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

buyers-counsel-legal-opinion.docx DOCUMENT M&A / Corporate

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

Telephone: (212) 848-7000 Facsimile: (212) 848-7100

July 22, 2025

Tralvendo National Bank, as Administrative Agent for the Term Loan Lenders 100 Federal Street, 30th Floor Boston, Massachusetts 02110

Prairie State Bank, N.A., as Administrative Agent for the Revolving Credit Facility Lenders 231 South LaSalle Street, Suite 4400 Chicago, Illinois 60604

(Collectively, the "Agents"; together with the Lenders party to the Credit Agreement (as defined below), the "Lender Parties")

Ladies and Gentlemen:

Re: Senior Secured Credit Agreement, dated as of July 22, 2025 (the "Credit Agreement"), among VeloPay Systems, Inc., a Delaware corporation, as Borrower, Harrowgate Private Equity Fund IV LP, a Delaware limited partnership, as Holdings, Tralvendo National Bank, as Administrative Agent for the Term Loan Facility, Prairie State Bank, N.A., as Administrative Agent for the Revolving Credit Facility, and the Lenders party thereto; and the Agreement and Plan of Merger, dated as of March 18, 2025 (the "Merger Agreement"), among Harrowgate Private Equity Fund IV LP ("HPE Fund IV"), Harrowgate Velocity Merger Sub Inc. ("Merger Sub"), and VeloPay Systems, Inc. ("VeloPay" or the "Company")

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I. INTRODUCTION AND CONTEXT

A. Identification of Firm and Client

We have acted as counsel to Harrowgate Private Equity Fund IV LP, a Delaware limited partnership ("HPE Fund IV"), and Harrowgate Velocity Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of HPE Fund IV ("Merger Sub"), in connection with the transactions described herein (Firm Matter Number: 1003-00003). This opinion letter is delivered to you pursuant to Section 4.01(f) of the Credit Agreement. Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Credit Agreement or the Merger Agreement, as applicable.

B. Description of the Transactions

This opinion is rendered in connection with the following transactions, which have been consummated as of the date hereof:

1. The Merger. The reverse triangular merger (the "Merger") pursuant to which Merger Sub has merged with and into VeloPay Systems, Inc., a Delaware corporation (the "Company"), with the Company surviving as a wholly-owned subsidiary of HPE Fund IV, in accordance with the terms and conditions of the Agreement and Plan of Merger, dated as of March 18, 2025 (the "Merger Agreement"), among HPE Fund IV, Merger Sub, and VeloPay. The aggregate merger consideration payable in connection with the Merger is $1,900,000,000, representing $20.00 per share on a fully diluted basis across 95,000,000 fully diluted shares of common stock of VeloPay.

2. The Financing. The incurrence of indebtedness under the Credit Agreement consisting of (a) a senior secured term loan facility in the aggregate principal amount of $500,000,000 (the "Term Loan Facility"), with a maturity date of July 22, 2032 (seven years from the Closing Date), bearing interest at a rate per annum equal to the Adjusted Term SOFR Rate plus 3.75%, and (b) a senior secured revolving credit facility in the aggregate available amount of $260,000,000 (the "Revolving Credit Facility"), with a maturity date of July 22, 2030 (five years from the Closing Date), bearing interest at a rate per annum equal to the Adjusted Term SOFR Rate plus 3.25%.

3. The Equity Contribution. The equity contribution by HPE Fund IV in the aggregate amount of $1,140,000,000 in immediately available funds, which, together with the proceeds of the Term Loan Facility drawn on the Closing Date, was used to fund the aggregate merger consideration, transaction expenses, and other amounts payable in connection with the consummation of the Merger and the related transactions.

The Merger, the financing transactions described above, and the other transactions contemplated by the Transaction Documents (as defined below) and the Financing Documents (as defined below) are collectively referred to herein as the "Transactions."

C. Identification of Opinion Parties

As used herein, the "Opinion Parties" are the following entities:

(a) Harrowgate Private Equity Fund IV LP ("HPE Fund IV") — a limited partnership duly formed under the laws of the State of Delaware; Employer Identification Number: 87-4231956; principal office: 300 King Street, Suite 4200, Wilmington, Delaware 19801.

(b) Harrowgate Capital Management IV LLC — a limited liability company duly formed under the laws of the State of Delaware; Employer Identification Number: 87-4231847; the sole general partner of HPE Fund IV.

(c) Harrowgate Velocity Merger Sub Inc. ("Merger Sub") — a corporation incorporated under the laws of the State of Delaware on February 24, 2025; Employer Identification Number: 93-1847265; Delaware Secretary of State File Number: 7291034; registered agent: Capitol Registered Agents LLC, 1209 Orange Street, Wilmington, Delaware 19801; sole stockholder: HPE Fund IV. As of the Effective Time of the Merger, Merger Sub has been merged with and into VeloPay and has ceased to exist as a separate legal entity.

(d) VeloPay Systems, Inc. (as the Surviving Corporation in the Merger and the Borrower under the Credit Agreement) — a corporation organized under the laws of the State of Delaware; Employer Identification Number: 82-3019478; Delaware Secretary of State File Number: 5748392; principal office: 1455 Innovation Parkway, Suite 800, Austin, Texas 78759.

II. DOCUMENTS REVIEWED

In connection with the opinions expressed herein, we have reviewed executed originals or copies of the following documents (or, where indicated, drafts that we have been advised are substantially in the form of the executed versions):

A. Transaction Agreements

1. The Agreement and Plan of Merger, dated as of March 18, 2025 (the "Merger Agreement"), among HPE Fund IV, Merger Sub, and VeloPay (execution version), including all schedules and exhibits thereto.

2. The Disclosure Schedules delivered by HPE Fund IV and Merger Sub pursuant to the Merger Agreement, dated as of March 18, 2025.

3. The Equity Commitment Letter, dated as of February 14, 2025, from Harrowgate Capital Management IV LLC to VeloPay, pursuant to which Harrowgate Capital Management IV LLC committed to cause HPE Fund IV to fund the equity contribution described therein.

4. The Limited Guarantee, dated as of March 18, 2025, from Harrowgate Capital Management IV LLC in favor of VeloPay, guaranteeing HPE Fund IV's reverse termination fee obligation in the amount of $57,000,000 and certain other specified obligations, as set forth therein.

5. The Stockholder Support Agreement, dated as of March 18, 2025, among HPE Fund IV, Merger Sub, and certain stockholders of VeloPay identified therein.

6. The Rollover Agreement, dated as of March 18, 2025, among HPE Fund IV, Harrowgate Velocity Co-Invest LP, Nathan Aldridge, and Sonia Reyes-Watkins, pursuant to which certain shares of VeloPay common stock and equity awards were contributed or exchanged for equity interests in HPE Fund IV.

7. The Certificate of Merger, duly executed and filed with the Secretary of State of the State of Delaware on July 22, 2025, in accordance with Section 251 of the Delaware General Corporation Law (the "DGCL").

B. Financing Documents

1. The Debt Commitment Letter, dated as of February 14, 2025, from Tralvendo National Bank and Prairie State Bank, N.A. to HPE Fund IV (Reference: CRE-2025-SPF-0441), together with the related fee letters and engagement letters delivered in connection therewith.

2. The Senior Secured Credit Agreement, dated as of July 22, 2025 (execution version) (the "Credit Agreement"), among VeloPay Systems, Inc. (as Borrower), HPE Fund IV (as Holdings), Tralvendo National Bank (as Administrative Agent for the Term Loan Facility), Prairie State Bank, N.A. (as Administrative Agent for the Revolving Credit Facility), and the Lenders party thereto.

3. The Guarantee and Collateral Agreement, dated as of July 22, 2025 (the "Guarantee and Collateral Agreement"), among VeloPay Systems, Inc. (as Borrower), HPE Fund IV (as Holdings), and the following subsidiary guarantors: VeloPay Processing LLC, a Delaware limited liability company; VeloPay Fraud intelligence Inc., a Delaware corporation; and PayStream Gateway LLC, a Delaware limited liability company.

4. The Intercreditor Agreement, dated as of July 22, 2025 (the "Intercreditor Agreement"), between Tralvendo National Bank (as Term Loan Agent) and Prairie State Bank, N.A. (as Revolver Agent).

5. The Fee Letter, dated as of February 14, 2025 (confidential), among HPE Fund IV, Tralvendo National Bank, and Prairie State Bank, N.A., setting forth certain fees payable in connection with the financing transactions contemplated by the Credit Agreement.

C. Organizational Documents

1. The Certificate of Incorporation of Merger Sub, as filed with the Secretary of State of the State of Delaware on February 24, 2025.

2. The Amended and Restated Certificate of Incorporation of VeloPay Systems, Inc. (as Surviving Corporation), effective as of July 22, 2025, adopted in connection with the Merger.

3. The Amended and Restated Bylaws of VeloPay Systems, Inc. (as Surviving Corporation), effective as of July 22, 2025, adopted in connection with the Merger.

4. The Certificate of Limited Partnership of HPE Fund IV, as filed with the Secretary of State of the State of Delaware, and the Amended and Restated Agreement of Limited Partnership of HPE Fund IV, dated as of the date specified therein.

5. The Certificate of Formation of Harrowgate Capital Management IV LLC, as filed with the Secretary of State of the State of Delaware, and the Amended and Restated Operating Agreement of Harrowgate Capital Management IV LLC, dated as of the date specified therein.

D. Authorizing Resolutions

1. The written consent resolutions of the sole director of Merger Sub, dated as of March 18, 2025, authorizing the execution and delivery of the Merger Agreement by Merger Sub and the consummation by Merger Sub of the Merger and the other transactions contemplated by the Merger Agreement.

2. The written consent of Harrowgate Capital Management IV LLC, acting in its capacity as the sole general partner of HPE Fund IV, dated as of March 18, 2025 (as supplemented by additional written consents dated as of July 21, 2025), authorizing the Merger, the equity commitment, the execution and delivery of the Merger Agreement, the Credit Agreement, and all other Transaction Documents and Financing Documents, and the consummation of all related transactions.

3. The written consent of HPE Fund IV, acting in its capacity as the sole stockholder of Merger Sub, dated as of March 18, 2025, approving the Merger Agreement and the consummation of the Merger.

E. Closing Deliverables and Certificates

1. The Officer's Certificate of HPE Fund IV and Merger Sub, dated as of July 22, 2025, executed by Priya Deshmukh, Managing Partner, Fund IV, certifying as to certain matters relating to the satisfaction of conditions to closing.

2. The Secretary's Certificate of HPE Fund IV and Merger Sub, dated as of July 22, 2025, certifying as to the incumbency and specimen signatures of authorized officers, the authenticity of organizational documents, and the adoption of authorizing resolutions.

3. The Solvency Certificate, dated as of July 22, 2025, executed and delivered by Marcus Langford, Chief Financial Officer of VeloPay, certifying as to the solvency of VeloPay and its subsidiaries on a consolidated basis after giving effect to the Transactions.

4. Good standing certificates (or equivalent) for each of HPE Fund IV, Harrowgate Capital Management IV LLC, Merger Sub (dated prior to the Effective Time of the Merger), VeloPay Systems, Inc., and each subsidiary guarantor (VeloPay Processing LLC, VeloPay Fraud intelligence Inc., and PayStream Gateway LLC), issued by the Secretary of State of the State of Delaware and, where applicable, by other relevant governmental authorities in their respective jurisdictions of formation, qualification, or organization, each dated within a recent date prior to the date hereof.

5. The Funds Flow Memorandum, dated as of July 21, 2025, setting forth the sources and uses of funds and the wiring instructions for the distribution of the merger consideration, equity contributions, debt proceeds, and payment of fees and expenses.

F. Escrow and Paying Agent Agreements

1. The Escrow Agreement, dated as of July 22, 2025 (Reference: GT-ESC-2025-07223), among HPE Fund IV, Nathan Aldridge (in his capacity as Stockholder Representative), and Garrison Trust Company (as Escrow Agent), establishing an escrow fund in the amount of $133,000,000 (representing approximately 7% of the aggregate merger consideration) to secure the indemnification obligations of the former stockholders of VeloPay under the Merger Agreement.

2. The Paying Agent Agreement, dated as of July 22, 2025, between VeloPay Systems, Inc. (as the Surviving Corporation) and Keystone Pacific Transfer Services Inc. (as Paying Agent), providing for the exchange of outstanding shares of VeloPay common stock for the per-share merger consideration and the processing of letters of transmittal.

G. Other Documents

We have also reviewed such other certificates, instruments, agreements, and documents as we have deemed necessary or appropriate for the purposes of the opinions expressed herein, including records of proceedings made available to us by the Opinion Parties.

The documents listed in Sections II.A through II.G above are collectively referred to herein as the "Transaction Documents." The Credit Agreement, the Guarantee and Collateral Agreement, the Intercreditor Agreement, and the related documents referred to in Sections II.B above are collectively referred to herein as the "Financing Documents."

III. ASSUMPTIONS

In rendering the opinions set forth herein, we have, with your permission and without independent verification or investigation, assumed the following:

A. General Assumptions

1. All signatures on all documents reviewed by us in connection with the rendering of this opinion are genuine and authentic, and each such document was signed by the person or persons purporting to have signed such document.

2. All documents submitted to us as originals are authentic, complete, and accurate, and all documents submitted to us as copies, whether certified or otherwise, conform to the authentic originals of such documents in all material respects.

3. Each natural person who has executed any document reviewed by us in connection with the rendering of this opinion had, at the time of such execution, the requisite legal capacity to execute and deliver such document.

4. All parties to the Transaction Documents and Financing Documents (other than the Opinion Parties) have been duly organized or formed, are validly existing, and are in good standing under the laws of their respective jurisdictions of organization or formation, and have full power and authority to execute, deliver, and perform their respective obligations under, and to consummate the transactions contemplated by, the Transaction Documents and Financing Documents to which they are party.

5. All parties to the Transaction Documents and Financing Documents (other than the Opinion Parties) have taken all necessary organizational action required to authorize the execution, delivery, and performance of their obligations under the Transaction Documents and Financing Documents to which they are a party, and such documents have been duly executed and delivered by such parties.

6. The Transaction Documents and Financing Documents constitute the legal, valid, binding, and enforceable obligations of all parties thereto other than the Opinion Parties, enforceable against such parties in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and similar laws affecting creditors' rights generally, and to general principles of equity.

7. There are no agreements, understandings, or course of dealings among the parties to the Transaction Documents and Financing Documents that would modify, amend, supplement, or otherwise affect the terms of such documents, other than as expressly set forth therein and in the documents described herein.

8. The Credit Agreement and the other Financing Documents are governed by, and will be construed in accordance with, the laws of the State of New York, and the Merger Agreement is governed by, and will be construed in accordance with, the DGCL and, to the extent applicable, the laws of the State of Delaware.

B. Factual Assumptions

1. The representations and warranties of the Opinion Parties contained in the Transaction Documents and the Financing Documents were true and correct in all material respects when made and are true and correct in all material respects as of the date hereof, except where such representations and warranties expressly relate to an earlier date, in which case they were true and correct in all material respects as of such earlier date.

2. The certifications, statements, representations, and warranties contained in the Officer's Certificate executed by Priya Deshmukh and in each Secretary's Certificate delivered in connection with the closing of the Transactions are accurate and complete in all respects as of the date hereof.

3. All conditions precedent to the obligation of the parties to consummate the transactions contemplated by the Merger Agreement and the Credit Agreement have been duly satisfied or, where permitted, waived in accordance with the terms thereof.

4. All regulatory approvals and governmental consents required for the consummation of the Transactions have been duly obtained, remain in full force and effect, and have not been revoked, withdrawn, amended, or modified in any manner that would adversely affect the legality, validity, or enforceability of any Transaction Document or Financing Document or the consummation of any Transaction, including without limitation:

(a) Clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), obtained on July 15, 2025, upon expiration of the applicable waiting period;

(b) Approval under the Investment Canada Act, obtained on June 3, 2025; and

5. The funds flow memorandum dated July 21, 2025 has been implemented in accordance with its terms, and all payments contemplated thereby have been made or are being made contemporaneously with the delivery of this opinion.

C. Reliance on Good Standing Certificates

With respect to all opinions regarding the good standing of any Opinion Party, we have relied solely upon good standing certificates (or their equivalent) issued by the Secretary of State of the State of Delaware and other applicable governmental authorities, each dated within five (5) business days prior to the date hereof. We have made no independent investigation of the status of any Opinion Party with any governmental authority beyond our review of such certificates, and we express no opinion as to the continued good standing of any Opinion Party after the date and time of the issuance of such certificates.

IV. OPINIONS

Based upon and subject to the foregoing, and subject further to the qualifications, exceptions, and limitations set forth in Sections V and VI below, we are of the opinion that:

4.1 Due Organization and Good Standing — HPE Fund IV

HPE Fund IV is a limited partnership duly formed, validly existing, and in good standing under the laws of the State of Delaware. Harrowgate Capital Management IV LLC is a limited liability company duly formed, validly existing, and in good standing under the laws of the State of Delaware, and is the sole general partner of HPE Fund IV, duly authorized to act in such capacity in accordance with the Certificate of Limited Partnership and the Amended and Restated Agreement of Limited Partnership of HPE Fund IV.

4.2 Due Organization and Good Standing — Merger Sub

Merger Sub was, immediately prior to the Effective Time of the Merger (as defined in the Certificate of Merger), a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Delaware (Delaware Secretary of State File Number: 7291034). At the Effective Time, Merger Sub was merged with and into VeloPay Systems, Inc., with VeloPay continuing as the surviving corporation in the Merger, and Merger Sub thereupon ceased to exist as a separate legal entity, all in accordance with Section 251 of the DGCL and the terms and conditions of the Merger Agreement and the Certificate of Merger.

4.3 Due Organization and Good Standing — VeloPay (Surviving Corporation)

VeloPay Systems, Inc., as the surviving corporation in the Merger (the "Surviving Corporation"), is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Delaware (Delaware Secretary of State File Number: 5748392). The Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws of the Surviving Corporation are in full force and effect as of the date hereof.

4.4 Power and Authority — HPE Fund IV

HPE Fund IV has the limited partnership power and authority under its Certificate of Limited Partnership, its Amended and Restated Agreement of Limited Partnership, and applicable law to execute, deliver, and perform its obligations under each of the Transaction Documents and Financing Documents to which it is a party, including without limitation the Merger Agreement, the Credit Agreement (in its capacity as Holdings), the Equity Commitment Letter, the Escrow Agreement, the Guarantee and Collateral Agreement, and each other Transaction Document and Financing Document to which HPE Fund IV is a party, and to consummate the transactions contemplated thereby, including the making of the equity contribution in the aggregate amount of $1,140,000,000.

4.5 Power and Authority — Merger Sub

Merger Sub had, immediately prior to the Effective Time of the Merger, the corporate power and authority under its Certificate of Incorporation, its Bylaws, and applicable law to execute and deliver the Merger Agreement and to consummate the Merger and the other transactions contemplated by the Merger Agreement, including the merger of Merger Sub with and into VeloPay.

4.6 Power and Authority — Surviving Corporation

VeloPay Systems, Inc., as the Surviving Corporation, has the corporate power and authority under its Amended and Restated Certificate of Incorporation, its Amended and Restated Bylaws, and applicable law to execute, deliver, and perform its obligations under the Credit Agreement (in its capacity as Borrower), the Guarantee and Collateral Agreement, and each other Financing Document to which the Surviving Corporation is a party, and to consummate the transactions contemplated thereby, including the incurrence of the indebtedness under the Term Loan Facility and the Revolving Credit Facility and the granting of security interests in the collateral described in the Guarantee and Collateral Agreement.

4.7 Due Authorization — HPE Fund IV

The execution, delivery, and performance by HPE Fund IV of each Transaction Document and Financing Document to which it is a party, and the consummation by HPE Fund IV of the transactions contemplated thereby (including, without limitation, the equity contribution of $1,140,000,000), have been duly authorized by all necessary limited partnership action on the part of HPE Fund IV, including the written consent of Harrowgate Capital Management IV LLC, acting in its capacity as the sole general partner of HPE Fund IV. No other limited partnership action on the part of HPE Fund IV, and no vote, consent, or approval of the limited partners of HPE Fund IV (beyond that which has been obtained), is required to authorize the foregoing.

4.8 Due Authorization — Merger Sub

The execution, delivery, and performance by Merger Sub of the Merger Agreement, and the consummation by Merger Sub of the Merger and the other transactions contemplated by the Merger Agreement, were duly authorized by all necessary corporate action on the part of Merger Sub, including (a) the approval of the Merger Agreement and the Merger by the sole director of Merger Sub by written consent in lieu of a meeting of the board of directors, and (b) the approval and adoption of the Merger Agreement by HPE Fund IV, acting in its capacity as the sole stockholder of Merger Sub, by written consent in lieu of a meeting of the stockholders, in each case in accordance with the Certificate of Incorporation and Bylaws of Merger Sub and the DGCL.

4.9 Due Authorization — Surviving Corporation

The execution, delivery, and performance by VeloPay Systems, Inc. (as the Surviving Corporation) of the Credit Agreement and each other Financing Document to which the Surviving Corporation is a party, and the consummation of the transactions contemplated thereby, have been duly authorized by all necessary corporate action on the part of the Surviving Corporation, including action by its board of directors (or a duly authorized committee thereof) and, to the extent required, its sole stockholder, in accordance with the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws of the Surviving Corporation and the DGCL.

4.10 Due Execution and Delivery

Each of the Transaction Documents and Financing Documents to which HPE Fund IV, Merger Sub, or VeloPay Systems, Inc. (as the Surviving Corporation) is a party has been duly executed and delivered by such entity. With respect to Merger Sub, such execution and delivery occurred prior to the Effective Time of the Merger while Merger Sub was a validly existing Delaware corporation.

4.11 Enforceability — Merger Agreement

The Merger Agreement constitutes the legal, valid, and binding obligation of each of HPE Fund IV and Merger Sub (prior to the Effective Time), enforceable against each of them in accordance with its terms, subject to the Enforceability Exceptions (as defined in Section V hereof).

4.12 Enforceability — Credit Agreement

The Credit Agreement constitutes the legal, valid, and binding obligation of each of HPE Fund IV (in its capacity as Holdings) and VeloPay Systems, Inc. (in its capacity as the Surviving Corporation and Borrower), enforceable against each of them in accordance with its terms, subject to the Enforceability Exceptions. Without limiting the generality of the foregoing, the term loan facility thereunder in the aggregate principal amount of $500,000,000 and the revolving credit facility thereunder in the aggregate available amount of $260,000,000 have been duly authorized, and VeloPay Systems, Inc. (as Borrower) is authorized to borrow, repay, and reborrow amounts under the Revolving Credit Facility in accordance with the terms of the Credit Agreement.

4.13 Enforceability — Guarantee and Collateral Agreement

The Guarantee and Collateral Agreement constitutes the legal, valid, and binding obligation of each of HPE Fund IV (in its capacity as Holdings), VeloPay Systems, Inc. (in its capacity as the Surviving Corporation), and each subsidiary guarantor party thereto (namely, VeloPay Processing LLC, VeloPay Fraud intelligence Inc., and PayStream Gateway LLC), enforceable against each of them in accordance with its terms, subject to the Enforceability Exceptions. The guarantees and security interests granted pursuant to the Guarantee and Collateral Agreement have been duly authorized by all necessary organizational action on the part of each such entity.

4.14 Enforceability — Intercreditor Agreement

The Intercreditor Agreement constitutes the legal, valid, and binding obligation of each party thereto, enforceable against each such party in accordance with its terms, subject to the Enforceability Exceptions. The provisions of the Intercreditor Agreement governing the relative priorities and rights of the Term Loan Agent and the Revolver Agent with respect to the collateral are enforceable in accordance with their terms, subject to the Enforceability Exceptions.

4.15 Enforceability — Other Transaction Documents

Each of the following documents constitutes the legal, valid, and binding obligation of the Opinion Party or Opinion Parties (as applicable) that is or are a party thereto, enforceable against such Opinion Party or Opinion Parties in accordance with its respective terms, subject to the Enforceability Exceptions:

(a) The Equity Commitment Letter (constituting an obligation of Harrowgate Capital Management IV LLC);

(b) The Limited Guarantee (constituting an obligation of Harrowgate Capital Management IV LLC; guaranteed amount: the reverse termination fee of $57,000,000 and certain other obligations expressly set forth therein);

(c) The Escrow Agreement (constituting an obligation of HPE Fund IV, solely to the extent of the obligations of HPE Fund IV thereunder); and

(d) The Paying Agent Agreement (constituting an obligation of VeloPay Systems, Inc., as the Surviving Corporation, solely to the extent of the obligations of the Surviving Corporation thereunder).

4.16 No-Conflicts — Organizational Documents

The execution, delivery, and performance by each of HPE Fund IV, Merger Sub (prior to the Effective Time), Harrowgate Capital Management IV LLC, and VeloPay Systems, Inc. (as the Surviving Corporation) of the Transaction Documents and Financing Documents to which such entity is a party, and the consummation by each such entity of the transactions contemplated thereby (including, without limitation, the Merger, the equity contribution, and the incurrence of indebtedness under the Credit Agreement), do not and did not:

(a) violate, conflict with, or result in a breach of any provision of the certificate of limited partnership, amended and restated agreement of limited partnership, certificate of incorporation, bylaws, certificate of formation, or operating agreement (as applicable) of any such entity;

(b) result in the creation or imposition of any lien, charge, encumbrance, or security interest upon any of the assets or properties of any such entity pursuant to the terms of any such organizational document (other than liens and security interests expressly created pursuant to the Guarantee and Collateral Agreement); or

(c) give rise to any right of termination, cancellation, or acceleration of any obligation under any such organizational document.

4.17 No-Conflicts — Specified Laws

The execution, delivery, and performance by the Opinion Parties of the Transaction Documents and Financing Documents to which they are a party, and the consummation of the transactions contemplated thereby (including, without limitation, the Merger, the equity contribution, and the incurrence of indebtedness under the Credit Agreement), do not violate any federal law of the United States, any law of the State of New York, or any provision of the General Corporation Law of the State of Delaware that, in our experience, is normally applicable to transactions of the type contemplated by the Transaction Documents and Financing Documents and that would be customarily recognized by a lawyer in the State of New York as being applicable to such transactions (collectively, the "Specified Laws"), without our having made any special investigation as to the applicability of any specific law, rule, or regulation.

For the avoidance of doubt, this opinion does not address compliance with or the effect of (i) federal or state securities laws, including the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, or any state "blue sky" laws (except as expressly set forth herein), (ii) federal or state antitrust laws, including the HSR Act, (iii) federal or state banking or financial institution regulatory laws, (iv) federal or state money transmitter laws or payment processing regulations, (v) federal, state, or local tax laws, (vi) the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and the rules and regulations promulgated thereunder, (vii) federal, state, or local environmental laws, (viii) federal, state, or local data privacy or data security laws, (ix) PCI-DSS or other industry payment card standards, or (x) the laws of any jurisdiction other than the federal laws of the United States, the laws of the State of New York, and the General Corporation Law of the State of Delaware.

4.18 No Consents — Specified Laws

No consent, approval, authorization, order, registration, qualification, or filing with any federal, state, or local governmental authority or regulatory body under the Specified Laws is required for the execution, delivery, and performance by any Opinion Party of the Transaction Documents and Financing Documents to which such Opinion Party is a party, or for the consummation of the transactions contemplated thereby, that has not already been duly obtained or made as of the date hereof.

This opinion does not address any consents, approvals, authorizations, orders, registrations, qualifications, or filings that may be required under (i) the HSR Act, (ii) the Investment Canada Act, (iii) state money transmitter laws or regulations, (iv) federal or state banking or financial institution regulatory laws, (v) any securities law, (vi) any environmental law, (vii) ERISA, or (viii) the laws of any jurisdiction other than the federal laws of the United States, the laws of the State of New York, and the General Corporation Law of the State of Delaware.

4.19 Certificate of Merger

The Certificate of Merger relating to the merger of Merger Sub with and into VeloPay has been duly executed by an authorized officer of each of Merger Sub and VeloPay and has been filed with the Secretary of State of the State of Delaware on July 22, 2025, in accordance with Section 251 of the DGCL. The Merger has become effective as of the date and time specified in such Certificate of Merger (the "Effective Time"), and VeloPay continues as the surviving corporation in the Merger.

4.20 Security Interest Opinions (UCC)

(a) The Guarantee and Collateral Agreement creates a valid security interest in favor of the Agents (for the ratable benefit of the Lender Parties) in the collateral described therein (the "Collateral"), to the extent that such Collateral constitutes personal property in which a security interest may be created under Article 9 of the Uniform Commercial Code as in effect in the State of New York (the "NY UCC"). Such security interest secures the payment and performance of the obligations described in the Guarantee and Collateral Agreement.

(b) Upon the filing of appropriate UCC-1 financing statements in the office of the Secretary of State of the State of Delaware (or, where required by the NY UCC, in such other filing offices as may be appropriate), the security interests created under the Guarantee and Collateral Agreement in favor of the Agents (for the ratable benefit of the Lender Parties) will be perfected to the extent that a security interest in such Collateral can be perfected by the filing of a UCC-1 financing statement under the NY UCC.

(c) For the avoidance of doubt, this opinion does not address the creation, validity, perfection, or priority of any security interest in (i) intellectual property (including patents, trademarks, copyrights, and trade secrets) to the extent that the perfection of a security interest therein is governed by federal law (including the United States Patent and Trademark Office or the United States Copyright Office filing systems), (ii) real property or fixtures, (iii) deposit accounts (other than to the extent that a security interest therein may be perfected by the filing of a UCC-1 financing statement under the NY UCC), (iv) letter-of-credit rights (other than supporting obligations), (v) commercial tort claims, (vi) any property subject to a certificate of title statute, or (vii) any Collateral to the extent that the perfection or priority of a security interest therein is governed by the laws of a jurisdiction other than the State of New York or the State of Delaware. We express no opinion as to the priority of any security interest created by the Guarantee and Collateral Agreement relative to any other lien, security interest, or encumbrance.

V. ENFORCEABILITY EXCEPTIONS

The opinions set forth in Section IV above as to the enforceability of the Transaction Documents and the Financing Documents are subject to the following exceptions and qualifications (collectively, the "Enforceability Exceptions"):

5.1 Bankruptcy and Insolvency Exception

The enforceability of the Transaction Documents and the Financing Documents may be limited by applicable bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent transfer, fraudulent conveyance, voidable transaction, and other similar laws relating to or affecting creditors' rights and remedies generally, now or hereafter in effect, including without limitation the United States Bankruptcy Code (Title 11 of the United States Code), applicable state insolvency laws, and laws governing preferences, fraudulent transfers, and equitable subordination.

5.2 Equitable Principles Exception

The enforceability of the Transaction Documents and the Financing Documents may be limited by general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith, fair dealing, unconscionability, and the availability of equitable remedies), whether considered in a proceeding at law or in equity, regardless of whether enforcement is sought in a proceeding at law or in equity. The availability of specific performance, injunctive relief, and other equitable remedies is subject to the discretion of the court before which any proceeding therefor may be brought, and such remedies may not be available in every instance where a breach of contract or other legal wrong has occurred.

5.3 Specific Enforceability Limitations

Without limiting the generality of the foregoing:

(a) The enforceability of provisions in the Transaction Documents and the Financing Documents relating to indemnification and contribution may be limited by applicable law, public policy, and equitable principles, including laws and principles that may limit or prohibit indemnification for losses arising from the negligence, gross negligence, or willful misconduct of the indemnified party, or for losses arising from violations of securities laws.

(b) The enforceability of provisions in the Transaction Documents and the Financing Documents providing for the payment of liquidated damages, late charges, default interest, prepayment premiums, or make-whole amounts may be limited by applicable law to the extent that such provisions are deemed to constitute a penalty or forfeiture rather than a reasonable estimate of actual damages.

(c) Rights to specific performance, injunctive relief, or other equitable remedies are subject to the discretion of the court before which any proceeding therefor may be brought, and no assurance can be given that such remedies would be granted in any particular case.

(d) The enforceability of provisions in the Transaction Documents and the Financing Documents purporting to waive rights of debtors or obligors, including but not limited to waivers of rights to notice, presentment, demand, protest, rights of redemption, marshaling of assets, or other rights that may not be waived under applicable law, may be limited by applicable law and public policy.

(e) The enforceability of provisions purporting to establish evidentiary standards, to relieve a party of the obligation to mitigate damages, or to sever unenforceable provisions may be limited by applicable law.

(f) We express no opinion as to the enforceability of any provision in the Transaction Documents or the Financing Documents to the extent that such provision constitutes a waiver of any right that cannot, as a matter of law, be effectively waived.

VI. QUALIFICATIONS AND LIMITATIONS

The opinions expressed herein are further subject to the following qualifications and limitations:

6.1 Scope of Laws Covered

This opinion is limited in all respects to the federal laws of the United States of America, the laws of the State of New York (excluding the choice-of-law rules thereof that would apply the laws of another jurisdiction), and the General Corporation Law of the State of Delaware (including the provisions of the Delaware Constitution and reported judicial decisions interpreting the DGCL). We are members of the bar of the State of New York and do not purport to be experts in, and we express no opinion as to, the laws of any other jurisdiction, including without limitation:

(a) the laws of the State of Texas (where VeloPay Systems, Inc. is headquartered);

(b) the laws of Canada or any province or territory thereof (with respect to VeloPay Canada Inc., an indirect subsidiary of VeloPay);

(c) the laws of Portugal or the European Union (with respect to VeloPay Europe, Unipessoal Lda., an indirect subsidiary of VeloPay); or

(d) the laws of any other state or foreign jurisdiction in which any Opinion Party or any subsidiary of VeloPay conducts business, maintains offices, or owns property.

We further express no opinion concerning compliance with or the effect of (i) any securities laws, rules, or regulations (federal, state, or foreign), (ii) any antitrust or competition laws, rules, or regulations (federal, state, or foreign), (iii) any banking, savings association, or financial institution regulatory laws, rules, or regulations, (iv) any money transmitter, payments, or money services business laws, rules, or regulations, (v) any tax laws, rules, or regulations (federal, state, local, or foreign), (vi) ERISA or any laws, rules, or regulations relating to employee benefit plans, (vii) any environmental or natural resource laws, rules, or regulations, (viii) any data privacy, data security, cybersecurity, or consumer protection laws, rules, or regulations (including GLBA, CCPA, GDPR, and state breach notification laws), or (ix) the Payment Card Industry Data Security Standard (PCI-DSS) or any similar industry standard or self-regulatory framework.

6.2 No Opinion on Financial Terms

We express no opinion as to (a) the financial terms of the Transaction Documents or Financing Documents, (b) the adequacy or fairness of the merger consideration or any other consideration provided for in the Transaction Documents, (c) the solvency or financial condition of any person or entity (whether before, on, or after the date hereof), or (d) compliance with any financial covenants contained in the Credit Agreement or any other Financing Document. The Solvency Certificate referenced in Section II.E above was delivered by Marcus Langford, Chief Financial Officer of VeloPay, based upon his knowledge and examination of the financial condition and prospects of VeloPay and its subsidiaries, and does not constitute an opinion of this firm. We have not independently verified the accuracy of any financial information or projections provided to us, and we express no opinion with respect thereto.

6.3 Reliance on Certificates and Representations

In rendering the opinions expressed herein, we have relied, without independent investigation or verification, upon (a) the Officer's Certificate executed by Priya Deshmukh, Managing Partner, Fund IV, (b) the Secretary's Certificates of HPE Fund IV and Merger Sub, (c) the good standing certificates and certificates of status described in Section II.E above, and (d) the representations and warranties of the parties contained in the Transaction Documents and the Financing Documents. We have assumed that all such certificates, statements, and representations are true, correct, and complete in all respects as of the date hereof, and we have not undertaken any independent investigation or due diligence to verify the accuracy or completeness of any such certificates, statements, or representations. To the extent that any of the opinions expressed herein is based upon or relates to matters of fact, we have relied upon the foregoing sources and upon such other factual information as has been made available to us by the Opinion Parties and their respective officers, directors, agents, and representatives.

6.4 Date and Change Limitation

The opinions expressed herein are rendered solely as of the date hereof and are based upon the laws, rules, regulations, and facts existing and known to us as of such date. We assume no obligation to update, supplement, revise, or reaffirm this opinion for any reason, including without limitation any changes in applicable law, the occurrence of any event, or the discovery of any fact or circumstance existing on or before the date hereof, after the date hereof. We disclaim any undertaking to advise you of any changes in the matters stated or assumed herein or of any subsequent developments that might affect the opinions expressed herein.

6.5 No Implied Opinions

No opinion is implied or may be inferred beyond those expressly stated herein. Without limiting the generality of the foregoing, we express no opinion as to (a) the compliance by any person or entity with any fiduciary duties, (b) the adequacy of disclosure in any document, (c) the tax consequences of the Transactions, (d) the applicability or effect of the laws of any jurisdiction other than those expressly covered herein, (e) the enforceability of any provision of the Transaction Documents or Financing Documents that purports to waive or modify any obligation implied by law, (f) the title to, or condition of, any real or personal property, or (g) the perfection, priority, or enforceability of any security interest, mortgage, or lien, except as expressly set forth in Section IV, Paragraph 4.20.

6.6 Benefit of Opinion

This opinion is furnished solely for the benefit of the Agents and the Lender Parties in connection with the Credit Agreement and the transactions contemplated thereby. This opinion may not be relied upon by any other person or entity, or used, quoted, circulated, or referred to for any other purpose, without our prior written consent in each instance.

Notwithstanding the foregoing, this opinion may be relied upon by any person or entity that becomes a Lender under the Credit Agreement by way of assignment or participation in accordance with Section 10.04 of the Credit Agreement, as if this opinion were addressed and delivered to such person or entity on the date hereof, subject to the same assumptions, qualifications, exceptions, and limitations set forth herein.

This opinion may not be relied upon by any holder of equity interests in HPE Fund IV, any limited partner of HPE Fund IV, any affiliate of the Agents or the Lender Parties (other than successors and assigns who become Lenders under the Credit Agreement as described above), or any other third party, without our prior written consent.

We are furnishing this opinion to you solely in connection with the closing of the Transactions described herein. We consent to the delivery of copies of this opinion to the Lenders party to the Credit Agreement in connection with the syndication of the credit facilities thereunder, subject to the limitations on reliance set forth in Section VI.6 above. Except as set forth in the preceding sentence, this opinion may not be furnished to, or relied upon by, any other person or entity without our prior written consent.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Name: Sandra Tung

Title: Partner

(Responsible Partner, Mergers & Acquisitions)

Reference Billing Partner: Oliver Mackenzie Engagement Team: Megan Chu, Lead Associate; Derek Okonkwo, Working Associate

SCHEDULE A

LIST OF TRANSACTION DOCUMENTS

The following is a complete list of the Transaction Documents referenced in this opinion:

SCHEDULE B

LIST OF FINANCING DOCUMENTS

The following is a complete list of the Financing Documents referenced in this opinion:

SCHEDULE C

ORGANIZATIONAL DOCUMENTS REVIEWED

The following is a complete list of organizational documents reviewed for each Opinion Party in connection with the rendering of this opinion:

I. Harrowgate Private Equity Fund IV LP (HPE Fund IV)

II. Harrowgate Capital Management IV LLC (General Partner of HPE Fund IV)

III. Harrowgate Velocity Merger Sub Inc. (Merger Sub)

IV. VeloPay Systems, Inc. (Surviving Corporation / Borrower)

V. Subsidiary Guarantors

CONFIDENTIAL — This opinion letter is subject to the limitations on reliance and use set forth in Section VI.6 hereof.

No.	Document	Date	Parties
1	Agreement and Plan of Merger	March 18, 2025	HPE Fund IV, Merger Sub, and VeloPay Systems, Inc.
2	Disclosure Schedules to the Merger Agreement	March 18, 2025	HPE Fund IV and Merger Sub
3	Equity Commitment Letter	February 14, 2025	Harrowgate Capital Management IV LLC and VeloPay Systems, Inc.
4	Limited Guarantee	March 18, 2025	Harrowgate Capital Management IV LLC (as guarantor) in favor of VeloPay Systems, Inc.
5	Stockholder Support Agreement	March 18, 2025	HPE Fund IV, Merger Sub, and certain stockholders of VeloPay
6	Rollover Agreement	March 18, 2025	HPE Fund IV, Harrowgate Velocity Co-Invest LP, Nathan Aldridge, and Sonia Reyes-Watkins
7	Certificate of Merger	July 22, 2025	Filed with the Secretary of State of the State of Delaware
8	Escrow Agreement (Ref: GT-ESC-2025-07223)	July 22, 2025	HPE Fund IV, Nathan Aldridge (as Stockholder Representative), and Garrison Trust Company (as Escrow Agent)
9	Paying Agent Agreement	July 22, 2025	VeloPay Systems, Inc. (as Surviving Corporation) and Keystone Pacific Transfer Services Inc. (as Paying Agent)
No.	Document	Date	Parties
1	Debt Commitment Letter (Ref: CRE-2025-SPF-0441)	February 14, 2025	Tralvendo National Bank, Prairie State Bank, N.A., and HPE Fund IV
2	Senior Secured Credit Agreement	July 22, 2025	VeloPay Systems, Inc. (as Borrower), HPE Fund IV (as Holdings), Tralvendo National Bank (as Administrative Agent — Term Loan Facility), Prairie State Bank, N.A. (as Administrative Agent — Revolving Credit Facility), and the Lenders party thereto
3	Guarantee and Collateral Agreement	July 22, 2025	VeloPay Systems, Inc. (as Borrower), HPE Fund IV (as Holdings), VeloPay Processing LLC, VeloPay Fraud intelligence Inc., and PayStream Gateway LLC (each as Subsidiary Guarantor), in favor of the Agents (for the ratable benefit of the Lender Parties)
4	Intercreditor Agreement	July 22, 2025	Tralvendo National Bank (as Term Loan Agent) and Prairie State Bank, N.A. (as Revolver Agent)
5	Fee Letter (Confidential)	February 14, 2025	HPE Fund IV, Tralvendo National Bank, and Prairie State Bank, N.A.
No.	Document	Date / Status
1	Certificate of Limited Partnership of HPE Fund IV	Filed with the Delaware Secretary of State
2	Amended and Restated Agreement of Limited Partnership of HPE Fund IV	As of the date specified therein
3	Good Standing Certificate — Delaware Secretary of State	Dated July 17, 2025
No.	Document	Date / Status
1	Certificate of Formation of Harrowgate Capital Management IV LLC	Filed with the Delaware Secretary of State
2	Amended and Restated Operating Agreement of Harrowgate Capital Management IV LLC	As of the date specified therein
3	Good Standing Certificate — Delaware Secretary of State	Dated July 17, 2025
No.	Document	Date / Status

1	Certificate of Incorporation of Merger Sub	Filed February 24, 2025
2	Bylaws of Merger Sub	Adopted February 24, 2025
3	Good Standing Certificate — Delaware Secretary of State	Dated July 17, 2025 (prior to the Effective Time)
No.	Document	Date / Status
1	Amended and Restated Certificate of Incorporation of VeloPay Systems, Inc. (as Surviving Corporation)	Effective July 22, 2025
2	Amended and Restated Bylaws of VeloPay Systems, Inc. (as Surviving Corporation)	Effective July 22, 2025
3	Good Standing Certificate — Delaware Secretary of State	Dated July 17, 2025
Entity	Document	Date / Status
VeloPay Processing LLC	Certificate of Formation — Delaware Secretary of State	As filed
VeloPay Processing LLC	Operating Agreement	As of the date specified therein
VeloPay Processing LLC	Good Standing Certificate — Delaware Secretary of State	Dated July 17, 2025
VeloPay Fraud intelligence Inc.	Certificate of Incorporation — Delaware Secretary of State	As filed
VeloPay Fraud intelligence Inc.	Bylaws	As of the date adopted
VeloPay Fraud intelligence Inc.	Good Standing Certificate — Delaware Secretary of State	Dated July 17, 2025
PayStream Gateway LLC	Certificate of Formation — Delaware Secretary of State	As filed
PayStream Gateway LLC	Operating Agreement	As of the date specified therein
PayStream Gateway LLC	Good Standing Certificate — Delaware Secretary of State	Dated July 17, 2025

CALDERWOOD & HARKNESS LLP 787 Seventh Avenue, 38th Floor New York, New York 10019
Telephone: (212) 848-7000 Facsimile: (212) 848-7100
July 22, 2025
Tralvendo National Bank, as Administrative Agent for the Term Loan Lenders 100 Federal Street, 30th Floor Boston, Massachusetts 02110
Prairie State Bank, N.A., as Administrative Agent for the Revolving Credit Facility Lenders 231 South LaSalle Street, Suite 4400 Chicago, Illinois 60604
(Collectively, the "Agents"; together with the Lenders party to the Credit Agreement (as defined below), the "Lender Parties")
Ladies and Gentlemen:
Re: Senior Secured Credit Agreement, dated as of July 22, 2025 (the "Credit Agreement"), among VeloPay Systems, Inc., a Delaware corporation, as Borrower, Harrowgate Private Equity Fund IV LP, a Delaware limited partnership, as Holdings, Tralvendo National Bank, as Administrative Agent for the Term Loan Facility, Prairie State Bank, N.A., as Administrative Agent for the Revolving Credit Facility, and the Lenders party thereto; and the Agreement and Plan of Merger, dated as of March 18, 2025 (the "Merger Agreement"), among Harrowgate Private Equity Fund IV LP ("HPE Fund IV"), Harrowgate Velocity Merger Sub Inc. ("Merger Sub"), and VeloPay Systems, Inc. ("VeloPay" or the "Company")
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I. INTRODUCTION AND CONTEXT
A. Identification of Firm and Client
We have acted as counsel to Harrowgate Private Equity Fund IV LP, a Delaware limited partnership ("HPE Fund IV"), and Harrowgate Velocity Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of HPE Fund IV ("Merger Sub"), in connection with the transactions described herein (Firm Matter Number: 1003-00003). This opinion letter is delivered to you pursuant to Section 4.01(f) of the Credit Agreement. Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Credit Agreement or the Merger Agreement, as applicable.
B. Description of the Transactions
This opinion is rendered in connection with the following transactions, which have been consummated as of the date hereof:
1.  The Merger. The reverse triangular merger (the "Merger") pursuant to which Merger Sub has merged with and into VeloPay Systems, Inc., a Delaware corporation (the "Company"), with the Company surviving as a wholly-owned subsidiary of HPE Fund IV, in accordance with the terms and conditions of the Agreement and Plan of Merger, dated as of March 18, 2025 (the "Merger Agreement"), among HPE Fund IV, Merger Sub, and VeloPay. The aggregate merger consideration payable in connection with the Merger is $1,900,000,000, representing $20.00 per share on a fully diluted basis across 95,000,000 fully diluted shares of common stock of VeloPay.
2.  The Financing. The incurrence of indebtedness under the Credit Agreement consisting of (a) a senior secured term loan facility in the aggregate principal amount of $500,000,000 (the "Term Loan Facility"), with a maturity date of July 22, 2032 (seven years from the Closing Date), bearing interest at a rate per annum equal to the Adjusted Term SOFR Rate plus 3.75%, and (b) a senior secured revolving credit facility in the aggregate available amount of $260,000,000 (the "Revolving Credit Facility"), with a maturity date of July 22, 2030 (five years from the Closing Date), bearing interest at a rate per annum equal to the Adjusted Term SOFR Rate plus 3.25%.
3.  The Equity Contribution. The equity contribution by HPE Fund IV in the aggregate amount of $1,140,000,000 in immediately available funds, which, together with the proceeds of the Term Loan Facility drawn on the Closing Date, was used to fund the aggregate merger consideration, transaction expenses, and other amounts payable in connection with the consummation of the Merger and the related transactions.
The Merger, the financing transactions described above, and the other transactions contemplated by the Transaction Documents (as defined below) and the Financing Documents (as defined below) are collectively referred to herein as the "Transactions."
C. Identification of Opinion Parties
As used herein, the "Opinion Parties" are the following entities:
(a) Harrowgate Private Equity Fund IV LP ("HPE Fund IV") — a limited partnership duly formed under the laws of the State of Delaware; Employer Identification Number: 87-4231956; principal office: 300 King Street, Suite 4200, Wilmington, Delaware 19801.
(b) Harrowgate Capital Management IV LLC — a limited liability company duly formed under the laws of the State of Delaware; Employer Identification Number: 87-4231847; the sole general partner of HPE Fund IV.
(c) Harrowgate Velocity Merger Sub Inc. ("Merger Sub") — a corporation incorporated under the laws of the State of Delaware on February 24, 2025; Employer Identification Number: 93-1847265; Delaware Secretary of State File Number: 7291034; registered agent: Capitol Registered Agents LLC, 1209 Orange Street, Wilmington, Delaware 19801; sole stockholder: HPE Fund IV. As of the Effective Time of the Merger, Merger Sub has been merged with and into VeloPay and has ceased to exist as a separate legal entity.
(d) VeloPay Systems, Inc. (as the Surviving Corporation in the Merger and the Borrower under the Credit Agreement) — a corporation organized under the laws of the State of Delaware; Employer Identification Number: 82-3019478; Delaware Secretary of State File Number: 5748392; principal office: 1455 Innovation Parkway, Suite 800, Austin, Texas 78759.
II. DOCUMENTS REVIEWED
In connection with the opinions expressed herein, we have reviewed executed originals or copies of the following documents (or, where indicated, drafts that we have been advised are substantially in the form of the executed versions):
A. Transaction Agreements
1.  The Agreement and Plan of Merger, dated as of March 18, 2025 (the "Merger Agreement"), among HPE Fund IV, Merger Sub, and VeloPay (execution version), including all schedules and exhibits thereto.
2.  The Disclosure Schedules delivered by HPE Fund IV and Merger Sub pursuant to the Merger Agreement, dated as of March 18, 2025.
3.  The Equity Commitment Letter, dated as of February 14, 2025, from Harrowgate Capital Management IV LLC to VeloPay, pursuant to which Harrowgate Capital Management IV LLC committed to cause HPE Fund IV to fund the equity contribution described therein.
4.  The Limited Guarantee, dated as of March 18, 2025, from Harrowgate Capital Management IV LLC in favor of VeloPay, guaranteeing HPE Fund IV's reverse termination fee obligation in the amount of $57,000,000 and certain other specified obligations, as set forth therein.
5.  The Stockholder Support Agreement, dated as of March 18, 2025, among HPE Fund IV, Merger Sub, and certain stockholders of VeloPay identified therein.
6.  The Rollover Agreement, dated as of March 18, 2025, among HPE Fund IV, Harrowgate Velocity Co-Invest LP, Nathan Aldridge, and Sonia Reyes-Watkins, pursuant to which certain shares of VeloPay common stock and equity awards were contributed or exchanged for equity interests in HPE Fund IV.
7.  The Certificate of Merger, duly executed and filed with the Secretary of State of the State of Delaware on July 22, 2025, in accordance with Section 251 of the Delaware General Corporation Law (the "DGCL").
B. Financing Documents
1.  The Debt Commitment Letter, dated as of February 14, 2025, from Tralvendo National Bank and Prairie State Bank, N.A. to HPE Fund IV (Reference: CRE-2025-SPF-0441), together with the related fee letters and engagement letters delivered in connection therewith.
2.  The Senior Secured Credit Agreement, dated as of July 22, 2025 (execution version) (the "Credit Agreement"), among VeloPay Systems, Inc. (as Borrower), HPE Fund IV (as Holdings), Tralvendo National Bank (as Administrative Agent for the Term Loan Facility), Prairie State Bank, N.A. (as Administrative Agent for the Revolving Credit Facility), and the Lenders party thereto.
3.  The Guarantee and Collateral Agreement, dated as of July 22, 2025 (the "Guarantee and Collateral Agreement"), among VeloPay Systems, Inc. (as Borrower), HPE Fund IV (as Holdings), and the following subsidiary guarantors: VeloPay Processing LLC, a Delaware limited liability company; VeloPay Fraud intelligence Inc., a Delaware corporation; and PayStream Gateway LLC, a Delaware limited liability company.
4.  The Intercreditor Agreement, dated as of July 22, 2025 (the "Intercreditor Agreement"), between Tralvendo National Bank (as Term Loan Agent) and Prairie State Bank, N.A. (as Revolver Agent).
5.  The Fee Letter, dated as of February 14, 2025 (confidential), among HPE Fund IV, Tralvendo National Bank, and Prairie State Bank, N.A., setting forth certain fees payable in connection with the financing transactions contemplated by the Credit Agreement.
C. Organizational Documents
1.  The Certificate of Incorporation of Merger Sub, as filed with the Secretary of State of the State of Delaware on February 24, 2025.
2.  The Amended and Restated Certificate of Incorporation of VeloPay Systems, Inc. (as Surviving Corporation), effective as of July 22, 2025, adopted in connection with the Merger.
3.  The Amended and Restated Bylaws of VeloPay Systems, Inc. (as Surviving Corporation), effective as of July 22, 2025, adopted in connection with the Merger.
4.  The Certificate of Limited Partnership of HPE Fund IV, as filed with the Secretary of State of the State of Delaware, and the Amended and Restated Agreement of Limited Partnership of HPE Fund IV, dated as of the date specified therein.
5.  The Certificate of Formation of Harrowgate Capital Management IV LLC, as filed with the Secretary of State of the State of Delaware, and the Amended and Restated Operating Agreement of Harrowgate Capital Management IV LLC, dated as of the date specified therein.
D. Authorizing Resolutions
1.  The written consent resolutions of the sole director of Merger Sub, dated as of March 18, 2025, authorizing the execution and delivery of the Merger Agreement by Merger Sub and the consummation by Merger Sub of the Merger and the other transactions contemplated by the Merger Agreement.
2.  The written consent of Harrowgate Capital Management IV LLC, acting in its capacity as the sole general partner of HPE Fund IV, dated as of March 18, 2025 (as supplemented by additional written consents dated as of July 21, 2025), authorizing the Merger, the equity commitment, the execution and delivery of the Merger Agreement, the Credit Agreement, and all other Transaction Documents and Financing Documents, and the consummation of all related transactions.
3.  The written consent of HPE Fund IV, acting in its capacity as the sole stockholder of Merger Sub, dated as of March 18, 2025, approving the Merger Agreement and the consummation of the Merger.
E. Closing Deliverables and Certificates
1.  The Officer's Certificate of HPE Fund IV and Merger Sub, dated as of July 22, 2025, executed by Priya Deshmukh, Managing Partner, Fund IV, certifying as to certain matters relating to the satisfaction of conditions to closing.
2.  The Secretary's Certificate of HPE Fund IV and Merger Sub, dated as of July 22, 2025, certifying as to the incumbency and specimen signatures of authorized officers, the authenticity of organizational documents, and the adoption of authorizing resolutions.
3.  The Solvency Certificate, dated as of July 22, 2025, executed and delivered by Marcus Langford, Chief Financial Officer of VeloPay, certifying as to the solvency of VeloPay and its subsidiaries on a consolidated basis after giving effect to the Transactions.
4.  Good standing certificates (or equivalent) for each of HPE Fund IV, Harrowgate Capital Management IV LLC, Merger Sub (dated prior to the Effective Time of the Merger), VeloPay Systems, Inc., and each subsidiary guarantor (VeloPay Processing LLC, VeloPay Fraud intelligence Inc., and PayStream Gateway LLC), issued by the Secretary of State of the State of Delaware and, where applicable, by other relevant governmental authorities in their respective jurisdictions of formation, qualification, or organization, each dated within a recent date prior to the date hereof.
5.  The Funds Flow Memorandum, dated as of July 21, 2025, setting forth the sources and uses of funds and the wiring instructions for the distribution of the merger consideration, equity contributions, debt proceeds, and payment of fees and expenses.
F. Escrow and Paying Agent Agreements
1.  The Escrow Agreement, dated as of July 22, 2025 (Reference: GT-ESC-2025-07223), among HPE Fund IV, Nathan Aldridge (in his capacity as Stockholder Representative), and Garrison Trust Company (as Escrow Agent), establishing an escrow fund in the amount of $133,000,000 (representing approximately 7% of the aggregate merger consideration) to secure the indemnification obligations of the former stockholders of VeloPay under the Merger Agreement.
2.  The Paying Agent Agreement, dated as of July 22, 2025, between VeloPay Systems, Inc. (as the Surviving Corporation) and Keystone Pacific Transfer Services Inc. (as Paying Agent), providing for the exchange of outstanding shares of VeloPay common stock for the per-share merger consideration and the processing of letters of transmittal.
G. Other Documents
We have also reviewed such other certificates, instruments, agreements, and documents as we have deemed necessary or appropriate for the purposes of the opinions expressed herein, including records of proceedings made available to us by the Opinion Parties.
The documents listed in Sections II.A through II.G above are collectively referred to herein as the "Transaction Documents." The Credit Agreement, the Guarantee and Collateral Agreement, the Intercreditor Agreement, and the related documents referred to in Sections II.B above are collectively referred to herein as the "Financing Documents."
III. ASSUMPTIONS
In rendering the opinions set forth herein, we have, with your permission and without independent verification or investigation, assumed the following:
A. General Assumptions
1.  All signatures on all documents reviewed by us in connection with the rendering of this opinion are genuine and authentic, and each such document was signed by the person or persons purporting to have signed such document.
2.  All documents submitted to us as originals are authentic, complete, and accurate, and all documents submitted to us as copies, whether certified or otherwise, conform to the authentic originals of such documents in all material respects.
3.  Each natural person who has executed any document reviewed by us in connection with the rendering of this opinion had, at the time of such execution, the requisite legal capacity to execute and deliver such document.
4.  All parties to the Transaction Documents and Financing Documents (other than the Opinion Parties) have been duly organized or formed, are validly existing, and are in good standing under the laws of their respective jurisdictions of organization or formation, and have full power and authority to execute, deliver, and perform their respective obligations under, and to consummate the transactions contemplated by, the Transaction Documents and Financing Documents to which they are party.
5.  All parties to the Transaction Documents and Financing Documents (other than the Opinion Parties) have taken all necessary organizational action required to authorize the execution, delivery, and performance of their obligations under the Transaction Documents and Financing Documents to which they are a party, and such documents have been duly executed and delivered by such parties.
6.  The Transaction Documents and Financing Documents constitute the legal, valid, binding, and enforceable obligations of all parties thereto other than the Opinion Parties, enforceable against such parties in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and similar laws affecting creditors' rights generally, and to general principles of equity.
7.  There are no agreements, understandings, or course of dealings among the parties to the Transaction Documents and Financing Documents that would modify, amend, supplement, or otherwise affect the terms of such documents, other than as expressly set forth therein and in the documents described herein.
8.  The Credit Agreement and the other Financing Documents are governed by, and will be construed in accordance with, the laws of the State of New York, and the Merger Agreement is governed by, and will be construed in accordance with, the DGCL and, to the extent applicable, the laws of the State of Delaware.
B. Factual Assumptions
1.  The representations and warranties of the Opinion Parties contained in the Transaction Documents and the Financing Documents were true and correct in all material respects when made and are true and correct in all material respects as of the date hereof, except where such representations and warranties expressly relate to an earlier date, in which case they were true and correct in all material respects as of such earlier date.
2.  The certifications, statements, representations, and warranties contained in the Officer's Certificate executed by Priya Deshmukh and in each Secretary's Certificate delivered in connection with the closing of the Transactions are accurate and complete in all respects as of the date hereof.
3.  All conditions precedent to the obligation of the parties to consummate the transactions contemplated by the Merger Agreement and the Credit Agreement have been duly satisfied or, where permitted, waived in accordance with the terms thereof.
4.  All regulatory approvals and governmental consents required for the consummation of the Transactions have been duly obtained, remain in full force and effect, and have not been revoked, withdrawn, amended, or modified in any manner that would adversely affect the legality, validity, or enforceability of any Transaction Document or Financing Document or the consummation of any Transaction, including without limitation:
(a) Clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), obtained on July 15, 2025, upon expiration of the applicable waiting period;
(b) Approval under the Investment Canada Act, obtained on June 3, 2025; and
(c) All applicable state money transmitter change-of-control approvals, the last of which was obtained on July 18, 2025.
5.  The funds flow memorandum dated July 21, 2025 has been implemented in accordance with its terms, and all payments contemplated thereby have been made or are being made contemporaneously with the delivery of this opinion.
C. Reliance on Good Standing Certificates
With respect to all opinions regarding the good standing of any Opinion Party, we have relied solely upon good standing certificates (or their equivalent) issued by the Secretary of State of the State of Delaware and other applicable governmental authorities, each dated within five (5) business days prior to the date hereof. We have made no independent investigation of the status of any Opinion Party with any governmental authority beyond our review of such certificates, and we express no opinion as to the continued good standing of any Opinion Party after the date and time of the issuance of such certificates.
IV. OPINIONS
Based upon and subject to the foregoing, and subject further to the qualifications, exceptions, and limitations set forth in Sections V and VI below, we are of the opinion that:
4.1 Due Organization and Good Standing — HPE Fund IV
HPE Fund IV is a limited partnership duly formed, validly existing, and in good standing under the laws of the State of Delaware. Harrowgate Capital Management IV LLC is a limited liability company duly formed, validly existing, and in good standing under the laws of the State of Delaware, and is the sole general partner of HPE Fund IV, duly authorized to act in such capacity in accordance with the Certificate of Limited Partnership and the Amended and Restated Agreement of Limited Partnership of HPE Fund IV.
4.2 Due Organization and Good Standing — Merger Sub
Merger Sub was, immediately prior to the Effective Time of the Merger (as defined in the Certificate of Merger), a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Delaware (Delaware Secretary of State File Number: 7291034). At the Effective Time, Merger Sub was merged with and into VeloPay Systems, Inc., with VeloPay continuing as the surviving corporation in the Merger, and Merger Sub thereupon ceased to exist as a separate legal entity, all in accordance with Section 251 of the DGCL and the terms and conditions of the Merger Agreement and the Certificate of Merger.
4.3 Due Organization and Good Standing — VeloPay (Surviving Corporation)
VeloPay Systems, Inc., as the surviving corporation in the Merger (the "Surviving Corporation"), is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Delaware (Delaware Secretary of State File Number: 5748392). The Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws of the Surviving Corporation are in full force and effect as of the date hereof.
4.4 Power and Authority — HPE Fund IV
HPE Fund IV has the limited partnership power and authority under its Certificate of Limited Partnership, its Amended and Restated Agreement of Limited Partnership, and applicable law to execute, deliver, and perform its obligations under each of the Transaction Documents and Financing Documents to which it is a party, including without limitation the Merger Agreement, the Credit Agreement (in its capacity as Holdings), the Equity Commitment Letter, the Escrow Agreement, the Guarantee and Collateral Agreement, and each other Transaction Document and Financing Document to which HPE Fund IV is a party, and to consummate the transactions contemplated thereby, including the making of the equity contribution in the aggregate amount of $1,140,000,000.
4.5 Power and Authority — Merger Sub
Merger Sub had, immediately prior to the Effective Time of the Merger, the corporate power and authority under its Certificate of Incorporation, its Bylaws, and applicable law to execute and deliver the Merger Agreement and to consummate the Merger and the other transactions contemplated by the Merger Agreement, including the merger of Merger Sub with and into VeloPay.
4.6 Power and Authority — Surviving Corporation
VeloPay Systems, Inc., as the Surviving Corporation, has the corporate power and authority under its Amended and Restated Certificate of Incorporation, its Amended and Restated Bylaws, and applicable law to execute, deliver, and perform its obligations under the Credit Agreement (in its capacity as Borrower), the Guarantee and Collateral Agreement, and each other Financing Document to which the Surviving Corporation is a party, and to consummate the transactions contemplated thereby, including the incurrence of the indebtedness under the Term Loan Facility and the Revolving Credit Facility and the granting of security interests in the collateral described in the Guarantee and Collateral Agreement.
4.7 Due Authorization — HPE Fund IV
The execution, delivery, and performance by HPE Fund IV of each Transaction Document and Financing Document to which it is a party, and the consummation by HPE Fund IV of the transactions contemplated thereby (including, without limitation, the equity contribution of $1,140,000,000), have been duly authorized by all necessary limited partnership action on the part of HPE Fund IV, including the written consent of Harrowgate Capital Management IV LLC, acting in its capacity as the sole general partner of HPE Fund IV. No other limited partnership action on the part of HPE Fund IV, and no vote, consent, or approval of the limited partners of HPE Fund IV (beyond that which has been obtained), is required to authorize the foregoing.
4.8 Due Authorization — Merger Sub
The execution, delivery, and performance by Merger Sub of the Merger Agreement, and the consummation by Merger Sub of the Merger and the other transactions contemplated by the Merger Agreement, were duly authorized by all necessary corporate action on the part of Merger Sub, including (a) the approval of the Merger Agreement and the Merger by the sole director of Merger Sub by written consent in lieu of a meeting of the board of directors, and (b) the approval and adoption of the Merger Agreement by HPE Fund IV, acting in its capacity as the sole stockholder of Merger Sub, by written consent in lieu of a meeting of the stockholders, in each case in accordance with the Certificate of Incorporation and Bylaws of Merger Sub and the DGCL.
4.9 Due Authorization — Surviving Corporation
The execution, delivery, and performance by VeloPay Systems, Inc. (as the Surviving Corporation) of the Credit Agreement and each other Financing Document to which the Surviving Corporation is a party, and the consummation of the transactions contemplated thereby, have been duly authorized by all necessary corporate action on the part of the Surviving Corporation, including action by its board of directors (or a duly authorized committee thereof) and, to the extent required, its sole stockholder, in accordance with the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws of the Surviving Corporation and the DGCL.
4.10 Due Execution and Delivery
Each of the Transaction Documents and Financing Documents to which HPE Fund IV, Merger Sub, or VeloPay Systems, Inc. (as the Surviving Corporation) is a party has been duly executed and delivered by such entity. With respect to Merger Sub, such execution and delivery occurred prior to the Effective Time of the Merger while Merger Sub was a validly existing Delaware corporation.
4.11 Enforceability — Merger Agreement
The Merger Agreement constitutes the legal, valid, and binding obligation of each of HPE Fund IV and Merger Sub (prior to the Effective Time), enforceable against each of them in accordance with its terms, subject to the Enforceability Exceptions (as defined in Section V hereof).
4.12 Enforceability — Credit Agreement
The Credit Agreement constitutes the legal, valid, and binding obligation of each of HPE Fund IV (in its capacity as Holdings) and VeloPay Systems, Inc. (in its capacity as the Surviving Corporation and Borrower), enforceable against each of them in accordance with its terms, subject to the Enforceability Exceptions. Without limiting the generality of the foregoing, the term loan facility thereunder in the aggregate principal amount of $500,000,000 and the revolving credit facility thereunder in the aggregate available amount of $260,000,000 have been duly authorized, and VeloPay Systems, Inc. (as Borrower) is authorized to borrow, repay, and reborrow amounts under the Revolving Credit Facility in accordance with the terms of the Credit Agreement.
4.13 Enforceability — Guarantee and Collateral Agreement
The Guarantee and Collateral Agreement constitutes the legal, valid, and binding obligation of each of HPE Fund IV (in its capacity as Holdings), VeloPay Systems, Inc. (in its capacity as the Surviving Corporation), and each subsidiary guarantor party thereto (namely, VeloPay Processing LLC, VeloPay Fraud intelligence Inc., and PayStream Gateway LLC), enforceable against each of them in accordance with its terms, subject to the Enforceability Exceptions. The guarantees and security interests granted pursuant to the Guarantee and Collateral Agreement have been duly authorized by all necessary organizational action on the part of each such entity.
4.14 Enforceability — Intercreditor Agreement
The Intercreditor Agreement constitutes the legal, valid, and binding obligation of each party thereto, enforceable against each such party in accordance with its terms, subject to the Enforceability Exceptions. The provisions of the Intercreditor Agreement governing the relative priorities and rights of the Term Loan Agent and the Revolver Agent with respect to the collateral are enforceable in accordance with their terms, subject to the Enforceability Exceptions.
4.15 Enforceability — Other Transaction Documents
Each of the following documents constitutes the legal, valid, and binding obligation of the Opinion Party or Opinion Parties (as applicable) that is or are a party thereto, enforceable against such Opinion Party or Opinion Parties in accordance with its respective terms, subject to the Enforceability Exceptions:
(a) The Equity Commitment Letter (constituting an obligation of Harrowgate Capital Management IV LLC);
(b) The Limited Guarantee (constituting an obligation of Harrowgate Capital Management IV LLC; guaranteed amount: the reverse termination fee of $57,000,000 and certain other obligations expressly set forth therein);
(c) The Escrow Agreement (constituting an obligation of HPE Fund IV, solely to the extent of the obligations of HPE Fund IV thereunder); and
(d) The Paying Agent Agreement (constituting an obligation of VeloPay Systems, Inc., as the Surviving Corporation, solely to the extent of the obligations of the Surviving Corporation thereunder).
4.16 No-Conflicts — Organizational Documents
The execution, delivery, and performance by each of HPE Fund IV, Merger Sub (prior to the Effective Time), Harrowgate Capital Management IV LLC, and VeloPay Systems, Inc. (as the Surviving Corporation) of the Transaction Documents and Financing Documents to which such entity is a party, and the consummation by each such entity of the transactions contemplated thereby (including, without limitation, the Merger, the equity contribution, and the incurrence of indebtedness under the Credit Agreement), do not and did not:
(a) violate, conflict with, or result in a breach of any provision of the certificate of limited partnership, amended and restated agreement of limited partnership, certificate of incorporation, bylaws, certificate of formation, or operating agreement (as applicable) of any such entity;
(b) result in the creation or imposition of any lien, charge, encumbrance, or security interest upon any of the assets or properties of any such entity pursuant to the terms of any such organizational document (other than liens and security interests expressly created pursuant to the Guarantee and Collateral Agreement); or
(c) give rise to any right of termination, cancellation, or acceleration of any obligation under any such organizational document.
4.17 No-Conflicts — Specified Laws
The execution, delivery, and performance by the Opinion Parties of the Transaction Documents and Financing Documents to which they are a party, and the consummation of the transactions contemplated thereby (including, without limitation, the Merger, the equity contribution, and the incurrence of indebtedness under the Credit Agreement), do not violate any federal law of the United States, any law of the State of New York, or any provision of the General Corporation Law of the State of Delaware that, in our experience, is normally applicable to transactions of the type contemplated by the Transaction Documents and Financing Documents and that would be customarily recognized by a lawyer in the State of New York as being applicable to such transactions (collectively, the "Specified Laws"), without our having made any special investigation as to the applicability of any specific law, rule, or regulation.
For the avoidance of doubt, this opinion does not address compliance with or the effect of (i) federal or state securities laws, including the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, or any state "blue sky" laws (except as expressly set forth herein), (ii) federal or state antitrust laws, including the HSR Act, (iii) federal or state banking or financial institution regulatory laws, (iv) federal or state money transmitter laws or payment processing regulations, (v) federal, state, or local tax laws, (vi) the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and the rules and regulations promulgated thereunder, (vii) federal, state, or local environmental laws, (viii) federal, state, or local data privacy or data security laws, (ix) PCI-DSS or other industry payment card standards, or (x) the laws of any jurisdiction other than the federal laws of the United States, the laws of the State of New York, and the General Corporation Law of the State of Delaware.
4.18 No Consents — Specified Laws
No consent, approval, authorization, order, registration, qualification, or filing with any federal, state, or local governmental authority or regulatory body under the Specified Laws is required for the execution, delivery, and performance by any Opinion Party of the Transaction Documents and Financing Documents to which such Opinion Party is a party, or for the consummation of the transactions contemplated thereby, that has not already been duly obtained or made as of the date hereof.
This opinion does not address any consents, approvals, authorizations, orders, registrations, qualifications, or filings that may be required under (i) the HSR Act, (ii) the Investment Canada Act, (iii) state money transmitter laws or regulations, (iv) federal or state banking or financial institution regulatory laws, (v) any securities law, (vi) any environmental law, (vii) ERISA, or (viii) the laws of any jurisdiction other than the federal laws of the United States, the laws of the State of New York, and the General Corporation Law of the State of Delaware.
4.19 Certificate of Merger
The Certificate of Merger relating to the merger of Merger Sub with and into VeloPay has been duly executed by an authorized officer of each of Merger Sub and VeloPay and has been filed with the Secretary of State of the State of Delaware on July 22, 2025, in accordance with Section 251 of the DGCL. The Merger has become effective as of the date and time specified in such Certificate of Merger (the "Effective Time"), and VeloPay continues as the surviving corporation in the Merger.
4.20 Security Interest Opinions (UCC)
(a) The Guarantee and Collateral Agreement creates a valid security interest in favor of the Agents (for the ratable benefit of the Lender Parties) in the collateral described therein (the "Collateral"), to the extent that such Collateral constitutes personal property in which a security interest may be created under Article 9 of the Uniform Commercial Code as in effect in the State of New York (the "NY UCC"). Such security interest secures the payment and performance of the obligations described in the Guarantee and Collateral Agreement.
(b) Upon the filing of appropriate UCC-1 financing statements in the office of the Secretary of State of the State of Delaware (or, where required by the NY UCC, in such other filing offices as may be appropriate), the security interests created under the Guarantee and Collateral Agreement in favor of the Agents (for the ratable benefit of the Lender Parties) will be perfected to the extent that a security interest in such Collateral can be perfected by the filing of a UCC-1 financing statement under the NY UCC.
(c) For the avoidance of doubt, this opinion does not address the creation, validity, perfection, or priority of any security interest in (i) intellectual property (including patents, trademarks, copyrights, and trade secrets) to the extent that the perfection of a security interest therein is governed by federal law (including the United States Patent and Trademark Office or the United States Copyright Office filing systems), (ii) real property or fixtures, (iii) deposit accounts (other than to the extent that a security interest therein may be perfected by the filing of a UCC-1 financing statement under the NY UCC), (iv) letter-of-credit rights (other than supporting obligations), (v) commercial tort claims, (vi) any property subject to a certificate of title statute, or (vii) any Collateral to the extent that the perfection or priority of a security interest therein is governed by the laws of a jurisdiction other than the State of New York or the State of Delaware. We express no opinion as to the priority of any security interest created by the Guarantee and Collateral Agreement relative to any other lien, security interest, or encumbrance.
V. ENFORCEABILITY EXCEPTIONS
The opinions set forth in Section IV above as to the enforceability of the Transaction Documents and the Financing Documents are subject to the following exceptions and qualifications (collectively, the "Enforceability Exceptions"):
5.1 Bankruptcy and Insolvency Exception
The enforceability of the Transaction Documents and the Financing Documents may be limited by applicable bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent transfer, fraudulent conveyance, voidable transaction, and other similar laws relating to or affecting creditors' rights and remedies generally, now or hereafter in effect, including without limitation the United States Bankruptcy Code (Title 11 of the United States Code), applicable state insolvency laws, and laws governing preferences, fraudulent transfers, and equitable subordination.
5.2 Equitable Principles Exception
The enforceability of the Transaction Documents and the Financing Documents may be limited by general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith, fair dealing, unconscionability, and the availability of equitable remedies), whether considered in a proceeding at law or in equity, regardless of whether enforcement is sought in a proceeding at law or in equity. The availability of specific performance, injunctive relief, and other equitable remedies is subject to the discretion of the court before which any proceeding therefor may be brought, and such remedies may not be available in every instance where a breach of contract or other legal wrong has occurred.
5.3 Specific Enforceability Limitations
Without limiting the generality of the foregoing:
(a) The enforceability of provisions in the Transaction Documents and the Financing Documents relating to indemnification and contribution may be limited by applicable law, public policy, and equitable principles, including laws and principles that may limit or prohibit indemnification for losses arising from the negligence, gross negligence, or willful misconduct of the indemnified party, or for losses arising from violations of securities laws.
(b) The enforceability of provisions in the Transaction Documents and the Financing Documents providing for the payment of liquidated damages, late charges, default interest, prepayment premiums, or make-whole amounts may be limited by applicable law to the extent that such provisions are deemed to constitute a penalty or forfeiture rather than a reasonable estimate of actual damages.
(c) Rights to specific performance, injunctive relief, or other equitable remedies are subject to the discretion of the court before which any proceeding therefor may be brought, and no assurance can be given that such remedies would be granted in any particular case.
(d) The enforceability of provisions in the Transaction Documents and the Financing Documents purporting to waive rights of debtors or obligors, including but not limited to waivers of rights to notice, presentment, demand, protest, rights of redemption, marshaling of assets, or other rights that may not be waived under applicable law, may be limited by applicable law and public policy.
(e) The enforceability of provisions purporting to establish evidentiary standards, to relieve a party of the obligation to mitigate damages, or to sever unenforceable provisions may be limited by applicable law.
(f) We express no opinion as to the enforceability of any provision in the Transaction Documents or the Financing Documents to the extent that such provision constitutes a waiver of any right that cannot, as a matter of law, be effectively waived.
VI. QUALIFICATIONS AND LIMITATIONS
The opinions expressed herein are further subject to the following qualifications and limitations:
6.1 Scope of Laws Covered
This opinion is limited in all respects to the federal laws of the United States of America, the laws of the State of New York (excluding the choice-of-law rules thereof that would apply the laws of another jurisdiction), and the General Corporation Law of the State of Delaware (including the provisions of the Delaware Constitution and reported judicial decisions interpreting the DGCL). We are members of the bar of the State of New York and do not purport to be experts in, and we express no opinion as to, the laws of any other jurisdiction, including without limitation:
(a) the laws of the State of Texas (where VeloPay Systems, Inc. is headquartered);
(b) the laws of Canada or any province or territory thereof (with respect to VeloPay Canada Inc., an indirect subsidiary of VeloPay);
(c) the laws of Portugal or the European Union (with respect to VeloPay Europe, Unipessoal Lda., an indirect subsidiary of VeloPay); or
(d) the laws of any other state or foreign jurisdiction in which any Opinion Party or any subsidiary of VeloPay conducts business, maintains offices, or owns property.
We further express no opinion concerning compliance with or the effect of (i) any securities laws, rules, or regulations (federal, state, or foreign), (ii) any antitrust or competition laws, rules, or regulations (federal, state, or foreign), (iii) any banking, savings association, or financial institution regulatory laws, rules, or regulations, (iv) any money transmitter, payments, or money services business laws, rules, or regulations, (v) any tax laws, rules, or regulations (federal, state, local, or foreign), (vi) ERISA or any laws, rules, or regulations relating to employee benefit plans, (vii) any environmental or natural resource laws, rules, or regulations, (viii) any data privacy, data security, cybersecurity, or consumer protection laws, rules, or regulations (including GLBA, CCPA, GDPR, and state breach notification laws), or (ix) the Payment Card Industry Data Security Standard (PCI-DSS) or any similar industry standard or self-regulatory framework.
6.2 No Opinion on Financial Terms
We express no opinion as to (a) the financial terms of the Transaction Documents or Financing Documents, (b) the adequacy or fairness of the merger consideration or any other consideration provided for in the Transaction Documents, (c) the solvency or financial condition of any person or entity (whether before, on, or after the date hereof), or (d) compliance with any financial covenants contained in the Credit Agreement or any other Financing Document. The Solvency Certificate referenced in Section II.E above was delivered by Marcus Langford, Chief Financial Officer of VeloPay, based upon his knowledge and examination of the financial condition and prospects of VeloPay and its subsidiaries, and does not constitute an opinion of this firm. We have not independently verified the accuracy of any financial information or projections provided to us, and we express no opinion with respect thereto.
6.3 Reliance on Certificates and Representations
In rendering the opinions expressed herein, we have relied, without independent investigation or verification, upon (a) the Officer's Certificate executed by Priya Deshmukh, Managing Partner, Fund IV, (b) the Secretary's Certificates of HPE Fund IV and Merger Sub, (c) the good standing certificates and certificates of status described in Section II.E above, and (d) the representations and warranties of the parties contained in the Transaction Documents and the Financing Documents. We have assumed that all such certificates, statements, and representations are true, correct, and complete in all respects as of the date hereof, and we have not undertaken any independent investigation or due diligence to verify the accuracy or completeness of any such certificates, statements, or representations. To the extent that any of the opinions expressed herein is based upon or relates to matters of fact, we have relied upon the foregoing sources and upon such other factual information as has been made available to us by the Opinion Parties and their respective officers, directors, agents, and representatives.
6.4 Date and Change Limitation
The opinions expressed herein are rendered solely as of the date hereof and are based upon the laws, rules, regulations, and facts existing and known to us as of such date. We assume no obligation to update, supplement, revise, or reaffirm this opinion for any reason, including without limitation any changes in applicable law, the occurrence of any event, or the discovery of any fact or circumstance existing on or before the date hereof, after the date hereof. We disclaim any undertaking to advise you of any changes in the matters stated or assumed herein or of any subsequent developments that might affect the opinions expressed herein.
6.5 No Implied Opinions
No opinion is implied or may be inferred beyond those expressly stated herein. Without limiting the generality of the foregoing, we express no opinion as to (a) the compliance by any person or entity with any fiduciary duties, (b) the adequacy of disclosure in any document, (c) the tax consequences of the Transactions, (d) the applicability or effect of the laws of any jurisdiction other than those expressly covered herein, (e) the enforceability of any provision of the Transaction Documents or Financing Documents that purports to waive or modify any obligation implied by law, (f) the title to, or condition of, any real or personal property, or (g) the perfection, priority, or enforceability of any security interest, mortgage, or lien, except as expressly set forth in Section IV, Paragraph 4.20.
6.6 Benefit of Opinion
This opinion is furnished solely for the benefit of the Agents and the Lender Parties in connection with the Credit Agreement and the transactions contemplated thereby. This opinion may not be relied upon by any other person or entity, or used, quoted, circulated, or referred to for any other purpose, without our prior written consent in each instance.
Notwithstanding the foregoing, this opinion may be relied upon by any person or entity that becomes a Lender under the Credit Agreement by way of assignment or participation in accordance with Section 10.04 of the Credit Agreement, as if this opinion were addressed and delivered to such person or entity on the date hereof, subject to the same assumptions, qualifications, exceptions, and limitations set forth herein.
This opinion may not be relied upon by any holder of equity interests in HPE Fund IV, any limited partner of HPE Fund IV, any affiliate of the Agents or the Lender Parties (other than successors and assigns who become Lenders under the Credit Agreement as described above), or any other third party, without our prior written consent.
We are furnishing this opinion to you solely in connection with the closing of the Transactions described herein. We consent to the delivery of copies of this opinion to the Lenders party to the Credit Agreement in connection with the syndication of the credit facilities thereunder, subject to the limitations on reliance set forth in Section VI.6 above. Except as set forth in the preceding sentence, this opinion may not be furnished to, or relied upon by, any other person or entity without our prior written consent.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Sandra Tung
Title: Partner
(Responsible Partner, Mergers & Acquisitions)
Reference Billing Partner: Oliver Mackenzie Engagement Team: Megan Chu, Lead Associate; Derek Okonkwo, Working Associate
SCHEDULE A
LIST OF TRANSACTION DOCUMENTS
The following is a complete list of the Transaction Documents referenced in this opinion:
SCHEDULE B
LIST OF FINANCING DOCUMENTS
The following is a complete list of the Financing Documents referenced in this opinion:
SCHEDULE C
ORGANIZATIONAL DOCUMENTS REVIEWED
The following is a complete list of organizational documents reviewed for each Opinion Party in connection with the rendering of this opinion:
I. Harrowgate Private Equity Fund IV LP (HPE Fund IV)
II. Harrowgate Capital Management IV LLC (General Partner of HPE Fund IV)
III. Harrowgate Velocity Merger Sub Inc. (Merger Sub)
IV. VeloPay Systems, Inc. (Surviving Corporation / Borrower)
V. Subsidiary Guarantors
CONFIDENTIAL — This opinion letter is subject to the limitations on reliance and use set forth in Section VI.6 hereof.
No. | Document | Date | Parties
1 | Agreement and Plan of Merger | March 18, 2025 | HPE Fund IV, Merger Sub, and VeloPay Systems, Inc.
2 | Disclosure Schedules to the Merger Agreement | March 18, 2025 | HPE Fund IV and Merger Sub
3 | Equity Commitment Letter | February 14, 2025 | Harrowgate Capital Management IV LLC and VeloPay Systems, Inc.
4 | Limited Guarantee | March 18, 2025 | Harrowgate Capital Management IV LLC (as guarantor) in favor of VeloPay Systems, Inc.
5 | Stockholder Support Agreement | March 18, 2025 | HPE Fund IV, Merger Sub, and certain stockholders of VeloPay
6 | Rollover Agreement | March 18, 2025 | HPE Fund IV, Harrowgate Velocity Co-Invest LP, Nathan Aldridge, and Sonia Reyes-Watkins
7 | Certificate of Merger | July 22, 2025 | Filed with the Secretary of State of the State of Delaware
8 | Escrow Agreement (Ref: GT-ESC-2025-07223) | July 22, 2025 | HPE Fund IV, Nathan Aldridge (as Stockholder Representative), and Garrison Trust Company (as Escrow Agent)
9 | Paying Agent Agreement | July 22, 2025 | VeloPay Systems, Inc. (as Surviving Corporation) and Keystone Pacific Transfer Services Inc. (as Paying Agent)
No. | Document | Date | Parties
1 | Debt Commitment Letter (Ref: CRE-2025-SPF-0441) | February 14, 2025 | Tralvendo National Bank, Prairie State Bank, N.A., and HPE Fund IV
2 | Senior Secured Credit Agreement | July 22, 2025 | VeloPay Systems, Inc. (as Borrower), HPE Fund IV (as Holdings), Tralvendo National Bank (as Administrative Agent — Term Loan Facility), Prairie State Bank, N.A. (as Administrative Agent — Revolving Credit Facility), and the Lenders party thereto
3 | Guarantee and Collateral Agreement | July 22, 2025 | VeloPay Systems, Inc. (as Borrower), HPE Fund IV (as Holdings), VeloPay Processing LLC, VeloPay Fraud intelligence Inc., and PayStream Gateway LLC (each as Subsidiary Guarantor), in favor of the Agents (for the ratable benefit of the Lender Parties)
4 | Intercreditor Agreement | July 22, 2025 | Tralvendo National Bank (as Term Loan Agent) and Prairie State Bank, N.A. (as Revolver Agent)
5 | Fee Letter (Confidential) | February 14, 2025 | HPE Fund IV, Tralvendo National Bank, and Prairie State Bank, N.A.
No. | Document | Date / Status
1 | Certificate of Limited Partnership of HPE Fund IV | Filed with the Delaware Secretary of State
2 | Amended and Restated Agreement of Limited Partnership of HPE Fund IV | As of the date specified therein
3 | Good Standing Certificate — Delaware Secretary of State | Dated July 17, 2025
No. | Document | Date / Status
1 | Certificate of Formation of Harrowgate Capital Management IV LLC | Filed with the Delaware Secretary of State
2 | Amended and Restated Operating Agreement of Harrowgate Capital Management IV LLC | As of the date specified therein
3 | Good Standing Certificate — Delaware Secretary of State | Dated July 17, 2025
No. | Document | Date / Status
1 | Certificate of Incorporation of Merger Sub | Filed February 24, 2025
2 | Bylaws of Merger Sub | Adopted February 24, 2025
3 | Good Standing Certificate — Delaware Secretary of State | Dated July 17, 2025 (prior to the Effective Time)
No. | Document | Date / Status
1 | Amended and Restated Certificate of Incorporation of VeloPay Systems, Inc. (as Surviving Corporation) | Effective July 22, 2025
2 | Amended and Restated Bylaws of VeloPay Systems, Inc. (as Surviving Corporation) | Effective July 22, 2025
3 | Good Standing Certificate — Delaware Secretary of State | Dated July 17, 2025
Entity | Document | Date / Status
VeloPay Processing LLC | Certificate of Formation — Delaware Secretary of State | As filed
VeloPay Processing LLC | Operating Agreement | As of the date specified therein
VeloPay Processing LLC | Good Standing Certificate — Delaware Secretary of State | Dated July 17, 2025
VeloPay Fraud intelligence Inc. | Certificate of Incorporation — Delaware Secretary of State | As filed
VeloPay Fraud intelligence Inc. | Bylaws | As of the date adopted
VeloPay Fraud intelligence Inc. | Good Standing Certificate — Delaware Secretary of State | Dated July 17, 2025
PayStream Gateway LLC | Certificate of Formation — Delaware Secretary of State | As filed
PayStream Gateway LLC | Operating Agreement | As of the date specified therein
PayStream Gateway LLC | Good Standing Certificate — Delaware Secretary of State | Dated July 17, 2025