opinion-request-letter-wjc.docx

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

opinion-request-letter-wjc.docx DOCUMENT M&A / Corporate

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CALDERWOOD & HARKNESS LLP 787 Seventh Avenue, 38th Floor New York, New York 10019 Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com

July 18, 2025

VIA EMAIL AND OVERNIGHT COURIER

Rebecca Thornton-Hayes, Partner Whitford Jessup & Crane LLP 600 Congress Avenue, Suite 2400 Austin, Texas 78701

Re: Closing Legal Opinion of Target's Counsel — Acquisition of VeloPay Systems, Inc. by Harrowgate Private Equity Fund IV LP

Calderwood & Harkness Matter Number: 1003-00003

Dear Ms. Thornton-Hayes:

1. Introduction

We are counsel to Harrowgate Private Equity Fund IV LP, a Delaware limited partnership ("HPE Fund IV" or the "Buyer"), in connection with the transactions contemplated by the Agreement and Plan of Merger, dated as of March 18, 2025 (as it may be amended, supplemented, or otherwise modified from time to time in accordance with its terms, the "Merger Agreement"), among HPE Fund IV, Harrowgate Velocity Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of HPE Fund IV ("Merger Sub"), and VeloPay Systems, Inc., a Delaware corporation (the "Company" or "VeloPay"). The Merger Agreement provides for a reverse triangular merger pursuant to Section 251 of the Delaware General Corporation Law (the "DGCL"), in which Merger Sub will merge with and into VeloPay, with VeloPay continuing as the surviving corporation and becoming a wholly-owned subsidiary of HPE Fund IV (the "Merger"). The aggregate merger consideration to be paid in connection with the Merger is One Billion Nine Hundred Million Dollars ($1,900,000,000), representing Twenty Dollars ($20.00) per share of Company common stock on a fully diluted basis.

The closing of the Merger (the "Closing") is expected to occur on July 22, 2025. As you are aware, Section 7.2(f) of the Merger Agreement provides that, as a condition precedent to the obligation of the Buyer to consummate the Merger, VeloPay shall have delivered to HPE Fund IV a legal opinion from VeloPay's outside counsel, Whitford Jessup & Crane LLP, in the form specified by counsel to HPE Fund IV. This letter sets forth the form, substance, and scope of the legal opinion that HPE Fund IV requests be delivered by Whitford Jessup & Crane LLP (the "Opinion") on the Closing Date, as well as the assumptions, qualifications, and limitations that HPE Fund IV will accept in such Opinion. We look forward to working with you and your team to ensure that the Opinion satisfies the requirements of the Merger Agreement and the expectations of the parties and the financing sources in connection with the Closing.

2. Defined Terms

Capitalized terms used but not otherwise defined in this letter shall have the meanings ascribed to such terms in the Merger Agreement. In addition, the following defined terms shall be used in the Opinion and in this letter for purposes of clarity and consistency:

(a) "Merger Agreement" means the Agreement and Plan of Merger dated as of March 18, 2025, among HPE Fund IV, Merger Sub, and the Company, as it may be amended, supplemented, or otherwise modified in accordance with its terms.

(b) "Company" means VeloPay Systems, Inc., a Delaware corporation.

(c) "Merger Sub" means Harrowgate Velocity Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of HPE Fund IV.

(d) "Parent" or "Buyer" means Harrowgate Private Equity Fund IV LP, a Delaware limited partnership.

(e) "Merger" means the reverse triangular merger of Merger Sub with and into the Company, with the Company surviving as a wholly-owned subsidiary of the Buyer.

(f) "Effective Time" means the effective time of the Merger as set forth in the Certificate of Merger filed with the Secretary of State of the State of Delaware.

(g) "Stockholder Support Agreement" means the Stockholder Support Agreement dated as of March 18, 2025, among HPE Fund IV, Ridgeline Ventures Fund III LP, Apex Growth Partners II LP, Broadleaf Capital Partners LP, Nathan Aldridge, and Sonia Reyes-Watkins.

(h) "Transaction Documents" means, collectively, the Merger Agreement, the Stockholder Representative Agreement, and all ancillary agreements, instruments, and documents to which VeloPay is a party that are delivered or to be delivered in connection with the consummation of the transactions contemplated by the Merger Agreement.

3. Documents to Be Reviewed by Opining Counsel

We request that the Opinion identify the documents examined and relied upon by Whitford Jessup & Crane LLP in connection with the rendering of the Opinion. At a minimum, we expect that Whitford Jessup & Crane LLP will have reviewed the following documents and records:

(a) The Merger Agreement (execution version, dated March 18, 2025), including all exhibits and schedules thereto, a copy of which is attached hereto as Enclosure A.

(b) The Amended and Restated Certificate of Incorporation of VeloPay Systems, Inc., as currently in effect (as filed with the Secretary of State of the State of Delaware).

(d) The Amended and Restated Certificate of Incorporation of VeloPay Systems, Inc., as the surviving corporation in the Merger (the "Surviving Corporation Charter"), to be filed with the Secretary of State of the State of Delaware at the Effective Time.

(e) Resolutions of the Board of Directors of VeloPay approving the Merger Agreement and the transactions contemplated thereby, as adopted on March 17, 2025, certified by the Secretary or an Assistant Secretary of VeloPay.

(f) The Written Consent of Stockholders of VeloPay, delivered on March 18, 2025, pursuant to Section 228 of the DGCL, by stockholders holding approximately 63.1% of the outstanding shares of Company common stock, together with evidence of compliance with the notice requirements of DGCL Section 228(e), including the Information Statement mailed to VeloPay stockholders on April 14, 2025.

(g) The Certificate of Merger to be filed with the Secretary of State of the State of Delaware in connection with the Merger.

(h) A certificate of good standing (or equivalent) for VeloPay Systems, Inc., issued by the Secretary of State of the State of Delaware, dated within five (5) business days of the Closing Date.

(i) Certificates of good standing, certificates of qualification, or equivalent certificates for VeloPay Systems, Inc. in each jurisdiction in which VeloPay is qualified to do business as a foreign corporation, including the State of Texas (VeloPay's headquarters state), in each case dated within a reasonably recent period prior to the Closing Date.

(j) The Stockholder Support Agreement (execution version, dated March 18, 2025).

(k) The Stockholder Representative Agreement (execution version, dated March 18, 2025).

(l) The Escrow Agreement (execution version, dated July 22, 2025), among HPE Fund IV, Nathan Aldridge, in his capacity as Stockholder Representative, and Garrison Trust Company, as escrow agent (Reference No. GT-ESC-2025-07223).

(m) The Paying Agent Agreement (execution version, dated July 22, 2025), between VeloPay Systems, Inc., as the surviving corporation, and Keystone Pacific Transfer Services Inc., as paying agent.

(n) Such other documents, records, instruments, and certificates of officers of the Company, public officials, and other persons as Whitford Jessup & Crane LLP deems necessary or appropriate for the purposes of rendering the Opinion.

A list of the Transaction Documents to which VeloPay is a party, including the documents referenced above, is attached hereto as Enclosure B for your reference.

4. Opinions Requested

We request that the Opinion include each of the following opinions. Each opinion set forth below should be rendered as a "clean" opinion (and not as a "reasoned" or "should" opinion), subject only to the customary assumptions, qualifications, and limitations described in Section 6 below.

4.1 Due Organization and Good Standing

We request that Whitford Jessup & Crane LLP opine that VeloPay Systems, Inc. (Delaware File Number 5748392) is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Delaware. In addition, we request an opinion that VeloPay is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company. For purposes of this opinion, we understand that Whitford Jessup & Crane LLP may rely upon certificates of good standing or equivalent certificates issued by the relevant governmental authorities as described in Section 3 above.

4.2 Subsidiaries — Due Organization

To the extent within the scope of Whitford Jessup & Crane LLP's engagement and representation, we request an opinion that each of VeloPay's domestic subsidiaries — namely, VeloPay Processing LLC, a Delaware limited liability company, VeloPay Fraud intelligence Inc., a Delaware corporation, and PayStream Gateway LLC, a Delaware limited liability company — is duly organized or formed, validly existing, and in good standing under the laws of the State of Delaware, its jurisdiction of organization. We note that Calderwood & Harkness, on behalf of HPE Fund IV, will accept the exclusion of VeloPay's foreign subsidiaries — VeloPay Canada Inc. (organized under the laws of the Province of Ontario, Canada) and VeloPay Europe, Unipessoal Lda. (organized under the laws of the Portuguese Republic) — from the scope of the Opinion, provided that the Opinion includes a statement that no opinion is expressed with respect to the laws of any jurisdiction other than those identified in Section 6.3 below and that, to the extent local counsel opinions have been obtained or will be obtained with respect to such foreign subsidiaries, such reliance is referenced in the Opinion.

4.3 Corporate Power and Authority

We request an opinion that VeloPay has the requisite corporate power and authority to execute and deliver the Merger Agreement and each of the Transaction Documents to which it is a party, and to perform its obligations thereunder and to consummate the Merger and the other transactions contemplated thereby. This opinion should confirm that VeloPay's Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws do not restrict or otherwise limit VeloPay's ability to enter into and perform under the Merger Agreement and the Transaction Documents or to consummate the Merger.

4.4 Due Authorization

We request an opinion that the execution, delivery, and performance by VeloPay of the Merger Agreement and each of the Transaction Documents to which it is a party, and the consummation by VeloPay of the Merger and the transactions contemplated thereby, have been duly authorized by all necessary corporate action on the part of VeloPay. In rendering this opinion, we expect that Whitford Jessup & Crane LLP will have reviewed and confirmed the following:

(a) The Board of Directors of VeloPay duly adopted resolutions on March 17, 2025, approving the Merger Agreement and the transactions contemplated thereby, including the Merger, and recommending that VeloPay's stockholders approve and adopt the Merger Agreement;

(b) The requisite vote of VeloPay's stockholders was obtained by written consent in lieu of a meeting pursuant to Section 228 of the DGCL, with stockholders holding approximately 63.1% of the outstanding shares of Company common stock having delivered their written consent on March 18, 2025, which percentage exceeded the affirmative vote of a majority of the outstanding shares of Company common stock required under Section 251(c) of the DGCL and VeloPay's organizational documents;

(c) The Company has complied with the notice requirements of Section 228(e) of the DGCL, including the mailing of the Information Statement to all non-consenting stockholders of VeloPay on April 14, 2025; and

(d) No other corporate proceedings on the part of VeloPay are necessary to authorize, approve, or adopt the Merger Agreement, the Transaction Documents, or the consummation of the Merger or the other transactions contemplated thereby.

4.5 Execution and Delivery

We request an opinion that the Merger Agreement and each of the Transaction Documents to which VeloPay is a party has been duly executed and delivered by VeloPay. This opinion should confirm that the individuals who executed such documents on behalf of VeloPay were duly authorized to do so and that such execution and delivery were effected in accordance with applicable corporate formalities.

4.6 Enforceability. We request an opinion that the Merger Agreement and each of the Transaction Documents to which VeloPay is a party constitutes the legal, valid, and binding obligation of VeloPay, enforceable against VeloPay in accordance with its respective terms. This enforceability opinion may be subject to the customary qualifications and exceptions set forth in Section 6.2 below, but should not be rendered as a "reasoned" or "should" opinion. We expect a "clean" enforceability opinion for each of the Transaction Documents identified in this letter and in Enclosure B.

4.7 No Conflicts — Organizational Documents

We request an opinion that the execution, delivery, and performance by VeloPay of the Merger Agreement and the Transaction Documents to which it is a party, and the consummation by VeloPay of the Merger and the other transactions contemplated by the Merger Agreement, do not and will not violate, conflict with, or result in a breach of any provision of VeloPay's Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws, or the equivalent organizational documents (including certificates of formation, limited liability company agreements, certificates of incorporation, and bylaws, as applicable) of any of VeloPay's domestic subsidiaries (VeloPay Processing LLC, VeloPay Fraud intelligence Inc., and PayStream Gateway LLC).

4.8 No Conflicts — Laws and Orders

We request an opinion that the execution, delivery, and performance by VeloPay of the Merger Agreement and the Transaction Documents to which it is a party, and the consummation by VeloPay of the Merger and the other transactions contemplated by the Merger Agreement, do not and will not violate or conflict with any applicable law, statute, rule, regulation, judgment, order, writ, injunction, or decree of any governmental authority applicable to VeloPay or any of its domestic subsidiaries or any of their respective properties or assets.

For purposes of this opinion, the scope of laws to be addressed shall include: (i) the DGCL and other applicable laws of the State of Delaware; (ii) the federal laws of the United States, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"); and (iii) the laws of the State of Texas to the extent applicable to VeloPay's business and operations. With respect to the HSR Act, the Opinion may note that the applicable waiting period under the HSR Act expired on July 15, 2025, without any request for additional information or documentary material (HSR Transaction Number 25-0198374), and that no further filing or approval under the HSR Act is required in connection with the consummation of the Merger.

4.9 No Conflicts — Material Agreements

(a) result in a violation or breach of any provision of;

(b) constitute a default (or an event that, with the giving of notice or the lapse of time or both, would constitute a default) under;

(d) create in any party the right to accelerate, terminate, modify, or cancel; or

(e) require the payment of any penalty or additional consideration under;

any material agreement, contract, lease, license, instrument, or other arrangement to which VeloPay or any of its subsidiaries is a party or by which any of their respective properties or assets is bound (collectively, "Material Agreements").

We acknowledge that this opinion may be limited in scope to those Material Agreements listed on a schedule to be attached to the Opinion (and cross-referencing the applicable disclosure schedules to the Merger Agreement). A list of such Material Agreements, including the fourteen (14) material customer contracts that have been identified as requiring change of control consent or notification, is attached hereto as Enclosure C for your reference. We expect that the Opinion will address non-contravention of each of those fourteen material customer contracts. If Whitford Jessup & Crane LLP determines that it is not feasible to render a no-conflicts opinion with respect to one or more of those contracts, the Opinion should clearly identify any such carve-out, including the specific contract or contracts excluded and the basis for such exclusion, so that HPE Fund IV and its counsel may evaluate whether such carve-out is acceptable.

4.10 No Consents Required (or All Required Consents Obtained)

We request an opinion that no consent, approval, authorization, order, registration, qualification, or filing with any governmental authority or any other person is required to be made or obtained by VeloPay in connection with the execution, delivery, and performance of the Merger Agreement and the Transaction Documents, or the consummation of the Merger, except for:

(a) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware;

(b) any consents, approvals, authorizations, registrations, qualifications, or filings the absence of which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on VeloPay;

(c) filings and approvals previously made or obtained, including filings under the HSR Act (waiting period expired July 15, 2025), the Investment Canada Act, and applicable state money transmitter change-of-control filings; and

(d) such other consents, approvals, authorizations, registrations, qualifications, or filings as may have been obtained or made prior to the date of the Opinion.

4.11 Capitalization. We request that Whitford Jessup & Crane LLP opine, or alternatively provide a factual confirmation, that the authorized and outstanding capital stock of VeloPay is as described in Section 3.2 of the Merger Agreement and, as of the date immediately prior to the Effective Time, is as follows:

(a) Common Stock Outstanding: 82,400,000 shares of common stock, par value $0.001 per share;

(b) Stock Options Outstanding: 7,600,000 shares of common stock issuable upon exercise of outstanding stock options granted under the VeloPay Systems, Inc. 2018 Equity Incentive Plan and the VeloPay Systems, Inc. 2022 Equity Incentive Plan, with a weighted average exercise price of $12.84 per share;

(c) Restricted Stock Units Outstanding: 3,200,000 shares of common stock issuable upon vesting and settlement of outstanding restricted stock units granted under the aforementioned equity incentive plans;

(d) Warrants Outstanding: 1,800,000 shares of common stock issuable upon exercise of outstanding warrants, with an exercise price of $8.50 per share; and

(e) Fully Diluted Shares: 95,000,000 shares of common stock on a fully diluted basis (calculated on a treasury stock method or other basis consistent with the Merger Agreement).

We note that Calderwood & Harkness, on behalf of HPE Fund IV, will accept this confirmation as a factual confirmation (rather than a legal opinion) if Whitford Jessup & Crane LLP prefers that treatment, provided that such factual confirmation is rendered with the same degree of care and diligence as the legal opinions and is included in the Opinion letter.

4.12 Certificate of Merger

We request an opinion that the Certificate of Merger has been duly executed by VeloPay and is in proper form for filing with the Secretary of State of the State of Delaware pursuant to Section 251 of the DGCL. We further request an opinion that, upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware (and, if applicable, upon the later effective time specified therein), the Merger will become effective in accordance with the DGCL and the terms of the Merger Agreement.

5. Addressees and Reliance Parties

The Opinion shall be addressed to:

(a) Harrowgate Private Equity Fund IV LP, 300 King Street, Suite 4200, Wilmington, Delaware 19801; and

(b) Harrowgate Velocity Merger Sub Inc., c/o Harrowgate Capital Management IV LLC, 300 King Street, Suite 4200, Wilmington, Delaware 19801.

In addition, the Opinion shall be delivered for the benefit of, and may be relied upon by, each of the following persons and entities (together with HPE Fund IV and Merger Sub, the "Reliance Parties"):

(c) Tralvendo National Bank, in its capacity as Administrative Agent under the Senior Secured Credit Agreement dated as of July 22, 2025, 100 Federal Street, 30th Floor, Boston, Massachusetts 02110;

(d) Prairie State Bank, N.A., in its capacity as Administrative Agent for the Revolving Credit Facility under the Credit Agreement dated as of July 22, 2025, 231 South LaSalle Street, Suite 4400, Chicago, Illinois 60604;

(e) Maplewood & Strauss LLP, as counsel to the Lenders, One International Place, Suite 3600, Boston, Massachusetts 02110; and

(f) Calderwood & Harkness LLP, as counsel to HPE Fund IV, 787 Seventh Avenue, 38th Floor, New York, New York 10019.

We note for your information that the lenders referenced above and their counsel are expected reliance parties in connection with the Five Hundred Million Dollar ($500,000,000) senior secured term loan and the Two Hundred Sixty Million Dollar ($260,000,000) revolving credit facility being provided to finance the Merger pursuant to the Credit Agreement dated as of July 22, 2025. The inclusion of such lenders and their counsel as Reliance Parties is a condition to the availability of the financing under the Credit Agreement, and Whitford Jessup & Crane LLP's agreement to provide reliance to such parties is essential to the Closing.

6. Acceptable Assumptions, Qualifications, and Limitations

6.1 Customary Assumptions

The Opinion may contain the following customary assumptions, and HPE Fund IV will accept such assumptions without objection:

(a) The genuineness of all signatures on all documents reviewed by Whitford Jessup & Crane LLP in connection with the Opinion.

(b) The authenticity and completeness of all documents submitted to Whitford Jessup & Crane LLP as originals and the conformity to original documents of all documents submitted as copies, facsimiles, or electronic reproductions.

(c) The due organization, valid existence, and good standing of all parties to the Merger Agreement and the Transaction Documents (other than VeloPay and its domestic subsidiaries, to the extent covered by the opinions set forth in Sections 4.1 and 4.2 above).

(d) The due authorization, execution, and delivery of the Merger Agreement and the Transaction Documents by all parties thereto other than VeloPay, and that such execution and delivery were duly authorized by all necessary action on the part of such other parties.

(e) The legal capacity and authority of all natural persons who have executed documents in connection with the transactions contemplated by the Merger Agreement.

(f) That the Merger Agreement and the Transaction Documents constitute legal, valid, and binding obligations of the parties thereto other than VeloPay, enforceable against such other parties in accordance with their respective terms.

(g) That each party to the Merger Agreement and the Transaction Documents (other than VeloPay) has complied and will comply with all applicable laws and regulations in connection with the execution, delivery, and performance of such documents.

6.2 Customary Qualifications and Exceptions

The enforceability opinions set forth in Section 4.6 above may be subject to the following customary qualifications and exceptions:

(a) The effect of applicable bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent conveyance, fraudulent transfer, preferential transfer, and similar laws affecting the enforcement of creditors' rights generally, now or hereafter in effect.

(b) The effect of general principles of equity (whether considered in a proceeding at law or in equity), including, without limitation, concepts of materiality, reasonableness, good faith, and fair dealing, and the discretion of the court before which any proceeding therefor may be brought.

(c) The enforceability of provisions relating to indemnification, contribution, or exculpation to the extent such provisions may be limited by applicable law or considerations of public policy.

(d) The possible unenforceability of contractual provisions constituting penalties or forfeitures, or that a court may decline to enforce provisions imposing penalties or forfeitures.

(e) The effect of applicable usury laws on the enforceability of interest rate provisions.

(f) The possible unenforceability of provisions purporting to waive rights that cannot be waived as a matter of law, including, without limitation, waivers of the right to a jury trial.

(g) The enforceability of choice of forum, consent to jurisdiction, and venue selection provisions, which may be subject to the discretion of the court before which any action is brought, and the possible unavailability of specific performance, injunctive relief, or other equitable remedies, which remain subject to the discretion of the court before which any proceeding therefor may be brought.

6.3 Limitations Calderwood & Harkness Will Accept

HPE Fund IV and Calderwood & Harkness will accept the following limitations in the Opinion:

(a) Laws Covered. The Opinion need only address the laws of the State of Delaware, the laws of the State of Texas, and the federal laws of the United States of America. The Opinion need not address the laws of any other state, jurisdiction, or country, and the Opinion may include a statement that no opinion is expressed as to the laws of any jurisdiction other than those specifically identified.

(b) Foreign Subsidiaries. The Opinion may exclude VeloPay Canada Inc. (organized under the laws of the Province of Ontario, Canada) and VeloPay Europe, Unipessoal Lda. (organized under the laws of the Portuguese Republic) from its scope. Calderwood & Harkness will accept a statement that no opinion is expressed with respect to the organization, existence, good standing, or qualification of such foreign subsidiaries or the applicability of the laws of any foreign jurisdiction. If local counsel opinions have been obtained or are expected to be obtained with respect to such foreign subsidiaries, the Opinion should reference such local counsel opinions and the extent to which reliance is being placed thereon.

(c) Tax Matters. No opinion is required as to any federal, state, local, or foreign tax consequences of the Merger or any of the transactions contemplated by the Merger Agreement, including, without limitation, any characterization of the Merger for federal income tax purposes.

(d) Securities Law Compliance. The Opinion need not cover compliance with federal or state securities laws beyond the no-conflicts opinion set forth in Section 4.8 above. Without limiting the foregoing, no opinion is required regarding the availability of any exemption from registration under the Securities Act of 1933 or any state securities or "blue sky" laws.

(e) intellectual Property. No opinion is required regarding the validity, ownership, enforceability, or non-infringement of VeloPay's patents, trademarks, copyrights, trade secrets, or other intellectual property rights.

(f) Material Agreements. The no-conflicts opinion set forth in Section 4.9 may be limited to those Material Agreements listed on a schedule attached to the Opinion (cross-referencing the applicable disclosure schedules to the Merger Agreement), a draft of which is provided as Enclosure C hereto.

6.4 Limitations Calderwood & Harkness Will NOT Accept

HPE Fund IV and Calderwood & Harkness will not accept the following limitations, qualifications, or conditions in the Opinion, and we request that Whitford Jessup & Crane LLP not include any of the following in the Opinion:

(a) "Golden Rule" or "Reasoned Opinion" Qualification. The enforceability opinion should not be qualified by a "golden rule" or "reasoned opinion" standard (e.g., a qualification stating that a court "would" or "should" reach a particular conclusion, or that the opinion is rendered on a "reasoned" basis). As noted above, each opinion must be rendered as a "clean" opinion.

(b) Assumption as to Accuracy of VeloPay's Own Representations and Warranties. The Opinion should not contain any assumption as to the accuracy of VeloPay's own representations and warranties in the Merger Agreement. Whitford Jessup & Crane LLP, as counsel to VeloPay, should independently verify the factual matters underlying its opinions or, to the extent reliance on officer's certificates is appropriate, clearly identify which factual matters are based on such certificates (as described in Section 7 below).

(c) Broad Exclusion of No-Conflicts Opinion. The Opinion should not contain any broad or categorical exclusion of the no-conflicts opinion with respect to Material Agreements beyond those specifically identified in the schedule referenced in Section 4.9 above and in Enclosure C hereto.

(d) Limitation on Reliance. The Opinion should not contain any limitation on reliance by the Reliance Parties identified in Section 5 above. Each Reliance Party should be entitled to rely upon the Opinion as if it were addressed directly to such party.

7. Officer's Certificates and Factual Reliance

We acknowledge that the Opinion may appropriately rely upon certificates of officers of VeloPay as to certain factual matters that are not independently verifiable through legal analysis or review of public records. In particular, the Opinion may rely upon:

(a) A certificate of Nathan Aldridge, Chief Executive Officer of VeloPay, or Danielle Moreau, General Counsel of VeloPay, as to the accuracy of factual representations regarding VeloPay's capitalization (including the number of outstanding shares, stock options, restricted stock units, and warrants), pending or threatened litigation, consents obtained or required, the absence of defaults under material agreements, and other factual matters relevant to the opinions;

(b) A good standing certificate issued by the Secretary of State of the State of Delaware, dated within five (5) business days of the Closing Date; and

(c) A certificate of good standing or equivalent certificate issued by the Texas Secretary of State (or the Texas Comptroller of Public Accounts), dated within a reasonably recent period prior to the Closing Date, and such other governmental certificates as may be relied upon for purposes of the opinions regarding qualification in foreign jurisdictions.

We request that copies of all officer's certificates and governmental certificates upon which Whitford Jessup & Crane LLP relies in rendering the Opinion be attached as exhibits to the Opinion letter or, alternatively, made available to Calderwood & Harkness for review no later than one (1) business day prior to the Closing Date. In the event that any factual statements in the Opinion are based upon an officer's certificate rather than independent investigation by Whitford Jessup & Crane LLP, the Opinion should clearly identify such reliance and the specific certificate upon which it is based.

8. Form and Delivery Requirements

The Opinion shall satisfy each of the following form and delivery requirements:

(a) Date. The Opinion shall be dated as of the Closing Date, which is expected to be July 22, 2025.

(b) Delivery. The Opinion shall be delivered to Calderwood & Harkness LLP at 787 Seventh Avenue, 38th Floor, New York, New York 10019, Attention: Sandra Tung, by no later than 9:00 a.m. Eastern Time on the Closing Date. Delivery may be made by email transmission of a signed PDF copy, provided that an original executed copy is sent by overnight courier on the same date.

(c) Form. The Opinion shall be in form and substance reasonably satisfactory to HPE Fund IV and its counsel, Calderwood & Harkness LLP.

(d) Letterhead. The Opinion shall be on the letterhead of Whitford Jessup & Crane LLP.

(e) Signature. The Opinion shall be signed by a partner of Whitford Jessup & Crane LLP.

(f) Clean Opinion. The Opinion must be a "clean" opinion (i.e., not a "reasoned" or "should" opinion) with respect to each opinion set forth in Section 4 of this letter.

In addition, we request that an advance draft of the Opinion be provided to Calderwood & Harkness LLP no later than five (5) business days before the anticipated Closing Date — that is, no later than July 15, 2025 — to allow sufficient time for review, comment, and resolution of any open issues prior to the Closing. We recognize that the final form of the Opinion may be subject to developments occurring between the date of the advance draft and the Closing Date, and we will work collaboratively with your team to finalize the Opinion in advance of the Closing.

9. Coordination and Contact Information

We request that all communications regarding the form, substance, and scope of the Opinion be directed to the following individuals at Calderwood & Harkness LLP:

Sandra Tung, Partner Calderwood & Harkness LLP 787 Seventh Avenue, 38th Floor New York, New York 10019 Telephone: (212) 558-4127

Email: stung@calderwoodharkness.com

Megan Chu, Associate Calderwood & Harkness LLP 787 Seventh Avenue, 38th Floor New York, New York 10019 Telephone: (212) 558-4563

Email: mchu@calderwoodharkness.com

We acknowledge that Whitford Jessup & Crane LLP's engagement team for this matter includes Rebecca Thornton-Hayes (Lead Partner) and James Okoro (Lead Associate), and that any tax-related matters that may arise in connection with the Opinion would be handled by Ellen Fairchild (Tax Partner) of Whitford Jessup & Crane LLP. We anticipate that Ms. Thornton-Hayes and Mr. Okoro will be our primary points of contact with respect to the Opinion, and we welcome an initial call to discuss the scope and timing of the Opinion at your earliest convenience.

In addition, we request that Whitford Jessup & Crane LLP coordinate directly with Maplewood & Strauss LLP (Attention: Gordon Strauss, Partner) regarding any lender-specific opinion requirements that may apply under the Credit Agreement dated as of July 22, 2025. To the extent that the Lenders or Maplewood & Strauss LLP have additional or different requirements with respect to the form, substance, or scope of the Opinion, we will endeavor to communicate such requirements to your team promptly and in a coordinated manner.

10. Reservation of Rights / No Waiver

Calderwood & Harkness LLP, on behalf of HPE Fund IV, hereby reserves the right to request modifications to the form, substance, or scope of the Opinion as reasonably necessary based on developments occurring between the date of this letter and the Closing Date, including, without limitation, amendments or modifications to the Merger Agreement, changes in applicable law, or the identification of additional factual or legal issues that are material to the opinions. Any such request will be communicated to Whitford Jessup & Crane LLP as promptly as practicable.

Nothing in this letter shall be construed as a waiver of any closing condition set forth in the Merger Agreement, including, without limitation, the condition set forth in Section 7.2(f) thereof that VeloPay deliver the legal opinion of target's counsel as a condition to the Buyer's obligation to consummate the Merger. The delivery of this letter and any discussions or correspondence between Calderwood & Harkness LLP and Whitford Jessup & Crane LLP regarding the form or scope of the Opinion shall not constitute an agreement by HPE Fund IV to accept an opinion that does not satisfy the requirements of the Merger Agreement.

11. Closing

We thank you and your colleagues at Whitford Jessup & Crane LLP for your cooperation and attention to this matter. We understand that the preparation of the closing opinion involves significant effort and coordination, and we appreciate your willingness to work with us to ensure that the Opinion is delivered in a timely and complete manner. Should you have any questions regarding the requested opinion form or the matters addressed in this letter, please do not hesitate to contact the undersigned or Megan Chu at the coordinates set forth above.

We look forward to working with you in advance of the Closing.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Sandra Tung, Partner

cc (via email):

Priya Deshmukh, Harrowgate Capital Management IV LLC, 300 King Street, Suite 4200, Wilmington, DE 19801

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

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

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

Gordon Strauss, Maplewood & Strauss LLP, One International Place, Suite 3600, Boston, MA 02110

Enclosures

Enclosure A: Execution Version of the Agreement and Plan of Merger, dated March 18, 2025, among Harrowgate Private Equity Fund IV LP, Harrowgate Velocity Merger Sub Inc., and VeloPay Systems, Inc. (including all exhibits and schedules thereto).

Enclosure B: List of Transaction Documents to which VeloPay Systems, Inc. is a party, including (i) the Merger Agreement, (ii) the Stockholder Representative Agreement (execution version, dated March 18, 2025), (iii) the Escrow Agreement with Garrison Trust Company, as escrow agent (execution version, dated July 22, 2025, Reference No. GT-ESC-2025-07223), (iv) the Paying Agent Agreement with Keystone Pacific Transfer Services Inc. (execution version, dated July 22, 2025), and (v) such other ancillary agreements, instruments, and documents as may be identified prior to the Closing Date.

Enclosure C: List of Material Agreements for purposes of the no-conflicts opinion, cross-referencing applicable disclosure schedules to the Merger Agreement (Schedules 3.4 and 3.17), including the fourteen (14) material customer contracts identified as requiring change of control consent or notification pursuant to Section 5.4 of the Merger Agreement.

CALDERWOOD & HARKNESS LLP 787 Seventh Avenue, 38th Floor New York, New York 10019 Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com
July 18, 2025
VIA EMAIL AND OVERNIGHT COURIER
Rebecca Thornton-Hayes, Partner Whitford Jessup & Crane LLP 600 Congress Avenue, Suite 2400 Austin, Texas 78701
Re: Closing Legal Opinion of Target's Counsel — Acquisition of VeloPay Systems, Inc. by Harrowgate Private Equity Fund IV LP
Calderwood & Harkness Matter Number: 1003-00003
Dear Ms. Thornton-Hayes:
1. Introduction
We are counsel to Harrowgate Private Equity Fund IV LP, a Delaware limited partnership ("HPE Fund IV" or the "Buyer"), in connection with the transactions contemplated by the Agreement and Plan of Merger, dated as of March 18, 2025 (as it may be amended, supplemented, or otherwise modified from time to time in accordance with its terms, the "Merger Agreement"), among HPE Fund IV, Harrowgate Velocity Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of HPE Fund IV ("Merger Sub"), and VeloPay Systems, Inc., a Delaware corporation (the "Company" or "VeloPay"). The Merger Agreement provides for a reverse triangular merger pursuant to Section 251 of the Delaware General Corporation Law (the "DGCL"), in which Merger Sub will merge with and into VeloPay, with VeloPay continuing as the surviving corporation and becoming a wholly-owned subsidiary of HPE Fund IV (the "Merger"). The aggregate merger consideration to be paid in connection with the Merger is One Billion Nine Hundred Million Dollars ($1,900,000,000), representing Twenty Dollars ($20.00) per share of Company common stock on a fully diluted basis.
The closing of the Merger (the "Closing") is expected to occur on July 22, 2025. As you are aware, Section 7.2(f) of the Merger Agreement provides that, as a condition precedent to the obligation of the Buyer to consummate the Merger, VeloPay shall have delivered to HPE Fund IV a legal opinion from VeloPay's outside counsel, Whitford Jessup & Crane LLP, in the form specified by counsel to HPE Fund IV. This letter sets forth the form, substance, and scope of the legal opinion that HPE Fund IV requests be delivered by Whitford Jessup & Crane LLP (the "Opinion") on the Closing Date, as well as the assumptions, qualifications, and limitations that HPE Fund IV will accept in such Opinion. We look forward to working with you and your team to ensure that the Opinion satisfies the requirements of the Merger Agreement and the expectations of the parties and the financing sources in connection with the Closing.
2. Defined Terms
Capitalized terms used but not otherwise defined in this letter shall have the meanings ascribed to such terms in the Merger Agreement. In addition, the following defined terms shall be used in the Opinion and in this letter for purposes of clarity and consistency:
(a) "Merger Agreement" means the Agreement and Plan of Merger dated as of March 18, 2025, among HPE Fund IV, Merger Sub, and the Company, as it may be amended, supplemented, or otherwise modified in accordance with its terms.
(b) "Company" means VeloPay Systems, Inc., a Delaware corporation.
(c) "Merger Sub" means Harrowgate Velocity Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of HPE Fund IV.
(d) "Parent" or "Buyer" means Harrowgate Private Equity Fund IV LP, a Delaware limited partnership.
(e) "Merger" means the reverse triangular merger of Merger Sub with and into the Company, with the Company surviving as a wholly-owned subsidiary of the Buyer.
(f) "Effective Time" means the effective time of the Merger as set forth in the Certificate of Merger filed with the Secretary of State of the State of Delaware.
(g) "Stockholder Support Agreement" means the Stockholder Support Agreement dated as of March 18, 2025, among HPE Fund IV, Ridgeline Ventures Fund III LP, Apex Growth Partners II LP, Broadleaf Capital Partners LP, Nathan Aldridge, and Sonia Reyes-Watkins.
(h) "Transaction Documents" means, collectively, the Merger Agreement, the Stockholder Representative Agreement, and all ancillary agreements, instruments, and documents to which VeloPay is a party that are delivered or to be delivered in connection with the consummation of the transactions contemplated by the Merger Agreement.
3. Documents to Be Reviewed by Opining Counsel
We request that the Opinion identify the documents examined and relied upon by Whitford Jessup & Crane LLP in connection with the rendering of the Opinion. At a minimum, we expect that Whitford Jessup & Crane LLP will have reviewed the following documents and records:
(a) The Merger Agreement (execution version, dated March 18, 2025), including all exhibits and schedules thereto, a copy of which is attached hereto as Enclosure A.
(b) The Amended and Restated Certificate of Incorporation of VeloPay Systems, Inc., as currently in effect (as filed with the Secretary of State of the State of Delaware).
(c) The Amended and Restated Bylaws of VeloPay Systems, Inc., as currently in effect.
(d) The Amended and Restated Certificate of Incorporation of VeloPay Systems, Inc., as the surviving corporation in the Merger (the "Surviving Corporation Charter"), to be filed with the Secretary of State of the State of Delaware at the Effective Time.
(e) Resolutions of the Board of Directors of VeloPay approving the Merger Agreement and the transactions contemplated thereby, as adopted on March 17, 2025, certified by the Secretary or an Assistant Secretary of VeloPay.
(f) The Written Consent of Stockholders of VeloPay, delivered on March 18, 2025, pursuant to Section 228 of the DGCL, by stockholders holding approximately 63.1% of the outstanding shares of Company common stock, together with evidence of compliance with the notice requirements of DGCL Section 228(e), including the Information Statement mailed to VeloPay stockholders on April 14, 2025.
(g) The Certificate of Merger to be filed with the Secretary of State of the State of Delaware in connection with the Merger.
(h) A certificate of good standing (or equivalent) for VeloPay Systems, Inc., issued by the Secretary of State of the State of Delaware, dated within five (5) business days of the Closing Date.
(i) Certificates of good standing, certificates of qualification, or equivalent certificates for VeloPay Systems, Inc. in each jurisdiction in which VeloPay is qualified to do business as a foreign corporation, including the State of Texas (VeloPay's headquarters state), in each case dated within a reasonably recent period prior to the Closing Date.
(j) The Stockholder Support Agreement (execution version, dated March 18, 2025).
(k) The Stockholder Representative Agreement (execution version, dated March 18, 2025).
(l) The Escrow Agreement (execution version, dated July 22, 2025), among HPE Fund IV, Nathan Aldridge, in his capacity as Stockholder Representative, and Garrison Trust Company, as escrow agent (Reference No. GT-ESC-2025-07223).
(m) The Paying Agent Agreement (execution version, dated July 22, 2025), between VeloPay Systems, Inc., as the surviving corporation, and Keystone Pacific Transfer Services Inc., as paying agent.
(n) Such other documents, records, instruments, and certificates of officers of the Company, public officials, and other persons as Whitford Jessup & Crane LLP deems necessary or appropriate for the purposes of rendering the Opinion.
A list of the Transaction Documents to which VeloPay is a party, including the documents referenced above, is attached hereto as Enclosure B for your reference.
4. Opinions Requested
We request that the Opinion include each of the following opinions. Each opinion set forth below should be rendered as a "clean" opinion (and not as a "reasoned" or "should" opinion), subject only to the customary assumptions, qualifications, and limitations described in Section 6 below.
4.1 Due Organization and Good Standing
We request that Whitford Jessup & Crane LLP opine that VeloPay Systems, Inc. (Delaware File Number 5748392) is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Delaware. In addition, we request an opinion that VeloPay is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company. For purposes of this opinion, we understand that Whitford Jessup & Crane LLP may rely upon certificates of good standing or equivalent certificates issued by the relevant governmental authorities as described in Section 3 above.
4.2 Subsidiaries — Due Organization
To the extent within the scope of Whitford Jessup & Crane LLP's engagement and representation, we request an opinion that each of VeloPay's domestic subsidiaries — namely, VeloPay Processing LLC, a Delaware limited liability company, VeloPay Fraud intelligence Inc., a Delaware corporation, and PayStream Gateway LLC, a Delaware limited liability company — is duly organized or formed, validly existing, and in good standing under the laws of the State of Delaware, its jurisdiction of organization. We note that Calderwood & Harkness, on behalf of HPE Fund IV, will accept the exclusion of VeloPay's foreign subsidiaries — VeloPay Canada Inc. (organized under the laws of the Province of Ontario, Canada) and VeloPay Europe, Unipessoal Lda. (organized under the laws of the Portuguese Republic) — from the scope of the Opinion, provided that the Opinion includes a statement that no opinion is expressed with respect to the laws of any jurisdiction other than those identified in Section 6.3 below and that, to the extent local counsel opinions have been obtained or will be obtained with respect to such foreign subsidiaries, such reliance is referenced in the Opinion.
4.3 Corporate Power and Authority
We request an opinion that VeloPay has the requisite corporate power and authority to execute and deliver the Merger Agreement and each of the Transaction Documents to which it is a party, and to perform its obligations thereunder and to consummate the Merger and the other transactions contemplated thereby. This opinion should confirm that VeloPay's Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws do not restrict or otherwise limit VeloPay's ability to enter into and perform under the Merger Agreement and the Transaction Documents or to consummate the Merger.
4.4 Due Authorization
We request an opinion that the execution, delivery, and performance by VeloPay of the Merger Agreement and each of the Transaction Documents to which it is a party, and the consummation by VeloPay of the Merger and the transactions contemplated thereby, have been duly authorized by all necessary corporate action on the part of VeloPay. In rendering this opinion, we expect that Whitford Jessup & Crane LLP will have reviewed and confirmed the following:
(a) The Board of Directors of VeloPay duly adopted resolutions on March 17, 2025, approving the Merger Agreement and the transactions contemplated thereby, including the Merger, and recommending that VeloPay's stockholders approve and adopt the Merger Agreement;
(b) The requisite vote of VeloPay's stockholders was obtained by written consent in lieu of a meeting pursuant to Section 228 of the DGCL, with stockholders holding approximately 63.1% of the outstanding shares of Company common stock having delivered their written consent on March 18, 2025, which percentage exceeded the affirmative vote of a majority of the outstanding shares of Company common stock required under Section 251(c) of the DGCL and VeloPay's organizational documents;
(c) The Company has complied with the notice requirements of Section 228(e) of the DGCL, including the mailing of the Information Statement to all non-consenting stockholders of VeloPay on April 14, 2025; and
(d) No other corporate proceedings on the part of VeloPay are necessary to authorize, approve, or adopt the Merger Agreement, the Transaction Documents, or the consummation of the Merger or the other transactions contemplated thereby.
4.5 Execution and Delivery
We request an opinion that the Merger Agreement and each of the Transaction Documents to which VeloPay is a party has been duly executed and delivered by VeloPay. This opinion should confirm that the individuals who executed such documents on behalf of VeloPay were duly authorized to do so and that such execution and delivery were effected in accordance with applicable corporate formalities.
4.6 Enforceability.  We request an opinion that the Merger Agreement and each of the Transaction Documents to which VeloPay is a party constitutes the legal, valid, and binding obligation of VeloPay, enforceable against VeloPay in accordance with its respective terms. This enforceability opinion may be subject to the customary qualifications and exceptions set forth in Section 6.2 below, but should not be rendered as a "reasoned" or "should" opinion. We expect a "clean" enforceability opinion for each of the Transaction Documents identified in this letter and in Enclosure B.
4.7 No Conflicts — Organizational Documents
We request an opinion that the execution, delivery, and performance by VeloPay of the Merger Agreement and the Transaction Documents to which it is a party, and the consummation by VeloPay of the Merger and the other transactions contemplated by the Merger Agreement, do not and will not violate, conflict with, or result in a breach of any provision of VeloPay's Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws, or the equivalent organizational documents (including certificates of formation, limited liability company agreements, certificates of incorporation, and bylaws, as applicable) of any of VeloPay's domestic subsidiaries (VeloPay Processing LLC, VeloPay Fraud intelligence Inc., and PayStream Gateway LLC).
4.8 No Conflicts — Laws and Orders
We request an opinion that the execution, delivery, and performance by VeloPay of the Merger Agreement and the Transaction Documents to which it is a party, and the consummation by VeloPay of the Merger and the other transactions contemplated by the Merger Agreement, do not and will not violate or conflict with any applicable law, statute, rule, regulation, judgment, order, writ, injunction, or decree of any governmental authority applicable to VeloPay or any of its domestic subsidiaries or any of their respective properties or assets.
For purposes of this opinion, the scope of laws to be addressed shall include: (i) the DGCL and other applicable laws of the State of Delaware; (ii) the federal laws of the United States, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"); and (iii) the laws of the State of Texas to the extent applicable to VeloPay's business and operations. With respect to the HSR Act, the Opinion may note that the applicable waiting period under the HSR Act expired on July 15, 2025, without any request for additional information or documentary material (HSR Transaction Number 25-0198374), and that no further filing or approval under the HSR Act is required in connection with the consummation of the Merger.
4.9 No Conflicts — Material Agreements
We request an opinion that the execution, delivery, and performance by VeloPay of the Merger Agreement and the Transaction Documents to which it is a party, and the consummation by VeloPay of the Merger and the other transactions contemplated by the Merger Agreement, do not and will not:
(a) result in a violation or breach of any provision of;
(b) constitute a default (or an event that, with the giving of notice or the lapse of time or both, would constitute a default) under;
(c) result in the acceleration of any obligation under;
(d) create in any party the right to accelerate, terminate, modify, or cancel; or
(e) require the payment of any penalty or additional consideration under;
any material agreement, contract, lease, license, instrument, or other arrangement to which VeloPay or any of its subsidiaries is a party or by which any of their respective properties or assets is bound (collectively, "Material Agreements").
We acknowledge that this opinion may be limited in scope to those Material Agreements listed on a schedule to be attached to the Opinion (and cross-referencing the applicable disclosure schedules to the Merger Agreement). A list of such Material Agreements, including the fourteen (14) material customer contracts that have been identified as requiring change of control consent or notification, is attached hereto as Enclosure C for your reference. We expect that the Opinion will address non-contravention of each of those fourteen material customer contracts. If Whitford Jessup & Crane LLP determines that it is not feasible to render a no-conflicts opinion with respect to one or more of those contracts, the Opinion should clearly identify any such carve-out, including the specific contract or contracts excluded and the basis for such exclusion, so that HPE Fund IV and its counsel may evaluate whether such carve-out is acceptable.
4.10 No Consents Required (or All Required Consents Obtained)
We request an opinion that no consent, approval, authorization, order, registration, qualification, or filing with any governmental authority or any other person is required to be made or obtained by VeloPay in connection with the execution, delivery, and performance of the Merger Agreement and the Transaction Documents, or the consummation of the Merger, except for:
(a) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware;
(b) any consents, approvals, authorizations, registrations, qualifications, or filings the absence of which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on VeloPay;
(c) filings and approvals previously made or obtained, including filings under the HSR Act (waiting period expired July 15, 2025), the Investment Canada Act, and applicable state money transmitter change-of-control filings; and
(d) such other consents, approvals, authorizations, registrations, qualifications, or filings as may have been obtained or made prior to the date of the Opinion.
4.11 Capitalization.  We request that Whitford Jessup & Crane LLP opine, or alternatively provide a factual confirmation, that the authorized and outstanding capital stock of VeloPay is as described in Section 3.2 of the Merger Agreement and, as of the date immediately prior to the Effective Time, is as follows:
(a) Common Stock Outstanding: 82,400,000 shares of common stock, par value $0.001 per share;
(b) Stock Options Outstanding: 7,600,000 shares of common stock issuable upon exercise of outstanding stock options granted under the VeloPay Systems, Inc. 2018 Equity Incentive Plan and the VeloPay Systems, Inc. 2022 Equity Incentive Plan, with a weighted average exercise price of $12.84 per share;
(c) Restricted Stock Units Outstanding: 3,200,000 shares of common stock issuable upon vesting and settlement of outstanding restricted stock units granted under the aforementioned equity incentive plans;
(d) Warrants Outstanding: 1,800,000 shares of common stock issuable upon exercise of outstanding warrants, with an exercise price of $8.50 per share; and
(e) Fully Diluted Shares: 95,000,000 shares of common stock on a fully diluted basis (calculated on a treasury stock method or other basis consistent with the Merger Agreement).
We note that Calderwood & Harkness, on behalf of HPE Fund IV, will accept this confirmation as a factual confirmation (rather than a legal opinion) if Whitford Jessup & Crane LLP prefers that treatment, provided that such factual confirmation is rendered with the same degree of care and diligence as the legal opinions and is included in the Opinion letter.
4.12 Certificate of Merger
We request an opinion that the Certificate of Merger has been duly executed by VeloPay and is in proper form for filing with the Secretary of State of the State of Delaware pursuant to Section 251 of the DGCL. We further request an opinion that, upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware (and, if applicable, upon the later effective time specified therein), the Merger will become effective in accordance with the DGCL and the terms of the Merger Agreement.
5. Addressees and Reliance Parties
The Opinion shall be addressed to:
(a) Harrowgate Private Equity Fund IV LP, 300 King Street, Suite 4200, Wilmington, Delaware 19801; and
(b) Harrowgate Velocity Merger Sub Inc., c/o Harrowgate Capital Management IV LLC, 300 King Street, Suite 4200, Wilmington, Delaware 19801.
In addition, the Opinion shall be delivered for the benefit of, and may be relied upon by, each of the following persons and entities (together with HPE Fund IV and Merger Sub, the "Reliance Parties"):
(c) Tralvendo National Bank, in its capacity as Administrative Agent under the Senior Secured Credit Agreement dated as of July 22, 2025, 100 Federal Street, 30th Floor, Boston, Massachusetts 02110;
(d) Prairie State Bank, N.A., in its capacity as Administrative Agent for the Revolving Credit Facility under the Credit Agreement dated as of July 22, 2025, 231 South LaSalle Street, Suite 4400, Chicago, Illinois 60604;
(e) Maplewood & Strauss LLP, as counsel to the Lenders, One International Place, Suite 3600, Boston, Massachusetts 02110; and
(f) Calderwood & Harkness LLP, as counsel to HPE Fund IV, 787 Seventh Avenue, 38th Floor, New York, New York 10019.
We note for your information that the lenders referenced above and their counsel are expected reliance parties in connection with the Five Hundred Million Dollar ($500,000,000) senior secured term loan and the Two Hundred Sixty Million Dollar ($260,000,000) revolving credit facility being provided to finance the Merger pursuant to the Credit Agreement dated as of July 22, 2025. The inclusion of such lenders and their counsel as Reliance Parties is a condition to the availability of the financing under the Credit Agreement, and Whitford Jessup & Crane LLP's agreement to provide reliance to such parties is essential to the Closing.
6. Acceptable Assumptions, Qualifications, and Limitations
6.1 Customary Assumptions
The Opinion may contain the following customary assumptions, and HPE Fund IV will accept such assumptions without objection:
(a) The genuineness of all signatures on all documents reviewed by Whitford Jessup & Crane LLP in connection with the Opinion.
(b) The authenticity and completeness of all documents submitted to Whitford Jessup & Crane LLP as originals and the conformity to original documents of all documents submitted as copies, facsimiles, or electronic reproductions.
(c) The due organization, valid existence, and good standing of all parties to the Merger Agreement and the Transaction Documents (other than VeloPay and its domestic subsidiaries, to the extent covered by the opinions set forth in Sections 4.1 and 4.2 above).
(d) The due authorization, execution, and delivery of the Merger Agreement and the Transaction Documents by all parties thereto other than VeloPay, and that such execution and delivery were duly authorized by all necessary action on the part of such other parties.
(e) The legal capacity and authority of all natural persons who have executed documents in connection with the transactions contemplated by the Merger Agreement.
(f) That the Merger Agreement and the Transaction Documents constitute legal, valid, and binding obligations of the parties thereto other than VeloPay, enforceable against such other parties in accordance with their respective terms.
(g) That each party to the Merger Agreement and the Transaction Documents (other than VeloPay) has complied and will comply with all applicable laws and regulations in connection with the execution, delivery, and performance of such documents.
6.2 Customary Qualifications and Exceptions
The enforceability opinions set forth in Section 4.6 above may be subject to the following customary qualifications and exceptions:
(a) The effect of applicable bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent conveyance, fraudulent transfer, preferential transfer, and similar laws affecting the enforcement of creditors' rights generally, now or hereafter in effect.
(b) The effect of general principles of equity (whether considered in a proceeding at law or in equity), including, without limitation, concepts of materiality, reasonableness, good faith, and fair dealing, and the discretion of the court before which any proceeding therefor may be brought.
(c) The enforceability of provisions relating to indemnification, contribution, or exculpation to the extent such provisions may be limited by applicable law or considerations of public policy.
(d) The possible unenforceability of contractual provisions constituting penalties or forfeitures, or that a court may decline to enforce provisions imposing penalties or forfeitures.
(e) The effect of applicable usury laws on the enforceability of interest rate provisions.
(f) The possible unenforceability of provisions purporting to waive rights that cannot be waived as a matter of law, including, without limitation, waivers of the right to a jury trial.
(g) The enforceability of choice of forum, consent to jurisdiction, and venue selection provisions, which may be subject to the discretion of the court before which any action is brought, and the possible unavailability of specific performance, injunctive relief, or other equitable remedies, which remain subject to the discretion of the court before which any proceeding therefor may be brought.
6.3 Limitations Calderwood & Harkness Will Accept
HPE Fund IV and Calderwood & Harkness will accept the following limitations in the Opinion:
(a) Laws Covered. The Opinion need only address the laws of the State of Delaware, the laws of the State of Texas, and the federal laws of the United States of America. The Opinion need not address the laws of any other state, jurisdiction, or country, and the Opinion may include a statement that no opinion is expressed as to the laws of any jurisdiction other than those specifically identified.
(b) Foreign Subsidiaries. The Opinion may exclude VeloPay Canada Inc. (organized under the laws of the Province of Ontario, Canada) and VeloPay Europe, Unipessoal Lda. (organized under the laws of the Portuguese Republic) from its scope. Calderwood & Harkness will accept a statement that no opinion is expressed with respect to the organization, existence, good standing, or qualification of such foreign subsidiaries or the applicability of the laws of any foreign jurisdiction. If local counsel opinions have been obtained or are expected to be obtained with respect to such foreign subsidiaries, the Opinion should reference such local counsel opinions and the extent to which reliance is being placed thereon.
(c) Tax Matters. No opinion is required as to any federal, state, local, or foreign tax consequences of the Merger or any of the transactions contemplated by the Merger Agreement, including, without limitation, any characterization of the Merger for federal income tax purposes.
(d) Securities Law Compliance. The Opinion need not cover compliance with federal or state securities laws beyond the no-conflicts opinion set forth in Section 4.8 above. Without limiting the foregoing, no opinion is required regarding the availability of any exemption from registration under the Securities Act of 1933 or any state securities or "blue sky" laws.
(e) intellectual Property. No opinion is required regarding the validity, ownership, enforceability, or non-infringement of VeloPay's patents, trademarks, copyrights, trade secrets, or other intellectual property rights.
(f) Material Agreements. The no-conflicts opinion set forth in Section 4.9 may be limited to those Material Agreements listed on a schedule attached to the Opinion (cross-referencing the applicable disclosure schedules to the Merger Agreement), a draft of which is provided as Enclosure C hereto.
6.4 Limitations Calderwood & Harkness Will NOT Accept
HPE Fund IV and Calderwood & Harkness will not accept the following limitations, qualifications, or conditions in the Opinion, and we request that Whitford Jessup & Crane LLP not include any of the following in the Opinion:
(a) "Golden Rule" or "Reasoned Opinion" Qualification. The enforceability opinion should not be qualified by a "golden rule" or "reasoned opinion" standard (e.g., a qualification stating that a court "would" or "should" reach a particular conclusion, or that the opinion is rendered on a "reasoned" basis). As noted above, each opinion must be rendered as a "clean" opinion.
(b) Assumption as to Accuracy of VeloPay's Own Representations and Warranties. The Opinion should not contain any assumption as to the accuracy of VeloPay's own representations and warranties in the Merger Agreement. Whitford Jessup & Crane LLP, as counsel to VeloPay, should independently verify the factual matters underlying its opinions or, to the extent reliance on officer's certificates is appropriate, clearly identify which factual matters are based on such certificates (as described in Section 7 below).
(c) Broad Exclusion of No-Conflicts Opinion. The Opinion should not contain any broad or categorical exclusion of the no-conflicts opinion with respect to Material Agreements beyond those specifically identified in the schedule referenced in Section 4.9 above and in Enclosure C hereto.
(d) Limitation on Reliance. The Opinion should not contain any limitation on reliance by the Reliance Parties identified in Section 5 above. Each Reliance Party should be entitled to rely upon the Opinion as if it were addressed directly to such party.
7. Officer's Certificates and Factual Reliance
We acknowledge that the Opinion may appropriately rely upon certificates of officers of VeloPay as to certain factual matters that are not independently verifiable through legal analysis or review of public records. In particular, the Opinion may rely upon:
(a) A certificate of Nathan Aldridge, Chief Executive Officer of VeloPay, or Danielle Moreau, General Counsel of VeloPay, as to the accuracy of factual representations regarding VeloPay's capitalization (including the number of outstanding shares, stock options, restricted stock units, and warrants), pending or threatened litigation, consents obtained or required, the absence of defaults under material agreements, and other factual matters relevant to the opinions;
(b) A good standing certificate issued by the Secretary of State of the State of Delaware, dated within five (5) business days of the Closing Date; and
(c) A certificate of good standing or equivalent certificate issued by the Texas Secretary of State (or the Texas Comptroller of Public Accounts), dated within a reasonably recent period prior to the Closing Date, and such other governmental certificates as may be relied upon for purposes of the opinions regarding qualification in foreign jurisdictions.
We request that copies of all officer's certificates and governmental certificates upon which Whitford Jessup & Crane LLP relies in rendering the Opinion be attached as exhibits to the Opinion letter or, alternatively, made available to Calderwood & Harkness for review no later than one (1) business day prior to the Closing Date. In the event that any factual statements in the Opinion are based upon an officer's certificate rather than independent investigation by Whitford Jessup & Crane LLP, the Opinion should clearly identify such reliance and the specific certificate upon which it is based.
8. Form and Delivery Requirements
The Opinion shall satisfy each of the following form and delivery requirements:
(a) Date. The Opinion shall be dated as of the Closing Date, which is expected to be July 22, 2025.
(b) Delivery. The Opinion shall be delivered to Calderwood & Harkness LLP at 787 Seventh Avenue, 38th Floor, New York, New York 10019, Attention: Sandra Tung, by no later than 9:00 a.m. Eastern Time on the Closing Date. Delivery may be made by email transmission of a signed PDF copy, provided that an original executed copy is sent by overnight courier on the same date.
(c) Form. The Opinion shall be in form and substance reasonably satisfactory to HPE Fund IV and its counsel, Calderwood & Harkness LLP.
(d) Letterhead. The Opinion shall be on the letterhead of Whitford Jessup & Crane LLP.
(e) Signature. The Opinion shall be signed by a partner of Whitford Jessup & Crane LLP.
(f) Clean Opinion. The Opinion must be a "clean" opinion (i.e., not a "reasoned" or "should" opinion) with respect to each opinion set forth in Section 4 of this letter.
In addition, we request that an advance draft of the Opinion be provided to Calderwood & Harkness LLP no later than five (5) business days before the anticipated Closing Date — that is, no later than July 15, 2025 — to allow sufficient time for review, comment, and resolution of any open issues prior to the Closing. We recognize that the final form of the Opinion may be subject to developments occurring between the date of the advance draft and the Closing Date, and we will work collaboratively with your team to finalize the Opinion in advance of the Closing.
9. Coordination and Contact Information
We request that all communications regarding the form, substance, and scope of the Opinion be directed to the following individuals at Calderwood & Harkness LLP:
Sandra Tung, Partner Calderwood & Harkness LLP 787 Seventh Avenue, 38th Floor New York, New York 10019 Telephone: (212) 558-4127
Email: stung@calderwoodharkness.com
Megan Chu, Associate Calderwood & Harkness LLP 787 Seventh Avenue, 38th Floor New York, New York 10019 Telephone: (212) 558-4563
Email: mchu@calderwoodharkness.com
We acknowledge that Whitford Jessup & Crane LLP's engagement team for this matter includes Rebecca Thornton-Hayes (Lead Partner) and James Okoro (Lead Associate), and that any tax-related matters that may arise in connection with the Opinion would be handled by Ellen Fairchild (Tax Partner) of Whitford Jessup & Crane LLP. We anticipate that Ms. Thornton-Hayes and Mr. Okoro will be our primary points of contact with respect to the Opinion, and we welcome an initial call to discuss the scope and timing of the Opinion at your earliest convenience.
In addition, we request that Whitford Jessup & Crane LLP coordinate directly with Maplewood & Strauss LLP (Attention: Gordon Strauss, Partner) regarding any lender-specific opinion requirements that may apply under the Credit Agreement dated as of July 22, 2025. To the extent that the Lenders or Maplewood & Strauss LLP have additional or different requirements with respect to the form, substance, or scope of the Opinion, we will endeavor to communicate such requirements to your team promptly and in a coordinated manner.
10. Reservation of Rights / No Waiver
Calderwood & Harkness LLP, on behalf of HPE Fund IV, hereby reserves the right to request modifications to the form, substance, or scope of the Opinion as reasonably necessary based on developments occurring between the date of this letter and the Closing Date, including, without limitation, amendments or modifications to the Merger Agreement, changes in applicable law, or the identification of additional factual or legal issues that are material to the opinions. Any such request will be communicated to Whitford Jessup & Crane LLP as promptly as practicable.
Nothing in this letter shall be construed as a waiver of any closing condition set forth in the Merger Agreement, including, without limitation, the condition set forth in Section 7.2(f) thereof that VeloPay deliver the legal opinion of target's counsel as a condition to the Buyer's obligation to consummate the Merger. The delivery of this letter and any discussions or correspondence between Calderwood & Harkness LLP and Whitford Jessup & Crane LLP regarding the form or scope of the Opinion shall not constitute an agreement by HPE Fund IV to accept an opinion that does not satisfy the requirements of the Merger Agreement.
11. Closing
We thank you and your colleagues at Whitford Jessup & Crane LLP for your cooperation and attention to this matter. We understand that the preparation of the closing opinion involves significant effort and coordination, and we appreciate your willingness to work with us to ensure that the Opinion is delivered in a timely and complete manner. Should you have any questions regarding the requested opinion form or the matters addressed in this letter, please do not hesitate to contact the undersigned or Megan Chu at the coordinates set forth above.
We look forward to working with you in advance of the Closing.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Sandra Tung, Partner
cc (via email):
Priya Deshmukh, Harrowgate Capital Management IV LLC, 300 King Street, Suite 4200, Wilmington, DE 19801
Thomas Eriksen, Harrowgate Capital Management IV LLC, 300 King Street, Suite 4200, Wilmington, DE 19801
Oliver Mackenzie, Calderwood & Harkness LLP, 787 Seventh Avenue, 38th Floor, New York, NY 10019
Megan Chu, Calderwood & Harkness LLP, 787 Seventh Avenue, 38th Floor, New York, NY 10019
Gordon Strauss, Maplewood & Strauss LLP, One International Place, Suite 3600, Boston, MA 02110
Enclosures
Enclosure A: Execution Version of the Agreement and Plan of Merger, dated March 18, 2025, among Harrowgate Private Equity Fund IV LP, Harrowgate Velocity Merger Sub Inc., and VeloPay Systems, Inc. (including all exhibits and schedules thereto).
Enclosure B: List of Transaction Documents to which VeloPay Systems, Inc. is a party, including (i) the Merger Agreement, (ii) the Stockholder Representative Agreement (execution version, dated March 18, 2025), (iii) the Escrow Agreement with Garrison Trust Company, as escrow agent (execution version, dated July 22, 2025, Reference No. GT-ESC-2025-07223), (iv) the Paying Agent Agreement with Keystone Pacific Transfer Services Inc. (execution version, dated July 22, 2025), and (v) such other ancillary agreements, instruments, and documents as may be identified prior to the Closing Date.
Enclosure C: List of Material Agreements for purposes of the no-conflicts opinion, cross-referencing applicable disclosure schedules to the Merger Agreement (Schedules 3.4 and 3.17), including the fourteen (14) material customer contracts identified as requiring change of control consent or notification pursuant to Section 5.4 of the Merger Agreement.

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