MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
This memorandum is a privileged and confidential attorney work product prepared by Calderwood & Harkness LLP in connection with the representation of Harrowgate Private Equity Fund IV LP. This memorandum is protected by the attorney-client privilege and the work product doctrine. It is intended solely for the use of the addressees and copy recipients identified below and should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP.
To: Sandra Tung, Responsible Partner, Mergers & Acquisitions, Calderwood & Harkness LLP
Cc: Priya Deshmukh, Managing Partner, Harrowgate Capital Management IV LLC Thomas Eriksen, Partner, Head of FinTech, Harrowgate Capital Management IV LLC Megan Chu, Lead Associate, M&A, Calderwood & Harkness LLP
From: Leonard Cross, Specialist Partner, Tax, Calderwood & Harkness LLP
Date: March 12, 2025
Re: FIRPTA and Withholding Analysis — Acquisition of VeloPay Systems, Inc. by Harrowgate Private Equity Fund IV LP
Matter No.: 1003-00003
Right-click to update Table of Contents
I. Executive Summary
This memorandum analyzes whether the Foreign Investment in Real Property Tax Act of 1986 ("FIRPTA"), codified at Sections 897 and 1445 of the Internal Revenue Code of 1986, as amended (the "Code"), imposes withholding obligations on payments of merger consideration to non-U.S. stockholders of VeloPay Systems, Inc. ("VeloPay" or the "Company") in connection with the proposed acquisition of VeloPay by Harrowgate Private Equity Fund IV LP ("HPE Fund IV") through a reverse triangular merger with Harrowgate Velocity Merger Sub Inc. ("Merger Sub"), a newly formed, wholly-owned subsidiary of HPE Fund IV. The transaction contemplates aggregate cash merger consideration of approximately $1,900,000,000, payable at $20.00 per share on a fully diluted, as-converted basis, across 95,000,000 fully diluted shares of VeloPay common stock.
The proposed transaction is structured as a reverse triangular merger under Section 251 of the Delaware General Corporation Law (the "DGCL"), pursuant to which Merger Sub will merge with and into VeloPay, with VeloPay surviving as a wholly-owned subsidiary of HPE Fund IV. All outstanding shares of VeloPay common stock (other than rollover equity and dissenting shares, if any) will be cancelled and converted into the right to receive the per-share cash merger consideration.
Key Conclusion — FIRPTA. Based on our review of VeloPay's audited financial statements for fiscal year 2024, its corporate structure, and the nature and composition of its assets, we conclude that VeloPay is not a "United States real property holding corporation" ("USRPHC") within the meaning of Section 897(c)(2) of the Code. VeloPay is a financial technology company whose assets consist overwhelmingly of intangible property (software intellectual property, patents, customer relationships, and goodwill), accounts receivable, cash and cash equivalents, and capitalized software development costs. The Company does not own any U.S. real property, and its leasehold interests in office space do not constitute "United States real property interests" ("USRPIs") under the applicable Treasury Regulations. Accordingly, shares of VeloPay common stock do not constitute USRPIs, and FIRPTA withholding under Section 1445 of the Code does not apply to the payment of merger consideration to non-U.S. stockholders. VeloPay will deliver a FIRPTA certificate at closing pursuant to Treasury Regulation § 1.1445-2(c)(3), which will formally relieve the transferees (HPE Fund IV, Merger Sub, and the Surviving Corporation) of any FIRPTA withholding obligation.
Non-FIRPTA Withholding. This memorandum also addresses withholding obligations under Sections 1441, 1442, and 1446 of the Code applicable to fixed or determinable annual or periodical ("FDAP") income paid to non-U.S. persons, as well as backup withholding under Section 3406 of the Code applicable to U.S. persons who fail to provide a valid taxpayer identification number. We conclude that the cash merger consideration payable to non-U.S. stockholders in exchange for their VeloPay shares is treated as proceeds from the sale or exchange of a capital asset (not FDAP income) and is therefore not subject to withholding under Sections 1441 or 1442. However, certain compensation-character payments arising from the cancellation and settlement of employee stock options and restricted stock units ("RSUs") held by non-U.S. employees in VeloPay's Toronto, Ontario and Lisbon, Portugal offices may be subject to withholding under Section 1441, potentially at reduced treaty rates under the U.S.-Canada Income Tax Convention and the U.S.-Portugal Income Tax Convention.
Non-U.S. Stockholder Exposure. Based on our review of VeloPay's capitalization records and diligence information, we have identified non-U.S. stockholders holding, in the aggregate, approximately 2.5% of VeloPay's fully diluted shares (approximately 2,375,000 shares), representing estimated aggregate merger consideration of approximately $47,500,000. These holders include certain non-resident alien individual angel investors, employee equity holders at VeloPay's international offices, and one Cayman Islands-domiciled investment fund.
Form Collection. We recommend that all stockholders be required to submit IRS Forms W-8BEN, W-8BEN-E, or W-9, as applicable, through the paying agent, Keystone Pacific Transfer Services Inc. (contact: Linda Matsumoto, Vice President, Corporate Actions), as a condition to disbursement of merger consideration. The Letter of Transmittal, which we are preparing as an exhibit to the Merger Agreement, will include detailed instructions for completion and submission of applicable tax forms.
The balance of this memorandum sets forth our detailed analysis and recommendations.
II. Transaction Overview
A. Parties and Structure
The transaction involves the following principal parties:
HPE Fund IV. Harrowgate Private Equity Fund IV LP is a Delaware limited partnership with its principal office located at 300 King Street, Suite 4200, Wilmington, Delaware 19801. HPE Fund IV's employer identification number is 87-4231956. The general partner of HPE Fund IV is Harrowgate Capital Management IV LLC, a Delaware limited liability company. HPE Fund IV is a private equity fund managed by Harrowgate Capital and is the acquiring entity in the proposed transaction.
Merger Sub. Harrowgate Velocity Merger Sub Inc. is a Delaware corporation formed on February 24, 2025, solely for the purpose of effecting the proposed merger. Merger Sub's employer identification number is 93-1847265, and its Delaware File Number is 7291034. HPE Fund IV is the sole shareholder of Merger Sub. Merger Sub has no material assets other than the consideration contributed by HPE Fund IV to fund the merger, and has not conducted any business since its formation other than activities incidental to its formation and the proposed transaction.
VeloPay. VeloPay Systems, Inc. is a Delaware corporation with its principal office located at 1455 Innovation Parkway, Suite 800, Austin, Texas 78759. VeloPay's employer identification number is 82-3019478, and its Delaware File Number is 5748392. VeloPay is a financial technology company that provides digital payment processing, payment gateway, and fraud detection solutions to merchants and financial institutions. The Company operates through several wholly-owned subsidiaries, as described in further detail in Section IV.B below.
Transaction Structure. The proposed transaction is structured as a reverse triangular merger under DGCL § 251. Pursuant to the Agreement and Plan of Merger (the "Merger Agreement"), dated as of March 18, 2025, among HPE Fund IV, Merger Sub, and VeloPay, Merger Sub will merge with and into VeloPay (the "Merger"), with VeloPay continuing as the surviving corporation (the "Surviving Corporation") and a wholly-owned subsidiary of HPE Fund IV. At the effective time of the Merger (the "Effective Time"), each share of VeloPay common stock issued and outstanding immediately prior to the Effective Time (other than shares held by VeloPay as treasury shares, shares held by HPE Fund IV or Merger Sub, shares subject to rollover, and dissenting shares, if any) will be cancelled and converted into the right to receive the per-share merger consideration described in Section II.B below. The closing of the Merger (the "Closing") is anticipated to occur on or about July 22, 2025, following satisfaction of customary closing conditions, including receipt of applicable regulatory clearances.
B. Merger Consideration
The aggregate merger consideration payable in the Merger is $1,900,000,000, payable entirely in cash. The per-share merger consideration is $20.00, calculated on a fully diluted, as-converted basis. The fully diluted share count of 95,000,000 shares consists of the following components:
The Merger Agreement provides for the following treatment of VeloPay's outstanding equity awards and warrants:
Vested Stock Options. Each vested and unexercised stock option to purchase shares of VeloPay common stock that is outstanding immediately prior to the Effective Time will be cancelled, and the holder thereof will be entitled to receive a cash payment equal to the product of (i) the number of shares of VeloPay common stock subject to such option and (ii) the excess, if any, of $20.00 over the per-share exercise price of such option, less applicable withholding taxes. The weighted average exercise price across all outstanding vested options is $12.84 per share, resulting in a weighted average net spread of $7.16 per share.
Unvested Stock Options. Fifty percent (50%) of each unvested stock option outstanding immediately prior to the Effective Time will vest and be cancelled, with the holder receiving the same cash-out treatment as vested options (described above). The remaining fifty percent (50%) of each unvested stock option will be converted into a replacement award over interests in HPE Fund IV, subject to continued vesting over a twenty-four (24) month period following the Closing, on terms and conditions substantially similar to the original VeloPay option (as adjusted for the conversion ratio).
Restricted Stock Units. All unvested RSUs outstanding immediately prior to the Effective Time will accelerate and fully vest at the Effective Time. Each vested RSU will be cancelled and converted into the right to receive a cash payment of $20.00, less applicable withholding taxes.
Warrants. All outstanding warrants to purchase shares of VeloPay common stock will be cancelled at the Effective Time, and the holders thereof will be entitled to receive a cash payment equal to the product of (i) the number of shares of VeloPay common stock subject to such warrant and (ii) the excess of $20.00 over the per-share exercise price of such warrant ($8.50). Accordingly, each warrant holder will receive $11.50 per warrant, for an aggregate warrant consideration of $20,700,000 (1,800,000 warrants × $11.50).
Escrow. Pursuant to the Merger Agreement and the Escrow Agreement, $133,000,000 (representing approximately 7% of the aggregate merger consideration) will be deposited at the Closing into an escrow account established with Garrison Trust Company (the "Escrow Agent") (contact: Valerie Drummond, Vice President, Corporate Trust; Reference No. GT-ESC-2025-07223). The escrow fund is intended to secure the indemnification obligations of VeloPay's stockholders under Article IX of the Merger Agreement. The escrow fund will be released as follows: (i) fifty percent (50%) of the escrow fund ($66,500,000), less amounts then subject to pending indemnification claims, will be released pro rata to VeloPay's former stockholders on the first anniversary of the Closing (the "First Release Date"); and (ii) the remaining balance of the escrow fund, less amounts then subject to pending indemnification claims, will be released pro rata on the date that is eighteen (18) months following the Closing (the "Second Release Date"). The withholding implications of escrow releases are discussed in Section VII.C below.
Paying Agent. Keystone Pacific Transfer Services Inc. ("Keystone Pacific") has been engaged as the paying agent for the Merger. Keystone Pacific's principal office is located at 250 Royall Street, Suite 100, Canton, Massachusetts 02021. The primary contact for the Merger is Linda Matsumoto, Vice President, Corporate Actions. Keystone Pacific will be responsible for distributing the merger consideration to VeloPay's stockholders upon receipt of properly completed Letters of Transmittal and related documentation, including applicable tax forms.
C. VeloPay Capitalization and Stockholder Base
VeloPay's capitalization records, as reflected in the Company's stock ledger and cap table maintained by Keystone Pacific Transfer Services Inc. in its capacity as VeloPay's transfer agent, indicate the following principal stockholders:
The identification of non-U.S. stockholders within VeloPay's capitalization structure is based upon our review of VeloPay's capitalization records, stock transfer records maintained by Keystone Pacific, and diligence information provided by VeloPay's counsel, Whitford Jessup & Crane LLP (contact: Rebecca Thornton-Hayes, Partner, and James Okoro, Associate). The results of our non-U.S. stockholder identification process are described in detail in Section III below.
III. Identification of Non-U.S. Stockholders
A. Methodology. The identification of non-U.S. stockholders is essential to determining the scope and application of FIRPTA withholding under Section 1445 of the Code, non-FIRPTA withholding under Sections 1441, 1442, and 1446, and backup withholding under Section 3406. We employed the following methodology to identify non-U.S. stockholders within VeloPay's capitalization structure:
First, we reviewed VeloPay's stockholder registry and cap table as maintained by Keystone Pacific Transfer Services Inc. in its capacity as VeloPay's stock transfer agent. The cap table reflects the names, addresses, taxpayer identification numbers (where available), and share/option/RSU/warrant holdings of all VeloPay equity holders as of the most recent capitalization date.
Second, we conducted a diligence review of investor subscription agreements, stock purchase agreements, option grant agreements, RSU award agreements, and warrant agreements, as well as any transfer records reflecting secondary sales of VeloPay stock, to the extent such documents were provided to us through the virtual data room established for the transaction. These documents provided additional information regarding the identity, domicile, and citizenship or country of organization of each holder.
Third, we coordinated directly with Danielle Moreau, VeloPay's General Counsel, and James Okoro of Whitford Jessup & Crane LLP, VeloPay's outside counsel, to obtain holder-level detail for holders whose status as U.S. or non-U.S. persons could not be definitively determined from the available records. In particular, we requested clarification regarding the domicile and citizenship status of certain individual angel investors and the country of organization and tax residence of certain institutional investors reflected in the "other investors" category.
Fourth, we classified each holder as either a "U.S. person" within the meaning of Section 7701(a)(30) of the Code (which includes U.S. citizens, U.S. resident aliens, domestic corporations, domestic partnerships, and certain trusts and estates) or a non-U.S. person (which includes non-resident alien individuals, foreign corporations, foreign partnerships, and foreign trusts and estates). For individuals, we applied the substantial presence test and green card test under Section 7701(b) of the Code to the extent relevant information was available. For entities, we determined the jurisdiction of organization and applied the classification rules under Section 7701(a).
We note that our identification of non-U.S. stockholders is preliminary and is based on the information currently available to us. The final determination of each holder's U.S. or non-U.S. status will be made based upon the tax forms (IRS Form W-9 or applicable Form W-8) submitted by each holder to Keystone Pacific in connection with the Letter of Transmittal process. We recommend that the paying agent not disburse merger consideration to any holder until a valid tax form has been received, or, in the alternative, that applicable backup withholding (for U.S. persons) or statutory withholding (for non-U.S. persons) be applied in the absence of proper documentation.
B. Identified Non-U.S. Holders
VeloPay's stockholder base is predominantly U.S.-based. The three largest institutional investors — Ridgeline Ventures Fund III LP, Apex Growth Partners II LP, and Broadleaf Capital Partners LP — are all Delaware limited partnerships and are treated as U.S. persons for purposes of the Code. The founders, Nathan Aldridge and Sonia Reyes-Watkins, are both U.S. citizens resident in the United States, and the named executives, Marcus Langford (CFO) and Danielle Moreau (General Counsel), are likewise confirmed U.S. persons based on the diligence information provided.
Notwithstanding the predominantly domestic character of VeloPay's stockholder base, we have identified the following categories of non-U.S. holders:
Non-Resident Alien Individual Angel Investors. Based on our review of VeloPay's capitalization records and investor subscription agreements, we have identified an estimated three to five (3–5) individual angel investors who appear to be non-resident alien individuals (i.e., individuals who are neither U.S. citizens nor U.S. resident aliens). These holders are believed to hold, in the aggregate, approximately 1.2% of VeloPay's fully diluted shares, representing approximately 1,140,000 shares. At the per-share merger consideration of $20.00, the estimated aggregate merger consideration payable to these holders is approximately $22,800,000. The countries of residence of these holders have been identified, in preliminary fashion, as including the United Kingdom, Germany, and Singapore, but final confirmation will be obtained through the W-8BEN collection process.
Canadian Employee Equity Holders. VeloPay operates a Canadian subsidiary, VeloPay Canada Inc. (Ontario), through which approximately 85 employees are engaged. Based on information provided by VeloPay's human resources department and General Counsel, an estimated 25–35 of these Canadian-based employees hold stock options and/or RSUs in VeloPay (the parent company), representing approximately 0.4% of VeloPay's fully diluted shares (approximately 380,000 shares). The estimated merger consideration allocable to these holders is approximately $8,000,000 (calculated at $20.00 per share equivalent, net of applicable exercise prices for in-the-money options). These employees are generally expected to be tax residents of Canada and non-resident aliens for U.S. federal income tax purposes.
Portuguese Employee Equity Holders. VeloPay operates a Portuguese subsidiary, VeloPay Europe, Unipessoal Lda. (Lisbon), through which approximately 60 employees are engaged, primarily in research and development functions. Based on the same sources, an estimated 20–25 of these Portuguese-based employees hold stock options and/or RSUs representing approximately 0.4% of VeloPay's fully diluted shares (approximately 380,000 shares). The estimated merger consideration allocable to these holders is approximately $7,200,000 (calculated on the same basis as the Canadian employee holders). These employees are generally expected to be tax residents of Portugal and non-resident aliens for U.S. federal income tax purposes.
Cayman Islands Fund. We have identified one foreign corporate entity among the "other investors" category: a Cayman Islands-domiciled investment fund (the specific name and GIIN of which are subject to confirmation through the W-8BEN-E collection process). This fund holds approximately 0.5% of VeloPay's fully diluted shares (approximately 475,000 shares), representing estimated merger consideration of approximately $9,500,000. As a Cayman Islands entity, this fund is treated as a foreign corporation (or, if a Cayman Islands exempted limited partnership, as a foreign partnership) for U.S. federal income tax purposes.
Summary of Non-U.S. Holder Exposure. The following table summarizes the estimated non-U.S. holder exposure:
These figures are subject to final confirmation through the collection of IRS Forms W-8BEN, W-8BEN-E, and W-9 from all stockholders. It is possible that additional non-U.S. holders will be identified during the Letter of Transmittal process, or that certain holders currently classified as non-U.S. persons will in fact be U.S. persons (e.g., an individual angel investor who has subsequently obtained U.S. permanent resident status). The withholding procedures described in Section VII below are designed to accommodate such adjustments.
C. Rollover Equity Participants
As contemplated by the Merger Agreement, two VeloPay stockholders will participate in a rollover of a portion of their merger consideration into equity interests in Harrowgate Velocity Co-Invest LP (EIN 93-2748163), a co-investment vehicle formed on March 14, 2025, for this purpose:
• Nathan Aldridge (CEO & Co-Founder): $14,200,000 rollover (representing a portion of his 14.2% stake)
• Sonia Reyes-Watkins (CTO & Co-Founder): $9,700,000 rollover (representing a portion of her 9.7% stake)
The total rollover amount is $23,900,000. Both Mr. Aldridge and Ms. Reyes-Watkins are confirmed U.S. persons (U.S. citizens). Their rollover equity contributions reduce the cash merger consideration they will receive at the Closing, but do not give rise to any FIRPTA or non-FIRPTA withholding implications distinct from those applicable to the balance of their cash merger consideration. The tax treatment of the rollover contributions (as a sale or exchange versus a tax-free contribution under Section 721 of the Code, depending on the structure of the co-investment vehicle) is the subject of a separate analysis and is not addressed in this memorandum.
IV. FIRPTA Analysis
A. Statutory Framework
The Foreign Investment in Real Property Tax Act of 1986, as amended, is codified principally at Sections 897 and 1445 of the Code. FIRPTA was enacted to ensure that non-U.S. persons who realize gain from the disposition of interests in U.S. real property are subject to U.S. federal income tax on such gain. Prior to FIRPTA's enactment, non-U.S. persons could, in many circumstances, dispose of U.S. real property interests without being subject to U.S. tax, because gain from the sale of real property by a non-U.S. person was not treated as effectively connected income unless the non-U.S. person conducted a U.S. trade or business.
Section 897(a) — Treatment of Gain or Loss. Section 897(a) of the Code provides that gain or loss of a non-U.S. person from the disposition of a "United States real property interest" ("USRPI") is treated as if the non-U.S. person were engaged in a trade or business within the United States during the taxable year, and as if such gain or loss were effectively connected with such trade or business ("ECI"). This treatment subjects the gain to U.S. federal income tax at the regular graduated rates applicable to ECI (for non-resident alien individuals) or the corporate tax rate (for foreign corporations), rather than the flat 30% rate applicable to FDAP income.
Section 897(c) — Definition of USRPI and USRPHC. Section 897(c)(1) of the Code defines a "United States real property interest" as (A) an interest in real property located in the United States or the U.S. Virgin Islands, and (B) any interest (other than an interest solely as a creditor) in any domestic corporation, unless the taxpayer establishes that such domestic corporation was at no time a "United States real property holding corporation" during the shorter of (i) the period during which the taxpayer held such interest, or (ii) the five-year period ending on the date of the disposition.
Section 897(c)(2) of the Code defines a "United States real property holding corporation" as any domestic corporation in which the fair market value of the corporation's United States real property interests equals or exceeds fifty percent (50%) of the sum of the fair market values of (i) its United States real property interests, (ii) its interests in real property located outside the United States, and (iii) any other of its assets which are used or held for use in a trade or business (the "Asset Ratio Test"). This determination is made as of the date on which the interest in the corporation is disposed of, or, in the case of a determination date, as of such date. Under Treasury Regulation § 1.897-2(b), a corporation must determine whether it is a USRPHC on each "determination date," which includes any date on which the corporation acquires or disposes of a real property interest or other asset used or held for use in a trade or business.
Section 1445(a) — Withholding Obligation. Section 1445(a) of the Code provides that a transferee of a United States real property interest must deduct and withhold a tax equal to fifteen percent (15%) of the "amount realized" by the transferor on the disposition. In the context of a corporate acquisition, the "transferee" is the acquiring entity (or, in the case of a merger, the entity paying the merger consideration), and the "amount realized" is the merger consideration received by the stockholder. This withholding obligation applies whenever a non-U.S. person disposes of shares in a domestic corporation that is a USRPHC, because such shares constitute a USRPI. The withholding rate was increased from ten percent (10%) to fifteen percent (15%) by the Protecting Americans from Tax Hikes Act of 2015 (the "PATH Act"), effective for dispositions after February 16, 2016 (with an exception for acquisitions of personal-use residences where the amount realized does not exceed $1,000,000, for which the withholding rate remains ten percent (10%)).
Treasury Regulation § 1.897-2(b) — Detailed Rules. Treasury Regulation § 1.897-2(b) provides detailed rules for determining whether a domestic corporation is a USRPHC, including rules for valuing assets, look-through rules for determining whether an interest in a subsidiary or partnership constitutes a USRPI, and rules regarding the treatment of leasehold interests and other intangible interests in real property.
B. Application to VeloPay
The central question for purposes of the FIRPTA analysis is whether VeloPay is a USRPHC — that is, whether the fair market value of VeloPay's United States real property interests equals or exceeds fifty percent (50%) of the fair market value of VeloPay's total assets as described in Section 897(c)(2).
We have reviewed VeloPay's audited consolidated financial statements for the fiscal year ended December 31, 2024, as audited by Vance Thornbury & Co. LLP (engagement partner: Robert Paulsen), together with VeloPay's internal asset schedules and management representations provided through the diligence process. Based on this review, VeloPay's asset composition is as follows:
Total Assets (as of December 31, 2024): $689,400,000
The principal categories of VeloPay's assets are as follows:
Intangible Assets. VeloPay's most significant asset category consists of intangible assets, including proprietary software and technology intellectual property, patents related to payment processing and fraud detection algorithms, customer relationships, and goodwill arising principally from VeloPay's 2021 acquisition of PayStream Gateway LLC for $45,000,000. These intangible assets do not constitute USRPIs under Section 897(c)(1) of the Code or Treasury Regulation § 1.897-1(b).
Accounts Receivable. VeloPay maintains substantial accounts receivable arising from its payment processing and SaaS subscription business. Accounts receivable are not USRPIs.
Cash and Cash Equivalents. As of December 31, 2024, VeloPay held cash and cash equivalents of $53,800,000. Cash and cash equivalents are not USRPIs.
Property and Equipment. VeloPay's property and equipment consists primarily of computer equipment, servers, office furniture, and leasehold improvements at its office locations in Austin, Texas; Denver, Colorado; Toronto, Ontario; and Lisbon, Portugal. Critically, VeloPay does not own any real property directly. All of VeloPay's office locations are occupied under operating leases. Leasehold improvements made to leased premises do not constitute USRPIs under Treasury Regulation § 1.897-1(b), which defines "real property" for FIRPTA purposes as including land, unsevered natural products of land, improvements thereon, and personal property associated with the use of real property — but specifically excludes leasehold interests in property that is not a USRPI owned by the lessor (unless the leasehold itself gives rise to a USRPI). Because VeloPay's leases are standard commercial operating leases and VeloPay does not hold any interest in the underlying real property, VeloPay's leasehold interests are not USRPIs.
Capitalized Software Development Costs. VeloPay capitalizes certain internal-use software development costs in accordance with ASC 350-40 and ASC 985-20. These capitalized costs relate to VeloPay's proprietary payment processing platform and fraud detection technology. Capitalized software development costs are intangible assets and do not constitute USRPIs.
Other Assets. VeloPay's remaining assets include prepaid expenses, deferred tax assets, right-of-use assets under ASC 842 (related to the operating leases described above), and miscellaneous other assets. None of these assets constitutes a USRPI.
Application of the Asset Ratio Test. The Asset Ratio Test under Section 897(c)(2) requires a comparison of the fair market value of VeloPay's USRPIs to the aggregate fair market value of all of VeloPay's assets. Based on our analysis:
• Fair market value of VeloPay's United States real property interests: $0 (or a nominal amount, to the extent any de minimis value is attributable to leasehold improvements, which, as noted above, do not constitute USRPIs under the applicable regulations)
• Fair market value of VeloPay's interests in real property located outside the United States: $0 (VeloPay does not own any foreign real property; its Toronto and Lisbon offices are leased)
• Fair market value of VeloPay's other assets used or held for use in a trade or business: $689,400,000 (or such higher fair market value as may be implied by the $1,900,000,000 enterprise value of the transaction; in either case, the denominator substantially exceeds zero)
Accordingly, VeloPay's Asset Ratio is $0 ÷ $689,400,000 = 0.0%, which is far below the 50% threshold that would cause VeloPay to be classified as a USRPHC. Even if one were to ascribe a nominal fair market value to VeloPay's leasehold improvements (which, again, are not properly classified as USRPIs), the ratio would remain de minimis.
Subsidiary Analysis. VeloPay conducts its business through the following wholly-owned subsidiaries, each of which we have analyzed for USRPI ownership:
VeloPay Processing LLC (Delaware limited liability company): VeloPay Processing LLC is the operating entity through which VeloPay conducts its core payment processing technology operations. This entity does not own any real property and holds no interests that would constitute USRPIs.
VeloPay Fraud intelligence Inc. (Delaware corporation): VeloPay Fraud intelligence Inc. operates VeloPay's SaaS-based fraud detection platform. This entity does not own any real property and holds no interests that would constitute USRPIs.
PayStream Gateway LLC (Delaware limited liability company): PayStream Gateway LLC was acquired by VeloPay in 2021 for $45,000,000 and operates VeloPay's payment gateway technology business. The assets of PayStream Gateway LLC consist of technology intellectual property, customer contracts, and goodwill. This entity does not own any real property and holds no interests that would constitute USRPIs.
VeloPay Canada Inc. (Ontario corporation): VeloPay Canada Inc. is VeloPay's Canadian subsidiary, through which VeloPay conducts its Canadian operations. This entity occupies leased office space in Toronto, Ontario. It does not own any U.S. real property.
VeloPay Europe, Unipessoal Lda. (Portuguese entity): VeloPay Europe, Unipessoal Lda. is VeloPay's Portuguese subsidiary, through which VeloPay conducts its European research and development activities. This entity occupies leased office space in Lisbon, Portugal. It does not own any U.S. real property.
None of VeloPay's subsidiaries owns or holds any U.S. real property interest. Accordingly, VeloPay's interests in its subsidiaries do not cause VeloPay to hold USRPIs under the look-through rules of Treasury Regulation § 1.897-2(e).
Conclusion. Based on the foregoing analysis, we conclude that VeloPay is not a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code. The fifty percent (50%) threshold under Section 897(c)(2) is not met, and indeed, VeloPay's U.S. real property interests represent effectively zero percent (0%) of its total assets. Accordingly, shares of VeloPay common stock are not United States real property interests, and the disposition of such shares by non-U.S. stockholders in the Merger does not give rise to gain or loss that is treated as effectively connected income under Section 897(a). FIRPTA withholding under Section 1445 of the Code does not apply to the payment of merger consideration to non-U.S. stockholders.
C. FIRPTA Certificate
Although our analysis establishes that VeloPay is not a USRPHC and that FIRPTA withholding does not apply, the transferees in the Merger (HPE Fund IV, Merger Sub, and the Surviving Corporation) bear the statutory obligation to withhold under Section 1445(a) unless they obtain a valid exemption from withholding. The most common and practical mechanism for establishing such an exemption in the context of a corporate acquisition is the delivery of a FIRPTA certificate by the target.
Treasury Regulation § 1.1445-2(c)(3) provides that a transferee of an interest in a domestic corporation is not required to withhold under Section 1445 if, prior to or at the time of the transfer, the transferee receives from the corporation a certification stating that the interest in the corporation is not a USRPI. The certification must include the following:
(i) A statement that the corporation is not, and has not been at any time during the applicable period (the shorter of the five-year period ending on the date of the transfer or the period during which the corporation held the relevant assets), a United States real property holding corporation;
(ii) The corporation's employer identification number (in the case of VeloPay, EIN 82-3019478);
(iii) The corporation's address; and
(iv) A signature by an authorized officer of the corporation, made under penalties of perjury.
We recommend that VeloPay deliver a FIRPTA certificate at the Closing, currently anticipated for July 22, 2025, in compliance with Treasury Regulation § 1.1445-2(c)(3). The FIRPTA certificate should be signed by Nathan Aldridge (CEO) or Marcus Langford (CFO) of VeloPay, as authorized officers of the Company. We will prepare a draft of the FIRPTA certificate for review by VeloPay's management and VeloPay's outside tax counsel, Ellen Fairchild, Tax Partner at Whitford Jessup & Crane LLP.
Upon receipt of a valid FIRPTA certificate, HPE Fund IV, Merger Sub, and the Surviving Corporation will be relieved of any FIRPTA withholding obligations under Section 1445 of the Code with respect to the merger consideration paid to non-U.S. stockholders. It is important to note that the FIRPTA certificate must be retained by HPE Fund IV (or its successor or assignee) for a period of five (5) years following the Closing, and a copy must be provided to the Internal Revenue Service upon request.
A draft of the FIRPTA certificate is referenced in Appendix D to this memorandum and will be circulated separately as a standalone document (firpta-certificate.docx).
D. No-FIRPTA Notice to IRS
Under Treasury Regulation § 1.1445-2(c)(3)(ii), a domestic corporation that provides a FIRPTA certification to a transferee must, by the date of the transfer, send a copy of the certification (or a notice thereof) to the Internal Revenue Service at the address specified in the applicable regulations. This notice requirement is designed to enable the IRS to verify the accuracy of the corporation's certification and, if appropriate, challenge the corporation's determination that it is not a USRPHC.
Calderwood & Harkness will coordinate the preparation and filing of the required notice with VeloPay's counsel, Whitford Jessup & Crane LLP, to ensure compliance with this requirement on or before the Closing Date. We will provide the notice to the Philadelphia Submission Processing Center at the address specified in Treasury Regulation § 1.1445-2(c)(3)(ii) and the instructions to IRS Form 8288-B.
V. Non-FIRPTA Withholding Analysis
A. Section 1441/1442 Withholding (FDAP Income)
Even in the absence of FIRPTA withholding, it is necessary to analyze whether other withholding provisions of the Code apply to payments made to non-U.S. stockholders in connection with the Merger.
Statutory Framework. Section 1441 of the Code requires withholding agents (including corporations, partnerships, and paying agents) to deduct and withhold a tax of thirty percent (30%) from any payment of fixed or determinable annual or periodical ("FDAP") income from U.S. sources made to a non-resident alien individual, to the extent such income is not effectively connected with a U.S. trade or business. FDAP income includes, among other things, dividends, interest, rents, salaries, wages, premiums, annuities, compensation, remunerations, and emoluments. Section 1442 of the Code imposes a parallel withholding requirement on FDAP income paid to foreign corporations.
Application to Merger Consideration. The cash merger consideration of $20.00 per share payable to VeloPay stockholders in the Merger is received in exchange for the cancellation and conversion of their VeloPay shares. Under well-established principles of tax law, merger consideration received by a stockholder in a fully taxable cash-out merger is treated as proceeds from the sale or exchange of the stockholder's shares, giving rise to capital gain or loss under Sections 1001 and 302/331 of the Code. Proceeds from the sale or exchange of stock are not characterized as FDAP income, and therefore Section 1441 and Section 1442 withholding do not apply.
We have considered whether any portion of the merger consideration could be recharacterized as a dividend for purposes of Sections 1441/1442 withholding. Such recharacterization could occur, for example, where merger consideration includes a mix of cash and stock and the transaction qualifies as a reorganization under Section 368 of the Code, in which case the receipt of "boot" (cash in addition to qualifying stock consideration) could be treated as a dividend under Section 356(a)(2) to the extent of the stockholder's share of the target's earnings and profits. However, the present transaction is a fully taxable, all-cash reverse triangular merger that does not qualify as a reorganization under Section 368. There is no stock consideration, and the transaction is not intended to qualify for tax-free treatment. Accordingly, there is no risk of dividend recharacterization under Section 356 or Section 302(d), and the entire merger consideration is treated as proceeds from a sale or exchange.
Conclusion. Section 1441 and Section 1442 withholding do not apply to the cash merger consideration payable to non-U.S. stockholders in the Merger.
B. Withholding on Option/RSU/Warrant Payments to Non-U.S. Holders
While the cash merger consideration payable in exchange for VeloPay shares is treated as sale or exchange proceeds, the characterization of payments arising from the cancellation and settlement of employee equity awards (stock options and RSUs) is more nuanced and requires separate analysis, particularly with respect to awards held by non-U.S. employees.
Stock Options — Non-Employee Holders. The cancellation of vested stock options held by non-employee stockholders (such as angel investors or consultants who received options in connection with advisory arrangements) and the payment of the net spread ($20.00 minus the exercise price) is treated as capital gain from a sale or exchange of the option. As such, these payments are not FDAP income and are not subject to Section 1441 withholding. The same analysis applies to the cancellation and cash-out of warrants held by non-employee holders.
Stock Options — Employee Holders. The tax treatment of stock option cancellation payments to current employees is more complex. For employees who hold nonqualified stock options ("NQSOs"), the spread realized upon cancellation (i.e., the excess of $20.00 over the exercise price) is generally treated as ordinary compensation income to the employee, subject to employment tax withholding (FICA and income tax withholding) for U.S. employees. For non-U.S. employees, the compensation-character income from the cancellation of NQSOs may be treated as U.S.-source income to the extent the services giving rise to the option grants were performed in the United States, and may be subject to withholding under Section 1441 at the statutory rate of thirty percent (30%), unless reduced by an applicable income tax treaty.
With respect to the specific categories of non-U.S. employees identified in Section III.B:
Canadian Employees (VeloPay Canada Inc.). Option and RSU cancellation payments to employees of VeloPay Canada Inc. who are tax residents of Canada and non-resident aliens for U.S. purposes present a mixed-character analysis. To the extent that the stock options were granted in connection with services performed in the United States (for example, if any Canadian employees were seconded to VeloPay's Austin or Denver offices during the vesting period), a portion of the option spread may be U.S.-source compensation income subject to Section 1441 withholding. The U.S.-Canada Income Tax Convention (the "U.S.-Canada Treaty") may reduce the withholding rate on such income. Under Article XV (Dependent Personal Services) of the U.S.-Canada Treaty, compensation for services performed in the United States by a Canadian resident is generally subject to U.S. tax, but the treaty may limit the rate of withholding or provide for an exemption if certain conditions are met (e.g., the employee is present in the United States for less than 183 days in the relevant period and the compensation is paid by a non-U.S. employer). The interplay between Article XV and the stock option sourcing rules under Section 861 and Treasury Regulation § 1.861-4 requires a holder-by-holder analysis that we recommend be conducted in coordination with VeloPay's payroll and human resources department. To the extent that the stock options were granted solely in connection with services performed in Canada (i.e., the employee never performed services in the United States), the compensation income may be entirely foreign-source and not subject to U.S. withholding.
Portuguese Employees (VeloPay Europe, Unipessoal Lda.). A similar analysis applies to option and RSU cancellation payments to employees of VeloPay Europe, Unipessoal Lda. who are tax residents of Portugal. The U.S.-Portugal Income Tax Convention (the "U.S.-Portugal Treaty") provides parallel protections. Article 16 (Dependent Personal Services) of the U.S.-Portugal Treaty may reduce or eliminate withholding on compensation income earned by Portuguese residents in the United States, depending on the specific facts. As with the Canadian employees, a holder-by-holder analysis of the source of income and the applicability of treaty benefits is recommended.
Restricted Stock Units — Employee Holders. All unvested RSUs outstanding immediately prior to the Effective Time will accelerate and fully vest, and each RSU will be cancelled and converted into a cash payment of $20.00. For non-U.S. employees, the settlement of RSUs is treated as the receipt of compensation income equal to the fair market value of the shares underlying the RSUs at the time of settlement ($20.00 per share). This compensation income is subject to Section 1441 withholding at the statutory rate of thirty percent (30%), unless reduced by an applicable income tax treaty. VeloPay, as the employer (or the Surviving Corporation, following the Effective Time), is the withholding agent and must withhold the applicable amount from the RSU settlement payments. As with stock options, the source of income and the availability of treaty benefits should be determined on a holder-by-holder basis.
Warrants — Non-Employee Holders. The warrants being cancelled in the Merger (1,800,000 warrants with an exercise price of $8.50) are held by non-employee investors. The cancellation of these warrants and the payment of $11.50 per warrant is treated as proceeds from a sale or exchange of the warrant, giving rise to capital gain or loss. This treatment applies regardless of whether the warrant holder is a U.S. or non-U.S. person. Accordingly, Section 1441 withholding does not apply to the warrant cancellation payments.
Recommendation. We recommend that VeloPay's payroll and human resources department, in coordination with Leonard Cross of Calderwood & Harkness and Ellen Fairchild, Tax Partner at Whitford Jessup & Crane LLP, conduct a detailed analysis of the withholding obligations applicable to employee equity settlements for non-U.S. employees in Canada and Portugal. This analysis should include (i) identification of each non-U.S. employee holding options and/or RSUs, (ii) determination of the source of income (U.S.-source vs. foreign-source) based on the location where services were performed during the option vesting period, (iii) application of applicable treaty provisions, and (iv) calculation of the withholding amount for each employee. The results of this analysis should be provided to Keystone Pacific (for coordination of payments) and to VeloPay's payroll department (for Form W-2 and Form 1042-S reporting purposes) in advance of the Closing.
C. Treaty Benefits and Reduced Rates
The availability of income tax treaty benefits is relevant to the withholding analysis for non-U.S. stockholders who are residents of countries with which the United States has entered into income tax conventions. We summarize below the key treaty provisions applicable to the identified categories of non-U.S. holders.
U.S.-Canada Income Tax Convention.
Article XIII (Capital Gains). Under Article XIII of the U.S.-Canada Treaty, gains derived by a resident of Canada from the alienation of shares of a company are generally taxable only in Canada, unless the shares derive their value principally from real property situated in the United States (which would invoke the FIRPTA overlay). As we have concluded that VeloPay is not a USRPHC and that VeloPay's shares do not derive their value from U.S. real property, the Article XIII exception does not apply. Accordingly, capital gains realized by Canadian resident stockholders on the sale of VeloPay shares in the Merger are generally exempt from U.S. tax under the U.S.-Canada Treaty.
Article XV (Dependent Personal Services). Article XV of the U.S.-Canada Treaty addresses the taxation of compensation for dependent personal services (i.e., employment income). Where a Canadian resident employee earns compensation income from services performed in the United States, such income is generally subject to U.S. tax, but Article XV provides an exemption if (a) the recipient is present in the United States for a period not exceeding 183 days in any twelve-month period, (b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the United States, and (c) the remuneration is not borne by a permanent establishment of the employer in the United States. Whether these conditions are satisfied for any particular Canadian employee will depend on the specific facts, including the employee's travel history and the identity of the employing entity.
U.S.-Portugal Income Tax Convention.
Article 13 (Capital Gains). Article 13 of the U.S.-Portugal Treaty provides that gains from the alienation of shares of a company are generally taxable only in the state of residence of the alienator (i.e., Portugal), unless the shares derive more than fifty percent (50%) of their value from immovable property situated in the other Contracting State (i.e., the United States). As VeloPay's shares do not derive their value from U.S. real property, this exception does not apply, and capital gains realized by Portuguese resident stockholders on the sale of VeloPay shares are generally exempt from U.S. tax under the U.S.-Portugal Treaty.
Article 16 (Dependent Personal Services). Article 16 of the U.S.-Portugal Treaty contains provisions similar to Article XV of the U.S.-Canada Treaty, providing an exemption from U.S. tax on compensation income earned by Portuguese residents for services performed in the United States if certain conditions are satisfied. The same holder-by-holder analysis described above with respect to Canadian employees applies to Portuguese employees.
Cayman Islands Fund. There is no income tax treaty between the United States and the Cayman Islands. Accordingly, the identified Cayman Islands fund cannot claim treaty-reduced withholding rates on any income subject to U.S. withholding. However, as discussed above, the merger consideration payable to the Cayman Islands fund is treated as proceeds from a sale or exchange of VeloPay shares (not FDAP income), and therefore Section 1441/1442 withholding does not apply to this holder's cash merger consideration in any event. The absence of a treaty is therefore not material to the withholding analysis for this particular holder.
D. Section 1446 Withholding (Partnership Income)
Section 1446 of the Code requires a partnership that has income effectively connected with a U.S. trade or business ("ECI") to withhold tax on the allocable share of such ECI attributable to its non-U.S. partners. We note this provision for completeness, but it does not directly apply to the payments of merger consideration to VeloPay's stockholders.
HPE Fund IV is a Delaware limited partnership and could, in principle, be subject to Section 1446 withholding obligations if it has ECI allocable to non-U.S. limited partners. However, Section 1446 applies to the partnership's own income (including any income attributable to its ownership of the Surviving Corporation following the Merger), not to the merger consideration paid to VeloPay's former stockholders. The VeloPay stockholders who are receiving merger consideration are not partners in HPE Fund IV (with the exception of the rollover participants, who are U.S. persons).
Similarly, Harrowgate Velocity Co-Invest LP (EIN 93-2748163), the co-investment vehicle formed on March 14, 2025, to receive the rollover equity from Mr. Aldridge and Ms. Reyes-Watkins, may have Section 1446 withholding obligations if it has non-U.S. limited partners (in addition to the rollover participants). However, the analysis of Section 1446 withholding obligations for the co-investment vehicle is outside the scope of this memorandum and will be addressed separately if and when non-U.S. limited partners are admitted to the vehicle.
Conclusion. Section 1446 withholding does not apply to the merger consideration payable to VeloPay's stockholders in the Merger.
VI. Backup Withholding under Section 3406
Section 3406 of the Code requires "payors" (including paying agents distributing merger consideration) to deduct and withhold at a rate of twenty-four percent (24%) from "reportable payments" made to U.S. persons who fail to provide a correct taxpayer identification number ("TIN") on IRS Form W-9, or who have been notified by the IRS that they are subject to backup withholding due to prior underreporting of interest or dividends. Reportable payments include, among other things, proceeds from broker and barter exchange transactions, which encompass payments of merger consideration in connection with a corporate acquisition.
Backup withholding under Section 3406 applies exclusively to U.S. persons. It does not apply to non-U.S. persons who properly certify their non-U.S. status by providing a valid IRS Form W-8BEN (for non-resident alien individuals) or IRS Form W-8BEN-E (for foreign entities), or another applicable Form W-8, to the paying agent. A non-U.S. person who fails to provide a valid Form W-8 may be subject to the presumption rules under Treasury Regulation § 1.1441-1(b)(3), which could result in withholding at the statutory rate of thirty percent (30%) under Section 1441 (rather than backup withholding under Section 3406), depending on the specific circumstances.
We recommend that the Letter of Transmittal, which Calderwood & Harkness is preparing as an exhibit to the Merger Agreement, include clear and detailed instructions requiring each stockholder to submit either (i) a properly completed and signed IRS Form W-9 (for U.S. persons) or (ii) the applicable IRS Form W-8 (for non-U.S. persons) as a condition to the disbursement of merger consideration. Keystone Pacific Transfer Services Inc., as paying agent, should be instructed to withhold twenty-four percent (24%) from any payment of merger consideration to a U.S. person who fails to provide a valid Form W-9 (or who is otherwise subject to backup withholding), and to refrain from applying backup withholding to any non-U.S. person who provides a valid Form W-8.
Amounts withheld under Section 3406 are not an additional tax; they represent advance payments of the stockholder's U.S. federal income tax liability and are creditable against such liability on the stockholder's annual tax return. However, the imposition of backup withholding can create significant inconvenience and cash flow issues for affected stockholders, and it is therefore in the interests of all parties to achieve the highest possible rate of compliance with the Form W-9 and W-8 collection process.
VII. Form Collection and Withholding Procedures
A. Required Tax Forms
The following IRS tax forms are required to be collected from VeloPay's stockholders in connection with the Merger:
IRS Form W-9 (Request for Taxpayer Identification Number and Certification). Form W-9 is required from all U.S. person stockholders, including U.S. citizens, U.S. resident aliens, domestic corporations, domestic partnerships, and domestic trusts and estates. Form W-9 certifies the holder's TIN and confirms that the holder is not subject to backup withholding. Each U.S. person stockholder must submit a properly completed and signed Form W-9 to Keystone Pacific Transfer Services Inc. as part of the Letter of Transmittal process.
IRS Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting — Individuals). Form W-8BEN is required from non-resident alien individual stockholders to certify their non-U.S. status and, where applicable, to claim benefits under an applicable income tax treaty. This form is required from the identified non-resident alien angel investors and from the individual employee equity holders in Canada and Portugal who are non-resident aliens.
IRS Form W-8BEN-E (Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting — Entities). Form W-8BEN-E is required from foreign entity stockholders, including foreign corporations and foreign partnerships, to certify their non-U.S. status, their Chapter 3 (withholding) status, their Chapter 4 (FATCA) status, and, where applicable, to claim treaty benefits. This form is required from the identified Cayman Islands fund and from any other foreign entity stockholders that may be identified during the Letter of Transmittal process.
IRS Form W-8IMY (Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding and Reporting). Form W-8IMY is required from intermediaries, flow-through entities, or U.S. branches of non-U.S. persons that receive merger consideration on behalf of the beneficial owners. For example, if a nominee or custodian holds VeloPay shares on behalf of a non-U.S. beneficial owner, the nominee or custodian must provide Form W-8IMY together with applicable withholding statements and underlying beneficial owner documentation. We do not currently anticipate that Form W-8IMY will be required from any identified VeloPay stockholder, as VeloPay's shares are not publicly traded and are held directly by the beneficial owners, but the paying agent should be prepared to accept and process this form if submitted.
IRS Form W-8ECI (Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States). Form W-8ECI is required from non-U.S. persons who claim that the income they receive is effectively connected with a U.S. trade or business. This form is unlikely to be applicable in the context of the Merger, because (i) FIRPTA does not apply (so the merger consideration is not ECI by reason of FIRPTA), and (ii) the non-U.S. stockholders identified in Section III.B do not appear to be engaged in a U.S. trade or business that would cause their merger consideration to be treated as ECI on an independent basis. However, if any non-U.S. stockholder submits Form W-8ECI, the paying agent should process it accordingly.
B. Procedures for Paying Agent
Keystone Pacific Transfer Services Inc. will serve as the paying agent for the Merger and will be responsible for collecting applicable tax forms from all VeloPay stockholders, applying required withholding, and disbursing merger consideration. We recommend the following procedures:
1. Collection Requirement. No merger consideration should be disbursed to any stockholder until a valid, properly completed and signed tax form (Form W-9 or applicable Form W-8) has been received by Keystone Pacific. The Letter of Transmittal should clearly state this requirement and include instructions for completion of the applicable form.
2. Withholding in Absence of Documentation. If a stockholder submits a Letter of Transmittal without a valid tax form, or if the submitted form is incomplete, expired, or otherwise deficient, Keystone Pacific should withhold the applicable amount from the merger consideration as follows: (a) twenty-four percent (24%) backup withholding for U.S. persons (or persons presumed to be U.S. persons) who fail to provide a valid Form W-9; and (b) thirty percent (30%) statutory withholding under Section 1441 for persons who appear to be non-U.S. persons based on available indicia (e.g., a foreign address) and who fail to provide a valid Form W-8.
3. Form Validation. Keystone Pacific should validate each submitted form for completeness, consistency, and authenticity. In particular, Forms W-8BEN and W-8BEN-E should be reviewed for proper completion of the country of residence, treaty claim (if any), FATCA classification, and taxpayer identification number (U.S. TIN, ITIN, or foreign TIN). Keystone Pacific should contact our office if any questions arise regarding the validity of a submitted form.
4. Escrow-Related Withholding. Keystone Pacific should coordinate with Garrison Trust Company regarding withholding obligations applicable to escr