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

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SOLVENCY CERTIFICATE

Delivered pursuant to Section 4.01(h) of the Credit Agreement dated as of July 22, 2025

Reference is made to that certain Senior Secured Credit Agreement dated as of July 22, 2025 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), among VeloPay Systems, Inc., a Delaware corporation (the "Borrower"), Harrowgate Private Equity Fund IV LP, a Delaware limited partnership ("Holdings"), Tralvendo National Bank, a national banking association, as administrative agent for the lenders under the Term Loan Facility (in such capacity, the "Term Loan Administrative Agent"), Prairie State Bank, N.A., a national banking association, as administrative agent for the lenders under the Revolving Credit Facility (in such capacity, the "Revolving Administrative Agent" and, together with the Term Loan Administrative Agent, each an "Administrative Agent" and collectively, the "Administrative Agents"), and the several banks and other financial institutions from time to time party thereto as lenders (the "Lenders").

Date: July 22, 2025

Section 1. Recitals and Identification of Certifying Officer

The undersigned, Marcus Langford, hereby certifies that he is the duly appointed Chief Financial Officer of VeloPay Systems, Inc., a corporation organized and existing under the laws of the State of Delaware (EIN: 82-3019478), with its principal executive office located at 1455 Innovation Parkway, Suite 800, Austin, Texas 78759 (the "Borrower" or the "Surviving Corporation"). In his capacity as Chief Financial Officer, the undersigned is authorized to execute and deliver this Solvency Certificate (this "Certificate") on behalf of the Borrower.

This Certificate is being delivered in connection with the closing of the transactions (as more fully described in Section 2 below) contemplated by:

(a) that certain Agreement and Plan of Merger dated as of March 18, 2025 (the "Merger Agreement"), among Harrowgate Private Equity Fund IV LP, a Delaware limited partnership ("HPE Fund IV" or "Holdings"), Harrowgate Velocity Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of HPE Fund IV ("Merger Sub"), and VeloPay Systems, Inc.; and

(b) the Credit Agreement (as defined above).

This Certificate is delivered as a condition precedent to the initial borrowings under the Credit Agreement on the closing date (the "Closing Date"), as required by Section 4.01(h) of the Credit Agreement. The undersigned has been duly authorized by the Board of Directors of the Borrower to deliver this Certificate in satisfaction of such condition precedent.

The undersigned further certifies that he is familiar with the businesses, financial condition, and operations of the Borrower and each of its Subsidiaries, and that, by reason of such familiarity, he is qualified and competent to execute this Certificate. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Credit Agreement.

Section 2. Description of the Transactions

Pursuant to the Merger Agreement, Merger Sub has merged with and into VeloPay Systems, Inc. in a reverse triangular merger effected under Section 251 of the Delaware General Corporation Law (the "Merger"), with VeloPay Systems, Inc. surviving the Merger as a wholly-owned direct subsidiary of HPE Fund IV. The Merger became effective upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware on the date hereof.

The aggregate merger consideration payable to the holders of the outstanding shares of common stock of VeloPay Systems, Inc. (including the in-the-money portion of all outstanding equity awards settled in connection with the Merger) was approximately $1,900,000,000 (representing $20.00 per share on a fully diluted basis across 95,000,000 fully diluted shares of common stock) (the "Merger Consideration").

The Merger Consideration and other amounts payable in connection with the closing of the Transactions were funded from the following sources:

(a) Equity Contribution. HPE Fund IV contributed equity in the amount of $1,140,000,000 to the Borrower (through Merger Sub) in connection with the Merger (the "Equity Contribution");

(b) Term Loan Facility. The Borrower incurred a senior secured term loan in the aggregate principal amount of $500,000,000 under the Credit Agreement (the "Term Loan Facility"), with a seven (7)-year maturity and bearing interest at a rate per annum equal to the Adjusted Term SOFR Rate plus 375 basis points, with Tralvendo National Bank acting as lead arranger and Term Loan Administrative Agent;

(c) Revolving Credit Facility. The Borrower obtained a senior secured revolving credit facility with aggregate commitments of $260,000,000 under the Credit Agreement (the "Revolving Credit Facility"), with a five (5)-year maturity and bearing interest at a rate per annum equal to the Adjusted Term SOFR Rate plus 325 basis points, with Prairie State Bank, N.A. acting as co-arranger and Revolving Administrative Agent; approximately $254,700,000 of the Revolving Credit Facility has been drawn at closing; and

(d) Cash on Hand. The Borrower applied approximately $53,800,000 of cash and cash equivalents on hand immediately prior to the closing of the Merger.

In connection with the closing of the Transactions, the following payments were made or deposits effected:

(e) Payoff of Existing Indebtedness. VeloPay Systems, Inc.'s existing senior secured term loan with Meridian Commercial Credit Corp. was repaid in full at closing in the approximate aggregate amount of $113,230,000 (consisting of $112,000,000 in outstanding principal plus approximately $1,230,000 in accrued and unpaid interest through the Closing Date), and all security interests and liens granted in connection therewith have been, or are being, released;

(f) Transaction Expenses. Estimated transaction expenses in the approximate aggregate amount of $48,500,000 (representing the combined fees, costs, and expenses of the Buyer and the Seller, including advisory fees, legal fees, accounting fees, financing fees, and other customary closing costs) were paid at or in connection with the closing; and

(g) Indemnification Escrow. An amount equal to $133,000,000 (representing approximately 7% of the aggregate Merger Consideration) was deposited with Garrison Trust Company, a New York trust company, as escrow agent (the "Escrow Agent"), pursuant to the terms of the Escrow Agreement dated as of the date hereof (the "Escrow Amount"), to secure certain indemnification obligations under the Merger Agreement.

The foregoing transactions are collectively referred to herein as the "Transactions." In making the certifications set forth in Section 5 below, the undersigned has given full effect to all of the Transactions as if they had occurred simultaneously on the date hereof, including the incurrence of all indebtedness under the Credit Agreement, the payment of the Merger Consideration, the repayment of all existing indebtedness owed to Meridian Commercial Credit Corp., the payment of all estimated transaction expenses, and the deposit of the Escrow Amount with the Escrow Agent.

Section 3. Definitions of Solvency Concepts

For purposes of this Certificate, the following terms shall have the meanings set forth below:

3.1 Fair Value

"Fair Value" means the amount at which the aggregate assets, both tangible and intangible, of the Borrower and its Subsidiaries, on a consolidated basis, would change hands between a willing buyer and a willing seller, within a commercially reasonable period of time, each having reasonable knowledge of the relevant facts, with neither being under any compulsion to act. For the avoidance of doubt, Fair Value takes into account all assets of the Borrower and its Subsidiaries, including goodwill, intellectual property, customer relationships, and other intangible assets, valued on a going-concern basis.

3.2 Present Fair Salable Value

"Present Fair Salable Value" means the amount that could be obtained by an independent willing seller from an independent willing buyer if the aggregate assets (both tangible and intangible) of the Borrower and its Subsidiaries, on a consolidated basis, were sold with reasonable promptness in an arm's-length transaction under present conditions for the sale of comparable assets. Present Fair Salable Value reflects the price that would be achievable in a sale conducted over a commercially reasonable period, taking into account the nature and character of the assets and the prevailing market conditions, but does not contemplate a forced liquidation or distressed disposition of such assets.

3.3 Stated Liabilities

"Stated Liabilities" means the recorded liabilities (including contingent liabilities that would be recorded in accordance with generally accepted accounting principles in the United States ("GAAP")) of the Borrower and its Subsidiaries, on a consolidated basis, as of the date hereof after giving effect to the Transactions, determined in accordance with GAAP consistently applied. Stated Liabilities include, without limitation, all obligations for borrowed money under the Credit Agreement, all trade payables, accrued expenses, deferred revenue, tax liabilities, lease obligations, and other liabilities required to be reflected on a consolidated balance sheet prepared in accordance with GAAP.

3.4 Identified Contingent Liabilities

"Identified Contingent Liabilities" means the maximum estimated amount of liabilities reasonably likely to result from pending litigation, asserted claims and assessments, guarantees, uninsured risks, and other contingent liabilities of the Borrower and its Subsidiaries, on a consolidated basis (including all contingent liabilities that are not otherwise reflected in the Stated Liabilities), as identified and estimated by the management of the Borrower in good faith and in consultation with legal counsel, as applicable. The determination of Identified Contingent Liabilities has been made in a manner consistent with the requirements of ASC 450 (Contingencies) and related GAAP guidance, taking into account both the probability of occurrence and the reasonably estimable range of potential exposure.

3.5 Debts. "Debts" means all liabilities, whether matured or unmatured, liquidated or unliquidated, absolute, fixed, or contingent, of the Borrower and its Subsidiaries, on a consolidated basis, including, without limitation:

(a) all indebtedness under the Credit Agreement, consisting of the Term Loan Facility in the aggregate principal amount of $500,000,000 and the Revolving Credit Facility drawn amount of approximately $254,700,000;

(b) all trade payables owing to vendors, suppliers, and other counterparties in the ordinary course of business;

(c) all other obligations required to be reflected as liabilities on a consolidated balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP, including accrued expenses, deferred revenue, tax liabilities (whether current or deferred), operating and finance lease liabilities, and pension and other post-employment benefit obligations; and

(d) all Identified Contingent Liabilities.

Section 4. Basis of Certification and Financial Analysis

In connection with the preparation and delivery of this Certificate, the undersigned, in his capacity as Chief Financial Officer of the Borrower, has undertaken the following review and analysis:

(i) The undersigned has reviewed the consolidated financial statements of VeloPay Systems, Inc. and its Subsidiaries, including the audited consolidated financial statements for the fiscal year ended December 31, 2024 (the "FY2024 Financial Statements"), which were audited by Vance Thornbury & Co. LLP, an independent registered public accounting firm (engagement partner: Robert Paulsen), and which received an unqualified audit opinion. The undersigned has also reviewed the unaudited interim consolidated financial statements of the Borrower and its Subsidiaries through the most recent practicable date prior to closing.

(ii) The undersigned has reviewed the pro forma consolidated financial information of the Borrower and its Subsidiaries prepared by management giving effect to the Transactions, including the incurrence of all indebtedness under the Credit Agreement, the payment of the Merger Consideration, the repayment in full of the existing indebtedness owed to Meridian Commercial Credit Corp., the payment of all estimated transaction expenses, and the deposit of the Escrow Amount with Garrison Trust Company.

(iii) The undersigned has reviewed the business plans, financial projections, and cash flow forecasts of the Borrower and its Subsidiaries as prepared by management, and has evaluated the reasonableness of the assumptions underlying such projections.

(iv) The undersigned has consulted with other officers and senior management personnel of the Borrower, including the Chief Executive Officer, the General Counsel, the Chief Technology Officer, and the Vice President of Corporate Development, as well as with outside advisors to the Borrower, regarding the financial condition, operations, business prospects, legal matters, and contingent liabilities of the Borrower and its Subsidiaries.

(v) The undersigned has made such other investigations and inquiries as he has deemed necessary and appropriate in connection with the preparation of this Certificate.

The Subsidiaries of the Borrower that are included in the consolidated financial analysis on which this Certificate is based are as follows:

The key financial metrics of the Borrower and its Subsidiaries, on a consolidated basis, derived from the FY2024 Financial Statements are set forth below for reference:

As of the date hereof, the Borrower and its Subsidiaries employ approximately 1,340 full-time employees across their principal offices in Austin, Texas; Denver, Colorado; Toronto, Ontario, Canada; and Lisbon, Portugal.

The undersigned has reviewed and considered all of the foregoing information, together with such other information as the undersigned deemed relevant, in making the certifications set forth in Section 5 below.

Section 5. Solvency Certifications

Based upon the review, analysis, and investigation described in Section 4 above, and after giving effect to the Transactions (including all indebtedness incurred, all payments made, and all other obligations assumed in connection therewith) as if such Transactions had occurred simultaneously on the date hereof, the undersigned hereby certifies, in his capacity as Chief Financial Officer of the Borrower, as follows:

5.1 Fair Value Exceeds Debts (Balance Sheet Solvency)

Immediately after giving effect to the Transactions, the Fair Value of the assets of the Borrower and its Subsidiaries, on a consolidated basis, exceeds the sum of their Debts, including all Stated Liabilities and all Identified Contingent Liabilities. That is, the Borrower and its Subsidiaries, on a consolidated basis, are not "insolvent" on a balance sheet basis within the meaning of applicable federal and state laws governing solvency, including Section 548 of Title 11 of the United States Code and applicable provisions of the Uniform Fraudulent Transfer Act, the Uniform Voidable Transactions Act, and any similar state statutes.

5.2 Present Fair Salable Value Exceeds Debts

Immediately after giving effect to the Transactions, the Present Fair Salable Value of the assets of the Borrower and its Subsidiaries, on a consolidated basis, is greater than the amount that will be required to pay the probable liability on their existing Debts and other liabilities (including all Stated Liabilities and all Identified Contingent Liabilities) as such Debts and liabilities become absolute and matured. The undersigned has taken into account, in making this certification, the nature, character, and marketability of the assets of the Borrower and its Subsidiaries, including tangible and intangible assets, and has concluded that, even assuming a sale conducted with reasonable promptness under present market conditions, the aggregate proceeds realizable from such a sale would be sufficient to satisfy all Debts and other liabilities of the Borrower and its Subsidiaries.

5.3 Ability to Pay Debts as They Become Due (Cash Flow Solvency)

Immediately after giving effect to the Transactions, the Borrower and its Subsidiaries, on a consolidated basis, are able to pay their Debts and other liabilities (including all Stated Liabilities, all Identified Contingent Liabilities, and all subordinated liabilities) as such Debts and liabilities become absolute and matured in the ordinary course of business. In making this certification, the undersigned has considered, among other things, the nature of the Borrower's business as a cloud-based payments processing and merchant acquiring platform that processes approximately $87 billion in annualized gross payment volume across more than 14,000 merchants, generating recurring and predictable revenue streams from interchange-plus processing fees, SaaS subscription fees, and gateway transaction fees. These revenue characteristics, together with the Borrower's historical operating cash flow generation and the availability of undrawn commitments under the Revolving Credit Facility, provide the Borrower with sufficient liquidity to meet its debt service and other payment obligations as they come due over the projected horizon.

5.4 Adequate Capital / Not Unreasonably Small Capital

Immediately after giving effect to the Transactions, the Borrower and its Subsidiaries, on a consolidated basis, do not have unreasonably small capital with which to conduct their business as such business is currently conducted and as such business is proposed to be conducted following the Closing Date. The capital of the Borrower and its Subsidiaries is adequate in light of their anticipated business operations, including expected revenue growth, operating expenses, working capital needs, capital expenditure requirements (including technology infrastructure, product development, and compliance-related investments), and debt service obligations under the Credit Agreement (including scheduled principal amortization payments on the Term Loan Facility and interest payments on both the Term Loan Facility and the Revolving Credit Facility). The undersigned has further considered the Borrower's ability to access the undrawn portion of the Revolving Credit Facility to fund short-term liquidity needs, seasonal working capital fluctuations, and other general corporate purposes.

5.5 No Intent to Incur Debts Beyond Ability to Pay

The Borrower and its Subsidiaries do not intend to, and do not believe that they will, incur Debts beyond their ability to pay such Debts as they mature, taking into account the timing and amounts of cash to be received by the Borrower and its Subsidiaries (from operations, asset dispositions, or other sources) and the timing and amounts of cash to be payable on or in respect of their Debts. The undersigned has reviewed the projected sources and uses of cash of the Borrower and its Subsidiaries over the term of the Credit Agreement and, based on such review and on the assumptions and projections described in Section 4 above, has concluded that the Borrower and its Subsidiaries will have sufficient cash flow and liquidity to satisfy their obligations as they become due.

Section 6. Assumptions and Qualifications

The certifications set forth in Section 5 above are based upon the undersigned's analysis of internal financial information, business plans, financial projections, and estimates that the undersigned believes to be reasonable as of the date hereof. In delivering this Certificate, the undersigned notes the following qualifications and limitations:

(a) The undersigned is not expressing any opinion or view as to the value that would be realized in a liquidation, forced sale, or other disposition of the assets of the Borrower or any of its Subsidiaries under distressed or non-market conditions. The Fair Value and Present Fair Salable Value determinations reflected in this Certificate assume orderly transactions conducted in the normal course over commercially reasonable time periods, and do not contemplate fire-sale, bankruptcy, or other forced-sale scenarios.

(b) The certifications contained herein do not constitute, and shall not be construed as, an opinion as to whether the Borrower or any of its Subsidiaries could be found to be insolvent or unable to pay its debts under any applicable federal or state law relating to bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, or preferential transfer, including Title 11 of the United States Code, the Uniform Fraudulent Transfer Act, the Uniform Voidable Transactions Act, or any analogous state or foreign law. The undersigned expresses no view as to how a court or other adjudicative body would determine questions of solvency or insolvency.

(c) The undersigned acknowledges that he is not a licensed appraiser, investment banker, certified valuation analyst, or other expert in the evaluation of the solvency of business entities, and the certifications made herein are rendered solely in his capacity as Chief Financial Officer of the Borrower based on information available to him and on his knowledge of the business, operations, and financial condition of the Borrower and its Subsidiaries.

(d) In making the certifications contained herein, the undersigned has relied, in part, on financial projections and forward-looking estimates that are inherently uncertain and subject to significant business, economic, competitive, regulatory, and other risks and uncertainties, many of which are beyond the control of the Borrower and its Subsidiaries. Actual results may differ—potentially materially—from such projections and estimates, and no assurance can be given that the financial performance of the Borrower and its Subsidiaries will conform to the projections and estimates upon which this Certificate is, in part, based.

(e) The certifications set forth herein are given solely as of the date hereof, and the undersigned assumes no obligation to update, revise, or supplement this Certificate after the date hereof to reflect any changes in the financial condition, operations, or business prospects of the Borrower or any of its Subsidiaries, or any subsequent events or circumstances that may affect the certifications contained herein.

Section 7. Reliance

This Certificate is delivered for the benefit of Tralvendo National Bank, in its capacity as Administrative Agent for the Term Loan Facility, Prairie State Bank, N.A., in its capacity as Administrative Agent for the Revolving Credit Facility, and each of the Lenders from time to time party to the Credit Agreement, and each such party is entitled to rely on the certifications contained herein in connection with the initial extensions of credit under the Credit Agreement on the Closing Date and for all other purposes contemplated by the Credit Agreement.

Except as set forth in the immediately preceding paragraph, this Certificate may not be relied upon by any other person or entity without the prior written consent of each of the Administrative Agents. Neither this Certificate nor any of the certifications contained herein shall be deemed to create any duty, obligation, or liability of the undersigned or the Borrower to any person or entity other than the Administrative Agents and the Lenders, as described above.

Section 8. Execution

IN WITNESS WHEREOF, the undersigned has executed this Solvency Certificate as of the date first written above.

VELOPAY SYSTEMS, INC. (as the Surviving Corporation and Borrower)

By: ________

Name: Marcus Langford

Title: Chief Financial Officer

Date: July 22, 2025

Subsidiary	Jurisdiction	Ownership	Notes
VeloPay Processing LLC	Delaware	100% wholly-owned	Core payment processing operations
VeloPay Canada Inc.	Ontario, Canada	100% wholly-owned	Canadian payment operations
VeloPay Europe, Unipessoal Lda.	Portugal (Lisbon)	100% wholly-owned	European payment operations
VeloPay Fraud intelligence Inc.	Delaware	100% wholly-owned	Fraud detection and prevention
PayStream Gateway LLC	Delaware	100% wholly-owned	Payment gateway platform; acquired in 2021 for $45,000,000
Metric	FY2024 Amount
Revenue	$412,300,000
Adjusted EBITDA	$98,100,000 (23.79% margin)
Net Income	$41,700,000
Total Assets	$689,400,000
Total Debt (pre-Transaction)	$112,000,000 (existing credit facility with Meridian Commercial Credit Corp., now refinanced)
Cash and Cash Equivalents	$53,800,000

SOLVENCY CERTIFICATE
Delivered pursuant to Section 4.01(h) of the Credit Agreement dated as of July 22, 2025
Reference is made to that certain Senior Secured Credit Agreement dated as of July 22, 2025 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), among VeloPay Systems, Inc., a Delaware corporation (the "Borrower"), Harrowgate Private Equity Fund IV LP, a Delaware limited partnership ("Holdings"), Tralvendo National Bank, a national banking association, as administrative agent for the lenders under the Term Loan Facility (in such capacity, the "Term Loan Administrative Agent"), Prairie State Bank, N.A., a national banking association, as administrative agent for the lenders under the Revolving Credit Facility (in such capacity, the "Revolving Administrative Agent" and, together with the Term Loan Administrative Agent, each an "Administrative Agent" and collectively, the "Administrative Agents"), and the several banks and other financial institutions from time to time party thereto as lenders (the "Lenders").
Date: July 22, 2025
Section 1. Recitals and Identification of Certifying Officer
The undersigned, Marcus Langford, hereby certifies that he is the duly appointed Chief Financial Officer of VeloPay Systems, Inc., a corporation organized and existing under the laws of the State of Delaware (EIN: 82-3019478), with its principal executive office located at 1455 Innovation Parkway, Suite 800, Austin, Texas 78759 (the "Borrower" or the "Surviving Corporation"). In his capacity as Chief Financial Officer, the undersigned is authorized to execute and deliver this Solvency Certificate (this "Certificate") on behalf of the Borrower.
This Certificate is being delivered in connection with the closing of the transactions (as more fully described in Section 2 below) contemplated by:
(a) that certain Agreement and Plan of Merger dated as of March 18, 2025 (the "Merger Agreement"), among Harrowgate Private Equity Fund IV LP, a Delaware limited partnership ("HPE Fund IV" or "Holdings"), Harrowgate Velocity Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of HPE Fund IV ("Merger Sub"), and VeloPay Systems, Inc.; and
(b) the Credit Agreement (as defined above).
This Certificate is delivered as a condition precedent to the initial borrowings under the Credit Agreement on the closing date (the "Closing Date"), as required by Section 4.01(h) of the Credit Agreement. The undersigned has been duly authorized by the Board of Directors of the Borrower to deliver this Certificate in satisfaction of such condition precedent.
The undersigned further certifies that he is familiar with the businesses, financial condition, and operations of the Borrower and each of its Subsidiaries, and that, by reason of such familiarity, he is qualified and competent to execute this Certificate. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Credit Agreement.
Section 2. Description of the Transactions
Pursuant to the Merger Agreement, Merger Sub has merged with and into VeloPay Systems, Inc. in a reverse triangular merger effected under Section 251 of the Delaware General Corporation Law (the "Merger"), with VeloPay Systems, Inc. surviving the Merger as a wholly-owned direct subsidiary of HPE Fund IV. The Merger became effective upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware on the date hereof.
The aggregate merger consideration payable to the holders of the outstanding shares of common stock of VeloPay Systems, Inc. (including the in-the-money portion of all outstanding equity awards settled in connection with the Merger) was approximately $1,900,000,000 (representing $20.00 per share on a fully diluted basis across 95,000,000 fully diluted shares of common stock) (the "Merger Consideration").
The Merger Consideration and other amounts payable in connection with the closing of the Transactions were funded from the following sources:
(a) Equity Contribution. HPE Fund IV contributed equity in the amount of $1,140,000,000 to the Borrower (through Merger Sub) in connection with the Merger (the "Equity Contribution");
(b) Term Loan Facility. The Borrower incurred a senior secured term loan in the aggregate principal amount of $500,000,000 under the Credit Agreement (the "Term Loan Facility"), with a seven (7)-year maturity and bearing interest at a rate per annum equal to the Adjusted Term SOFR Rate plus 375 basis points, with Tralvendo National Bank acting as lead arranger and Term Loan Administrative Agent;
(c) Revolving Credit Facility. The Borrower obtained a senior secured revolving credit facility with aggregate commitments of $260,000,000 under the Credit Agreement (the "Revolving Credit Facility"), with a five (5)-year maturity and bearing interest at a rate per annum equal to the Adjusted Term SOFR Rate plus 325 basis points, with Prairie State Bank, N.A. acting as co-arranger and Revolving Administrative Agent; approximately $254,700,000 of the Revolving Credit Facility has been drawn at closing; and
(d) Cash on Hand. The Borrower applied approximately $53,800,000 of cash and cash equivalents on hand immediately prior to the closing of the Merger.
In connection with the closing of the Transactions, the following payments were made or deposits effected:
(e) Payoff of Existing Indebtedness. VeloPay Systems, Inc.'s existing senior secured term loan with Meridian Commercial Credit Corp. was repaid in full at closing in the approximate aggregate amount of $113,230,000 (consisting of $112,000,000 in outstanding principal plus approximately $1,230,000 in accrued and unpaid interest through the Closing Date), and all security interests and liens granted in connection therewith have been, or are being, released;
(f) Transaction Expenses. Estimated transaction expenses in the approximate aggregate amount of $48,500,000 (representing the combined fees, costs, and expenses of the Buyer and the Seller, including advisory fees, legal fees, accounting fees, financing fees, and other customary closing costs) were paid at or in connection with the closing; and
(g) Indemnification Escrow. An amount equal to $133,000,000 (representing approximately 7% of the aggregate Merger Consideration) was deposited with Garrison Trust Company, a New York trust company, as escrow agent (the "Escrow Agent"), pursuant to the terms of the Escrow Agreement dated as of the date hereof (the "Escrow Amount"), to secure certain indemnification obligations under the Merger Agreement.
The foregoing transactions are collectively referred to herein as the "Transactions." In making the certifications set forth in Section 5 below, the undersigned has given full effect to all of the Transactions as if they had occurred simultaneously on the date hereof, including the incurrence of all indebtedness under the Credit Agreement, the payment of the Merger Consideration, the repayment of all existing indebtedness owed to Meridian Commercial Credit Corp., the payment of all estimated transaction expenses, and the deposit of the Escrow Amount with the Escrow Agent.
Section 3. Definitions of Solvency Concepts
For purposes of this Certificate, the following terms shall have the meanings set forth below:
3.1 Fair Value
"Fair Value" means the amount at which the aggregate assets, both tangible and intangible, of the Borrower and its Subsidiaries, on a consolidated basis, would change hands between a willing buyer and a willing seller, within a commercially reasonable period of time, each having reasonable knowledge of the relevant facts, with neither being under any compulsion to act. For the avoidance of doubt, Fair Value takes into account all assets of the Borrower and its Subsidiaries, including goodwill, intellectual property, customer relationships, and other intangible assets, valued on a going-concern basis.
3.2 Present Fair Salable Value
"Present Fair Salable Value" means the amount that could be obtained by an independent willing seller from an independent willing buyer if the aggregate assets (both tangible and intangible) of the Borrower and its Subsidiaries, on a consolidated basis, were sold with reasonable promptness in an arm's-length transaction under present conditions for the sale of comparable assets. Present Fair Salable Value reflects the price that would be achievable in a sale conducted over a commercially reasonable period, taking into account the nature and character of the assets and the prevailing market conditions, but does not contemplate a forced liquidation or distressed disposition of such assets.
3.3 Stated Liabilities
"Stated Liabilities" means the recorded liabilities (including contingent liabilities that would be recorded in accordance with generally accepted accounting principles in the United States ("GAAP")) of the Borrower and its Subsidiaries, on a consolidated basis, as of the date hereof after giving effect to the Transactions, determined in accordance with GAAP consistently applied. Stated Liabilities include, without limitation, all obligations for borrowed money under the Credit Agreement, all trade payables, accrued expenses, deferred revenue, tax liabilities, lease obligations, and other liabilities required to be reflected on a consolidated balance sheet prepared in accordance with GAAP.
3.4 Identified Contingent Liabilities
"Identified Contingent Liabilities" means the maximum estimated amount of liabilities reasonably likely to result from pending litigation, asserted claims and assessments, guarantees, uninsured risks, and other contingent liabilities of the Borrower and its Subsidiaries, on a consolidated basis (including all contingent liabilities that are not otherwise reflected in the Stated Liabilities), as identified and estimated by the management of the Borrower in good faith and in consultation with legal counsel, as applicable. The determination of Identified Contingent Liabilities has been made in a manner consistent with the requirements of ASC 450 (Contingencies) and related GAAP guidance, taking into account both the probability of occurrence and the reasonably estimable range of potential exposure.
3.5 Debts.  "Debts" means all liabilities, whether matured or unmatured, liquidated or unliquidated, absolute, fixed, or contingent, of the Borrower and its Subsidiaries, on a consolidated basis, including, without limitation:
(a) all indebtedness under the Credit Agreement, consisting of the Term Loan Facility in the aggregate principal amount of $500,000,000 and the Revolving Credit Facility drawn amount of approximately $254,700,000;
(b) all trade payables owing to vendors, suppliers, and other counterparties in the ordinary course of business;
(c) all other obligations required to be reflected as liabilities on a consolidated balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP, including accrued expenses, deferred revenue, tax liabilities (whether current or deferred), operating and finance lease liabilities, and pension and other post-employment benefit obligations; and
(d) all Identified Contingent Liabilities.
Section 4. Basis of Certification and Financial Analysis
In connection with the preparation and delivery of this Certificate, the undersigned, in his capacity as Chief Financial Officer of the Borrower, has undertaken the following review and analysis:
(i) The undersigned has reviewed the consolidated financial statements of VeloPay Systems, Inc. and its Subsidiaries, including the audited consolidated financial statements for the fiscal year ended December 31, 2024 (the "FY2024 Financial Statements"), which were audited by Vance Thornbury & Co. LLP, an independent registered public accounting firm (engagement partner: Robert Paulsen), and which received an unqualified audit opinion. The undersigned has also reviewed the unaudited interim consolidated financial statements of the Borrower and its Subsidiaries through the most recent practicable date prior to closing.
(ii) The undersigned has reviewed the pro forma consolidated financial information of the Borrower and its Subsidiaries prepared by management giving effect to the Transactions, including the incurrence of all indebtedness under the Credit Agreement, the payment of the Merger Consideration, the repayment in full of the existing indebtedness owed to Meridian Commercial Credit Corp., the payment of all estimated transaction expenses, and the deposit of the Escrow Amount with Garrison Trust Company.
(iii) The undersigned has reviewed the business plans, financial projections, and cash flow forecasts of the Borrower and its Subsidiaries as prepared by management, and has evaluated the reasonableness of the assumptions underlying such projections.
(iv) The undersigned has consulted with other officers and senior management personnel of the Borrower, including the Chief Executive Officer, the General Counsel, the Chief Technology Officer, and the Vice President of Corporate Development, as well as with outside advisors to the Borrower, regarding the financial condition, operations, business prospects, legal matters, and contingent liabilities of the Borrower and its Subsidiaries.
(v) The undersigned has made such other investigations and inquiries as he has deemed necessary and appropriate in connection with the preparation of this Certificate.
The Subsidiaries of the Borrower that are included in the consolidated financial analysis on which this Certificate is based are as follows:
The key financial metrics of the Borrower and its Subsidiaries, on a consolidated basis, derived from the FY2024 Financial Statements are set forth below for reference:
As of the date hereof, the Borrower and its Subsidiaries employ approximately 1,340 full-time employees across their principal offices in Austin, Texas; Denver, Colorado; Toronto, Ontario, Canada; and Lisbon, Portugal.
The undersigned has reviewed and considered all of the foregoing information, together with such other information as the undersigned deemed relevant, in making the certifications set forth in Section 5 below.
Section 5. Solvency Certifications
Based upon the review, analysis, and investigation described in Section 4 above, and after giving effect to the Transactions (including all indebtedness incurred, all payments made, and all other obligations assumed in connection therewith) as if such Transactions had occurred simultaneously on the date hereof, the undersigned hereby certifies, in his capacity as Chief Financial Officer of the Borrower, as follows:
5.1 Fair Value Exceeds Debts (Balance Sheet Solvency)
Immediately after giving effect to the Transactions, the Fair Value of the assets of the Borrower and its Subsidiaries, on a consolidated basis, exceeds the sum of their Debts, including all Stated Liabilities and all Identified Contingent Liabilities. That is, the Borrower and its Subsidiaries, on a consolidated basis, are not "insolvent" on a balance sheet basis within the meaning of applicable federal and state laws governing solvency, including Section 548 of Title 11 of the United States Code and applicable provisions of the Uniform Fraudulent Transfer Act, the Uniform Voidable Transactions Act, and any similar state statutes.
5.2 Present Fair Salable Value Exceeds Debts
Immediately after giving effect to the Transactions, the Present Fair Salable Value of the assets of the Borrower and its Subsidiaries, on a consolidated basis, is greater than the amount that will be required to pay the probable liability on their existing Debts and other liabilities (including all Stated Liabilities and all Identified Contingent Liabilities) as such Debts and liabilities become absolute and matured. The undersigned has taken into account, in making this certification, the nature, character, and marketability of the assets of the Borrower and its Subsidiaries, including tangible and intangible assets, and has concluded that, even assuming a sale conducted with reasonable promptness under present market conditions, the aggregate proceeds realizable from such a sale would be sufficient to satisfy all Debts and other liabilities of the Borrower and its Subsidiaries.
5.3 Ability to Pay Debts as They Become Due (Cash Flow Solvency)
Immediately after giving effect to the Transactions, the Borrower and its Subsidiaries, on a consolidated basis, are able to pay their Debts and other liabilities (including all Stated Liabilities, all Identified Contingent Liabilities, and all subordinated liabilities) as such Debts and liabilities become absolute and matured in the ordinary course of business. In making this certification, the undersigned has considered, among other things, the nature of the Borrower's business as a cloud-based payments processing and merchant acquiring platform that processes approximately $87 billion in annualized gross payment volume across more than 14,000 merchants, generating recurring and predictable revenue streams from interchange-plus processing fees, SaaS subscription fees, and gateway transaction fees. These revenue characteristics, together with the Borrower's historical operating cash flow generation and the availability of undrawn commitments under the Revolving Credit Facility, provide the Borrower with sufficient liquidity to meet its debt service and other payment obligations as they come due over the projected horizon.
5.4 Adequate Capital / Not Unreasonably Small Capital
Immediately after giving effect to the Transactions, the Borrower and its Subsidiaries, on a consolidated basis, do not have unreasonably small capital with which to conduct their business as such business is currently conducted and as such business is proposed to be conducted following the Closing Date. The capital of the Borrower and its Subsidiaries is adequate in light of their anticipated business operations, including expected revenue growth, operating expenses, working capital needs, capital expenditure requirements (including technology infrastructure, product development, and compliance-related investments), and debt service obligations under the Credit Agreement (including scheduled principal amortization payments on the Term Loan Facility and interest payments on both the Term Loan Facility and the Revolving Credit Facility). The undersigned has further considered the Borrower's ability to access the undrawn portion of the Revolving Credit Facility to fund short-term liquidity needs, seasonal working capital fluctuations, and other general corporate purposes.
5.5 No Intent to Incur Debts Beyond Ability to Pay
The Borrower and its Subsidiaries do not intend to, and do not believe that they will, incur Debts beyond their ability to pay such Debts as they mature, taking into account the timing and amounts of cash to be received by the Borrower and its Subsidiaries (from operations, asset dispositions, or other sources) and the timing and amounts of cash to be payable on or in respect of their Debts. The undersigned has reviewed the projected sources and uses of cash of the Borrower and its Subsidiaries over the term of the Credit Agreement and, based on such review and on the assumptions and projections described in Section 4 above, has concluded that the Borrower and its Subsidiaries will have sufficient cash flow and liquidity to satisfy their obligations as they become due.
Section 6. Assumptions and Qualifications
The certifications set forth in Section 5 above are based upon the undersigned's analysis of internal financial information, business plans, financial projections, and estimates that the undersigned believes to be reasonable as of the date hereof. In delivering this Certificate, the undersigned notes the following qualifications and limitations:
(a) The undersigned is not expressing any opinion or view as to the value that would be realized in a liquidation, forced sale, or other disposition of the assets of the Borrower or any of its Subsidiaries under distressed or non-market conditions. The Fair Value and Present Fair Salable Value determinations reflected in this Certificate assume orderly transactions conducted in the normal course over commercially reasonable time periods, and do not contemplate fire-sale, bankruptcy, or other forced-sale scenarios.
(b) The certifications contained herein do not constitute, and shall not be construed as, an opinion as to whether the Borrower or any of its Subsidiaries could be found to be insolvent or unable to pay its debts under any applicable federal or state law relating to bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, or preferential transfer, including Title 11 of the United States Code, the Uniform Fraudulent Transfer Act, the Uniform Voidable Transactions Act, or any analogous state or foreign law. The undersigned expresses no view as to how a court or other adjudicative body would determine questions of solvency or insolvency.
(c) The undersigned acknowledges that he is not a licensed appraiser, investment banker, certified valuation analyst, or other expert in the evaluation of the solvency of business entities, and the certifications made herein are rendered solely in his capacity as Chief Financial Officer of the Borrower based on information available to him and on his knowledge of the business, operations, and financial condition of the Borrower and its Subsidiaries.
(d) In making the certifications contained herein, the undersigned has relied, in part, on financial projections and forward-looking estimates that are inherently uncertain and subject to significant business, economic, competitive, regulatory, and other risks and uncertainties, many of which are beyond the control of the Borrower and its Subsidiaries. Actual results may differ—potentially materially—from such projections and estimates, and no assurance can be given that the financial performance of the Borrower and its Subsidiaries will conform to the projections and estimates upon which this Certificate is, in part, based.
(e) The certifications set forth herein are given solely as of the date hereof, and the undersigned assumes no obligation to update, revise, or supplement this Certificate after the date hereof to reflect any changes in the financial condition, operations, or business prospects of the Borrower or any of its Subsidiaries, or any subsequent events or circumstances that may affect the certifications contained herein.
Section 7. Reliance
This Certificate is delivered for the benefit of Tralvendo National Bank, in its capacity as Administrative Agent for the Term Loan Facility, Prairie State Bank, N.A., in its capacity as Administrative Agent for the Revolving Credit Facility, and each of the Lenders from time to time party to the Credit Agreement, and each such party is entitled to rely on the certifications contained herein in connection with the initial extensions of credit under the Credit Agreement on the Closing Date and for all other purposes contemplated by the Credit Agreement.
Except as set forth in the immediately preceding paragraph, this Certificate may not be relied upon by any other person or entity without the prior written consent of each of the Administrative Agents. Neither this Certificate nor any of the certifications contained herein shall be deemed to create any duty, obligation, or liability of the undersigned or the Borrower to any person or entity other than the Administrative Agents and the Lenders, as described above.
Section 8. Execution
IN WITNESS WHEREOF, the undersigned has executed this Solvency Certificate as of the date first written above.
VELOPAY SYSTEMS, INC. (as the Surviving Corporation and Borrower)
By: ________
Name: Marcus Langford
Title: Chief Financial Officer
Date: July 22, 2025
Subsidiary | Jurisdiction | Ownership | Notes
VeloPay Processing LLC | Delaware | 100% wholly-owned | Core payment processing operations
VeloPay Canada Inc. | Ontario, Canada | 100% wholly-owned | Canadian payment operations
VeloPay Europe, Unipessoal Lda. | Portugal (Lisbon) | 100% wholly-owned | European payment operations
VeloPay Fraud intelligence Inc. | Delaware | 100% wholly-owned | Fraud detection and prevention
PayStream Gateway LLC | Delaware | 100% wholly-owned | Payment gateway platform; acquired in 2021 for $45,000,000
Metric | FY2024 Amount
Revenue | $412,300,000
Adjusted EBITDA | $98,100,000 (23.79% margin)
Net Income | $41,700,000
Total Assets | $689,400,000
Total Debt (pre-Transaction) | $112,000,000 (existing credit facility with Meridian Commercial Credit Corp., now refinanced)
Cash and Cash Equivalents | $53,800,000

SOLVENCY CERTIFICATE

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