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 21, 2025
Matter No. 1003-00003
VIA EMAIL AND OVERNIGHT COURIER
Brian Castellano Vice President, Loan Administration Meridian Commercial Credit Corp. 599 Lexington Avenue, 26th Floor New York, New York 10022
Re: Payoff and Termination of Senior Secured Credit Facility — VeloPay Systems, Inc. (as Borrower); Credit Agreement dated as of September 14, 2021, by and among VeloPay Systems, Inc. (as Borrower), the Guarantors party thereto, the Lenders party thereto, and Meridian Commercial Credit Corp. (as Administrative Agent) — Outstanding Principal: $112,000,000
Dear Mr. Castellano:
This firm represents Harrowgate Private Equity Fund IV LP ("HPE Fund IV"), a Delaware limited partnership, in connection with the acquisition of VeloPay Systems, Inc. ("VeloPay" or the "Borrower"), a Delaware corporation. The acquisition is being effected through a reverse triangular merger in which Harrowgate Velocity Merger Sub Inc., a newly formed Delaware corporation and a wholly-owned subsidiary of HPE Fund IV, will merge with and into VeloPay, with VeloPay surviving the merger as a wholly-owned subsidiary of HPE Fund IV (the "Merger"). The Merger is being consummated pursuant to that certain Agreement and Plan of Merger, dated as of March 18, 2025, by and among HPE Fund IV, Harrowgate Velocity Merger Sub Inc., and VeloPay Systems, Inc. (the "Merger Agreement"). The closing of the Merger is currently scheduled to occur on July 22, 2025 (the "Closing Date").
This letter (this "Payoff Direction Letter") constitutes the formal direction and instruction to Meridian Commercial Credit Corp. ("Meridian" or the "Administrative Agent"), in its capacity as Administrative Agent and Lender under the Credit Agreement (as defined below), regarding the payoff in full and complete termination of VeloPay's existing senior secured credit facility in connection with and as a condition to the closing of the Merger. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Merger Agreement or the Credit Agreement, as applicable.
1. Reference to Payoff Letter.
We acknowledge receipt of the payoff letter issued by Meridian Commercial Credit Corp., dated July 18, 2025 (the "Payoff Letter"), a copy of which is attached hereto as an enclosure. The Payoff Letter confirms the total payoff amount required to satisfy in full all outstanding obligations of VeloPay Systems, Inc., as Borrower, under that certain Credit Agreement, dated as of September 14, 2021 (as amended by the First Amendment to Credit Agreement dated February 3, 2023, the Second Amendment to Credit Agreement dated August 19, 2023, and the Third Amendment to Credit Agreement dated May 6, 2024, and as further amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), by and among VeloPay Systems, Inc. (as Borrower), the Guarantors party thereto, the Lenders from time to time party thereto, and Meridian Commercial Credit Corp. (as Administrative Agent for the Lenders).
As set forth in the Payoff Letter, the total payoff amount required to satisfy in full all obligations of VeloPay under the Credit Agreement, calculated through the anticipated payoff date of July 22, 2025, is approximately $113,230,000 (the "Payoff Amount"), consisting of the following components:
(a) Outstanding principal balance: $112,000,000.00;
(b) Accrued and unpaid interest through and including July 22, 2025: approximately $1,230,000.00 (calculated at the applicable interest rate under the Credit Agreement); and
(c) All other fees, costs, expenses, and other amounts due and payable under or in connection with the Credit Agreement through and including the payoff date, as specified in the Payoff Letter, including without limitation any administrative agent fees, unused commitment fees, and reimbursable expenses of Meridian and the Lenders.
The exact Payoff Amount shall be as set forth in the Payoff Letter, calculated through the Closing Date of July 22, 2025. To the extent there is any discrepancy between the approximate amounts referenced herein and the amounts set forth in the Payoff Letter, the amounts set forth in the Payoff Letter shall govern and control.
2. Direction to Wire Payoff Amount.
HPE Fund IV and VeloPay hereby irrevocably direct and instruct that, on July 22, 2025, a wire transfer in an amount equal to the total Payoff Amount as specified in the Payoff Letter (approximately $113,230,000) be sent to Meridian Commercial Credit Corp. in accordance with and pursuant to the wire instructions set forth in the Payoff Letter.
The wire transfer will be initiated on the Closing Date of July 22, 2025, as part of the closing funds flow for the Merger. The Payoff Amount will be funded from the proceeds of the new senior secured credit facilities being established in connection with the Merger, specifically:
(a) the $500,000,000 Senior Secured Term Loan Facility provided by a syndicate of lenders for which Tralvendo National Bank is acting as Administrative Agent, pursuant to that certain Credit Agreement to be dated as of July 22, 2025, by and among VeloPay Systems, Inc. (as Borrower), the Guarantors party thereto, the Lenders from time to time party thereto, and Tralvendo National Bank (as Administrative Agent) (the "Term Loan Credit Agreement"); and
(b) the $260,000,000 Senior Secured Revolving Credit Facility provided by a syndicate of lenders for which Prairie State Bank, N.A. is acting as Administrative Agent, pursuant to that certain Credit Agreement to be dated as of July 22, 2025, by and among VeloPay Systems, Inc. (as Borrower), the Guarantors party thereto, the Lenders from time to time party thereto, and Prairie State Bank, N.A. (as Administrative Agent) (the "Revolving Credit Agreement" and, together with the Term Loan Credit Agreement, the "New Credit Agreements").
The payoff wire shall be transmitted in accordance with the wire transfer instructions provided by Meridian in the Payoff Letter. We respectfully request that Meridian promptly confirm in writing that the following wire instructions, as set forth in the Payoff Letter, remain current and accurate as of the anticipated Closing Date:
Bank Name: [As set forth in the Payoff Letter] ABA Routing Number: [As set forth in the Payoff Letter] Account Number: [As set forth in the Payoff Letter] Account Name: [As set forth in the Payoff Letter] Reference/Memo Line: "VeloPay Systems, Inc. — Payoff — Credit Agreement dated September 14, 2021" Attention: Brian Castellano, VP Loan Administration
We ask that you confirm the accuracy and currency of the foregoing wire instructions by no later than 5:00 p.m. (Eastern Time) on July 21, 2025, by email or telephone to the contact persons identified in Section 7 below.
3. Confirmation of Payoff Wire Instructions from Funds Flow Memorandum.
The payoff wire to Meridian Commercial Credit Corp. in the Payoff Amount is reflected as a line item in the Funds Flow Memorandum dated July 21, 2025 (the "Funds Flow Memorandum"), prepared by Calderwood & Harkness LLP in connection with the closing of the Merger. An excerpt of the Funds Flow Memorandum reflecting the Meridian payoff wire is attached hereto as an enclosure.
All parties to the closing of the Merger, including Tralvendo National Bank (as Administrative Agent under the Term Loan Credit Agreement) and Prairie State Bank, N.A. (as Administrative Agent under the Revolving Credit Agreement), as well as their respective counsel, have been provided with the payoff wire instructions for Meridian and the corresponding Payoff Amount, and each such party has been instructed to cause the appropriate portions of the closing funds to be disbursed in accordance with the Funds Flow Memorandum.
We respectfully request that Meridian confirm receipt of the payoff wire on July 22, 2025, promptly upon crediting of the funds to Meridian's account, by:
(a) telephone to Calderwood & Harkness LLP, Attention: Megan Chu, at the number set forth in Section 7 below; and
(b) email to Megan Chu at the email address set forth in Section 7 below.
Prompt confirmation of receipt is critical, as the closing of the Merger and the funding under the New Credit Agreements are conditioned upon, among other things, the satisfaction and discharge in full of VeloPay's existing obligations under the Credit Agreement and the release of all liens associated therewith.
4. Release of Liens and Security Interests.
Upon receipt of the Payoff Amount in full and in immediately available funds, Meridian Commercial Credit Corp., in its capacity as Administrative Agent and on behalf of the Lenders under the Credit Agreement, is hereby directed and requested, pursuant to the terms of the Payoff Letter and the applicable provisions of the Credit Agreement and related Security Documents, to take each of the following actions:
(a) Release of Liens. Release all liens, security interests, pledges, charges, mortgages, assignments, and encumbrances (collectively, "Liens") held by or on behalf of Meridian, as Administrative Agent, or any Lender under the Credit Agreement, on any and all assets, properties, and rights (whether tangible or intangible, real or personal) of VeloPay Systems, Inc. and each of its direct and indirect subsidiaries, including without limitation:
(i) VeloPay Processing LLC, a Delaware limited liability company;
(ii) VeloPay Canada Inc., a corporation organized under the laws of the Province of Ontario, Canada;
(iii) VeloPay Europe, Unipessoal Lda., a Portuguese private limited liability company (sociedade unipessoal por quotas de responsabilidade limitada);
(iv) VeloPay Fraud intelligence Inc., a Delaware corporation; and
(v) PayStream Gateway LLC, a Delaware limited liability company
(collectively with VeloPay, the "Loan Parties").
(b) UCC-3 Termination Statements. File UCC-3 termination statements with the applicable filing offices in all jurisdictions in which UCC-1 financing statements have been filed by or on behalf of Meridian, as Administrative Agent, against VeloPay or any of its subsidiaries, including without limitation filings with the Delaware Secretary of State, the Texas Secretary of State, and any other applicable state filing offices, so as to terminate of record all UCC-1 financing statements and any amendments or continuations thereof relating to the Credit Agreement and the Security Documents.
(c) Delivery of Lien Release Documents. Deliver to Calderwood & Harkness LLP executed copies of all lien release documents, including but not limited to:
(i) UCC-3 termination statements (with evidence of filing);
(ii) releases of any intellectual property security interests filed with the United States Patent and Trademark Office or the United States Copyright Office, to the extent applicable;
(iii) releases or discharges of any deposit account control agreements or securities account control agreements;
(iv) releases of any pledges of equity interests in VeloPay's subsidiaries; and
(v) any other release, termination, or discharge instruments reasonably required to evidence the release and termination of all Liens securing the obligations under the Credit Agreement.
(d) Termination of Guarantees. Terminate and release any and all guarantees (including the Subsidiary Guaranty Agreement dated as of September 14, 2021, and any amendments or supplements thereto) provided by VeloPay's subsidiaries in connection with the Credit Agreement, such that no subsidiary of VeloPay shall have any continuing obligation, liability, or exposure under any such guarantee following receipt of the Payoff Amount.
We request that all UCC-3 termination statements be filed and all lien release documents described above be delivered to Calderwood & Harkness LLP within five (5) business days following Meridian's receipt of the Payoff Amount in full, consistent with Meridian's commitment in the Payoff Letter. All such releases, termination statements, and related documentation should be delivered to:
Calderwood & Harkness LLP 787 Seventh Avenue, 38th Floor New York, New York 10019
Attention: Megan Chu
5. Termination of Credit Agreement.
Upon receipt of the Payoff Amount in full and in immediately available funds, the Credit Agreement, together with all schedules, exhibits, and annexes thereto, and all related Loan Documents (as defined in the Credit Agreement), including without limitation the Security Agreement, the Subsidiary Guaranty Agreement, and all other agreements, instruments, and documents executed and delivered in connection therewith, shall be deemed terminated in their entirety. Upon such termination, all commitments, obligations, covenants, representations, and warranties of the Loan Parties thereunder shall be of no further force or effect, except for those provisions that by their express terms survive termination of the Credit Agreement (including, without limitation, customary indemnification and expense reimbursement provisions, to the extent applicable).
We respectfully request that Meridian deliver to Calderwood & Harkness LLP a written confirmation, in the form attached to the Payoff Letter or in such other form as is reasonably acceptable to VeloPay and HPE Fund IV, confirming that (a) all obligations of VeloPay and the other Loan Parties under the Credit Agreement and the related Loan Documents have been indefeasibly paid and satisfied in full, (b) all commitments under the Credit Agreement have been terminated, and (c) the Credit Agreement and all related Loan Documents have been terminated. We request that such written confirmation be delivered promptly following receipt of the Payoff Amount, and in any event no later than two (2) business days following the Closing Date.
6. Per Diem Interest / Good-Through Date.
The parties acknowledge that the Payoff Amount set forth in the Payoff Letter is calculated through and including July 22, 2025 (the "Good-Through Date"). The Payoff Letter is valid only through the Good-Through Date, and the Payoff Amount is subject to adjustment in the event that the payoff is not consummated on or before such date.
In the event that, for any reason, the payoff wire is not transmitted on July 22, 2025, or the Closing Date is otherwise delayed beyond the Good-Through Date, we request that Meridian promptly confirm the per diem interest amount applicable to the outstanding obligations under the Credit Agreement, so that an adjusted Payoff Amount can be calculated for any subsequent payoff date. As specified in the Payoff Letter, the per diem interest amount is $____ per day (to be confirmed by Meridian). Any adjusted Payoff Amount shall be equal to the Payoff Amount set forth in the Payoff Letter, plus the applicable per diem interest amount for each day elapsed after July 22, 2025 through and including the actual date of receipt of the payoff wire by Meridian.
We ask that Meridian confirm the per diem interest amount in writing at its earliest convenience and in any event prior to the Closing Date.
7. Contact Information.
All communications regarding this Payoff Direction Letter, the payoff wire, and the matters described herein should be directed to the following persons:
Calderwood & Harkness LLP (Counsel to HPE Fund IV):
Megan Chu, Lead Associate Calderwood & Harkness LLP 787 Seventh Avenue, 38th Floor New York, New York 10019 Telephone: (212) 558-4127
Email: megan.chu@calderwoodharkness.com
with a copy to:
Sandra Tung, Partner Calderwood & Harkness LLP 787 Seventh Avenue, 38th Floor New York, New York 10019 Telephone: (212) 558-4063
Email: sandra.tung@calderwoodharkness.com
VeloPay Systems, Inc. (Borrower):
Marcus Langford, Chief Financial Officer VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759 Telephone: (512) 634-8800
Email: marcus.langford@velopay.com
with a copy to:
Danielle Moreau, General Counsel VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759 Telephone: (512) 634-8815
Email: danielle.moreau@velopay.com
8. Authorization and Acknowledgment.
This Payoff Direction Letter is delivered with the express authorization and at the direction of both VeloPay Systems, Inc. and Harrowgate Private Equity Fund IV LP. VeloPay Systems, Inc., by its countersignature below, hereby confirms and authorizes the payoff in full and termination of its existing senior secured credit facility with Meridian Commercial Credit Corp. on the terms described herein and in the Payoff Letter. HPE Fund IV has authorized Calderwood & Harkness LLP to deliver this letter on its behalf and to take all actions reasonably necessary in connection with the payoff and termination of the Credit Agreement.
We respectfully request that Meridian Commercial Credit Corp. countersign a copy of this Payoff Direction Letter in the space provided below and return such countersigned copy to Calderwood & Harkness LLP (Attention: Megan Chu) by email and overnight courier, to confirm Meridian's receipt of and agreement with the payoff instructions set forth herein. Such countersignature shall not be deemed to amend or supersede the terms of the Payoff Letter, which shall remain in full force and effect.
We appreciate your cooperation and prompt attention to this matter, and we look forward to a smooth closing on July 22, 2025. Please do not hesitate to contact the undersigned or Megan Chu at the contact information set forth above with any questions or concerns.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Sandra Tung, Partner On behalf of Harrowgate Private Equity Fund IV LP
ACKNOWLEDGED AND AGREED:
VELOPAY SYSTEMS, INC.
By: ________
Name: Marcus Langford
Title: Chief Financial Officer
Date: ________
RECEIPT AND AGREEMENT CONFIRMED:
MERIDIAN COMMERCIAL CREDIT CORP.
By: ________
Name: Brian Castellano
Title: Vice President, Loan Administration
Date: ________
cc:
Priya Deshmukh, Managing Partner, Harrowgate Capital Management IV LLC, 300 King Street, Suite 4200, Wilmington, DE 19801
Nathan Aldridge, Chief Executive Officer, VeloPay Systems, Inc., 1455 Innovation Parkway, Suite 800, Austin, TX 78759
Danielle Moreau, General Counsel, VeloPay Systems, Inc., 1455 Innovation Parkway, Suite 800, Austin, TX 78759
Rebecca Thornton-Hayes, Whitford Jessup & Crane LLP, 600 Congress Avenue, Suite 2400, Austin, TX 78701 (Counsel to VeloPay Systems, Inc.)
Andrew Birchfield, Tralvendo National Bank, 100 Federal Street, 30th Floor, Boston, MA 02110 (Administrative Agent — Term Loan Facility)
Monica Fuentes, Prairie State Bank, N.A., 231 South LaSalle Street, Suite 4400, Chicago, IL 60604 (Administrative Agent — Revolving Credit Facility)
Gordon Strauss, Maplewood & Strauss LLP, One International Place, Suite 3600, Boston, MA 02110 (Financing Counsel to Lenders)
Encl.:
1. Copy of Payoff Letter from Meridian Commercial Credit Corp. dated July 18, 2025
2. Funds Flow Memorandum (excerpted — Meridian payoff wire section only) dated July 21, 2025