1003-00003 · Harrowgate Private Equity Fund IV LP · Transaction Documents

equity-commitment-letter-execution.docx DOCUMENT M&A / Corporate

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EQUITY COMMITMENT LETTER

Execution Version

February 14, 2025

Harrowgate Capital Management IV LLC 300 King Street, Suite 4200 Wilmington, Delaware 19801 EIN: 87-4231847

VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759 EIN: 82-3019478

Re: Equity Commitment in Connection with the Merger of Harrowgate Velocity Merger Sub Inc. with and into VeloPay Systems, Inc.

Ladies and Gentlemen:

This Equity Commitment Letter (this "Equity Commitment Letter") sets forth the commitment of Harrowgate Capital Management IV LLC, a Delaware limited liability company (the "Commitment Party"), acting in its capacity as general partner of Harrowgate Private Equity Fund IV LP, a Delaware limited partnership ("HPE Fund IV" or the "Fund"), to contribute, or cause to be contributed, equity financing in connection with the transactions described herein.

Reference is made to the Agreement and Plan of Merger (the "Merger Agreement"), to be entered into among Harrowgate Private Equity Fund IV LP, Harrowgate Velocity Merger Sub Inc., a Delaware corporation and newly formed wholly-owned subsidiary of HPE Fund IV ("Merger Sub"), and VeloPay Systems, Inc., a Delaware corporation (the "Company"), which Merger Agreement will provide for the merger of Merger Sub with and into the Company (the "Merger"), with the Company surviving the Merger as a wholly-owned subsidiary of HPE Fund IV. As of the date of this Equity Commitment Letter, the Merger Agreement has not yet been executed by the parties thereto; execution of the Merger Agreement is expected to occur in March 2025. This Equity Commitment Letter is delivered in connection with, and as a condition to, the Company's willingness to enter into the Merger Agreement. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement, unless the context otherwise requires.

Section 1. Commitment.

Harrowgate Capital Management IV LLC, on behalf of HPE Fund IV, hereby irrevocably commits to contribute, or cause to be contributed, to Merger Sub (or its designee, as directed in writing by Merger Sub prior to the Closing) cash in an aggregate amount of up to $1,140,000,000 (one billion one hundred forty million dollars) (the "Equity Commitment") for the purpose of funding, together with the proceeds of the Debt Financing (as defined below), a portion of the aggregate merger consideration of $1,900,000,000 (one billion nine hundred million dollars) payable pursuant to the Merger Agreement, plus related fees, costs, and expenses incurred in connection with the Merger and the related financing transactions. The Equity Commitment represents approximately sixty percent (60%) of the aggregate merger consideration.

The Equity Commitment shall be funded at or immediately prior to the closing of the Merger (the "Closing") in accordance with the terms and conditions of the Merger Agreement, subject to the satisfaction or valid waiver of all conditions to closing set forth in the Merger Agreement. The Equity Commitment shall be funded in immediately available funds by wire transfer to such account or accounts as Merger Sub shall designate in writing, in accordance with the funds flow memorandum to be mutually agreed upon by the parties prior to the Closing (the "Funds Flow Memorandum"). The Commitment Party and Merger Sub shall cooperate in good faith to finalize the Funds Flow Memorandum no later than three (3) business days prior to the anticipated Closing date.

The Equity Commitment may be funded directly by HPE Fund IV from capital called from its limited partners pursuant to the limited partnership agreement of HPE Fund IV (the "LPA"), from the Fund's existing liquid assets (including cash and cash equivalents held by the Fund or its subsidiaries), or from any combination thereof, in the sole and absolute discretion of the Commitment Party in its capacity as general partner of HPE Fund IV. Nothing herein shall require the Commitment Party to fund the Equity Commitment from any particular source, and the Company acknowledges that the Commitment Party retains full discretion over the manner in which the Equity Commitment is sourced, provided that the Equity Commitment is funded in full at or immediately prior to the Closing in accordance with the terms hereof.

For the avoidance of doubt, the Equity Commitment is in addition to, and not in lieu of, the debt financing committed pursuant to that certain Debt Commitment Letter dated as of the date hereof (the "Debt Commitment Letter," Reference: CRE-2025-SPF-0441) from Tralvendo National Bank and Prairie State Bank, N.A. (collectively, the "Lenders"), which Debt Commitment Letter provides for (i) a senior secured term loan facility in an aggregate principal amount of $500,000,000 (five hundred million dollars) and (ii) a senior secured revolving credit facility in an aggregate principal amount of $260,000,000 (two hundred sixty million dollars) (the facilities described in clauses (i) and (ii), collectively, the "Debt Financing"). The aggregate sources of funds available to consummate the Merger and the related transactions are summarized as follows:

The foregoing table is provided for illustrative purposes only and does not limit or modify the terms of this Equity Commitment Letter or the Debt Commitment Letter. The actual allocation of sources and uses of funds at the Closing shall be set forth in the Funds Flow Memorandum.

Section 2. Purpose and Use of Funds.

The Equity Commitment shall be used solely for the following purposes (collectively, the "Permitted Uses"):

(a) To fund a portion of the aggregate merger consideration of $1,900,000,000 (representing $20.00 per share of Company common stock on a fully diluted basis, based on 95,000,000 fully diluted shares of Company common stock outstanding as of the date hereof) payable to the stockholders of the Company pursuant to the terms and conditions of the Merger Agreement, inclusive of the $133,000,000 indemnification escrow deposit (the "Escrow Amount") to be deposited with Garrison Trust Company, as escrow agent, pursuant to the escrow agreement to be entered into at the Closing in accordance with the Merger Agreement;

(b) To fund the payoff and discharge in full of all of the Company's existing indebtedness, including approximately $112,000,000 in aggregate principal amount outstanding under the Company's existing credit facility with Meridian Commercial Credit Corp. (the "Existing Credit Facility"), plus all accrued and unpaid interest thereon, all prepayment premiums or penalties (if any) due in connection therewith, and all other amounts required to fully satisfy and discharge the Company's obligations under the Existing Credit Facility (collectively, the "Payoff Amount"), such payoff to be made at the Closing in accordance with the payoff letter to be delivered by Meridian Commercial Credit Corp. prior to the Closing;

(c) To pay all transaction fees, costs, and expenses incurred by HPE Fund IV, Merger Sub, and/or the Company in connection with the Merger and the related debt and equity financing transactions, including advisory fees, legal fees, accounting fees, filing fees, printing costs, and all other expenses reasonably related thereto; and

(d) To fund working capital and other amounts required to be available at the Closing in accordance with the terms of the Merger Agreement, including any adjustments to the aggregate merger consideration pursuant to the working capital adjustment provisions of the Merger Agreement.

No portion of the Equity Commitment shall be used for any purpose other than the Permitted Uses described above. The Commitment Party acknowledges and agrees that the proceeds of the Equity Commitment, once contributed to Merger Sub, shall be applied by Merger Sub exclusively to the Permitted Uses in accordance with the Funds Flow Memorandum.

Section 3. Conditions to Funding.

The obligation of the Commitment Party, on behalf of HPE Fund IV, to fund the Equity Commitment is subject to the satisfaction or valid waiver (to the extent permitted by applicable law) of each of the following conditions:

(a) Simultaneous Closing of the Merger. The substantially simultaneous closing of the Merger in accordance with the terms and conditions of the Merger Agreement, including the satisfaction or valid waiver of all conditions precedent to the obligations of HPE Fund IV and Merger Sub to consummate the Merger as set forth in Article VII (or such other article as may be applicable) of the Merger Agreement. For the avoidance of doubt, the obligation to fund the Equity Commitment shall not arise unless and until all conditions to Closing set forth in the Merger Agreement have been satisfied or validly waived in accordance with the terms thereof;

(b) Simultaneous Funding of Debt Financing. The substantially simultaneous funding of the Debt Financing (or, in lieu thereof, alternative financing on terms and conditions not less favorable in the aggregate to HPE Fund IV than the terms and conditions set forth in the Debt Commitment Letter, as determined by the Commitment Party in its reasonable discretion) pursuant to the Debt Commitment Letter, such that the aggregate proceeds of the Debt Financing, together with the Equity Commitment, are sufficient to consummate the Merger and the related transactions and to pay all amounts required to be paid at the Closing in accordance with the Merger Agreement and the Funds Flow Memorandum;

(c) Accuracy of Representations and Warranties; Compliance with Covenants. The representations and warranties of the Company set forth in the Merger Agreement shall be true and correct as of the date of the Merger Agreement and as of the Closing date (or, in the case of representations and warranties that speak as of a specific date, as of such date), subject to the materiality and material adverse effect qualifiers set forth therein, and the Company shall have complied with and performed in all material respects all covenants and obligations required to be performed by it under the Merger Agreement at or prior to the Closing;

(d) Absence of Injunctions or Restraining Orders. There shall not be in effect any injunction, order, decree, judgment, or ruling of any court of competent jurisdiction or any governmental authority of competent jurisdiction that prohibits, enjoins, restrains, or otherwise prevents the consummation of the Merger or any of the other transactions contemplated by the Merger Agreement; and

(e) Regulatory Approvals. Receipt of all required regulatory approvals and clearances necessary for the consummation of the Merger, including without limitation: (i) the expiration or termination of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the rules and regulations promulgated thereunder; (ii) clearance under the Investment Canada Act (R.S.C., 1985, c. 28 (1st Supp.)) with respect to VeloPay Canada Inc., a wholly-owned subsidiary of the Company organized under the laws of the Province of Ontario; and (iii) all required state money transmitter change-of-control approvals, notifications, or non-objection confirmations in each jurisdiction in which the Company or any of its subsidiaries holds a money transmitter license or similar authorization, in each case without the imposition of any conditions, restrictions, or requirements that would reasonably be expected to have a material adverse effect on the Company or HPE Fund IV.

For the avoidance of doubt, the obligation of the Commitment Party to fund the Equity Commitment is not subject to any financing condition or "market-out" and shall not be excused by the unavailability of the Debt Financing or the inability of the Lenders to fund the Debt Financing on the Closing date, except as expressly set forth in the Merger Agreement with respect to the Reverse Termination Fee (as defined below). The Commitment Party acknowledges that the Company is entering into the Merger Agreement in reliance upon the Commitment Party's agreement to fund the Equity Commitment in accordance with the terms and conditions of this Equity Commitment Letter, and that the Company would not enter into the Merger Agreement but for the Commitment Party's commitments hereunder.

Section 4. Limited Guarantee; Reverse Termination Fee.

In connection with the execution of the Merger Agreement, the Commitment Party shall deliver, or cause to be delivered, a limited guarantee (the "Limited Guarantee") in favor of the Company, in form and substance reasonably satisfactory to the Company, pursuant to which the Commitment Party shall guarantee, subject to the terms and limitations set forth therein, the obligation of HPE Fund IV to pay the reverse termination fee of $57,000,000 (fifty-seven million dollars) (the "Reverse Termination Fee") and certain other specified obligations of HPE Fund IV under the Merger Agreement, in each case in accordance with, and subject to the terms and conditions of, the Merger Agreement and the Limited Guarantee. The Reverse Termination Fee represents three percent (3%) of the aggregate merger consideration (calculated as $1,900,000,000 × 0.03 = $57,000,000).

The Company acknowledges and agrees that the maximum aggregate liability of the Commitment Party under this Equity Commitment Letter and the Limited Guarantee, taken together, shall in no event exceed the sum of (i) the Equity Commitment amount of $1,140,000,000 and (ii) the Reverse Termination Fee of $57,000,000, for a maximum aggregate liability of $1,197,000,000. In no event shall the Company or any of its affiliates seek to recover, and in no event shall the Commitment Party or HPE Fund IV be liable for, any amount in excess of such maximum aggregate liability, whether based on contract, tort, equity, or any other theory of liability.

The Limited Guarantee shall be delivered by the Commitment Party to the Company concurrently with the execution and delivery of the Merger Agreement by the parties thereto, and shall be effective as of the date of the Merger Agreement. The terms and conditions of the Limited Guarantee shall be consistent with this Equity Commitment Letter and with the corresponding provisions of the Merger Agreement.

Section 5. No Third-Party Beneficiaries; Enforcement.

This Equity Commitment Letter is for the benefit of, and shall be enforceable by, the Company solely to the extent expressly provided herein and solely in connection with the transactions contemplated by the Merger Agreement. The Company shall be an express third-party beneficiary of this Equity Commitment Letter with respect to the Commitment Party's obligation to fund the Equity Commitment in accordance with the terms hereof, and shall have the right to seek specific performance of such obligation (including by seeking an order of specific performance or injunctive or other equitable relief from the Court of Chancery of the State of Delaware or any other court of competent jurisdiction), subject to the conditions set forth in this Equity Commitment Letter and in the Merger Agreement. The right of the Company to seek specific performance is an integral part of the transactions contemplated hereby and the Merger Agreement, and without such right, the Company would not have entered into this Equity Commitment Letter or agreed to enter into the Merger Agreement.

Except as expressly set forth in the immediately preceding paragraph, no other person (including, without limitation, any stockholder, creditor, employee, or affiliate of the Company, any limited partner, creditor, or affiliate of HPE Fund IV, any Lender, and any other party to or beneficiary of any of the transactions contemplated by the Merger Agreement or the Debt Commitment Letter) shall have any rights under, or be entitled to enforce, this Equity Commitment Letter, and this Equity Commitment Letter shall not create any rights, claims, or causes of action in favor of any such person. Nothing in this Equity Commitment Letter, express or implied, is intended to confer upon any person other than the Company any rights or remedies hereunder.

The Company's remedies under this Equity Commitment Letter and the Limited Guarantee, together with the Company's rights to the Reverse Termination Fee under the Merger Agreement, shall be the sole and exclusive remedy of the Company and its affiliates, stockholders, directors, officers, employees, agents, and representatives against the Commitment Party, HPE Fund IV, Merger Sub, and their respective affiliates, partners, members, equity holders, managers, directors, officers, employees, agents, advisors, and representatives (collectively, the "Sponsor Related Parties") in the event of any breach or failure to perform any obligation under this Equity Commitment Letter, the Limited Guarantee, or the Merger Agreement, and in no event shall the Company or any of its affiliates seek, and in no event shall any Sponsor Related Party be liable for, any damages or other monetary relief in excess of the amounts expressly contemplated by this Section 5, the Limited Guarantee, and the Reverse Termination Fee provisions of the Merger Agreement.

Section 6. Representations and Warranties of the Commitment Party.

The Commitment Party hereby represents and warrants to the Company, as of the date hereof and as of the date of the Merger Agreement (and, with respect to Section 6(e) and Section 6(f), as of the Closing date as well), as follows:

(a) Organization and Good Standing. Harrowgate Capital Management IV LLC is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has all requisite limited liability company power and authority to execute, deliver, and perform its obligations under this Equity Commitment Letter, to act as the general partner of HPE Fund IV, and to cause HPE Fund IV to fund the Equity Commitment. HPE Fund IV is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has all requisite limited partnership power and authority to fund the Equity Commitment and to consummate the transactions contemplated by the Merger Agreement.

(b) Authorization. The execution, delivery, and performance of this Equity Commitment Letter by the Commitment Party have been duly authorized by all necessary limited liability company action on the part of the Commitment Party, acting in its capacity as general partner of HPE Fund IV. No vote, consent, or approval of the limited partners of HPE Fund IV, any advisory committee or similar body of HPE Fund IV, or any other person is required in connection with the execution, delivery, or performance of this Equity Commitment Letter or the funding of the Equity Commitment, other than such votes, consents, or approvals as have been obtained and are in full force and effect as of the date hereof.

(c) Enforceability. This Equity Commitment Letter constitutes the legal, valid, and binding obligation of the Commitment Party, enforceable against the Commitment Party in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and similar laws affecting creditors' rights and remedies generally, and (ii) general principles of equity, including principles of commercial reasonableness, good faith, and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).

(d) No Conflicts. The execution, delivery, and performance of this Equity Commitment Letter by the Commitment Party, and the funding of the Equity Commitment by HPE Fund IV, do not and will not (i) conflict with, or result in any violation or breach of, any provision of the certificate of formation, limited liability company agreement, or other organizational documents of the Commitment Party, or the certificate of limited partnership, limited partnership agreement, or other organizational documents of HPE Fund IV, (ii) conflict with, or result in any violation or breach of, or constitute (with or without notice or lapse of time, or both) a default under, or give rise to a right of termination, cancellation, or acceleration of any obligation under, any material contract, agreement, instrument, permit, license, or arrangement to which the Commitment Party or HPE Fund IV is a party or by which the Commitment Party, HPE Fund IV, or any of their respective properties or assets may be bound, or (iii) violate any applicable law, statute, rule, regulation, order, judgment, injunction, or decree of any governmental authority applicable to the Commitment Party or HPE Fund IV.

(e) Sufficiency of Funds. HPE Fund IV has, or will have at the Closing, sufficient available capital commitments from its limited partners and/or liquid assets to fund the Equity Commitment in full, without qualification or limitation. HPE Fund IV is a $6.8 billion fund (vintage 2022) and has uncalled capital commitments from its limited partners that are sufficient, in the aggregate, to fund the Equity Commitment in its entirety. The Commitment Party, in its capacity as general partner of HPE Fund IV, has made all capital calls and has taken, or will take prior to the Closing, all other actions necessary or appropriate under the LPA and applicable law to ensure that the Equity Commitment can be funded in full at or immediately prior to the Closing. The Commitment Party is not aware of any limited partner of HPE Fund IV that has defaulted on a prior capital call or that has indicated an inability or unwillingness to fund its pro rata share of the Equity Commitment when called.

(f) Solvency. After giving effect to the funding of the Equity Commitment and the consummation of the Merger and the related debt and equity financing transactions, each of the Commitment Party and HPE Fund IV (i) will be able to pay its respective debts as they become due in the ordinary course of business, (ii) will have assets (at a fair valuation) that exceed its respective liabilities (including contingent, subordinated, unmatured, and unliquidated liabilities), and (iii) will not have unreasonably small capital with which to engage in its respective business as then conducted and as proposed to be conducted.

Section 7. Fund Information.

The following information is provided for the convenience of the Company and is accurate as of the date of this Equity Commitment Letter:

Harrowgate Private Equity Fund IV LP

Managing Partners of the Commitment Party:

• Richard Harrowgate — Founder & Chairman

• Priya Deshmukh — Managing Partner, Fund IV

• Thomas Eriksen — Partner, Head of Financial Technology

HPE Fund IV has previously completed three platform investments in the payments and financial infrastructure sectors and has extensive experience in the types of regulatory, operational, and commercial matters relevant to the acquisition of the Company. The investment in the Company will represent HPE Fund IV's fourth platform investment in the payments and financial infrastructure sector and is consistent with the Fund's stated investment strategy as described in its offering memorandum and limited partnership agreement.

Section 8. Termination.

This Equity Commitment Letter shall terminate automatically and be of no further force or effect upon the earliest to occur of the following events:

(a) The Closing, at which time the Equity Commitment shall have been fully funded in accordance with the terms hereof and the obligations of the Commitment Party hereunder shall be deemed fully satisfied, performed, and discharged;

(b) The valid termination of the Merger Agreement in accordance with its terms, including without limitation (i) termination by the mutual written consent of all parties to the Merger Agreement, (ii) termination by the Company in accordance with its fiduciary-out provisions set forth in the Merger Agreement (subject to the Company's payment of the Company termination fee of $76,000,000 (seventy-six million dollars) to HPE Fund IV in accordance with the terms of the Merger Agreement), or (iii) termination by HPE Fund IV in accordance with the terms of the Merger Agreement (subject, if applicable, to the payment of the Reverse Termination Fee of $57,000,000 (fifty-seven million dollars) by or on behalf of HPE Fund IV to the Company in accordance with the terms of the Merger Agreement); and

(c) The payment in full of the Reverse Termination Fee by or on behalf of HPE Fund IV to the Company in accordance with the terms and conditions of the Merger Agreement, which payment shall constitute liquidated damages and shall be the sole and exclusive remedy of the Company in the circumstances giving rise to such payment obligation, as more fully set forth in the Merger Agreement.

Upon the termination of this Equity Commitment Letter pursuant to this Section 8, no party hereto shall have any further obligation, liability, or responsibility hereunder or with respect hereto; provided, however, that such termination shall not relieve any party of liability for any willful and material breach of this Equity Commitment Letter occurring prior to the effective time of such termination. For purposes of this Section 8, a "willful and material breach" means a material breach of this Equity Commitment Letter that is a consequence of an act or failure to act undertaken by the breaching party with actual knowledge that the taking of such act or the failure to take such act would, or would reasonably be expected to, constitute or result in a material breach of this Equity Commitment Letter.

Section 9. Amendment; Assignment.

This Equity Commitment Letter may not be amended, modified, supplemented, or waived in whole or in part except by a written instrument duly executed by each of the Commitment Party and the Company. No failure or delay by either party in exercising any right hereunder shall operate as a waiver thereof, and no single or partial exercise of any such right shall preclude any other or further exercise thereof.

The Commitment Party may not assign, delegate, or otherwise transfer any of its rights or obligations under this Equity Commitment Letter to any person without the prior written consent of the Company, which consent may be withheld in the Company's sole discretion; provided, however, that the Commitment Party may, without the prior written consent of the Company, assign its obligations under this Equity Commitment Letter (in whole or in part) to (i) an affiliate directly or indirectly controlled by the Commitment Party, or (ii) Harrowgate Velocity Co-Invest LP, a Delaware limited partnership formed on March 14, 2025, with Harrowgate Capital Management IV LLC serving as its general partner (the "Co-Invest Vehicle"); provided, further, that no such assignment shall relieve the Commitment Party of any of its obligations or liabilities hereunder, and the Commitment Party shall remain primarily liable for the full performance of all obligations under this Equity Commitment Letter notwithstanding any such assignment.

The Company may not assign, delegate, or otherwise transfer any of its rights under this Equity Commitment Letter to any person without the prior written consent of the Commitment Party, which consent may be withheld in the Commitment Party's sole discretion.

Any purported assignment, delegation, or transfer in violation of this Section 9 shall be null and void and of no force or effect.

Section 10. Governing Law; Jurisdiction; Waiver of Jury Trial.

This Equity Commitment Letter shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of laws rules, provisions, or principles (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.

Any action, suit, or proceeding arising out of or relating to this Equity Commitment Letter or the transactions contemplated hereby shall be brought exclusively in 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 a particular matter, any state court of the State of Delaware located in Wilmington, Delaware, or, if no state court of the State of Delaware located in Wilmington, Delaware has jurisdiction, the United States District Court for the District of Delaware), and each party hereby irrevocably and unconditionally (i) submits to the exclusive jurisdiction of such courts for purposes of any such action, suit, or proceeding, (ii) agrees not to commence any such action, suit, or proceeding except in such courts, (iii) waives, and agrees not to plead or claim, that such courts are an inconvenient forum or that venue in such courts is improper, and (iv) waives any right to remove any such action, suit, or proceeding to any other court.

Each party agrees that service of process in any such action, suit, or proceeding may be made by delivery of process in the manner set forth in Section 11 of this Equity Commitment Letter for the giving of notices, and each party irrevocably waives any objection to such service of process.

EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS EQUITY COMMITMENT LETTER OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY 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) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS EQUITY COMMITMENT LETTER BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.

Section 11. Notices.

All notices, requests, demands, consents, waivers, and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when (i) delivered by hand, (ii) sent by electronic mail (with confirmation of receipt), (iii) sent by nationally recognized overnight courier service (with proof of delivery), or (iv) sent by registered or certified mail, return receipt requested, postage prepaid, in each case addressed to the applicable party at the address set forth below (or at such other address as such party may designate by written notice to the other parties in accordance with this Section 11):

If to the Commitment Party or HPE Fund IV:

Harrowgate Capital Management IV LLC 300 King Street, Suite 4200 Wilmington, Delaware 19801

Attention: Priya Deshmukh, Managing Partner

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

If to the Company:

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

Attention: Danielle Moreau, General Counsel

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

Section 12. Miscellaneous.

Entire Agreement. This Equity Commitment Letter, together with the Merger Agreement (when executed), the Limited Guarantee, and the Debt Commitment Letter, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and thereof, and supersedes all prior and contemporaneous agreements, understandings, negotiations, representations, warranties, and discussions, whether oral or written, among the parties with respect to such subject matter. There are no warranties, representations, or other agreements among the parties in connection with the subject matter hereof except as specifically set forth herein and in the other agreements referenced in this paragraph.

Counterparts. This Equity Commitment Letter may be executed in one or more counterparts (including by facsimile or electronic (.pdf) signature), each of which, when so executed and delivered, 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 Equity Commitment Letter by facsimile or electronic (.pdf) transmission shall be effective as delivery of a manually executed counterpart.

Headings. The section headings and captions contained in this Equity Commitment Letter are inserted for convenience of reference only and shall not affect the meaning, interpretation, or construction of any provision hereof.

Severability. If any provision of this Equity Commitment Letter is held to be invalid, illegal, or unenforceable by any court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Equity Commitment Letter, and the remaining provisions shall remain in full force and effect and shall be enforceable in accordance with their terms. The parties shall endeavor in good faith to replace any invalid, illegal, or unenforceable provision with a valid, legal, and enforceable provision that, to the greatest extent possible, achieves the economic, business, and other purposes of the invalid, illegal, or unenforceable provision.

Expenses. Each party shall bear its own costs and expenses (including fees and disbursements of legal counsel, financial advisors, accountants, and other advisors and consultants) incurred in connection with the negotiation, execution, delivery, and performance of this Equity Commitment Letter, except as otherwise expressly provided in the Merger Agreement.

Confidentiality. The existence and terms of this Equity Commitment Letter are confidential and shall not be disclosed by any party to any person, except (i) as required by applicable law, rule, regulation, legal process, or governmental order, (ii) to the respective advisors, accountants, attorneys, and other representatives of each party on a need-to-know basis, in each case who are informed of the confidential nature of this Equity Commitment Letter and who agree to maintain such confidentiality, (iii) as required in connection with regulatory filings made in connection with the Merger, including the HSR filing and any filing with the Investment Canada Act review authorities, and (iv) as required in connection with the Information Statement to be prepared and furnished to the stockholders of the Company pursuant to Section 228(e) of the Delaware General Corporation Law and Rule 14c-2 under the Securities Exchange Act of 1934, as amended, in connection with the stockholder approval of the Merger.

[Signature Pages Follow]

IN WITNESS WHEREOF, the Commitment Party has executed and delivered this Equity Commitment Letter as of the date first written above.

HARROWGATE CAPITAL MANAGEMENT IV LLC, in its capacity as general partner of Harrowgate Private Equity Fund IV LP

By: ________

Name: Priya Deshmukh

Title: Managing Partner, Fund IV

Date: February 14, 2025

ACKNOWLEDGED AND AGREED as of the date first written above:

VELOPAY SYSTEMS, INC.

By: ________

Name: Nathan Aldridge

Title: Chief Executive Officer

Date: February 14, 2025

Source	Amount
Equity Commitment (HPE Fund IV)	$1,140,000,000
Senior Secured Term Loan Facility (Tralvendo / Prairie State)	$500,000,000
Senior Secured Revolving Credit Facility (Tralvendo / Prairie State)	$260,000,000
Total Sources	$1,900,000,000
Item	Detail
Legal Name	Harrowgate Private Equity Fund IV LP
Jurisdiction of Organization	State of Delaware
EIN	87-4231956
General Partner	Harrowgate Capital Management IV LLC (EIN: 87-4231847)
Headquarters	300 King Street, Suite 4200, Wilmington, Delaware 19801
Fund Size	$6.8 billion
Vintage	2022
Investment Strategy	Growth and buyout investments in financial services technology, infrastructure software, and data analytics

EQUITY COMMITMENT LETTER
Execution Version
February 14, 2025
Harrowgate Capital Management IV LLC 300 King Street, Suite 4200 Wilmington, Delaware 19801 EIN: 87-4231847
VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759 EIN: 82-3019478
Re: Equity Commitment in Connection with the Merger of Harrowgate Velocity Merger Sub Inc. with and into VeloPay Systems, Inc.
Ladies and Gentlemen:
This Equity Commitment Letter (this "Equity Commitment Letter") sets forth the commitment of Harrowgate Capital Management IV LLC, a Delaware limited liability company (the "Commitment Party"), acting in its capacity as general partner of Harrowgate Private Equity Fund IV LP, a Delaware limited partnership ("HPE Fund IV" or the "Fund"), to contribute, or cause to be contributed, equity financing in connection with the transactions described herein.
Reference is made to the Agreement and Plan of Merger (the "Merger Agreement"), to be entered into among Harrowgate Private Equity Fund IV LP, Harrowgate Velocity Merger Sub Inc., a Delaware corporation and newly formed wholly-owned subsidiary of HPE Fund IV ("Merger Sub"), and VeloPay Systems, Inc., a Delaware corporation (the "Company"), which Merger Agreement will provide for the merger of Merger Sub with and into the Company (the "Merger"), with the Company surviving the Merger as a wholly-owned subsidiary of HPE Fund IV. As of the date of this Equity Commitment Letter, the Merger Agreement has not yet been executed by the parties thereto; execution of the Merger Agreement is expected to occur in March 2025. This Equity Commitment Letter is delivered in connection with, and as a condition to, the Company's willingness to enter into the Merger Agreement. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement, unless the context otherwise requires.
Section 1. Commitment.
Harrowgate Capital Management IV LLC, on behalf of HPE Fund IV, hereby irrevocably commits to contribute, or cause to be contributed, to Merger Sub (or its designee, as directed in writing by Merger Sub prior to the Closing) cash in an aggregate amount of up to $1,140,000,000 (one billion one hundred forty million dollars) (the "Equity Commitment") for the purpose of funding, together with the proceeds of the Debt Financing (as defined below), a portion of the aggregate merger consideration of $1,900,000,000 (one billion nine hundred million dollars) payable pursuant to the Merger Agreement, plus related fees, costs, and expenses incurred in connection with the Merger and the related financing transactions. The Equity Commitment represents approximately sixty percent (60%) of the aggregate merger consideration.
The Equity Commitment shall be funded at or immediately prior to the closing of the Merger (the "Closing") in accordance with the terms and conditions of the Merger Agreement, subject to the satisfaction or valid waiver of all conditions to closing set forth in the Merger Agreement. The Equity Commitment shall be funded in immediately available funds by wire transfer to such account or accounts as Merger Sub shall designate in writing, in accordance with the funds flow memorandum to be mutually agreed upon by the parties prior to the Closing (the "Funds Flow Memorandum"). The Commitment Party and Merger Sub shall cooperate in good faith to finalize the Funds Flow Memorandum no later than three (3) business days prior to the anticipated Closing date.
The Equity Commitment may be funded directly by HPE Fund IV from capital called from its limited partners pursuant to the limited partnership agreement of HPE Fund IV (the "LPA"), from the Fund's existing liquid assets (including cash and cash equivalents held by the Fund or its subsidiaries), or from any combination thereof, in the sole and absolute discretion of the Commitment Party in its capacity as general partner of HPE Fund IV. Nothing herein shall require the Commitment Party to fund the Equity Commitment from any particular source, and the Company acknowledges that the Commitment Party retains full discretion over the manner in which the Equity Commitment is sourced, provided that the Equity Commitment is funded in full at or immediately prior to the Closing in accordance with the terms hereof.
For the avoidance of doubt, the Equity Commitment is in addition to, and not in lieu of, the debt financing committed pursuant to that certain Debt Commitment Letter dated as of the date hereof (the "Debt Commitment Letter," Reference: CRE-2025-SPF-0441) from Tralvendo National Bank and Prairie State Bank, N.A. (collectively, the "Lenders"), which Debt Commitment Letter provides for (i) a senior secured term loan facility in an aggregate principal amount of $500,000,000 (five hundred million dollars) and (ii) a senior secured revolving credit facility in an aggregate principal amount of $260,000,000 (two hundred sixty million dollars) (the facilities described in clauses (i) and (ii), collectively, the "Debt Financing"). The aggregate sources of funds available to consummate the Merger and the related transactions are summarized as follows:
The foregoing table is provided for illustrative purposes only and does not limit or modify the terms of this Equity Commitment Letter or the Debt Commitment Letter. The actual allocation of sources and uses of funds at the Closing shall be set forth in the Funds Flow Memorandum.
Section 2. Purpose and Use of Funds.
The Equity Commitment shall be used solely for the following purposes (collectively, the "Permitted Uses"):
(a) To fund a portion of the aggregate merger consideration of $1,900,000,000 (representing $20.00 per share of Company common stock on a fully diluted basis, based on 95,000,000 fully diluted shares of Company common stock outstanding as of the date hereof) payable to the stockholders of the Company pursuant to the terms and conditions of the Merger Agreement, inclusive of the $133,000,000 indemnification escrow deposit (the "Escrow Amount") to be deposited with Garrison Trust Company, as escrow agent, pursuant to the escrow agreement to be entered into at the Closing in accordance with the Merger Agreement;
(b) To fund the payoff and discharge in full of all of the Company's existing indebtedness, including approximately $112,000,000 in aggregate principal amount outstanding under the Company's existing credit facility with Meridian Commercial Credit Corp. (the "Existing Credit Facility"), plus all accrued and unpaid interest thereon, all prepayment premiums or penalties (if any) due in connection therewith, and all other amounts required to fully satisfy and discharge the Company's obligations under the Existing Credit Facility (collectively, the "Payoff Amount"), such payoff to be made at the Closing in accordance with the payoff letter to be delivered by Meridian Commercial Credit Corp. prior to the Closing;
(c) To pay all transaction fees, costs, and expenses incurred by HPE Fund IV, Merger Sub, and/or the Company in connection with the Merger and the related debt and equity financing transactions, including advisory fees, legal fees, accounting fees, filing fees, printing costs, and all other expenses reasonably related thereto; and
(d) To fund working capital and other amounts required to be available at the Closing in accordance with the terms of the Merger Agreement, including any adjustments to the aggregate merger consideration pursuant to the working capital adjustment provisions of the Merger Agreement.
No portion of the Equity Commitment shall be used for any purpose other than the Permitted Uses described above. The Commitment Party acknowledges and agrees that the proceeds of the Equity Commitment, once contributed to Merger Sub, shall be applied by Merger Sub exclusively to the Permitted Uses in accordance with the Funds Flow Memorandum.
Section 3. Conditions to Funding.
The obligation of the Commitment Party, on behalf of HPE Fund IV, to fund the Equity Commitment is subject to the satisfaction or valid waiver (to the extent permitted by applicable law) of each of the following conditions:
(a) Simultaneous Closing of the Merger. The substantially simultaneous closing of the Merger in accordance with the terms and conditions of the Merger Agreement, including the satisfaction or valid waiver of all conditions precedent to the obligations of HPE Fund IV and Merger Sub to consummate the Merger as set forth in Article VII (or such other article as may be applicable) of the Merger Agreement. For the avoidance of doubt, the obligation to fund the Equity Commitment shall not arise unless and until all conditions to Closing set forth in the Merger Agreement have been satisfied or validly waived in accordance with the terms thereof;
(b) Simultaneous Funding of Debt Financing. The substantially simultaneous funding of the Debt Financing (or, in lieu thereof, alternative financing on terms and conditions not less favorable in the aggregate to HPE Fund IV than the terms and conditions set forth in the Debt Commitment Letter, as determined by the Commitment Party in its reasonable discretion) pursuant to the Debt Commitment Letter, such that the aggregate proceeds of the Debt Financing, together with the Equity Commitment, are sufficient to consummate the Merger and the related transactions and to pay all amounts required to be paid at the Closing in accordance with the Merger Agreement and the Funds Flow Memorandum;
(c) Accuracy of Representations and Warranties; Compliance with Covenants. The representations and warranties of the Company set forth in the Merger Agreement shall be true and correct as of the date of the Merger Agreement and as of the Closing date (or, in the case of representations and warranties that speak as of a specific date, as of such date), subject to the materiality and material adverse effect qualifiers set forth therein, and the Company shall have complied with and performed in all material respects all covenants and obligations required to be performed by it under the Merger Agreement at or prior to the Closing;
(d) Absence of Injunctions or Restraining Orders. There shall not be in effect any injunction, order, decree, judgment, or ruling of any court of competent jurisdiction or any governmental authority of competent jurisdiction that prohibits, enjoins, restrains, or otherwise prevents the consummation of the Merger or any of the other transactions contemplated by the Merger Agreement; and
(e) Regulatory Approvals. Receipt of all required regulatory approvals and clearances necessary for the consummation of the Merger, including without limitation: (i) the expiration or termination of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the rules and regulations promulgated thereunder; (ii) clearance under the Investment Canada Act (R.S.C., 1985, c. 28 (1st Supp.)) with respect to VeloPay Canada Inc., a wholly-owned subsidiary of the Company organized under the laws of the Province of Ontario; and (iii) all required state money transmitter change-of-control approvals, notifications, or non-objection confirmations in each jurisdiction in which the Company or any of its subsidiaries holds a money transmitter license or similar authorization, in each case without the imposition of any conditions, restrictions, or requirements that would reasonably be expected to have a material adverse effect on the Company or HPE Fund IV.
For the avoidance of doubt, the obligation of the Commitment Party to fund the Equity Commitment is not subject to any financing condition or "market-out" and shall not be excused by the unavailability of the Debt Financing or the inability of the Lenders to fund the Debt Financing on the Closing date, except as expressly set forth in the Merger Agreement with respect to the Reverse Termination Fee (as defined below). The Commitment Party acknowledges that the Company is entering into the Merger Agreement in reliance upon the Commitment Party's agreement to fund the Equity Commitment in accordance with the terms and conditions of this Equity Commitment Letter, and that the Company would not enter into the Merger Agreement but for the Commitment Party's commitments hereunder.
Section 4. Limited Guarantee; Reverse Termination Fee.
In connection with the execution of the Merger Agreement, the Commitment Party shall deliver, or cause to be delivered, a limited guarantee (the "Limited Guarantee") in favor of the Company, in form and substance reasonably satisfactory to the Company, pursuant to which the Commitment Party shall guarantee, subject to the terms and limitations set forth therein, the obligation of HPE Fund IV to pay the reverse termination fee of $57,000,000 (fifty-seven million dollars) (the "Reverse Termination Fee") and certain other specified obligations of HPE Fund IV under the Merger Agreement, in each case in accordance with, and subject to the terms and conditions of, the Merger Agreement and the Limited Guarantee. The Reverse Termination Fee represents three percent (3%) of the aggregate merger consideration (calculated as $1,900,000,000 × 0.03 = $57,000,000).
The Company acknowledges and agrees that the maximum aggregate liability of the Commitment Party under this Equity Commitment Letter and the Limited Guarantee, taken together, shall in no event exceed the sum of (i) the Equity Commitment amount of $1,140,000,000 and (ii) the Reverse Termination Fee of $57,000,000, for a maximum aggregate liability of $1,197,000,000. In no event shall the Company or any of its affiliates seek to recover, and in no event shall the Commitment Party or HPE Fund IV be liable for, any amount in excess of such maximum aggregate liability, whether based on contract, tort, equity, or any other theory of liability.
The Limited Guarantee shall be delivered by the Commitment Party to the Company concurrently with the execution and delivery of the Merger Agreement by the parties thereto, and shall be effective as of the date of the Merger Agreement. The terms and conditions of the Limited Guarantee shall be consistent with this Equity Commitment Letter and with the corresponding provisions of the Merger Agreement.
Section 5. No Third-Party Beneficiaries; Enforcement.
This Equity Commitment Letter is for the benefit of, and shall be enforceable by, the Company solely to the extent expressly provided herein and solely in connection with the transactions contemplated by the Merger Agreement. The Company shall be an express third-party beneficiary of this Equity Commitment Letter with respect to the Commitment Party's obligation to fund the Equity Commitment in accordance with the terms hereof, and shall have the right to seek specific performance of such obligation (including by seeking an order of specific performance or injunctive or other equitable relief from the Court of Chancery of the State of Delaware or any other court of competent jurisdiction), subject to the conditions set forth in this Equity Commitment Letter and in the Merger Agreement. The right of the Company to seek specific performance is an integral part of the transactions contemplated hereby and the Merger Agreement, and without such right, the Company would not have entered into this Equity Commitment Letter or agreed to enter into the Merger Agreement.
Except as expressly set forth in the immediately preceding paragraph, no other person (including, without limitation, any stockholder, creditor, employee, or affiliate of the Company, any limited partner, creditor, or affiliate of HPE Fund IV, any Lender, and any other party to or beneficiary of any of the transactions contemplated by the Merger Agreement or the Debt Commitment Letter) shall have any rights under, or be entitled to enforce, this Equity Commitment Letter, and this Equity Commitment Letter shall not create any rights, claims, or causes of action in favor of any such person. Nothing in this Equity Commitment Letter, express or implied, is intended to confer upon any person other than the Company any rights or remedies hereunder.
The Company's remedies under this Equity Commitment Letter and the Limited Guarantee, together with the Company's rights to the Reverse Termination Fee under the Merger Agreement, shall be the sole and exclusive remedy of the Company and its affiliates, stockholders, directors, officers, employees, agents, and representatives against the Commitment Party, HPE Fund IV, Merger Sub, and their respective affiliates, partners, members, equity holders, managers, directors, officers, employees, agents, advisors, and representatives (collectively, the "Sponsor Related Parties") in the event of any breach or failure to perform any obligation under this Equity Commitment Letter, the Limited Guarantee, or the Merger Agreement, and in no event shall the Company or any of its affiliates seek, and in no event shall any Sponsor Related Party be liable for, any damages or other monetary relief in excess of the amounts expressly contemplated by this Section 5, the Limited Guarantee, and the Reverse Termination Fee provisions of the Merger Agreement.
Section 6. Representations and Warranties of the Commitment Party.
The Commitment Party hereby represents and warrants to the Company, as of the date hereof and as of the date of the Merger Agreement (and, with respect to Section 6(e) and Section 6(f), as of the Closing date as well), as follows:
(a) Organization and Good Standing. Harrowgate Capital Management IV LLC is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has all requisite limited liability company power and authority to execute, deliver, and perform its obligations under this Equity Commitment Letter, to act as the general partner of HPE Fund IV, and to cause HPE Fund IV to fund the Equity Commitment. HPE Fund IV is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has all requisite limited partnership power and authority to fund the Equity Commitment and to consummate the transactions contemplated by the Merger Agreement.
(b) Authorization. The execution, delivery, and performance of this Equity Commitment Letter by the Commitment Party have been duly authorized by all necessary limited liability company action on the part of the Commitment Party, acting in its capacity as general partner of HPE Fund IV. No vote, consent, or approval of the limited partners of HPE Fund IV, any advisory committee or similar body of HPE Fund IV, or any other person is required in connection with the execution, delivery, or performance of this Equity Commitment Letter or the funding of the Equity Commitment, other than such votes, consents, or approvals as have been obtained and are in full force and effect as of the date hereof.
(c) Enforceability. This Equity Commitment Letter constitutes the legal, valid, and binding obligation of the Commitment Party, enforceable against the Commitment Party in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and similar laws affecting creditors' rights and remedies generally, and (ii) general principles of equity, including principles of commercial reasonableness, good faith, and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
(d) No Conflicts. The execution, delivery, and performance of this Equity Commitment Letter by the Commitment Party, and the funding of the Equity Commitment by HPE Fund IV, do not and will not (i) conflict with, or result in any violation or breach of, any provision of the certificate of formation, limited liability company agreement, or other organizational documents of the Commitment Party, or the certificate of limited partnership, limited partnership agreement, or other organizational documents of HPE Fund IV, (ii) conflict with, or result in any violation or breach of, or constitute (with or without notice or lapse of time, or both) a default under, or give rise to a right of termination, cancellation, or acceleration of any obligation under, any material contract, agreement, instrument, permit, license, or arrangement to which the Commitment Party or HPE Fund IV is a party or by which the Commitment Party, HPE Fund IV, or any of their respective properties or assets may be bound, or (iii) violate any applicable law, statute, rule, regulation, order, judgment, injunction, or decree of any governmental authority applicable to the Commitment Party or HPE Fund IV.
(e) Sufficiency of Funds. HPE Fund IV has, or will have at the Closing, sufficient available capital commitments from its limited partners and/or liquid assets to fund the Equity Commitment in full, without qualification or limitation. HPE Fund IV is a $6.8 billion fund (vintage 2022) and has uncalled capital commitments from its limited partners that are sufficient, in the aggregate, to fund the Equity Commitment in its entirety. The Commitment Party, in its capacity as general partner of HPE Fund IV, has made all capital calls and has taken, or will take prior to the Closing, all other actions necessary or appropriate under the LPA and applicable law to ensure that the Equity Commitment can be funded in full at or immediately prior to the Closing. The Commitment Party is not aware of any limited partner of HPE Fund IV that has defaulted on a prior capital call or that has indicated an inability or unwillingness to fund its pro rata share of the Equity Commitment when called.
(f) Solvency. After giving effect to the funding of the Equity Commitment and the consummation of the Merger and the related debt and equity financing transactions, each of the Commitment Party and HPE Fund IV (i) will be able to pay its respective debts as they become due in the ordinary course of business, (ii) will have assets (at a fair valuation) that exceed its respective liabilities (including contingent, subordinated, unmatured, and unliquidated liabilities), and (iii) will not have unreasonably small capital with which to engage in its respective business as then conducted and as proposed to be conducted.
Section 7. Fund Information.
The following information is provided for the convenience of the Company and is accurate as of the date of this Equity Commitment Letter:
Harrowgate Private Equity Fund IV LP
Managing Partners of the Commitment Party:
•  Richard Harrowgate — Founder & Chairman
•  Priya Deshmukh — Managing Partner, Fund IV
•  Thomas Eriksen — Partner, Head of Financial Technology
HPE Fund IV has previously completed three platform investments in the payments and financial infrastructure sectors and has extensive experience in the types of regulatory, operational, and commercial matters relevant to the acquisition of the Company. The investment in the Company will represent HPE Fund IV's fourth platform investment in the payments and financial infrastructure sector and is consistent with the Fund's stated investment strategy as described in its offering memorandum and limited partnership agreement.
Section 8. Termination.
This Equity Commitment Letter shall terminate automatically and be of no further force or effect upon the earliest to occur of the following events:
(a) The Closing, at which time the Equity Commitment shall have been fully funded in accordance with the terms hereof and the obligations of the Commitment Party hereunder shall be deemed fully satisfied, performed, and discharged;
(b) The valid termination of the Merger Agreement in accordance with its terms, including without limitation (i) termination by the mutual written consent of all parties to the Merger Agreement, (ii) termination by the Company in accordance with its fiduciary-out provisions set forth in the Merger Agreement (subject to the Company's payment of the Company termination fee of $76,000,000 (seventy-six million dollars) to HPE Fund IV in accordance with the terms of the Merger Agreement), or (iii) termination by HPE Fund IV in accordance with the terms of the Merger Agreement (subject, if applicable, to the payment of the Reverse Termination Fee of $57,000,000 (fifty-seven million dollars) by or on behalf of HPE Fund IV to the Company in accordance with the terms of the Merger Agreement); and
(c) The payment in full of the Reverse Termination Fee by or on behalf of HPE Fund IV to the Company in accordance with the terms and conditions of the Merger Agreement, which payment shall constitute liquidated damages and shall be the sole and exclusive remedy of the Company in the circumstances giving rise to such payment obligation, as more fully set forth in the Merger Agreement.
Upon the termination of this Equity Commitment Letter pursuant to this Section 8, no party hereto shall have any further obligation, liability, or responsibility hereunder or with respect hereto; provided, however, that such termination shall not relieve any party of liability for any willful and material breach of this Equity Commitment Letter occurring prior to the effective time of such termination. For purposes of this Section 8, a "willful and material breach" means a material breach of this Equity Commitment Letter that is a consequence of an act or failure to act undertaken by the breaching party with actual knowledge that the taking of such act or the failure to take such act would, or would reasonably be expected to, constitute or result in a material breach of this Equity Commitment Letter.
Section 9. Amendment; Assignment.
This Equity Commitment Letter may not be amended, modified, supplemented, or waived in whole or in part except by a written instrument duly executed by each of the Commitment Party and the Company. No failure or delay by either party in exercising any right hereunder shall operate as a waiver thereof, and no single or partial exercise of any such right shall preclude any other or further exercise thereof.
The Commitment Party may not assign, delegate, or otherwise transfer any of its rights or obligations under this Equity Commitment Letter to any person without the prior written consent of the Company, which consent may be withheld in the Company's sole discretion; provided, however, that the Commitment Party may, without the prior written consent of the Company, assign its obligations under this Equity Commitment Letter (in whole or in part) to (i) an affiliate directly or indirectly controlled by the Commitment Party, or (ii) Harrowgate Velocity Co-Invest LP, a Delaware limited partnership formed on March 14, 2025, with Harrowgate Capital Management IV LLC serving as its general partner (the "Co-Invest Vehicle"); provided, further, that no such assignment shall relieve the Commitment Party of any of its obligations or liabilities hereunder, and the Commitment Party shall remain primarily liable for the full performance of all obligations under this Equity Commitment Letter notwithstanding any such assignment.
The Company may not assign, delegate, or otherwise transfer any of its rights under this Equity Commitment Letter to any person without the prior written consent of the Commitment Party, which consent may be withheld in the Commitment Party's sole discretion.
Any purported assignment, delegation, or transfer in violation of this Section 9 shall be null and void and of no force or effect.
Section 10. Governing Law; Jurisdiction; Waiver of Jury Trial.
This Equity Commitment Letter shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of laws rules, provisions, or principles (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.
Any action, suit, or proceeding arising out of or relating to this Equity Commitment Letter or the transactions contemplated hereby shall be brought exclusively in 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 a particular matter, any state court of the State of Delaware located in Wilmington, Delaware, or, if no state court of the State of Delaware located in Wilmington, Delaware has jurisdiction, the United States District Court for the District of Delaware), and each party hereby irrevocably and unconditionally (i) submits to the exclusive jurisdiction of such courts for purposes of any such action, suit, or proceeding, (ii) agrees not to commence any such action, suit, or proceeding except in such courts, (iii) waives, and agrees not to plead or claim, that such courts are an inconvenient forum or that venue in such courts is improper, and (iv) waives any right to remove any such action, suit, or proceeding to any other court.
Each party agrees that service of process in any such action, suit, or proceeding may be made by delivery of process in the manner set forth in Section 11 of this Equity Commitment Letter for the giving of notices, and each party irrevocably waives any objection to such service of process.
EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS EQUITY COMMITMENT LETTER OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY 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) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS EQUITY COMMITMENT LETTER BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.
Section 11. Notices.
All notices, requests, demands, consents, waivers, and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when (i) delivered by hand, (ii) sent by electronic mail (with confirmation of receipt), (iii) sent by nationally recognized overnight courier service (with proof of delivery), or (iv) sent by registered or certified mail, return receipt requested, postage prepaid, in each case addressed to the applicable party at the address set forth below (or at such other address as such party may designate by written notice to the other parties in accordance with this Section 11):
If to the Commitment Party or HPE Fund IV:
Harrowgate Capital Management IV LLC 300 King Street, Suite 4200 Wilmington, Delaware 19801
Attention: Priya Deshmukh, Managing Partner
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
If to the Company:
VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759
Attention: Danielle Moreau, General Counsel
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
Section 12. Miscellaneous.
Entire Agreement. This Equity Commitment Letter, together with the Merger Agreement (when executed), the Limited Guarantee, and the Debt Commitment Letter, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and thereof, and supersedes all prior and contemporaneous agreements, understandings, negotiations, representations, warranties, and discussions, whether oral or written, among the parties with respect to such subject matter. There are no warranties, representations, or other agreements among the parties in connection with the subject matter hereof except as specifically set forth herein and in the other agreements referenced in this paragraph.
Counterparts. This Equity Commitment Letter may be executed in one or more counterparts (including by facsimile or electronic (.pdf) signature), each of which, when so executed and delivered, 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 Equity Commitment Letter by facsimile or electronic (.pdf) transmission shall be effective as delivery of a manually executed counterpart.
Headings. The section headings and captions contained in this Equity Commitment Letter are inserted for convenience of reference only and shall not affect the meaning, interpretation, or construction of any provision hereof.
Severability. If any provision of this Equity Commitment Letter is held to be invalid, illegal, or unenforceable by any court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Equity Commitment Letter, and the remaining provisions shall remain in full force and effect and shall be enforceable in accordance with their terms. The parties shall endeavor in good faith to replace any invalid, illegal, or unenforceable provision with a valid, legal, and enforceable provision that, to the greatest extent possible, achieves the economic, business, and other purposes of the invalid, illegal, or unenforceable provision.
Expenses. Each party shall bear its own costs and expenses (including fees and disbursements of legal counsel, financial advisors, accountants, and other advisors and consultants) incurred in connection with the negotiation, execution, delivery, and performance of this Equity Commitment Letter, except as otherwise expressly provided in the Merger Agreement.
Confidentiality. The existence and terms of this Equity Commitment Letter are confidential and shall not be disclosed by any party to any person, except (i) as required by applicable law, rule, regulation, legal process, or governmental order, (ii) to the respective advisors, accountants, attorneys, and other representatives of each party on a need-to-know basis, in each case who are informed of the confidential nature of this Equity Commitment Letter and who agree to maintain such confidentiality, (iii) as required in connection with regulatory filings made in connection with the Merger, including the HSR filing and any filing with the Investment Canada Act review authorities, and (iv) as required in connection with the Information Statement to be prepared and furnished to the stockholders of the Company pursuant to Section 228(e) of the Delaware General Corporation Law and Rule 14c-2 under the Securities Exchange Act of 1934, as amended, in connection with the stockholder approval of the Merger.
[Signature Pages Follow]
IN WITNESS WHEREOF, the Commitment Party has executed and delivered this Equity Commitment Letter as of the date first written above.
HARROWGATE CAPITAL MANAGEMENT IV LLC, in its capacity as general partner of Harrowgate Private Equity Fund IV LP
By: ________
Name: Priya Deshmukh
Title: Managing Partner, Fund IV
Date: February 14, 2025
ACKNOWLEDGED AND AGREED as of the date first written above:
VELOPAY SYSTEMS, INC.
By: ________
Name: Nathan Aldridge
Title: Chief Executive Officer
Date: February 14, 2025
Source | Amount
Equity Commitment (HPE Fund IV) | $1,140,000,000
Senior Secured Term Loan Facility (Tralvendo / Prairie State) | $500,000,000
Senior Secured Revolving Credit Facility (Tralvendo / Prairie State) | $260,000,000
Total Sources | $1,900,000,000
Item | Detail
Legal Name | Harrowgate Private Equity Fund IV LP
Jurisdiction of Organization | State of Delaware
EIN | 87-4231956
General Partner | Harrowgate Capital Management IV LLC (EIN: 87-4231847)
Headquarters | 300 King Street, Suite 4200, Wilmington, Delaware 19801
Fund Size | $6.8 billion
Vintage | 2022
Investment Strategy | Growth and buyout investments in financial services technology, infrastructure software, and data analytics

EQUITY COMMITMENT LETTER

VELOPAY SYSTEMS, INC.

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