by the Paying Agent of:

(i) a properly completed and duly executed Letter of Transmittal (or a facsimile or electronic copy thereof, in each case bearing an original or electronic signature acceptable to the Paying Agent); and

(ii) the stock certificate(s) representing the holder's shares of Company Common Stock (or, in the case of book-entry shares held through DTC or the direct registration system, a properly executed agent's message transmitted through the Automated Tender Offer Program ("ATOP") of DTC or such other evidence of transfer as the Paying Agent may reasonably require),

the Paying Agent shall, as promptly as practicable (and in any event within three (3) business days of receipt of a complete and conforming submission), pay to such holder an amount equal to the Per Share Merger Consideration of $20.00 multiplied by the number of shares of Company Common Stock represented by such surrendered certificate(s) or book-entry position, less (A) the pro rata escrow holdback amount of $1.40 per share, as described in Section 4 below, and (B) any amounts required to be deducted and withheld under applicable tax law, as described in Section 3.4 below.

Accordingly, the net initial cash payment per share to each stockholder shall be $18.60 per share (i.e., $20.00 minus $1.40 escrow holdback), subject to applicable withholding taxes.

Payment shall be made in the form elected by the holder in the Letter of Transmittal:

(a) Check. If the holder elects payment by check, the Paying Agent shall mail a check drawn on the Payment Fund account, payable to the order of the holder (or such other payee as may be specified in the Letter of Transmittal, subject to compliance with applicable "know your customer" and anti-money laundering requirements), to the address specified in the Letter of Transmittal or, if no address is specified, to the last known address of such holder as reflected in the stock transfer records.

(b) Wire Transfer. If the holder elects payment by wire transfer, the holder shall provide complete wire transfer instructions (including bank name, ABA routing number or SWIFT code, account name, and account number) in the Letter of Transmittal, and the Paying Agent shall transmit the applicable merger consideration to such account by federal wire transfer of immediately available funds. Wire transfer payments may be subject to a processing fee of up to $25.00, which shall be deducted from the holder's payment.

All stock certificates surrendered to the Paying Agent in connection with the Merger shall be cancelled and shall not be returned to the holder. From and after the Effective Time, each stock certificate that previously represented shares of Company Common Stock shall represent only the right to receive the Per Share Merger Consideration (less the pro rata escrow holdback and applicable withholding taxes), without interest.

3.3 Lost, Stolen, or Destroyed Certificates

In the event that any stock certificate shall have been lost, stolen, or destroyed, the holder of such certificate shall provide to the Paying Agent:

(a) an affidavit of loss, in a form reasonably satisfactory to the Surviving Corporation and the Paying Agent, setting forth the facts and circumstances surrounding the loss, theft, or destruction of such certificate; and

(b) if required by the Surviving Corporation in its reasonable discretion (which requirement shall be communicated to the Paying Agent in writing), a customary indemnity bond in an amount and from a surety company reasonably satisfactory to the Surviving Corporation and the Paying Agent, to protect the Surviving Corporation and the Paying Agent against any claim that may be made against them with respect to such lost, stolen, or destroyed certificate.

Upon receipt of such affidavit (and indemnity bond, if required), the Paying Agent shall treat such submission as a valid surrender of the applicable shares and shall disburse the Per Share Merger Consideration (less the pro rata escrow holdback and applicable withholding taxes) in the same manner as if the original certificate had been surrendered. The Surviving Corporation has determined that indemnity bonds shall be required for claims involving 10,000 or more shares; for claims involving fewer than 10,000 shares, an affidavit of loss alone shall be sufficient, unless the Surviving Corporation otherwise directs the Paying Agent in writing.

3.4 Withholding Obligations

The Paying Agent, the Surviving Corporation, and Parent shall each be entitled to deduct and withhold from the merger consideration (including any portion thereof payable to holders of Company Equity Awards) such amounts as are required to be deducted and withheld under the Internal Revenue Code of 1986, as amended (the "Code"), or any provision of applicable federal, state, local, or foreign tax law, including, without limitation:

(a) Backup Withholding. Backup withholding under Section 3406 of the Code at the rate then in effect (currently 24%) shall apply to any payment of merger consideration to a holder who fails to provide a properly completed IRS Form W-9 (Request for Taxpayer Identification Number and Certification) or, in the case of a non-U.S. holder, an appropriate IRS Form W-8 series form (e.g., Form W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, or W-8IMY, as applicable). The Paying Agent shall collect IRS Form W-9 (or the appropriate Form W-8 series form) from each holder prior to any disbursement of merger consideration. If a valid Form W-9 or Form W-8 is not received by the Paying Agent at the time of disbursement, the Paying Agent shall apply backup withholding at the applicable rate and shall remit such withheld amounts to the Internal Revenue Service in accordance with applicable law.

(b) FIRPTA Withholding. The Surviving Corporation hereby represents and certifies to the Paying Agent that it has delivered to Parent a certification, dated as of the Closing Date and signed by an authorized officer of the Company, in compliance with Treasury Regulation § 1.1445-2(c)(3), certifying that VeloPay Systems, Inc. is not, and has not been during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code, a "United States real property holding corporation" within the meaning of Section 897(c) of the Code. Accordingly, no withholding under FIRPTA (Section 1445 of the Code) is required on payments of merger consideration to non-U.S. stockholders solely on account of FIRPTA. Notwithstanding the foregoing, the Paying Agent acknowledges that other withholding obligations may apply to payments to non-U.S. holders (including, without limitation, withholding under Section 1441 or 1442 of the Code on amounts treated as dividends or fixed or determinable annual or periodical income, and any applicable withholding under FATCA (Sections 1471–1474 of the Code)), and the Paying Agent shall comply with all such withholding obligations in accordance with applicable law.

(c) Employment Tax Withholding. With respect to payments made to holders of Company Stock Options and Company RSUs that are treated as compensation for federal income tax purposes, the Paying Agent (or the Surviving Corporation's payroll department, as applicable) shall withhold applicable federal income tax, Social Security tax (FICA), and Medicare tax, as well as any applicable state and local income or employment taxes, in accordance with the holder's most recently filed IRS Form W-4 and applicable state withholding forms on file with the Company.

To the extent that amounts are so deducted and withheld and are timely remitted to the applicable governmental authority, such withheld amounts shall be treated for all purposes of the Merger Agreement and this Funding Instruction Letter as having been paid to the holder in respect of which such deduction and withholding was made.

3.5 Option, RSU, and Warrant Holder Payments

Payments to holders of cancelled Company Stock Options (including the accelerated portion of Unvested Options), accelerated Company RSUs, and cancelled Company Warrants shall be administered as follows:

(a) Payments Through the Surviving Corporation's Payroll System. To the extent that any payment in respect of Company Stock Options or Company RSUs constitutes compensation subject to employment tax withholding (including federal income tax withholding under Section 3402 of the Code and FICA/Medicare tax under Sections 3101 and 3111 of the Code), such payment shall be processed through the Surviving Corporation's payroll system (administered by Ashgrove Solutions) and shall be reported on the applicable holder's IRS Form W-2 for the 2025 tax year. The Paying Agent shall transfer to the Surviving Corporation's payroll account such amounts as the Surviving Corporation shall direct for purposes of funding such payroll-processed payments.

(b) Payments Directly by the Paying Agent. To the extent that any payment in respect of Company Stock Options, Company RSUs, or Company Warrants is designated in Exhibit A as payable directly by the Paying Agent (e.g., payments to former employees who are not on the Surviving Corporation's payroll as of the Closing Date, or payments to warrant holders who are not employees), the Paying Agent shall disburse such payments directly to the applicable holders upon receipt of a properly completed Letter of Transmittal or cancellation agreement (as applicable) and IRS Form W-9 or W-8, and shall report such payments on IRS Form 1099-MISC or 1099-B, as applicable.

The Paying Agent shall coordinate with the Surviving Corporation's payroll department (contact: Jennifer Wexler, Vice President, Human Resources, VeloPay Systems, Inc.) to ensure the proper allocation of payments between the payroll system and the Payment Fund, proper tax withholding on all equity award payments, and timely and accurate W-2 or 1099 information reporting for such payments.

4. Escrow Holdback — Pro Rata Reduction

Each stockholder's merger consideration payment (including payments to holders of Company Equity Awards) is subject to a pro rata reduction representing such holder's allocable share of the Escrow Amount of $133,000,000.00 (the "Escrow Holdback"). The Escrow Amount has been deposited with Garrison Trust Company, as Escrow Agent, to secure the indemnification obligations of the former stockholders of the Company under Article IX of the Merger Agreement.

The contact information for the Escrow Agent is as follows:

Garrison Trust Company One Liberty Plaza, 42nd Floor New York, New York 10006

Attention: Valerie Drummond, Vice President, Corporate Trust

Reference: GT-ESC-2025-07223

The escrow holdback percentage is seven percent (7%) of the Per Share Merger Consideration. Accordingly, the per-share escrow holdback amount is:

$20.00 × 7% = $1.40 per share withheld from each stockholder's merger consideration payment

The net initial payment to each stockholder (before applicable tax withholding) shall therefore be:

$20.00 − $1.40 = $18.60 per share

The same pro rata escrow holdback percentage shall apply to payments in respect of Company Stock Options (applied to the net spread amount), Company RSUs, and Company Warrants. The detailed holdback calculations for each equity award category are set forth in Exhibit A.

Escrow Release Schedule. The Escrow Amount shall be released in accordance with the following schedule, subject to the terms and conditions of the Escrow Agreement:

Upon each escrow release, the amounts released by the Escrow Agent to the Stockholder Representative (Nathan Aldridge) shall be distributed pro rata to the former stockholders and equity award holders of the Company in proportion to their respective shares of the Aggregate Merger Consideration. The Paying Agent shall coordinate with the Stockholder Representative and Garrison Trust Company for the disbursement of released escrow amounts to former stockholders on a pro rata basis. The Surviving Corporation shall provide the Paying Agent with a written direction and an updated payment spreadsheet at the time of each escrow release, setting forth the amounts payable to each former stockholder and the applicable bank or mailing information for each payment.

To the extent that any indemnification claims are pending at the time of a scheduled escrow release, the Escrow Agent shall retain in escrow an amount equal to the aggregate amount of all such pending claims (as determined in accordance with the Escrow Agreement), and the balance shall be released. Upon final resolution of all pending claims, any remaining escrow funds shall be released to the Stockholder Representative for pro rata distribution.

5. Unclaimed Funds and Escheatment

Any portion of the Payment Fund (including any interest or other income earned thereon) that remains undistributed to former holders of Company securities on the date that is twelve (12) months after the Effective Time (i.e., on or about July 22, 2026) shall, upon written demand by the Surviving Corporation, be delivered by the Paying Agent to the Surviving Corporation. From and after such delivery, any former stockholders or holders of Company Equity Awards who have not yet surrendered their certificates or complied with the Letter of Transmittal procedures (or the applicable equity award cancellation procedures) shall thereafter look only to the Surviving Corporation (subject to abandoned property, escheat, and similar laws) for payment of their merger consideration, without interest thereon.

Neither the Surviving Corporation, Parent, the Paying Agent, nor any other party hereto shall be liable to any former holder of Company securities for any merger consideration (or any interest or other amount in respect thereof) delivered to a public official pursuant to any applicable abandoned property, escheat, or similar law of any jurisdiction.

The Surviving Corporation and the Paying Agent shall each comply with all applicable abandoned property, escheat, and similar laws with respect to unclaimed merger consideration amounts. The Paying Agent shall perform commercially reasonable due diligence searches, including mailings to last known addresses and, where appropriate, skip tracing, prior to escheating any unclaimed funds. The Paying Agent shall provide the Surviving Corporation with reports on unclaimed property status no less frequently than quarterly, and shall coordinate with the Surviving Corporation's legal department regarding compliance with the reporting and remittance requirements of the applicable jurisdictions.

6. Cancellation of Treasury Shares and Parent-Owned Shares

In accordance with Section 2.01(b) of the Merger Agreement, any shares of Company Common Stock held in treasury by the Company immediately prior to the Effective Time, and any shares of Company Common Stock owned by Parent, Merger Sub, or any direct or indirect wholly-owned subsidiary of Parent (other than the Company and its subsidiaries), shall be automatically cancelled at the Effective Time and shall cease to exist, and no merger consideration or other consideration shall be payable with respect thereto.

The Paying Agent is hereby instructed not to make any disbursement of merger consideration with respect to any cancelled treasury shares or Parent-owned shares. As of the date hereof, the Company holds 215,000 shares of Company Common Stock in treasury, and neither Parent nor Merger Sub owns any shares of Company Common Stock (other than through the ownership of the Company following the Effective Time). The Surviving Corporation shall promptly notify the Paying Agent in writing if any of the foregoing share counts change prior to the Effective Time.

7. Investment of Payment Fund

The Paying Agent is authorized and instructed to invest and reinvest the Payment Fund pending disbursement, in accordance with Section 4.03 of the Paying Agent Agreement, solely in the following categories of investments:

(i) direct obligations of the United States of America (including United States Treasury bills, notes, and bonds);

(ii) obligations for which the full and timely payment of principal and interest is guaranteed by the United States of America; or

(iii) money market funds that are registered under the Investment Company Act of 1940, as amended, and that invest solely in obligations described in clauses (i) and (ii) above (including, without limitation, the Halcyon Capital Group, the Crowne Albany Partners, or the Northgate Private Capital);

in each case, with maturities not exceeding thirty (30) days from the date of investment.

Any income, interest, dividends, or other earnings realized from the investment of the Payment Fund shall be for the account of the Surviving Corporation and shall not increase the amount of the merger consideration payable to any former holder of Company securities. The Paying Agent shall account for all such earnings separately and shall remit such earnings to the Surviving Corporation upon demand or, if earlier, upon the termination of the Paying Agent's engagement under the Paying Agent Agreement. Any losses realized on the investment of the Payment Fund shall be borne by the Surviving Corporation and shall not reduce the amount of the merger consideration payable to any former holder of Company securities; in the event of any such loss, the Surviving Corporation shall promptly deposit additional funds with the Paying Agent sufficient to cover the shortfall.

8. Reporting Obligations

The Paying Agent shall provide the Surviving Corporation with weekly status reports (each, a "Disbursement Report") commencing on the first Friday following the Effective Time and continuing until such time as the Payment Fund has been fully disbursed or returned to the Surviving Corporation. Each Disbursement Report shall detail, at a minimum, the following information:

(a) the number of Letters of Transmittal received and processed during the applicable reporting period and on a cumulative basis since the Effective Time;

(b) the aggregate dollar amount of merger consideration disbursed to former holders of Company securities during the applicable reporting period and on a cumulative basis since the Effective Time;

(c) the remaining Payment Fund balance as of the end of the applicable reporting period, including a breakdown of cash on hand and invested amounts;

(d) the number of outstanding or unprocessed claims (i.e., Letters of Transmittal received but not yet processed, and holders who have not yet submitted a Letter of Transmittal), together with a summary of the reasons for any delays in processing (e.g., incomplete documentation, missing W-9/W-8, lost certificate claims); and

(e) any other information reasonably requested by the Surviving Corporation or Parent.

A form of the Disbursement Report is attached hereto as Exhibit D for reference. The Paying Agent shall deliver each Disbursement Report by email to the Surviving Corporation contacts identified in Section 9 below no later than 5:00 p.m. Eastern Time on the applicable Friday.

In addition to the foregoing, the Paying Agent shall prepare, file, and furnish all IRS information returns (including, without limitation, Forms 1099-B, 1099-MISC, 1099-DIV, and 1042-S, as applicable) and any state or local tax information reporting, as required by applicable law, in connection with payments of merger consideration from the Payment Fund. The Paying Agent shall provide copies of all such information returns to the Surviving Corporation promptly upon filing. The Paying Agent shall also provide the Surviving Corporation with all information and records reasonably necessary for the Surviving Corporation to prepare and file any tax returns or information returns required in connection with the Merger or the payments contemplated hereby.

9. Key Contact Information

The following individuals and entities are the key contacts for purposes of the transactions contemplated by this Funding Instruction Letter, the Paying Agent Agreement, and the Merger Agreement:

Surviving Corporation Contacts:

Danielle Moreau General Counsel VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759 Telephone: (512) 555-4100

Email: d.moreau@velopay.com

Marcus Langford Chief Financial Officer VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759 Telephone: (512) 555-4105

Email: m.langford@velopay.com

Parent's Counsel:.

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

Attention: Sandra Tung, Responsible Partner; Megan Chu, Lead Associate

Telephone: (212) 555-6000

Email: stung@calderwoodharkness.com; mchu@calderwoodharkness.com

Matter Number: 1003-00003

Stockholder Representative:.

Nathan Aldridge c/o VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759 Telephone: (512) 555-4001

Email: n.aldridge@velopay.com

Escrow Agent:.

Garrison Trust Company One Liberty Plaza, 42nd Floor New York, New York 10006

Attention: Valerie Drummond, Vice President, Corporate Trust

Telephone: (212) 555-7300

Email: v.drummond@garrisontrust.com

Reference: GT-ESC-2025-07223

All notices, reports, and other communications to be delivered pursuant to this Funding Instruction Letter or the Paying Agent Agreement shall be delivered to the applicable persons at the addresses set forth above (or such other address as may be specified by written notice from time to time) in the manner prescribed by Section 8.01 of the Paying Agent Agreement.

10. Acknowledgment and Confirmation

The Surviving Corporation hereby requests that Keystone Pacific Transfer Services Inc. acknowledge receipt of this Funding Instruction Letter and confirm its readiness to (a) receive the Payment Fund deposit by wire transfer on the morning of July 22, 2025, and (b) commence the mailing of the Letters of Transmittal to all holders of record of Company Common Stock within five (5) business days following the Effective Time, by executing and returning the enclosed copy of this letter to the undersigned at the address set forth above.

The Paying Agent hereby confirms that it has received and reviewed complete copies of each of the following documents in connection with the Merger and the transactions contemplated hereby:

(i) the Merger Agreement, dated as of March 18, 2025, including all exhibits, schedules, and amendments thereto;

(ii) the Paying Agent Agreement, dated as of July 22, 2025, including all exhibits thereto;

(iii) the Form of Letter of Transmittal attached as Exhibit B to the Paying Agent Agreement; and

(iv) this Funding Instruction Letter, including Exhibits A through D attached hereto.

This Funding Instruction Letter may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this letter by facsimile transmission, by electronic mail in ".pdf" format, or by any other electronic means intended to preserve the original graphic and pictorial appearance of the document shall have the same effect as delivery of the original executed counterpart.

If you have any questions regarding the foregoing instructions, please do not hesitate to contact Danielle Moreau or Marcus Langford at the contact information set forth in Section 9 above.

[Remainder of Page Intentionally Left Blank — Signature Pages Follow]

SIGNATURE PAGE TO PAYING AGENT FUNDING INSTRUCTION LETTER

We appreciate your cooperation in connection with the Merger and the prompt processing of the merger consideration payments to the former holders of Company securities. Please execute and return the enclosed copy of this letter at your earliest convenience.

Very truly yours,

VELOPAY SYSTEMS, INC. (as the Surviving Corporation)

By: ________

Name: Nathan Aldridge

Title: Chief Executive Officer

Date: July 21, 2025

Acknowledged and agreed with respect to Parent's obligations hereunder:

HARROWGATE PRIVATE EQUITY FUND IV LP

By: Harrowgate Capital Management IV LLC, its General Partner

By: ________

Name: Priya Deshmukh

Title: Managing Partner

Date: ________

ACKNOWLEDGMENT AND ACCEPTANCE BY PAYING AGENT

Keystone Pacific Transfer Services Inc. hereby acknowledges receipt of the foregoing Paying Agent Funding Instruction Letter, dated July 21, 2025, confirms that it has received and reviewed the Merger Agreement, the Paying Agent Agreement, and the Form of Letter of Transmittal, and confirms its readiness to receive the Payment Fund deposit and to commence the Letter of Transmittal mailing process in accordance with the instructions set forth herein and in the Paying Agent Agreement.

KEYSTONE PACIFIC TRANSFER SERVICES INC.

By: ________

Name: Linda Matsumoto

Title: Vice President, Corporate Actions

Date: ________

EXHIBITS AND ATTACHMENTS

Exhibit A — Option, RSU, and Warrant Cancellation Schedule

The Option, RSU, and Warrant Cancellation Schedule sets forth, for each outstanding Company Stock Option, Company RSU, and Company Warrant as of immediately prior to the Effective Time, the following information: (i) the name of the holder; (ii) the type of award (stock option, RSU, or warrant); (iii) the grant date; (iv) the number of shares underlying the award; (v) the per-share exercise price (if applicable); (vi) the vesting status (vested, unvested, or partially vested); (vii) the treatment at the Effective Time (cancellation for cash, acceleration and cancellation for cash, or conversion to replacement award); (viii) the per-share net spread or payout amount; (ix) the aggregate payout amount (before escrow holdback and tax withholding); (x) the per-share and aggregate escrow holdback amount; (xi) the net payment amount (after escrow holdback, before tax withholding); and (xii) the designated payment method (Paying Agent disbursement or Surviving Corporation payroll).

[Detailed schedule to be attached — consists of 47 pages covering 312 individual equity award grants]

Exhibit B — Form of Letter of Transmittal

The Form of Letter of Transmittal is the form attached as Exhibit B to the Paying Agent Agreement, dated as of July 22, 2025, which form was prepared by Calderwood & Harkness LLP, counsel to Parent, and approved by Drummond & Ames LLP, counsel to the Company. The Letter of Transmittal sets forth the procedures for the surrender of stock certificates (or the transfer of book-entry shares) in exchange for the Per Share Merger Consideration of $20.00 per share (less the pro rata escrow holdback and applicable withholding taxes) and includes, among other things, an IRS Form W-9 (or instructions for non-U.S. holders to submit the applicable Form W-8), an election as to the form of payment (check or wire transfer), and representations and warranties of the surrendering holder.

[Cross-reference to Exhibit B to the Paying Agent Agreement — form of Letter of Transmittal incorporated herein by reference]

Exhibit C — Wire Transfer Instructions for Payment Fund Deposit

To be completed and returned by Keystone Pacific Transfer Services Inc. no later than 5:00 p.m. Eastern Time on July 21, 2025.

Wire Transfer Instructions — Keystone Pacific Transfer Services Inc.

Bank Name: ________

ABA Routing Number: ________

Account Name: Keystone Pacific Transfer Services Inc. — VeloPay Merger Consideration Trust Account

Account Number: ________

SWIFT Code (if applicable): ________

Intermediary Bank (if applicable): ________

Intermediary ABA/SWIFT (if applicable): ________

For Further Credit To: ________

Reference: VeloPay Systems, Inc. — Merger Consideration / Paying Agent Agreement dated July 22, 2025

Authorized Signatory: ________

Name: ________

Title: ________

Date: ________

Exhibit D — Form of Weekly Disbursement Status Report

The following is the form of Weekly Disbursement Status Report to be delivered by the Paying Agent to the Surviving Corporation on each Friday following the Effective Time, pursuant to Section 8 of this Funding Instruction Letter.

WEEKLY DISBURSEMENT STATUS REPORT

Report Date: ___ Reporting Period: ___ through ___ Report Number: ___

Notes / Comments:

VELOPAY SYSTEMS, INC. (as the Surviving Corporation) 1455 Innovation Parkway, Suite 800 Austin, Texas 78759
July 21, 2025
Keystone Pacific Transfer Services Inc. 250 Royall Street, Suite 100 Canton, Massachusetts 02021
Attention: Linda Matsumoto, Vice President, Corporate Actions
Re: Paying Agent Funding Instructions Pursuant to that certain Paying Agent Agreement, dated as of July 22, 2025 (the "Paying Agent Agreement"), by and between VeloPay Systems, Inc. (the "Surviving Corporation") and Keystone Pacific Transfer Services Inc. (the "Paying Agent"), and in connection with the Agreement and Plan of Merger, dated as of March 18, 2025 (the "Merger Agreement"), by and among Harrowgate Private Equity Fund IV LP ("Parent"), Harrowgate Velocity Merger Sub Inc. ("Merger Sub"), and VeloPay Systems, Inc. (the "Company")
Dear Ms. Matsumoto:
1. Introduction and Authorization
This letter (this "Funding Instruction Letter") constitutes the formal direction and instruction from VeloPay Systems, Inc., as the Surviving Corporation, to Keystone Pacific Transfer Services Inc., as the Paying Agent, regarding the deposit of the merger consideration and the procedures for disbursement of such merger consideration to the former holders of shares of common stock, par value $0.001 per share, of the Company ("Company Common Stock"), stock options granted under the Company's 2018 Equity Incentive Plan and 2022 Equity Incentive Plan (collectively, the "Company Stock Options"), restricted stock units granted under the Company's equity incentive plans ("Company RSUs"), and warrants to purchase shares of Company Common Stock ("Company Warrants," and, together with the Company Stock Options and Company RSUs, the "Company Equity Awards"), all as contemplated by the Paying Agent Agreement and the Merger Agreement.
Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Paying Agent Agreement or, if not defined therein, in the Merger Agreement. In the event of any conflict between the terms of this Funding Instruction Letter and the terms of the Paying Agent Agreement, the Paying Agent Agreement shall govern and control.
As you are aware, on March 18, 2025, Parent, Merger Sub, and the Company entered into the Merger Agreement, pursuant to which Merger Sub will merge with and into the Company (the "Merger"), with the Company continuing as the surviving corporation and a wholly-owned subsidiary of Parent. The stockholders of the Company approved the Merger Agreement and the transactions contemplated thereby at a Special Meeting of Stockholders held on June 27, 2025, at which approximately 91.3% of the outstanding shares of Company Common Stock entitled to vote were voted in favor of adoption of the Merger Agreement.
The Merger is expected to become effective upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware on July 22, 2025, at or about 9:00 a.m. Eastern Time (the "Effective Time"), pursuant to Section 251 of the Delaware General Corporation Law. At the Effective Time, Merger Sub will merge with and into the Company, the separate corporate existence of Merger Sub will cease, and the Company will continue as the surviving corporation under the name "VeloPay Systems, Inc." as a wholly-owned subsidiary of Harrowgate Private Equity Fund IV LP. Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than shares held in treasury by the Company and shares owned by Parent or Merger Sub, which shall be cancelled) will be converted into the right to receive the Per Share Merger Consideration (as defined below), subject to the terms and conditions set forth in the Merger Agreement, including the pro rata escrow holdback described in Section 4 below.
This Funding Instruction Letter is being delivered to the Paying Agent in advance of the Effective Time to ensure that all necessary arrangements are in place for the timely deposit of the Payment Fund and the commencement of the disbursement process immediately following the closing of the Merger.
2. Deposit of Merger Consideration — Payment Fund
2.1 Aggregate Merger Consideration
Pursuant to Article II of the Merger Agreement, the aggregate merger consideration payable to all holders of Company securities (including holders of Company Common Stock, Company Stock Options, Company RSUs, and Company Warrants) in connection with the Merger is $1,900,000,000.00 (One Billion Nine Hundred Million Dollars and No Cents) (the "Aggregate Merger Consideration").
The per-share merger consideration payable to each holder of Company Common Stock for each share of Company Common Stock outstanding immediately prior to the Effective Time is $20.00 per share (the "Per Share Merger Consideration"), payable in cash, without interest, on a fully diluted, as-converted basis.
The fully diluted share count upon which the Aggregate Merger Consideration is calculated is 95,000,000 shares, consisting of the following:
The foregoing share counts have been confirmed by the Company's transfer agent records, the Company's equity plan administrator (Tidewater Software), and the Company's independent registered public accounting firm, Severin Beck CPAs LLP, and are set forth in greater detail in the Closing Certificate delivered by the Company pursuant to Section 7.02(e) of the Merger Agreement.
2.2 Amount to Be Deposited with the Paying Agent
On or prior to the Effective Time on July 22, 2025, the Surviving Corporation shall cause to be deposited with the Paying Agent, by wire transfer of immediately available funds, the aggregate amount of the merger consideration payable to stockholders and holders of Company Equity Awards, net of amounts required to be deposited separately with the Escrow Agent as described below.
Escrow Holdback. Pursuant to Section 2.12 of the Merger Agreement and Section 3 of the Escrow Agreement, dated as of July 22, 2025, by and among the Surviving Corporation, Garrison Trust Company, as escrow agent (the "Escrow Agent"), and Nathan Aldridge, as the Stockholder Representative (the "Escrow Agreement"), an amount equal to $133,000,000.00 (One Hundred Thirty-Three Million Dollars and No Cents) (the "Escrow Amount"), representing seven percent (7%) of the Aggregate Merger Consideration, shall be deposited separately with the Escrow Agent at or promptly following the Effective Time. The Escrow Amount shall be deposited with Garrison Trust Company pursuant to Reference Number GT-ESC-2025-07223 and shall be held and disbursed in accordance with the terms and conditions of the Escrow Agreement. The Escrow Amount secures the indemnification obligations of the former stockholders of the Company under Article IX of the Merger Agreement.
Net Amount to Be Deposited with the Paying Agent. The net amount to be deposited with the Paying Agent (the "Payment Fund") shall be the Aggregate Merger Consideration minus the Escrow Amount, calculated as follows:
The net amount to be deposited with the Paying Agent is therefore $1,767,000,000.00 (One Billion Seven Hundred Sixty-Seven Million Dollars and No Cents), subject to adjustment as may be necessary to account for the amounts payable to holders of Company Stock Options (net spread payments), Company RSUs (accelerated payout), and Company Warrants (net spread payments), as described in Section 2.3 below. This amount shall constitute the "Payment Fund" as defined in Section 1.1 of the Paying Agent Agreement. The Payment Fund shall be held in trust by the Paying Agent for the benefit of the former holders of Company securities entitled to receive a portion of the merger consideration, and shall be disbursed in accordance with the procedures set forth in this Funding Instruction Letter and the Paying Agent Agreement.
For the avoidance of doubt, the Payment Fund includes amounts payable to holders of Company Common Stock, as well as amounts payable to holders of Company Stock Options, Company RSUs, and Company Warrants, to the extent such payments are to be made by the Paying Agent (rather than through the Surviving Corporation's payroll system) as specified in Section 3.5 below.
2.3 Component Calculations — Equity Award Payments
The following sets forth the calculation of the merger consideration payable with respect to each category of Company Equity Awards:
Vested Stock Options. At the Effective Time, each outstanding Company Stock Option that is vested and exercisable as of immediately prior to the Effective Time (each, a "Vested Option") shall be cancelled and converted into the right to receive a cash payment equal to (i) $20.00 minus the per-share exercise price of such Vested Option, multiplied by (ii) the number of shares of Company Common Stock subject to such Vested Option (the "Option Net Spread Amount"). No payment shall be made with respect to any Vested Option that has a per-share exercise price equal to or greater than $20.00 (i.e., any "out-of-the-money" option). The aggregate exercise prices vary by grant, as set forth in the option cancellation schedule attached hereto as Exhibit A. The Paying Agent is instructed to disburse the applicable Option Net Spread Amounts to the holders of Vested Options in accordance with the option cancellation schedule attached as Exhibit A, subject to the applicable tax withholding described in Section 3.4 below and subject to the pro rata escrow holdback described in Section 4 below.
Unvested Stock Options. At the Effective Time, each outstanding Company Stock Option that is unvested as of immediately prior to the Effective Time (each, an "Unvested Option") shall be treated as follows:
(a) Accelerated Portion (50%). Fifty percent (50%) of the shares of Company Common Stock subject to each Unvested Option shall accelerate and become fully vested as of the Effective Time. The holder of each such accelerated Unvested Option shall be entitled to receive a cash payment equal to (i) $20.00 minus the per-share exercise price of such Unvested Option, multiplied by (ii) the number of shares of Company Common Stock subject to the accelerated portion of such Unvested Option, subject to applicable tax withholding and the pro rata escrow holdback. Such payments shall be disbursed through the Paying Agent or the Surviving Corporation's payroll system, as specified in Exhibit A.
(b) Replacement Award Portion (50%). The remaining fifty percent (50%) of the shares of Company Common Stock subject to each Unvested Option shall be converted into replacement equity awards of Parent (or an affiliate thereof) in accordance with Section 2.08(b) of the Merger Agreement. No cash payment shall be made by the Paying Agent with respect to the replacement award portion of any Unvested Option. The Surviving Corporation's human resources department shall administer the issuance of replacement awards separately from the Payment Fund.
Restricted Stock Units. At the Effective Time, all 3,200,000 outstanding Company RSUs (whether vested or unvested) shall be fully accelerated, cancelled, and converted into the right to receive a cash payment equal to $20.00 per RSU, for an aggregate payment amount of:
3,200,000 RSUs × $20.00 = $64,000,000.00
Such payments shall be made through the Paying Agent or the Surviving Corporation's payroll system, as applicable, subject to applicable employment tax withholding and the pro rata escrow holdback. The RSU cancellation schedule is included in Exhibit A.
Warrants. At the Effective Time, all 1,800,000 outstanding Company Warrants shall be cancelled and converted into the right to receive a cash payment equal to $20.00 minus the exercise price of $8.50 per warrant, for a per-warrant payment of $11.50, resulting in an aggregate warrant cancellation payment of:
1,800,000 warrants × $11.50 = $20,700,000.00
Such payments shall be made through the Paying Agent, subject to applicable tax withholding and the pro rata escrow holdback. The warrant cancellation schedule is included in Exhibit A.
2.4 Wire Transfer Instructions
The Surviving Corporation will cause the Payment Fund to be wired to the Paying Agent's designated account on the morning of July 22, 2025, no later than 10:00 a.m. Eastern Time. The Payment Fund shall be transmitted by federal wire transfer of immediately available funds to the following account of the Paying Agent:
Bank Name: [Paying Agent's designated depository bank — to be confirmed by Keystone Pacific and set forth in Exhibit C]
ABA Routing Number: [To be confirmed by Keystone Pacific and set forth in Exhibit C]
Account Name: Keystone Pacific Transfer Services Inc. — VeloPay Merger Consideration Trust Account
Account Number: [To be confirmed by Keystone Pacific and set forth in Exhibit C]
Reference: VeloPay Systems, Inc. — Merger Consideration / Paying Agent Agreement dated July 22, 2025
The Paying Agent is requested to provide its complete wire transfer instructions, including any additional intermediary bank information, by completing and returning Exhibit C attached hereto no later than 5:00 p.m. Eastern Time on July 21, 2025, to allow sufficient time for the Surviving Corporation to arrange the wire transfer.
Upon receipt of the Payment Fund, the Paying Agent is instructed to hold the Payment Fund in a segregated trust account for the sole benefit of the former holders of Company securities who are entitled to receive a portion of the merger consideration, pending disbursement in accordance with the Paying Agent Agreement and this Funding Instruction Letter. The Payment Fund shall not be commingled with any other funds of the Paying Agent or any other person, and shall be maintained in a separate account clearly identified as being held for the benefit of the former stockholders and equity award holders of the Company.
The Surviving Corporation shall provide the Paying Agent with prompt written confirmation of the wire transfer, including the Federal Reserve wire reference number, upon completion of the transfer on July 22, 2025.
3. Procedures for Disbursement to Stockholders
3.1 Letters of Transmittal
As promptly as practicable after the Effective Time, and in any event within five (5) business days following the Effective Time (i.e., no later than July 29, 2025), the Paying Agent shall mail to each holder of record of Company Common Stock as of immediately prior to the Effective Time:
(a) A Letter of Transmittal, substantially in the form attached as Exhibit B to the Paying Agent Agreement (the form of which was prepared by Calderwood & Harkness LLP, counsel to Parent, and has been approved by Drummond & Ames LLP, counsel to the Company), together with any additional enclosures or inserts as may be directed by the Surviving Corporation; and
(b) Written instructions advising each holder of the procedures for surrendering stock certificates (or, in the case of book-entry shares, effecting book-entry transfers through the Depository Trust Company ("DTC") or otherwise) in exchange for the Per Share Merger Consideration of $20.00 per share, less the pro rata escrow holdback described in Section 4 below and any applicable withholding taxes.
The Letter of Transmittal shall include, among other things, a certification by the holder under penalty of perjury as to such holder's taxpayer identification number (or a claim of exemption from backup withholding), an election as to the form of payment (check or wire transfer), and, for non-U.S. holders, appropriate certifications regarding FIRPTA and treaty benefits, as applicable.
The Paying Agent shall also post the Letter of Transmittal and related instructions on a dedicated web portal accessible to stockholders, the URL and access credentials for which shall be included in the mailing. The Paying Agent shall maintain a toll-free telephone number dedicated to handling stockholder inquiries relating to the Letter of Transmittal process, which number shall be included in the mailing materials.
The Paying Agent acknowledges that it has been provided with a complete and accurate list of all holders of record of Company Common Stock as of immediately prior to the Effective Time, as reflected on the stock transfer records of the Company maintained by the Paying Agent in its capacity as transfer agent for the Company.
3.2 Surrender of Certificates / Book-Entry Shares
Upon receipt by the Paying Agent of:
(i) a properly completed and duly executed Letter of Transmittal (or a facsimile or electronic copy thereof, in each case bearing an original or electronic signature acceptable to the Paying Agent); and
(ii) the stock certificate(s) representing the holder's shares of Company Common Stock (or, in the case of book-entry shares held through DTC or the direct registration system, a properly executed agent's message transmitted through the Automated Tender Offer Program ("ATOP") of DTC or such other evidence of transfer as the Paying Agent may reasonably require),
the Paying Agent shall, as promptly as practicable (and in any event within three (3) business days of receipt of a complete and conforming submission), pay to such holder an amount equal to the Per Share Merger Consideration of $20.00 multiplied by the number of shares of Company Common Stock represented by such surrendered certificate(s) or book-entry position, less (A) the pro rata escrow holdback amount of $1.40 per share, as described in Section 4 below, and (B) any amounts required to be deducted and withheld under applicable tax law, as described in Section 3.4 below.
Accordingly, the net initial cash payment per share to each stockholder shall be $18.60 per share (i.e., $20.00 minus $1.40 escrow holdback), subject to applicable withholding taxes.
Payment shall be made in the form elected by the holder in the Letter of Transmittal:
(a) Check. If the holder elects payment by check, the Paying Agent shall mail a check drawn on the Payment Fund account, payable to the order of the holder (or such other payee as may be specified in the Letter of Transmittal, subject to compliance with applicable "know your customer" and anti-money laundering requirements), to the address specified in the Letter of Transmittal or, if no address is specified, to the last known address of such holder as reflected in the stock transfer records.
(b) Wire Transfer. If the holder elects payment by wire transfer, the holder shall provide complete wire transfer instructions (including bank name, ABA routing number or SWIFT code, account name, and account number) in the Letter of Transmittal, and the Paying Agent shall transmit the applicable merger consideration to such account by federal wire transfer of immediately available funds. Wire transfer payments may be subject to a processing fee of up to $25.00, which shall be deducted from the holder's payment.
All stock certificates surrendered to the Paying Agent in connection with the Merger shall be cancelled and shall not be returned to the holder. From and after the Effective Time, each stock certificate that previously represented shares of Company Common Stock shall represent only the right to receive the Per Share Merger Consideration (less the pro rata escrow holdback and applicable withholding taxes), without interest.
3.3 Lost, Stolen, or Destroyed Certificates
In the event that any stock certificate shall have been lost, stolen, or destroyed, the holder of such certificate shall provide to the Paying Agent:
(a) an affidavit of loss, in a form reasonably satisfactory to the Surviving Corporation and the Paying Agent, setting forth the facts and circumstances surrounding the loss, theft, or destruction of such certificate; and
(b) if required by the Surviving Corporation in its reasonable discretion (which requirement shall be communicated to the Paying Agent in writing), a customary indemnity bond in an amount and from a surety company reasonably satisfactory to the Surviving Corporation and the Paying Agent, to protect the Surviving Corporation and the Paying Agent against any claim that may be made against them with respect to such lost, stolen, or destroyed certificate.
Upon receipt of such affidavit (and indemnity bond, if required), the Paying Agent shall treat such submission as a valid surrender of the applicable shares and shall disburse the Per Share Merger Consideration (less the pro rata escrow holdback and applicable withholding taxes) in the same manner as if the original certificate had been surrendered. The Surviving Corporation has determined that indemnity bonds shall be required for claims involving 10,000 or more shares; for claims involving fewer than 10,000 shares, an affidavit of loss alone shall be sufficient, unless the Surviving Corporation otherwise directs the Paying Agent in writing.
3.4 Withholding Obligations
The Paying Agent, the Surviving Corporation, and Parent shall each be entitled to deduct and withhold from the merger consideration (including any portion thereof payable to holders of Company Equity Awards) such amounts as are required to be deducted and withheld under the Internal Revenue Code of 1986, as amended (the "Code"), or any provision of applicable federal, state, local, or foreign tax law, including, without limitation:
(a) Backup Withholding. Backup withholding under Section 3406 of the Code at the rate then in effect (currently 24%) shall apply to any payment of merger consideration to a holder who fails to provide a properly completed IRS Form W-9 (Request for Taxpayer Identification Number and Certification) or, in the case of a non-U.S. holder, an appropriate IRS Form W-8 series form (e.g., Form W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, or W-8IMY, as applicable). The Paying Agent shall collect IRS Form W-9 (or the appropriate Form W-8 series form) from each holder prior to any disbursement of merger consideration. If a valid Form W-9 or Form W-8 is not received by the Paying Agent at the time of disbursement, the Paying Agent shall apply backup withholding at the applicable rate and shall remit such withheld amounts to the Internal Revenue Service in accordance with applicable law.
(b) FIRPTA Withholding. The Surviving Corporation hereby represents and certifies to the Paying Agent that it has delivered to Parent a certification, dated as of the Closing Date and signed by an authorized officer of the Company, in compliance with Treasury Regulation § 1.1445-2(c)(3), certifying that VeloPay Systems, Inc. is not, and has not been during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code, a "United States real property holding corporation" within the meaning of Section 897(c) of the Code. Accordingly, no withholding under FIRPTA (Section 1445 of the Code) is required on payments of merger consideration to non-U.S. stockholders solely on account of FIRPTA. Notwithstanding the foregoing, the Paying Agent acknowledges that other withholding obligations may apply to payments to non-U.S. holders (including, without limitation, withholding under Section 1441 or 1442 of the Code on amounts treated as dividends or fixed or determinable annual or periodical income, and any applicable withholding under FATCA (Sections 1471–1474 of the Code)), and the Paying Agent shall comply with all such withholding obligations in accordance with applicable law.
(c) Employment Tax Withholding. With respect to payments made to holders of Company Stock Options and Company RSUs that are treated as compensation for federal income tax purposes, the Paying Agent (or the Surviving Corporation's payroll department, as applicable) shall withhold applicable federal income tax, Social Security tax (FICA), and Medicare tax, as well as any applicable state and local income or employment taxes, in accordance with the holder's most recently filed IRS Form W-4 and applicable state withholding forms on file with the Company.
To the extent that amounts are so deducted and withheld and are timely remitted to the applicable governmental authority, such withheld amounts shall be treated for all purposes of the Merger Agreement and this Funding Instruction Letter as having been paid to the holder in respect of which such deduction and withholding was made.
3.5 Option, RSU, and Warrant Holder Payments
Payments to holders of cancelled Company Stock Options (including the accelerated portion of Unvested Options), accelerated Company RSUs, and cancelled Company Warrants shall be administered as follows:
(a) Payments Through the Surviving Corporation's Payroll System. To the extent that any payment in respect of Company Stock Options or Company RSUs constitutes compensation subject to employment tax withholding (including federal income tax withholding under Section 3402 of the Code and FICA/Medicare tax under Sections 3101 and 3111 of the Code), such payment shall be processed through the Surviving Corporation's payroll system (administered by Ashgrove Solutions) and shall be reported on the applicable holder's IRS Form W-2 for the 2025 tax year. The Paying Agent shall transfer to the Surviving Corporation's payroll account such amounts as the Surviving Corporation shall direct for purposes of funding such payroll-processed payments.
(b) Payments Directly by the Paying Agent. To the extent that any payment in respect of Company Stock Options, Company RSUs, or Company Warrants is designated in Exhibit A as payable directly by the Paying Agent (e.g., payments to former employees who are not on the Surviving Corporation's payroll as of the Closing Date, or payments to warrant holders who are not employees), the Paying Agent shall disburse such payments directly to the applicable holders upon receipt of a properly completed Letter of Transmittal or cancellation agreement (as applicable) and IRS Form W-9 or W-8, and shall report such payments on IRS Form 1099-MISC or 1099-B, as applicable.
The Paying Agent shall coordinate with the Surviving Corporation's payroll department (contact: Jennifer Wexler, Vice President, Human Resources, VeloPay Systems, Inc.) to ensure the proper allocation of payments between the payroll system and the Payment Fund, proper tax withholding on all equity award payments, and timely and accurate W-2 or 1099 information reporting for such payments.
4. Escrow Holdback — Pro Rata Reduction
Each stockholder's merger consideration payment (including payments to holders of Company Equity Awards) is subject to a pro rata reduction representing such holder's allocable share of the Escrow Amount of $133,000,000.00 (the "Escrow Holdback"). The Escrow Amount has been deposited with Garrison Trust Company, as Escrow Agent, to secure the indemnification obligations of the former stockholders of the Company under Article IX of the Merger Agreement.
The contact information for the Escrow Agent is as follows:
Garrison Trust Company One Liberty Plaza, 42nd Floor New York, New York 10006
Attention: Valerie Drummond, Vice President, Corporate Trust
Reference: GT-ESC-2025-07223
The escrow holdback percentage is seven percent (7%) of the Per Share Merger Consideration. Accordingly, the per-share escrow holdback amount is:
$20.00 × 7% = $1.40 per share withheld from each stockholder's merger consideration payment
The net initial payment to each stockholder (before applicable tax withholding) shall therefore be:
$20.00 − $1.40 = $18.60 per share
The same pro rata escrow holdback percentage shall apply to payments in respect of Company Stock Options (applied to the net spread amount), Company RSUs, and Company Warrants. The detailed holdback calculations for each equity award category are set forth in Exhibit A.
Escrow Release Schedule. The Escrow Amount shall be released in accordance with the following schedule, subject to the terms and conditions of the Escrow Agreement:
Upon each escrow release, the amounts released by the Escrow Agent to the Stockholder Representative (Nathan Aldridge) shall be distributed pro rata to the former stockholders and equity award holders of the Company in proportion to their respective shares of the Aggregate Merger Consideration. The Paying Agent shall coordinate with the Stockholder Representative and Garrison Trust Company for the disbursement of released escrow amounts to former stockholders on a pro rata basis. The Surviving Corporation shall provide the Paying Agent with a written direction and an updated payment spreadsheet at the time of each escrow release, setting forth the amounts payable to each former stockholder and the applicable bank or mailing information for each payment.
To the extent that any indemnification claims are pending at the time of a scheduled escrow release, the Escrow Agent shall retain in escrow an amount equal to the aggregate amount of all such pending claims (as determined in accordance with the Escrow Agreement), and the balance shall be released. Upon final resolution of all pending claims, any remaining escrow funds shall be released to the Stockholder Representative for pro rata distribution.
5. Unclaimed Funds and Escheatment
Any portion of the Payment Fund (including any interest or other income earned thereon) that remains undistributed to former holders of Company securities on the date that is twelve (12) months after the Effective Time (i.e., on or about July 22, 2026) shall, upon written demand by the Surviving Corporation, be delivered by the Paying Agent to the Surviving Corporation. From and after such delivery, any former stockholders or holders of Company Equity Awards who have not yet surrendered their certificates or complied with the Letter of Transmittal procedures (or the applicable equity award cancellation procedures) shall thereafter look only to the Surviving Corporation (subject to abandoned property, escheat, and similar laws) for payment of their merger consideration, without interest thereon.
Neither the Surviving Corporation, Parent, the Paying Agent, nor any other party hereto shall be liable to any former holder of Company securities for any merger consideration (or any interest or other amount in respect thereof) delivered to a public official pursuant to any applicable abandoned property, escheat, or similar law of any jurisdiction.
The Surviving Corporation and the Paying Agent shall each comply with all applicable abandoned property, escheat, and similar laws with respect to unclaimed merger consideration amounts. The Paying Agent shall perform commercially reasonable due diligence searches, including mailings to last known addresses and, where appropriate, skip tracing, prior to escheating any unclaimed funds. The Paying Agent shall provide the Surviving Corporation with reports on unclaimed property status no less frequently than quarterly, and shall coordinate with the Surviving Corporation's legal department regarding compliance with the reporting and remittance requirements of the applicable jurisdictions.
6. Cancellation of Treasury Shares and Parent-Owned Shares
In accordance with Section 2.01(b) of the Merger Agreement, any shares of Company Common Stock held in treasury by the Company immediately prior to the Effective Time, and any shares of Company Common Stock owned by Parent, Merger Sub, or any direct or indirect wholly-owned subsidiary of Parent (other than the Company and its subsidiaries), shall be automatically cancelled at the Effective Time and shall cease to exist, and no merger consideration or other consideration shall be payable with respect thereto.
The Paying Agent is hereby instructed not to make any disbursement of merger consideration with respect to any cancelled treasury shares or Parent-owned shares. As of the date hereof, the Company holds 215,000 shares of Company Common Stock in treasury, and neither Parent nor Merger Sub owns any shares of Company Common Stock (other than through the ownership of the Company following the Effective Time). The Surviving Corporation shall promptly notify the Paying Agent in writing if any of the foregoing share counts change prior to the Effective Time.
7. Investment of Payment Fund
The Paying Agent is authorized and instructed to invest and reinvest the Payment Fund pending disbursement, in accordance with Section 4.03 of the Paying Agent Agreement, solely in the following categories of investments:
(i) direct obligations of the United States of America (including United States Treasury bills, notes, and bonds);
(ii) obligations for which the full and timely payment of principal and interest is guaranteed by the United States of America; or
(iii) money market funds that are registered under the Investment Company Act of 1940, as amended, and that invest solely in obligations described in clauses (i) and (ii) above (including, without limitation, the Halcyon Capital Group, the Crowne Albany Partners, or the Northgate Private Capital);
in each case, with maturities not exceeding thirty (30) days from the date of investment.
Any income, interest, dividends, or other earnings realized from the investment of the Payment Fund shall be for the account of the Surviving Corporation and shall not increase the amount of the merger consideration payable to any former holder of Company securities. The Paying Agent shall account for all such earnings separately and shall remit such earnings to the Surviving Corporation upon demand or, if earlier, upon the termination of the Paying Agent's engagement under the Paying Agent Agreement. Any losses realized on the investment of the Payment Fund shall be borne by the Surviving Corporation and shall not reduce the amount of the merger consideration payable to any former holder of Company securities; in the event of any such loss, the Surviving Corporation shall promptly deposit additional funds with the Paying Agent sufficient to cover the shortfall.
8. Reporting Obligations
The Paying Agent shall provide the Surviving Corporation with weekly status reports (each, a "Disbursement Report") commencing on the first Friday following the Effective Time and continuing until such time as the Payment Fund has been fully disbursed or returned to the Surviving Corporation. Each Disbursement Report shall detail, at a minimum, the following information:
(a) the number of Letters of Transmittal received and processed during the applicable reporting period and on a cumulative basis since the Effective Time;
(b) the aggregate dollar amount of merger consideration disbursed to former holders of Company securities during the applicable reporting period and on a cumulative basis since the Effective Time;
(c) the remaining Payment Fund balance as of the end of the applicable reporting period, including a breakdown of cash on hand and invested amounts;
(d) the number of outstanding or unprocessed claims (i.e., Letters of Transmittal received but not yet processed, and holders who have not yet submitted a Letter of Transmittal), together with a summary of the reasons for any delays in processing (e.g., incomplete documentation, missing W-9/W-8, lost certificate claims); and
(e) any other information reasonably requested by the Surviving Corporation or Parent.
A form of the Disbursement Report is attached hereto as Exhibit D for reference. The Paying Agent shall deliver each Disbursement Report by email to the Surviving Corporation contacts identified in Section 9 below no later than 5:00 p.m. Eastern Time on the applicable Friday.
In addition to the foregoing, the Paying Agent shall prepare, file, and furnish all IRS information returns (including, without limitation, Forms 1099-B, 1099-MISC, 1099-DIV, and 1042-S, as applicable) and any state or local tax information reporting, as required by applicable law, in connection with payments of merger consideration from the Payment Fund. The Paying Agent shall provide copies of all such information returns to the Surviving Corporation promptly upon filing. The Paying Agent shall also provide the Surviving Corporation with all information and records reasonably necessary for the Surviving Corporation to prepare and file any tax returns or information returns required in connection with the Merger or the payments contemplated hereby.
9. Key Contact Information
The following individuals and entities are the key contacts for purposes of the transactions contemplated by this Funding Instruction Letter, the Paying Agent Agreement, and the Merger Agreement:
Surviving Corporation Contacts:
Danielle Moreau General Counsel VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759 Telephone: (512) 555-4100
Email: d.moreau@velopay.com
Marcus Langford Chief Financial Officer VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759 Telephone: (512) 555-4105
Email: m.langford@velopay.com
Parent's Counsel:.  
Calderwood & Harkness LLP 787 Seventh Avenue, 38th Floor New York, New York 10019
Attention: Sandra Tung, Responsible Partner; Megan Chu, Lead Associate
Telephone: (212) 555-6000
Email: stung@calderwoodharkness.com; mchu@calderwoodharkness.com
Matter Number: 1003-00003
Stockholder Representative:.  
Nathan Aldridge c/o VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759 Telephone: (512) 555-4001
Email: n.aldridge@velopay.com
Escrow Agent:.  
Garrison Trust Company One Liberty Plaza, 42nd Floor New York, New York 10006
Attention: Valerie Drummond, Vice President, Corporate Trust
Telephone: (212) 555-7300
Email: v.drummond@garrisontrust.com
Reference: GT-ESC-2025-07223
All notices, reports, and other communications to be delivered pursuant to this Funding Instruction Letter or the Paying Agent Agreement shall be delivered to the applicable persons at the addresses set forth above (or such other address as may be specified by written notice from time to time) in the manner prescribed by Section 8.01 of the Paying Agent Agreement.
10. Acknowledgment and Confirmation
The Surviving Corporation hereby requests that Keystone Pacific Transfer Services Inc. acknowledge receipt of this Funding Instruction Letter and confirm its readiness to (a) receive the Payment Fund deposit by wire transfer on the morning of July 22, 2025, and (b) commence the mailing of the Letters of Transmittal to all holders of record of Company Common Stock within five (5) business days following the Effective Time, by executing and returning the enclosed copy of this letter to the undersigned at the address set forth above.
The Paying Agent hereby confirms that it has received and reviewed complete copies of each of the following documents in connection with the Merger and the transactions contemplated hereby:
(i) the Merger Agreement, dated as of March 18, 2025, including all exhibits, schedules, and amendments thereto;
(ii) the Paying Agent Agreement, dated as of July 22, 2025, including all exhibits thereto;
(iii) the Form of Letter of Transmittal attached as Exhibit B to the Paying Agent Agreement; and
(iv) this Funding Instruction Letter, including Exhibits A through D attached hereto.
This Funding Instruction Letter may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this letter by facsimile transmission, by electronic mail in ".pdf" format, or by any other electronic means intended to preserve the original graphic and pictorial appearance of the document shall have the same effect as delivery of the original executed counterpart.
If you have any questions regarding the foregoing instructions, please do not hesitate to contact Danielle Moreau or Marcus Langford at the contact information set forth in Section 9 above.
[Remainder of Page Intentionally Left Blank — Signature Pages Follow]
SIGNATURE PAGE TO PAYING AGENT FUNDING INSTRUCTION LETTER
We appreciate your cooperation in connection with the Merger and the prompt processing of the merger consideration payments to the former holders of Company securities. Please execute and return the enclosed copy of this letter at your earliest convenience.
Very truly yours,
VELOPAY SYSTEMS, INC. (as the Surviving Corporation)
By: ________
Name: Nathan Aldridge
Title: Chief Executive Officer
Date: July 21, 2025
Acknowledged and agreed with respect to Parent's obligations hereunder:
HARROWGATE PRIVATE EQUITY FUND IV LP
By: Harrowgate Capital Management IV LLC, its General Partner
By: ________
Name: Priya Deshmukh
Title: Managing Partner
Date: ________
ACKNOWLEDGMENT AND ACCEPTANCE BY PAYING AGENT
Keystone Pacific Transfer Services Inc. hereby acknowledges receipt of the foregoing Paying Agent Funding Instruction Letter, dated July 21, 2025, confirms that it has received and reviewed the Merger Agreement, the Paying Agent Agreement, and the Form of Letter of Transmittal, and confirms its readiness to receive the Payment Fund deposit and to commence the Letter of Transmittal mailing process in accordance with the instructions set forth herein and in the Paying Agent Agreement.
KEYSTONE PACIFIC TRANSFER SERVICES INC.
By: ________
Name: Linda Matsumoto
Title: Vice President, Corporate Actions
Date: ________
EXHIBITS AND ATTACHMENTS
Exhibit A — Option, RSU, and Warrant Cancellation Schedule
The Option, RSU, and Warrant Cancellation Schedule sets forth, for each outstanding Company Stock Option, Company RSU, and Company Warrant as of immediately prior to the Effective Time, the following information: (i) the name of the holder; (ii) the type of award (stock option, RSU, or warrant); (iii) the grant date; (iv) the number of shares underlying the award; (v) the per-share exercise price (if applicable); (vi) the vesting status (vested, unvested, or partially vested); (vii) the treatment at the Effective Time (cancellation for cash, acceleration and cancellation for cash, or conversion to replacement award); (viii) the per-share net spread or payout amount; (ix) the aggregate payout amount (before escrow holdback and tax withholding); (x) the per-share and aggregate escrow holdback amount; (xi) the net payment amount (after escrow holdback, before tax withholding); and (xii) the designated payment method (Paying Agent disbursement or Surviving Corporation payroll).
[Detailed schedule to be attached — consists of 47 pages covering 312 individual equity award grants]
Exhibit B — Form of Letter of Transmittal
The Form of Letter of Transmittal is the form attached as Exhibit B to the Paying Agent Agreement, dated as of July 22, 2025, which form was prepared by Calderwood & Harkness LLP, counsel to Parent, and approved by Drummond & Ames LLP, counsel to the Company. The Letter of Transmittal sets forth the procedures for the surrender of stock certificates (or the transfer of book-entry shares) in exchange for the Per Share Merger Consideration of $20.00 per share (less the pro rata escrow holdback and applicable withholding taxes) and includes, among other things, an IRS Form W-9 (or instructions for non-U.S. holders to submit the applicable Form W-8), an election as to the form of payment (check or wire transfer), and representations and warranties of the surrendering holder.
[Cross-reference to Exhibit B to the Paying Agent Agreement — form of Letter of Transmittal incorporated herein by reference]
Exhibit C — Wire Transfer Instructions for Payment Fund Deposit
To be completed and returned by Keystone Pacific Transfer Services Inc. no later than 5:00 p.m. Eastern Time on July 21, 2025.
Wire Transfer Instructions — Keystone Pacific Transfer Services Inc.
Bank Name: ________
ABA Routing Number: ________
Account Name: Keystone Pacific Transfer Services Inc. — VeloPay Merger Consideration Trust Account
Account Number: ________
SWIFT Code (if applicable): ________
Intermediary Bank (if applicable): ________
Intermediary ABA/SWIFT (if applicable): ________
For Further Credit To: ________
Reference: VeloPay Systems, Inc. — Merger Consideration / Paying Agent Agreement dated July 22, 2025
Authorized Signatory: ________
Name: ________
Title: ________
Date: ________
Exhibit D — Form of Weekly Disbursement Status Report
The following is the form of Weekly Disbursement Status Report to be delivered by the Paying Agent to the Surviving Corporation on each Friday following the Effective Time, pursuant to Section 8 of this Funding Instruction Letter.
WEEKLY DISBURSEMENT STATUS REPORT
Report Date: ___ Reporting Period: ___ through ___ Report Number: ___
Notes / Comments:
________________________________________
________________________________________
Prepared by: ________
Title: ________
Date: ________
[End of Exhibits]
Component | Number of Shares | Notes
Shares of Company Common Stock outstanding | 82,400,000 | As of the close of business on July 21, 2025
Shares underlying outstanding Company Stock Options | 7,600,000 | Weighted average exercise price: $12.84 per share
Shares underlying outstanding Company RSUs | 3,200,000 | Unvested RSUs subject to acceleration
Shares underlying outstanding Company Warrants | 1,800,000 | Exercise price: $8.50 per share
Total Fully Diluted Share Count | 95,000,000
Item | Amount
Aggregate Merger Consideration | $1,900,000,000.00
Less: Escrow Holdback (7%) | ($133,000,000.00)
Net Payment Fund Deposit | $1,767,000,000.00
Release Event | Date | Amount | Notes
12-Month Release | On or about July 22, 2026 | $66,500,000.00 (50% of Escrow Amount) | Released to the Stockholder Representative for pro rata distribution to stockholders
18-Month Release (Final Release) | On or about January 22, 2027 | Remainder of Escrow Amount, less amounts reserved for pending or unresolved indemnification claims | Released upon expiration of the 18-month survival period for representations and warranties under the Merger Agreement
Category | Current Period | Cumulative to Date
Letters of Transmittal Received
Letters of Transmittal Processed
Letters of Transmittal Pending (Incomplete)
Shares Represented by Processed Transmittals
Aggregate Merger Consideration Disbursed ($)
Aggregate Escrow Holdback Deducted ($)
Aggregate Tax Withholding Deducted ($)
Net Cash Disbursed to Stockholders ($)
Remaining Payment Fund Balance ($)
Payment Fund — Cash on Hand ($)
Payment Fund — Invested Amount ($)
Number of Lost Certificate Claims Received
Number of Lost Certificate Claims Resolved
Equity Award Payments Processed (Options/RSUs/Warrants)
Outstanding / Unprocessed Claims (Total)
Reasons for Delays (Summary)

VELOPAY SYSTEMS, INC. (as the Surviving Corporation) 1455 Innovation Parkway, Suite 800 Austin, Texas 78759

SIGNATURE PAGE TO PAYING AGENT FUNDING INSTRUCTION LETTER

HARROWGATE PRIVATE EQUITY FUND IV LP

ACKNOWLEDGMENT AND ACCEPTANCE BY PAYING AGENT

KEYSTONE PACIFIC TRANSFER SERVICES INC.

EXHIBITS AND ATTACHMENTS

WEEKLY DISBURSEMENT STATUS REPORT

Record

Parties

Dates

Amounts