exclusivity-agreement.docx

1003-00003 · Harrowgate Private Equity Fund IV LP · Pre-Signing

exclusivity-agreement.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

December 6, 2024

VIA EMAIL AND OVERNIGHT COURIER

VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759

Attention: Nathan Aldridge, Chief Executive Officer

Danielle Moreau, General Counsel

Copy to:

Whitford Jessup & Crane LLP 600 Congress Avenue, Suite 2400 Austin, Texas 78701

Attention: Rebecca Thornton-Hayes

EXCLUSIVITY AGREEMENT

Ladies and Gentlemen:

This letter agreement (this "Agreement") is submitted on behalf of our client, Harrowgate Private Equity Fund IV LP, a Delaware limited partnership ("HPE Fund IV" or "Buyer"), whose principal place of business is located at 300 King Street, Suite 4200, Wilmington, Delaware 19801, and whose general partner is Harrowgate Capital Management IV LLC, a Delaware limited liability company. This Agreement is addressed to VeloPay Systems, Inc., a Delaware corporation ("VeloPay" or the "Company"), and sets forth the terms and conditions under which VeloPay will grant HPE Fund IV an exclusive period within which to negotiate and conduct due diligence with respect to a potential acquisition of VeloPay (as further defined below, the "Proposed Transaction").

Reference is made to the non-binding letter of intent submitted by HPE Fund IV to VeloPay on November 15, 2024 (the "Indication of Interest" or "LOI"), in which HPE Fund IV expressed its interest in acquiring one hundred percent (100%) of the outstanding equity interests of VeloPay. The LOI outlined certain preliminary terms and conditions upon which HPE Fund IV would be willing to pursue the Proposed Transaction, subject to, among other things, the satisfactory completion of confirmatory due diligence, the negotiation and execution of mutually satisfactory definitive documentation, and the receipt of all requisite approvals.

Reference is further made to the Mutual Confidentiality and Non-Disclosure Agreement between HPE Fund IV and VeloPay, dated as of October 14, 2024 (the "NDA"), which remains in full force and effect and governs the treatment of all Confidential Information (as defined therein) exchanged between the parties and their respective Representatives in connection with the evaluation of the Proposed Transaction.

The purpose of this Agreement is to establish a framework under which VeloPay will provide HPE Fund IV with an exclusive period to conduct comprehensive due diligence with respect to VeloPay and its subsidiaries, to negotiate the terms of a definitive agreement with respect to the Proposed Transaction, and to undertake such other activities as are customary and necessary in connection with a transaction of this nature. In consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

Section 1: Definitions

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

1.1 "Exclusivity Period" shall mean the period commencing on December 6, 2024 (the date of this Agreement) and continuing through 11:59 p.m. (Eastern Time) on March 7, 2025, representing an initial period of ninety (90) calendar days. The Exclusivity Period shall be subject to the automatic extension and early termination provisions set forth in Section 4 of this Agreement. All references herein to the "Exclusivity Period" shall be deemed to include any extension thereof pursuant to Section 4.2.

1.2 "Proposed Transaction" shall mean the potential acquisition by HPE Fund IV (or a newly formed acquisition subsidiary thereof) of all of the outstanding equity securities of VeloPay, whether structured as a merger, stock purchase, or other business combination, on terms and conditions to be set forth in a mutually agreed definitive purchase agreement, merger agreement, or other appropriate acquisition agreement (the "Definitive Agreement"). The parties acknowledge that the specific structure of the Proposed Transaction has not yet been determined and will be subject to further discussion and negotiation during the Exclusivity Period, taking into account, among other things, tax, regulatory, and operational considerations.

1.3 "Alternative Transaction" shall mean any inquiry, proposal, offer, indication of interest, or transaction (other than the Proposed Transaction) involving:

(a) a merger, consolidation, business combination, recapitalization, reorganization, or similar transaction involving VeloPay or any of its subsidiaries;

(b) the acquisition, directly or indirectly, by any person or group of persons (other than HPE Fund IV and its affiliates) of twenty percent (20%) or more of the outstanding equity securities (including any securities convertible into, or exercisable or exchangeable for, equity securities) of VeloPay or any of its material subsidiaries, whether by way of purchase, tender offer, exchange offer, or otherwise;

(c) the acquisition, directly or indirectly, by any person or group of persons (other than HPE Fund IV and its affiliates) of assets constituting twenty percent (20%) or more of the consolidated assets or revenues of VeloPay and its subsidiaries, taken as a whole, whether in a single transaction or a series of related transactions; or

(d) any other extraordinary corporate transaction the consummation of which would reasonably be expected to prevent, materially impede, or materially delay the consummation of the Proposed Transaction.

For the avoidance of doubt, the term "Alternative Transaction" shall include any transaction of the types described in clauses (a) through (d) above, regardless of whether such transaction is proposed by a third party or by VeloPay or any of its subsidiaries.

1.4 "Representatives" shall mean, with respect to each party, such party's affiliates, and its and their respective directors, officers, employees, managing partners, general partners, agents, advisors (including, without limitation, financial advisors, investment bankers, legal counsel, and accountants), and other representatives, whether acting in a professional, advisory, or consultative capacity.

Without limiting the generality of the foregoing:

(a) With respect to HPE Fund IV, "Representatives" shall include Harrowgate Capital Management IV LLC (its general partner), Pendleton Hawkes & Co. (HPE Fund IV's financial advisor), and Calderwood & Harkness LLP (HPE Fund IV's legal counsel), and their respective partners, principals, managing directors, officers, employees, and personnel.

(b) With respect to VeloPay, "Representatives" shall include Velthryn Greer & Associates (VeloPay's financial advisor), Whitford Jessup & Crane LLP (VeloPay's legal counsel), Vance Thornbury & Co. LLP (VeloPay's independent auditor), and their respective partners, principals, managing directors, officers, employees, and personnel.

1.5 "Confidential Information" shall have the meaning ascribed to such term in the NDA dated October 14, 2024, between HPE Fund IV and VeloPay.

Section 2: Exclusivity Covenants

2.1 Exclusivity Obligations of VeloPay. During the Exclusivity Period, VeloPay shall not, and shall cause its subsidiaries (including, without limitation, VeloPay Processing LLC, VeloPay Canada Inc., VeloPay Europe Unipessoal Lda., VeloPay Fraud intelligence Inc., and PayStream Gateway LLC) and its and their respective Representatives not to, directly or indirectly:

(a) solicit, initiate, knowingly encourage, or knowingly facilitate (including by way of furnishing non-public information or granting access to properties, books, records, or personnel) any inquiry, proposal, or offer relating to an Alternative Transaction;

(b) engage in, continue, enter into, or participate in any discussions or negotiations with any person or group of persons (other than HPE Fund IV and its Representatives) regarding any Alternative Transaction, or otherwise cooperate with, assist, or participate in any effort or attempt by any person or group of persons to pursue an Alternative Transaction;

(c) provide any non-public information or data concerning VeloPay or any of its subsidiaries (including financial, operational, technical, or strategic information) to any person or group of persons (other than HPE Fund IV and its Representatives) in connection with, or in furtherance of, an Alternative Transaction;

(d) enter into any letter of intent, memorandum of understanding, term sheet, agreement in principle, acquisition agreement, merger agreement, or other agreement or understanding (whether binding or non-binding, oral or written) relating to an Alternative Transaction; or

(e) approve, endorse, recommend, or take any action in furtherance of any Alternative Transaction, or resolve or agree to take any of the foregoing actions.

VeloPay acknowledges that HPE Fund IV is devoting, and will continue to devote, substantial time, effort, and resources (including the engagement of external advisors) to the evaluation of the Proposed Transaction and the negotiation of the Definitive Agreement, and that the exclusivity covenants set forth in this Section 2.1 are a material inducement to HPE Fund IV to continue such efforts.

2.2 Cessation of Existing Discussions. VeloPay hereby confirms, represents, and warrants that, as of the date hereof, it has terminated (or will immediately terminate, and in any event no later than 11:59 p.m. Eastern Time on December 6, 2024) all existing discussions, conversations, and negotiations with any third party regarding any Alternative Transaction or any potential transaction that could constitute an Alternative Transaction. VeloPay further covenants that it shall promptly request the return or destruction of any non-public information or data previously provided to any such third party in connection with any such discussions or negotiations, to the extent that VeloPay has the right to make such request pursuant to any applicable confidentiality agreement, clean room arrangement, or similar agreement. VeloPay shall promptly inform HPE Fund IV if any such third party declines or fails to comply with such request.

2.3 Notification Obligation. During the Exclusivity Period, VeloPay shall promptly (and in any event within two (2) business days) notify HPE Fund IV in writing if VeloPay or any of its subsidiaries or any of their respective Representatives receives any inquiry, proposal, offer, indication of interest, or request for non-public information relating to an Alternative Transaction, regardless of whether such inquiry, proposal, offer, indication of interest, or request was solicited or unsolicited. Such written notification shall include a description of the material terms and conditions of any such inquiry, proposal, offer, indication of interest, or request (including, to the extent known, the proposed consideration, structure, and any conditions or contingencies) and the identity of the person or persons making such inquiry, proposal, offer, indication of interest, or request. VeloPay shall keep HPE Fund IV reasonably informed of any subsequent developments with respect to any such inquiry, proposal, offer, indication of interest, or request.

2.4 Board of Directors. VeloPay hereby acknowledges and confirms that the board of directors of VeloPay, consisting of Nathan Aldridge (Chair), Sonia Reyes-Watkins, Janet Gould, Kwame Asante, Catherine Lindström, and Philip Rosenthal (collectively, the "VeloPay Board"), has duly authorized the execution and delivery of this Agreement by VeloPay and has directed VeloPay's management and Representatives to comply fully with the exclusivity obligations and other covenants set forth herein. VeloPay represents that the execution, delivery, and performance of this Agreement by VeloPay has been duly approved by all necessary corporate action on the part of VeloPay, and that this Agreement constitutes the valid and binding obligation of VeloPay, enforceable against VeloPay in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and to general principles of equity.

Section 3: Due Diligence Access and Cooperation

3.1 Data Room Access. During the Exclusivity Period, VeloPay shall provide HPE Fund IV and its Representatives with reasonable access to a virtual data room (the "Data Room") hosted on a platform mutually agreed upon by the parties, containing documents and information reasonably requested by HPE Fund IV in connection with its due diligence review of VeloPay, its subsidiaries, and the Proposed Transaction. The Data Room shall be opened promptly following the execution of this Agreement. VeloPay shall use commercially reasonable efforts to populate the Data Room with responsive documents and information within a reasonable time following each request from HPE Fund IV, and to respond to HPE Fund IV's due diligence requests and follow-up questions in a timely manner. VeloPay shall make available appropriate officers, directors, employees, and other personnel of VeloPay and its subsidiaries for discussions, interviews, and presentations with HPE Fund IV and its Representatives as reasonably requested by HPE Fund IV. Without limiting the foregoing, VeloPay shall use commercially reasonable efforts to ensure that the Data Room contains, at a minimum, the categories of documents and information customarily reviewed in connection with a transaction of the type contemplated by the Proposed Transaction, including financial statements, material contracts, intellectual property records, regulatory filings, employee benefit plan documents, litigation summaries, tax returns, and insurance policies.

3.2 Management Access. VeloPay shall arrange for HPE Fund IV and its Representatives to have reasonable access, at mutually agreed times during normal business hours, to the following senior management personnel of VeloPay for the purpose of management presentations, due diligence discussions, and strategic reviews:

(a) Nathan Aldridge, Chief Executive Officer;

(b) Sonia Reyes-Watkins, Chief Technology Officer;

(d) Danielle Moreau, General Counsel.

VeloPay shall also make available such other senior management personnel and subject matter experts as may be reasonably requested by HPE Fund IV from time to time during the Exclusivity Period. In addition, VeloPay shall make available Robert Paulsen of Vance Thornbury & Co. LLP, VeloPay's independent auditor, for customary auditor access discussions with HPE Fund IV and its Representatives, subject to Vance Thornbury & Co. LLP's standard access letter protocols and any other requirements or conditions imposed by Vance Thornbury & Co. LLP. VeloPay shall use commercially reasonable efforts to facilitate the execution and delivery of any access letter or consent letter reasonably requested by HPE Fund IV in connection with such auditor access.

3.3 Cooperation. Each party shall negotiate the terms of the Definitive Agreement in good faith during the Exclusivity Period, with the objective of reaching mutually satisfactory terms and conditions as expeditiously as practicable. HPE Fund IV shall use commercially reasonable efforts to complete its due diligence review in a timely manner, to communicate any material open issues, concerns, or findings to VeloPay promptly, and to provide VeloPay with a draft of the Definitive Agreement within a reasonable time following the substantial completion of its due diligence review. VeloPay shall cooperate with HPE Fund IV and its Representatives in good faith and shall use commercially reasonable efforts to provide any additional information, documentation, or access reasonably requested by HPE Fund IV in furtherance of the timely completion of due diligence and the negotiation of the Definitive Agreement.

3.4 Confidentiality. All Confidential Information exchanged between the parties and their respective Representatives in connection with the evaluation, negotiation, and consummation of the Proposed Transaction shall be subject to the terms and conditions of the NDA dated October 14, 2024, between HPE Fund IV and VeloPay, which is incorporated herein by reference in its entirety. Each party acknowledges and agrees that the obligations and restrictions set forth in the NDA shall apply to all Confidential Information disclosed pursuant to this Agreement, including all information and materials made available through the Data Room, management presentations, and due diligence discussions. In the event of any conflict between the terms of this Agreement and the terms of the NDA with respect to the treatment of Confidential Information, the more restrictive provision shall control.

Section 4: Term, Extension, and Termination

4.1 Initial Exclusivity Period. The initial Exclusivity Period shall commence on December 6, 2024 and shall continue for a period of ninety (90) calendar days, expiring at 11:59 p.m. (Eastern Time) on March 7, 2025, unless extended pursuant to Section 4.2 or earlier terminated pursuant to Section 4.3.

4.2 Extension. HPE Fund IV shall have the right, in its sole discretion, to extend the Exclusivity Period for one (1) additional period of thirty (30) calendar days (such that the Exclusivity Period, as so extended, would expire at 11:59 p.m. (Eastern Time) on April 6, 2025), by delivering written notice of such extension to VeloPay at least five (5) business days prior to the expiration of the initial Exclusivity Period (i.e., no later than February 28, 2025); provided, however, that HPE Fund IV may exercise its right to extend the Exclusivity Period only if HPE Fund IV is then negotiating in good faith toward the execution and delivery of a Definitive Agreement with respect to the Proposed Transaction. For the avoidance of doubt, VeloPay shall not have the right to extend the Exclusivity Period, and the Exclusivity Period may not be extended for more than one additional thirty (30)-calendar-day period pursuant to this Section 4.2.

4.3 Early Termination. Notwithstanding anything to the contrary in this Agreement, the Exclusivity Period shall terminate upon the earliest to occur of the following:

(a) the execution and delivery of a Definitive Agreement by and among HPE Fund IV (or its acquisition subsidiary), VeloPay, and any other parties thereto;

(b) written notice of termination delivered by HPE Fund IV to VeloPay at any time, for any reason or no reason, in HPE Fund IV's sole discretion;

(c) written notice of termination delivered by VeloPay to HPE Fund IV if HPE Fund IV has materially failed to negotiate in good faith toward the execution and delivery of a Definitive Agreement, provided that VeloPay has delivered prior written notice to HPE Fund IV specifying in reasonable detail the nature of such failure and HPE Fund IV has failed to cure such failure within five (5) business days following its receipt of such notice; or

(d) the expiration of the Exclusivity Period (including any extension thereof pursuant to Section 4.2) without the execution and delivery of a Definitive Agreement by and among the parties.

4.4 Effect of Termination. Upon the termination of the Exclusivity Period (whether by expiration, early termination, or otherwise), VeloPay shall be free to solicit, encourage, negotiate, and enter into any Alternative Transaction without any restriction or limitation under this Agreement, and neither party shall have any further obligation to the other party under this Agreement, except as expressly set forth in this Section 4.4. For the avoidance of doubt, the termination of this Agreement shall not affect, diminish, or release the obligations of the parties under the NDA, which shall survive in accordance with its terms. In addition, the following provisions of this Agreement shall survive the termination of the Exclusivity Period and shall continue in full force and effect in accordance with their respective terms: Section 5 (No Binding Obligation to Consummate), Section 6 (Remedies), Section 7 (Expenses), Section 8 (Governing Law; Jurisdiction; Waiver of Jury Trial), and Section 9 (Miscellaneous Provisions).

Section 5: No Binding Obligation to Consummate

The parties acknowledge and agree that this Agreement does not constitute, and shall not be deemed to constitute, a binding commitment or obligation of either party to enter into, or to consummate, the Proposed Transaction or any other transaction. Neither party shall have any liability to the other party with respect to the Proposed Transaction (whether in contract, tort, equity, or otherwise) unless and until a Definitive Agreement is duly executed and delivered by all parties thereto, and then only to the extent and in accordance with the terms and conditions set forth in such Definitive Agreement.

Without limiting the generality of the foregoing, the consummation of the Proposed Transaction is subject to, among other things:

(a) the completion of due diligence by HPE Fund IV with results satisfactory to HPE Fund IV in its sole and absolute discretion;

(b) the negotiation, execution, and delivery of a mutually satisfactory Definitive Agreement containing such terms, conditions, representations, warranties, covenants, indemnification provisions, and other provisions as are customary for transactions of this type and nature;

(c) the approval of the board of directors and/or the investment committee of HPE Fund IV and Harrowgate Capital Management IV LLC, in each case in their sole discretion;

(d) the approval of the board of directors and, to the extent required by applicable law, the stockholders of VeloPay;

(e) the receipt of all required governmental, regulatory, and third-party approvals and consents, including any approvals required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any other applicable antitrust, competition, or foreign investment laws; and

(f) the obtaining by HPE Fund IV of committed debt financing on terms and conditions acceptable to HPE Fund IV in its sole discretion.

Notwithstanding anything to the contrary in this Section 5, the parties acknowledge and agree that (i) the exclusivity covenants set forth in Section 2 of this Agreement and (ii) the confidentiality obligations incorporated by reference from the NDA are, and are intended to be, binding obligations of the parties, enforceable in accordance with their terms, and shall not be affected by the non-binding nature of the parties' obligations with respect to the consummation of the Proposed Transaction.

Section 6: Remedies

The parties acknowledge and agree that a breach or threatened breach of the exclusivity covenants set forth in Section 2 of this Agreement would cause irreparable harm to HPE Fund IV that could not be adequately compensated by monetary damages alone. In the event of any such breach or threatened breach by VeloPay or any of its subsidiaries or Representatives, HPE Fund IV shall be entitled to seek and obtain specific performance, injunctive relief, and any other equitable remedies available under applicable law, in addition to any and all other remedies available to HPE Fund IV at law or in equity, without the necessity of proving actual damages, posting any bond or other security, or establishing the inadequacy of any remedy at law. The remedies provided in this Section 6 shall be cumulative and shall not be deemed to be exclusive of any other remedies available to HPE Fund IV. Nothing in this Section 6 shall be construed to limit or restrict HPE Fund IV's right to seek damages or any other relief to which it may be entitled under applicable law in connection with a breach of this Agreement.

Section 7: Expenses

Each party shall bear and be solely responsible for its own costs and expenses (including, without limitation, the fees and disbursements of its respective financial advisors, investment bankers, legal counsel, accountants, and other advisors and consultants) incurred in connection with the negotiation, execution, and delivery of this Agreement, the evaluation of the Proposed Transaction, the conduct of due diligence, and the negotiation of the Definitive Agreement and related transaction documents, whether or not the Proposed Transaction is consummated. For the avoidance of doubt, no break-up fee, termination fee, expense reimbursement, or similar payment shall be payable by either party to the other party in connection with this Agreement or the termination thereof, regardless of the circumstances of such termination.

Section 8: Governing Law; Jurisdiction; Waiver of Jury Trial

8.1 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

8.2 Jurisdiction. Each party hereby irrevocably and unconditionally submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over any particular matter, any state or federal court of competent jurisdiction located in Wilmington, Delaware) for the purpose of any action, suit, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, and each party agrees not to commence any such action, suit, or proceeding except in such courts. Each party further irrevocably and unconditionally waives, and agrees not to assert by way of motion, defense, or otherwise, in any such action, suit, or proceeding: (a) any claim that it is not personally subject to the jurisdiction of the above-named courts; (b) any claim that such action, suit, or proceeding has been brought in an inconvenient forum; and (c) any claim that the venue of such action, suit, or proceeding is improper. Each party agrees that a final judgment in any such action, suit, or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law.

8.3 Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NDA, THE PROPOSED TRANSACTION, OR THE NEGOTIATION, PERFORMANCE, OR ENFORCEMENT HEREOF OR THEREOF. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT, OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) IT MAKES THIS WAIVER VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.3.

Section 9: Miscellaneous Provisions

9.1 Entire Agreement. This Agreement, together with the NDA dated October 14, 2024, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, discussions, agreements, commitments, representations, and understandings (whether written or oral) between the parties with respect to such subject matter. The LOI dated November 15, 2024, to the extent that any terms or provisions thereof are inconsistent with the terms and provisions of this Agreement, is hereby superseded by this Agreement, and the terms of this Agreement shall control.

9.2 Amendments and Waivers. No amendment, modification, supplement, or waiver of any provision of this Agreement shall be effective or binding unless made in a writing that is signed by the party against whom enforcement of such amendment, modification, supplement, or waiver is sought. No waiver of any provision of this Agreement shall be deemed to be, or shall constitute, a waiver of any other provision hereof (whether or not similar), and no waiver shall constitute a continuing waiver unless otherwise expressly provided in writing. The failure of either party to exercise or enforce any right or provision of this Agreement shall not operate as a waiver of such right or provision.

9.3 Assignment. Neither party may assign, transfer, delegate, or otherwise dispose of any of its rights or obligations under this Agreement without the prior written consent of the other party, and any purported assignment, transfer, delegation, or disposition without such consent shall be null and void; provided, however, that HPE Fund IV may assign its rights (but not its obligations) under this Agreement to any wholly-owned subsidiary or newly formed acquisition vehicle (including, without limitation, any merger subsidiary formed for purposes of effectuating the Proposed Transaction) without the prior written consent of VeloPay, so long as HPE Fund IV remains primarily liable for its obligations hereunder. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

9.4 Notices. All notices, requests, demands, consents, waivers, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and effective (a) when delivered by hand, (b) one (1) business day after being sent by a nationally recognized overnight courier service (with tracking capability and charges prepaid), or (c) when sent by email (with written confirmation of receipt by the recipient, which may include an automated "read receipt" or a responsive email from the recipient), addressed as follows:

If to HPE Fund IV:

Harrowgate Private Equity Fund IV LP 300 King Street, Suite 4200 Wilmington, Delaware 19801

Attention: Priya Deshmukh, Managing Partner

Email: p.deshmukh@harrowgatecapital.com

with a copy (which shall not constitute notice) to:

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

Attention: Sandra Tung

Email: s.tung@calderwoodharkness.com

If to VeloPay:

VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759

Attention: Nathan Aldridge, Chief Executive Officer

and Danielle Moreau, General Counsel

Email: naldridge@velopay.com; dmoreau@velopay.com

with a copy (which shall not constitute notice) to:

Whitford Jessup & Crane LLP 600 Congress Avenue, Suite 2400 Austin, Texas 78701

Attention: Rebecca Thornton-Hayes

Email: rthornton-hayes@wjclaw.com

Either party may change its address or other contact information for purposes of notices under this Agreement by providing written notice of such change to the other party in accordance with this Section 9.4.

9.5 Counterparts. This Agreement may be executed in one or more counterparts (including by means of email transmission of Portable Document Format (PDF) signature pages or by use of electronic signatures in compliance with the Federal ESIGN Act or applicable state law), each of which shall be deemed to be an original and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by email or other electronic means shall be effective as delivery of a manually executed counterpart of this Agreement.

9.6 Severability. If any provision of this Agreement (or any portion thereof) is held to be invalid, illegal, or unenforceable under applicable law by a court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions of this Agreement shall continue in full force and effect. In such event, the parties shall negotiate in good faith a substitute provision that, to the greatest extent possible, achieves the intended economic, business, and legal purposes of the invalid, illegal, or unenforceable provision.

9.7 No Third-Party Beneficiaries. This Agreement is for the sole and exclusive benefit of the parties hereto and their respective successors and permitted assigns. Nothing contained in this Agreement, express or implied, is intended to, or shall be construed to, confer upon any person other than the parties hereto and their respective successors and permitted assigns any rights, remedies, obligations, or liabilities of any nature whatsoever under or by reason of this Agreement.

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

If the foregoing accurately reflects the agreement of the parties, please indicate VeloPay's acceptance and agreement by executing and returning a counterpart of this Agreement in the space provided below.

Very truly yours,

HARROWGATE PRIVATE EQUITY FUND IV LP

By: Harrowgate Capital Management IV LLC,

its General Partner

By: ________

Name: Priya Deshmukh

Title: Managing Partner

Date: December 6, 2024

ACKNOWLEDGED AND AGREED

The undersigned hereby acknowledges receipt of the foregoing Exclusivity Agreement and, on behalf of VeloPay Systems, Inc., agrees to be bound by the terms and conditions set forth therein, effective as of the date first written above.

VELOPAY SYSTEMS, INC.

By: ________

Name: Nathan Aldridge

Title: Chief Executive Officer

Date: December 6, 2024

CALDERWOOD & HARKNESS LLP 787 Seventh Avenue, 38th Floor New York, New York 10019 Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com
December 6, 2024
VIA EMAIL AND OVERNIGHT COURIER
VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759
Attention: Nathan Aldridge, Chief Executive Officer
Danielle Moreau, General Counsel
Copy to:
Whitford Jessup & Crane LLP 600 Congress Avenue, Suite 2400 Austin, Texas 78701
Attention: Rebecca Thornton-Hayes
EXCLUSIVITY AGREEMENT
Ladies and Gentlemen:
This letter agreement (this "Agreement") is submitted on behalf of our client, Harrowgate Private Equity Fund IV LP, a Delaware limited partnership ("HPE Fund IV" or "Buyer"), whose principal place of business is located at 300 King Street, Suite 4200, Wilmington, Delaware 19801, and whose general partner is Harrowgate Capital Management IV LLC, a Delaware limited liability company. This Agreement is addressed to VeloPay Systems, Inc., a Delaware corporation ("VeloPay" or the "Company"), and sets forth the terms and conditions under which VeloPay will grant HPE Fund IV an exclusive period within which to negotiate and conduct due diligence with respect to a potential acquisition of VeloPay (as further defined below, the "Proposed Transaction").
Reference is made to the non-binding letter of intent submitted by HPE Fund IV to VeloPay on November 15, 2024 (the "Indication of Interest" or "LOI"), in which HPE Fund IV expressed its interest in acquiring one hundred percent (100%) of the outstanding equity interests of VeloPay. The LOI outlined certain preliminary terms and conditions upon which HPE Fund IV would be willing to pursue the Proposed Transaction, subject to, among other things, the satisfactory completion of confirmatory due diligence, the negotiation and execution of mutually satisfactory definitive documentation, and the receipt of all requisite approvals.
Reference is further made to the Mutual Confidentiality and Non-Disclosure Agreement between HPE Fund IV and VeloPay, dated as of October 14, 2024 (the "NDA"), which remains in full force and effect and governs the treatment of all Confidential Information (as defined therein) exchanged between the parties and their respective Representatives in connection with the evaluation of the Proposed Transaction.
The purpose of this Agreement is to establish a framework under which VeloPay will provide HPE Fund IV with an exclusive period to conduct comprehensive due diligence with respect to VeloPay and its subsidiaries, to negotiate the terms of a definitive agreement with respect to the Proposed Transaction, and to undertake such other activities as are customary and necessary in connection with a transaction of this nature. In consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
Section 1: Definitions
For purposes of this Agreement, the following terms shall have the meanings set forth below:
1.1 "Exclusivity Period" shall mean the period commencing on December 6, 2024 (the date of this Agreement) and continuing through 11:59 p.m. (Eastern Time) on March 7, 2025, representing an initial period of ninety (90) calendar days. The Exclusivity Period shall be subject to the automatic extension and early termination provisions set forth in Section 4 of this Agreement. All references herein to the "Exclusivity Period" shall be deemed to include any extension thereof pursuant to Section 4.2.
1.2 "Proposed Transaction" shall mean the potential acquisition by HPE Fund IV (or a newly formed acquisition subsidiary thereof) of all of the outstanding equity securities of VeloPay, whether structured as a merger, stock purchase, or other business combination, on terms and conditions to be set forth in a mutually agreed definitive purchase agreement, merger agreement, or other appropriate acquisition agreement (the "Definitive Agreement"). The parties acknowledge that the specific structure of the Proposed Transaction has not yet been determined and will be subject to further discussion and negotiation during the Exclusivity Period, taking into account, among other things, tax, regulatory, and operational considerations.
1.3 "Alternative Transaction" shall mean any inquiry, proposal, offer, indication of interest, or transaction (other than the Proposed Transaction) involving:
(a) a merger, consolidation, business combination, recapitalization, reorganization, or similar transaction involving VeloPay or any of its subsidiaries;
(b) the acquisition, directly or indirectly, by any person or group of persons (other than HPE Fund IV and its affiliates) of twenty percent (20%) or more of the outstanding equity securities (including any securities convertible into, or exercisable or exchangeable for, equity securities) of VeloPay or any of its material subsidiaries, whether by way of purchase, tender offer, exchange offer, or otherwise;
(c) the acquisition, directly or indirectly, by any person or group of persons (other than HPE Fund IV and its affiliates) of assets constituting twenty percent (20%) or more of the consolidated assets or revenues of VeloPay and its subsidiaries, taken as a whole, whether in a single transaction or a series of related transactions; or
(d) any other extraordinary corporate transaction the consummation of which would reasonably be expected to prevent, materially impede, or materially delay the consummation of the Proposed Transaction.
For the avoidance of doubt, the term "Alternative Transaction" shall include any transaction of the types described in clauses (a) through (d) above, regardless of whether such transaction is proposed by a third party or by VeloPay or any of its subsidiaries.
1.4 "Representatives" shall mean, with respect to each party, such party's affiliates, and its and their respective directors, officers, employees, managing partners, general partners, agents, advisors (including, without limitation, financial advisors, investment bankers, legal counsel, and accountants), and other representatives, whether acting in a professional, advisory, or consultative capacity.
Without limiting the generality of the foregoing:
(a) With respect to HPE Fund IV, "Representatives" shall include Harrowgate Capital Management IV LLC (its general partner), Pendleton Hawkes & Co. (HPE Fund IV's financial advisor), and Calderwood & Harkness LLP (HPE Fund IV's legal counsel), and their respective partners, principals, managing directors, officers, employees, and personnel.
(b) With respect to VeloPay, "Representatives" shall include Velthryn Greer & Associates (VeloPay's financial advisor), Whitford Jessup & Crane LLP (VeloPay's legal counsel), Vance Thornbury & Co. LLP (VeloPay's independent auditor), and their respective partners, principals, managing directors, officers, employees, and personnel.
1.5 "Confidential Information" shall have the meaning ascribed to such term in the NDA dated October 14, 2024, between HPE Fund IV and VeloPay.
Section 2: Exclusivity Covenants
2.1 Exclusivity Obligations of VeloPay. During the Exclusivity Period, VeloPay shall not, and shall cause its subsidiaries (including, without limitation, VeloPay Processing LLC, VeloPay Canada Inc., VeloPay Europe Unipessoal Lda., VeloPay Fraud intelligence Inc., and PayStream Gateway LLC) and its and their respective Representatives not to, directly or indirectly:
(a) solicit, initiate, knowingly encourage, or knowingly facilitate (including by way of furnishing non-public information or granting access to properties, books, records, or personnel) any inquiry, proposal, or offer relating to an Alternative Transaction;
(b) engage in, continue, enter into, or participate in any discussions or negotiations with any person or group of persons (other than HPE Fund IV and its Representatives) regarding any Alternative Transaction, or otherwise cooperate with, assist, or participate in any effort or attempt by any person or group of persons to pursue an Alternative Transaction;
(c) provide any non-public information or data concerning VeloPay or any of its subsidiaries (including financial, operational, technical, or strategic information) to any person or group of persons (other than HPE Fund IV and its Representatives) in connection with, or in furtherance of, an Alternative Transaction;
(d) enter into any letter of intent, memorandum of understanding, term sheet, agreement in principle, acquisition agreement, merger agreement, or other agreement or understanding (whether binding or non-binding, oral or written) relating to an Alternative Transaction; or
(e) approve, endorse, recommend, or take any action in furtherance of any Alternative Transaction, or resolve or agree to take any of the foregoing actions.
VeloPay acknowledges that HPE Fund IV is devoting, and will continue to devote, substantial time, effort, and resources (including the engagement of external advisors) to the evaluation of the Proposed Transaction and the negotiation of the Definitive Agreement, and that the exclusivity covenants set forth in this Section 2.1 are a material inducement to HPE Fund IV to continue such efforts.
2.2 Cessation of Existing Discussions. VeloPay hereby confirms, represents, and warrants that, as of the date hereof, it has terminated (or will immediately terminate, and in any event no later than 11:59 p.m. Eastern Time on December 6, 2024) all existing discussions, conversations, and negotiations with any third party regarding any Alternative Transaction or any potential transaction that could constitute an Alternative Transaction. VeloPay further covenants that it shall promptly request the return or destruction of any non-public information or data previously provided to any such third party in connection with any such discussions or negotiations, to the extent that VeloPay has the right to make such request pursuant to any applicable confidentiality agreement, clean room arrangement, or similar agreement. VeloPay shall promptly inform HPE Fund IV if any such third party declines or fails to comply with such request.
2.3 Notification Obligation. During the Exclusivity Period, VeloPay shall promptly (and in any event within two (2) business days) notify HPE Fund IV in writing if VeloPay or any of its subsidiaries or any of their respective Representatives receives any inquiry, proposal, offer, indication of interest, or request for non-public information relating to an Alternative Transaction, regardless of whether such inquiry, proposal, offer, indication of interest, or request was solicited or unsolicited. Such written notification shall include a description of the material terms and conditions of any such inquiry, proposal, offer, indication of interest, or request (including, to the extent known, the proposed consideration, structure, and any conditions or contingencies) and the identity of the person or persons making such inquiry, proposal, offer, indication of interest, or request. VeloPay shall keep HPE Fund IV reasonably informed of any subsequent developments with respect to any such inquiry, proposal, offer, indication of interest, or request.
2.4 Board of Directors. VeloPay hereby acknowledges and confirms that the board of directors of VeloPay, consisting of Nathan Aldridge (Chair), Sonia Reyes-Watkins, Janet Gould, Kwame Asante, Catherine Lindström, and Philip Rosenthal (collectively, the "VeloPay Board"), has duly authorized the execution and delivery of this Agreement by VeloPay and has directed VeloPay's management and Representatives to comply fully with the exclusivity obligations and other covenants set forth herein. VeloPay represents that the execution, delivery, and performance of this Agreement by VeloPay has been duly approved by all necessary corporate action on the part of VeloPay, and that this Agreement constitutes the valid and binding obligation of VeloPay, enforceable against VeloPay in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and to general principles of equity.
Section 3: Due Diligence Access and Cooperation
3.1 Data Room Access. During the Exclusivity Period, VeloPay shall provide HPE Fund IV and its Representatives with reasonable access to a virtual data room (the "Data Room") hosted on a platform mutually agreed upon by the parties, containing documents and information reasonably requested by HPE Fund IV in connection with its due diligence review of VeloPay, its subsidiaries, and the Proposed Transaction. The Data Room shall be opened promptly following the execution of this Agreement. VeloPay shall use commercially reasonable efforts to populate the Data Room with responsive documents and information within a reasonable time following each request from HPE Fund IV, and to respond to HPE Fund IV's due diligence requests and follow-up questions in a timely manner. VeloPay shall make available appropriate officers, directors, employees, and other personnel of VeloPay and its subsidiaries for discussions, interviews, and presentations with HPE Fund IV and its Representatives as reasonably requested by HPE Fund IV. Without limiting the foregoing, VeloPay shall use commercially reasonable efforts to ensure that the Data Room contains, at a minimum, the categories of documents and information customarily reviewed in connection with a transaction of the type contemplated by the Proposed Transaction, including financial statements, material contracts, intellectual property records, regulatory filings, employee benefit plan documents, litigation summaries, tax returns, and insurance policies.
3.2 Management Access. VeloPay shall arrange for HPE Fund IV and its Representatives to have reasonable access, at mutually agreed times during normal business hours, to the following senior management personnel of VeloPay for the purpose of management presentations, due diligence discussions, and strategic reviews:
(a) Nathan Aldridge, Chief Executive Officer;
(b) Sonia Reyes-Watkins, Chief Technology Officer;
(c) Marcus Langford, Chief Financial Officer; and
(d) Danielle Moreau, General Counsel.
VeloPay shall also make available such other senior management personnel and subject matter experts as may be reasonably requested by HPE Fund IV from time to time during the Exclusivity Period. In addition, VeloPay shall make available Robert Paulsen of Vance Thornbury & Co. LLP, VeloPay's independent auditor, for customary auditor access discussions with HPE Fund IV and its Representatives, subject to Vance Thornbury & Co. LLP's standard access letter protocols and any other requirements or conditions imposed by Vance Thornbury & Co. LLP. VeloPay shall use commercially reasonable efforts to facilitate the execution and delivery of any access letter or consent letter reasonably requested by HPE Fund IV in connection with such auditor access.
3.3 Cooperation. Each party shall negotiate the terms of the Definitive Agreement in good faith during the Exclusivity Period, with the objective of reaching mutually satisfactory terms and conditions as expeditiously as practicable. HPE Fund IV shall use commercially reasonable efforts to complete its due diligence review in a timely manner, to communicate any material open issues, concerns, or findings to VeloPay promptly, and to provide VeloPay with a draft of the Definitive Agreement within a reasonable time following the substantial completion of its due diligence review. VeloPay shall cooperate with HPE Fund IV and its Representatives in good faith and shall use commercially reasonable efforts to provide any additional information, documentation, or access reasonably requested by HPE Fund IV in furtherance of the timely completion of due diligence and the negotiation of the Definitive Agreement.
3.4 Confidentiality. All Confidential Information exchanged between the parties and their respective Representatives in connection with the evaluation, negotiation, and consummation of the Proposed Transaction shall be subject to the terms and conditions of the NDA dated October 14, 2024, between HPE Fund IV and VeloPay, which is incorporated herein by reference in its entirety. Each party acknowledges and agrees that the obligations and restrictions set forth in the NDA shall apply to all Confidential Information disclosed pursuant to this Agreement, including all information and materials made available through the Data Room, management presentations, and due diligence discussions. In the event of any conflict between the terms of this Agreement and the terms of the NDA with respect to the treatment of Confidential Information, the more restrictive provision shall control.
Section 4: Term, Extension, and Termination
4.1 Initial Exclusivity Period. The initial Exclusivity Period shall commence on December 6, 2024 and shall continue for a period of ninety (90) calendar days, expiring at 11:59 p.m. (Eastern Time) on March 7, 2025, unless extended pursuant to Section 4.2 or earlier terminated pursuant to Section 4.3.
4.2 Extension. HPE Fund IV shall have the right, in its sole discretion, to extend the Exclusivity Period for one (1) additional period of thirty (30) calendar days (such that the Exclusivity Period, as so extended, would expire at 11:59 p.m. (Eastern Time) on April 6, 2025), by delivering written notice of such extension to VeloPay at least five (5) business days prior to the expiration of the initial Exclusivity Period (i.e., no later than February 28, 2025); provided, however, that HPE Fund IV may exercise its right to extend the Exclusivity Period only if HPE Fund IV is then negotiating in good faith toward the execution and delivery of a Definitive Agreement with respect to the Proposed Transaction. For the avoidance of doubt, VeloPay shall not have the right to extend the Exclusivity Period, and the Exclusivity Period may not be extended for more than one additional thirty (30)-calendar-day period pursuant to this Section 4.2.
4.3 Early Termination. Notwithstanding anything to the contrary in this Agreement, the Exclusivity Period shall terminate upon the earliest to occur of the following:
(a) the execution and delivery of a Definitive Agreement by and among HPE Fund IV (or its acquisition subsidiary), VeloPay, and any other parties thereto;
(b) written notice of termination delivered by HPE Fund IV to VeloPay at any time, for any reason or no reason, in HPE Fund IV's sole discretion;
(c) written notice of termination delivered by VeloPay to HPE Fund IV if HPE Fund IV has materially failed to negotiate in good faith toward the execution and delivery of a Definitive Agreement, provided that VeloPay has delivered prior written notice to HPE Fund IV specifying in reasonable detail the nature of such failure and HPE Fund IV has failed to cure such failure within five (5) business days following its receipt of such notice; or
(d) the expiration of the Exclusivity Period (including any extension thereof pursuant to Section 4.2) without the execution and delivery of a Definitive Agreement by and among the parties.
4.4 Effect of Termination. Upon the termination of the Exclusivity Period (whether by expiration, early termination, or otherwise), VeloPay shall be free to solicit, encourage, negotiate, and enter into any Alternative Transaction without any restriction or limitation under this Agreement, and neither party shall have any further obligation to the other party under this Agreement, except as expressly set forth in this Section 4.4. For the avoidance of doubt, the termination of this Agreement shall not affect, diminish, or release the obligations of the parties under the NDA, which shall survive in accordance with its terms. In addition, the following provisions of this Agreement shall survive the termination of the Exclusivity Period and shall continue in full force and effect in accordance with their respective terms: Section 5 (No Binding Obligation to Consummate), Section 6 (Remedies), Section 7 (Expenses), Section 8 (Governing Law; Jurisdiction; Waiver of Jury Trial), and Section 9 (Miscellaneous Provisions).
Section 5: No Binding Obligation to Consummate
The parties acknowledge and agree that this Agreement does not constitute, and shall not be deemed to constitute, a binding commitment or obligation of either party to enter into, or to consummate, the Proposed Transaction or any other transaction. Neither party shall have any liability to the other party with respect to the Proposed Transaction (whether in contract, tort, equity, or otherwise) unless and until a Definitive Agreement is duly executed and delivered by all parties thereto, and then only to the extent and in accordance with the terms and conditions set forth in such Definitive Agreement.
Without limiting the generality of the foregoing, the consummation of the Proposed Transaction is subject to, among other things:
(a) the completion of due diligence by HPE Fund IV with results satisfactory to HPE Fund IV in its sole and absolute discretion;
(b) the negotiation, execution, and delivery of a mutually satisfactory Definitive Agreement containing such terms, conditions, representations, warranties, covenants, indemnification provisions, and other provisions as are customary for transactions of this type and nature;
(c) the approval of the board of directors and/or the investment committee of HPE Fund IV and Harrowgate Capital Management IV LLC, in each case in their sole discretion;
(d) the approval of the board of directors and, to the extent required by applicable law, the stockholders of VeloPay;
(e) the receipt of all required governmental, regulatory, and third-party approvals and consents, including any approvals required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any other applicable antitrust, competition, or foreign investment laws; and
(f) the obtaining by HPE Fund IV of committed debt financing on terms and conditions acceptable to HPE Fund IV in its sole discretion.
Notwithstanding anything to the contrary in this Section 5, the parties acknowledge and agree that (i) the exclusivity covenants set forth in Section 2 of this Agreement and (ii) the confidentiality obligations incorporated by reference from the NDA are, and are intended to be, binding obligations of the parties, enforceable in accordance with their terms, and shall not be affected by the non-binding nature of the parties' obligations with respect to the consummation of the Proposed Transaction.
Section 6: Remedies
The parties acknowledge and agree that a breach or threatened breach of the exclusivity covenants set forth in Section 2 of this Agreement would cause irreparable harm to HPE Fund IV that could not be adequately compensated by monetary damages alone. In the event of any such breach or threatened breach by VeloPay or any of its subsidiaries or Representatives, HPE Fund IV shall be entitled to seek and obtain specific performance, injunctive relief, and any other equitable remedies available under applicable law, in addition to any and all other remedies available to HPE Fund IV at law or in equity, without the necessity of proving actual damages, posting any bond or other security, or establishing the inadequacy of any remedy at law. The remedies provided in this Section 6 shall be cumulative and shall not be deemed to be exclusive of any other remedies available to HPE Fund IV. Nothing in this Section 6 shall be construed to limit or restrict HPE Fund IV's right to seek damages or any other relief to which it may be entitled under applicable law in connection with a breach of this Agreement.
Section 7: Expenses
Each party shall bear and be solely responsible for its own costs and expenses (including, without limitation, the fees and disbursements of its respective financial advisors, investment bankers, legal counsel, accountants, and other advisors and consultants) incurred in connection with the negotiation, execution, and delivery of this Agreement, the evaluation of the Proposed Transaction, the conduct of due diligence, and the negotiation of the Definitive Agreement and related transaction documents, whether or not the Proposed Transaction is consummated. For the avoidance of doubt, no break-up fee, termination fee, expense reimbursement, or similar payment shall be payable by either party to the other party in connection with this Agreement or the termination thereof, regardless of the circumstances of such termination.
Section 8: Governing Law; Jurisdiction; Waiver of Jury Trial
8.1 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
8.2 Jurisdiction. Each party hereby irrevocably and unconditionally submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over any particular matter, any state or federal court of competent jurisdiction located in Wilmington, Delaware) for the purpose of any action, suit, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, and each party agrees not to commence any such action, suit, or proceeding except in such courts. Each party further irrevocably and unconditionally waives, and agrees not to assert by way of motion, defense, or otherwise, in any such action, suit, or proceeding: (a) any claim that it is not personally subject to the jurisdiction of the above-named courts; (b) any claim that such action, suit, or proceeding has been brought in an inconvenient forum; and (c) any claim that the venue of such action, suit, or proceeding is improper. Each party agrees that a final judgment in any such action, suit, or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law.
8.3 Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NDA, THE PROPOSED TRANSACTION, OR THE NEGOTIATION, PERFORMANCE, OR ENFORCEMENT HEREOF OR THEREOF. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT, OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) IT MAKES THIS WAIVER VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.3.
Section 9: Miscellaneous Provisions
9.1 Entire Agreement. This Agreement, together with the NDA dated October 14, 2024, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, discussions, agreements, commitments, representations, and understandings (whether written or oral) between the parties with respect to such subject matter. The LOI dated November 15, 2024, to the extent that any terms or provisions thereof are inconsistent with the terms and provisions of this Agreement, is hereby superseded by this Agreement, and the terms of this Agreement shall control.
9.2 Amendments and Waivers. No amendment, modification, supplement, or waiver of any provision of this Agreement shall be effective or binding unless made in a writing that is signed by the party against whom enforcement of such amendment, modification, supplement, or waiver is sought. No waiver of any provision of this Agreement shall be deemed to be, or shall constitute, a waiver of any other provision hereof (whether or not similar), and no waiver shall constitute a continuing waiver unless otherwise expressly provided in writing. The failure of either party to exercise or enforce any right or provision of this Agreement shall not operate as a waiver of such right or provision.
9.3 Assignment. Neither party may assign, transfer, delegate, or otherwise dispose of any of its rights or obligations under this Agreement without the prior written consent of the other party, and any purported assignment, transfer, delegation, or disposition without such consent shall be null and void; provided, however, that HPE Fund IV may assign its rights (but not its obligations) under this Agreement to any wholly-owned subsidiary or newly formed acquisition vehicle (including, without limitation, any merger subsidiary formed for purposes of effectuating the Proposed Transaction) without the prior written consent of VeloPay, so long as HPE Fund IV remains primarily liable for its obligations hereunder. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.
9.4 Notices. All notices, requests, demands, consents, waivers, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and effective (a) when delivered by hand, (b) one (1) business day after being sent by a nationally recognized overnight courier service (with tracking capability and charges prepaid), or (c) when sent by email (with written confirmation of receipt by the recipient, which may include an automated "read receipt" or a responsive email from the recipient), addressed as follows:
If to HPE Fund IV:
Harrowgate Private Equity Fund IV LP 300 King Street, Suite 4200 Wilmington, Delaware 19801
Attention: Priya Deshmukh, Managing Partner
Email: p.deshmukh@harrowgatecapital.com
with a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 787 Seventh Avenue, 38th Floor New York, New York 10019
Attention: Sandra Tung
Email: s.tung@calderwoodharkness.com
If to VeloPay:
VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759
Attention: Nathan Aldridge, Chief Executive Officer
and Danielle Moreau, General Counsel
Email: naldridge@velopay.com; dmoreau@velopay.com
with a copy (which shall not constitute notice) to:
Whitford Jessup & Crane LLP 600 Congress Avenue, Suite 2400 Austin, Texas 78701
Attention: Rebecca Thornton-Hayes
Email: rthornton-hayes@wjclaw.com
Either party may change its address or other contact information for purposes of notices under this Agreement by providing written notice of such change to the other party in accordance with this Section 9.4.
9.5 Counterparts. This Agreement may be executed in one or more counterparts (including by means of email transmission of Portable Document Format (PDF) signature pages or by use of electronic signatures in compliance with the Federal ESIGN Act or applicable state law), each of which shall be deemed to be an original and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by email or other electronic means shall be effective as delivery of a manually executed counterpart of this Agreement.
9.6 Severability. If any provision of this Agreement (or any portion thereof) is held to be invalid, illegal, or unenforceable under applicable law by a court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions of this Agreement shall continue in full force and effect. In such event, the parties shall negotiate in good faith a substitute provision that, to the greatest extent possible, achieves the intended economic, business, and legal purposes of the invalid, illegal, or unenforceable provision.
9.7 No Third-Party Beneficiaries. This Agreement is for the sole and exclusive benefit of the parties hereto and their respective successors and permitted assigns. Nothing contained in this Agreement, express or implied, is intended to, or shall be construed to, confer upon any person other than the parties hereto and their respective successors and permitted assigns any rights, remedies, obligations, or liabilities of any nature whatsoever under or by reason of this Agreement.
[Remainder of Page Intentionally Left Blank — Signature Pages Follow]
If the foregoing accurately reflects the agreement of the parties, please indicate VeloPay's acceptance and agreement by executing and returning a counterpart of this Agreement in the space provided below.
Very truly yours,
HARROWGATE PRIVATE EQUITY FUND IV LP
By: Harrowgate Capital Management IV LLC,
its General Partner
By: ________
Name: Priya Deshmukh
Title: Managing Partner
Date: December 6, 2024
ACKNOWLEDGED AND AGREED
The undersigned hereby acknowledges receipt of the foregoing Exclusivity Agreement and, on behalf of VeloPay Systems, Inc., agrees to be bound by the terms and conditions set forth therein, effective as of the date first written above.
VELOPAY SYSTEMS, INC.
By: ________
Name: Nathan Aldridge
Title: Chief Executive Officer
Date: December 6, 2024

VIA EMAIL AND OVERNIGHT COURIER

EXCLUSIVITY AGREEMENT

HARROWGATE PRIVATE EQUITY FUND IV LP

ACKNOWLEDGED AND AGREED

VELOPAY SYSTEMS, INC.

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