STOCKHOLDER SUPPORT AGREEMENT
Dated as of March 18, 2025
among
HARROWGATE PRIVATE EQUITY FUND IV LP
RIDGELINE VENTURES FUND III LP
APEX GROWTH PARTNERS II LP
BROADLEAF CAPITAL PARTNERS LP
NATHAN ALDRIDGE
SONIA REYES-WATKINS
In connection with the Agreement and Plan of Merger, dated as of March 18, 2025, among Harrowgate Private Equity Fund IV LP, Harrowgate Velocity Merger Sub Inc., and VeloPay Systems, Inc.
STOCKHOLDER SUPPORT AGREEMENT
This STOCKHOLDER SUPPORT AGREEMENT (this "Agreement") is made and entered into as of March 18, 2025, by and among Harrowgate Private Equity Fund IV LP, a Delaware limited partnership ("Parent"), and each of the stockholders of VeloPay Systems, Inc., a Delaware corporation (the "Company"), listed on the signature pages hereto (each, a "Stockholder" and collectively, the "Stockholders").
RECITALS
WHEREAS, Parent is a Delaware limited partnership with its principal offices at 300 King Street, Suite 4200, Wilmington, Delaware 19801;
WHEREAS, Harrowgate Velocity Merger Sub Inc. ("Merger Sub") is a Delaware corporation and wholly-owned subsidiary of Parent, incorporated on February 24, 2025, formed solely for the purpose of effectuating the transactions contemplated by the Merger Agreement (as defined below);
WHEREAS, VeloPay Systems, Inc. (the "Company") is a Delaware corporation with its principal offices at 1455 Innovation Parkway, Suite 800, Austin, Texas 78759;
WHEREAS, Parent, Merger Sub, and the Company have entered into that certain Agreement and Plan of Merger, dated as of the date hereof (as may be amended, supplemented, or modified from time to time in accordance with its terms, the "Merger Agreement"), pursuant to which Merger Sub will merge with and into the Company, with the Company surviving as a wholly-owned subsidiary of Parent (the "Merger"), in a reverse triangular merger under Section 251 of the Delaware General Corporation Law (the "DGCL");
WHEREAS, the aggregate merger consideration under the Merger Agreement is One Billion Nine Hundred Million Dollars ($1,900,000,000), representing Twenty Dollars ($20.00) per share of the Company's common stock on a fully diluted, as-converted basis (the "Per Share Merger Consideration");
WHEREAS, each Stockholder is the record and/or beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of shares of common stock, par value $0.001 per share, of the Company (the "Company Common Stock"), as set forth opposite such Stockholder's name on Schedule A hereto (the "Owned Shares"), which Owned Shares collectively represent approximately 63.1% of the outstanding shares of Company Common Stock;
WHEREAS, specifically: (a) Ridgeline Ventures Fund III LP owns approximately 22.4% of the outstanding Company Common Stock, (b) Apex Growth Partners II LP owns approximately 16.8% of the outstanding Company Common Stock, (c) Nathan Aldridge owns approximately 14.2% of the outstanding Company Common Stock, (d) Sonia Reyes-Watkins owns approximately 9.7% of the outstanding Company Common Stock, and (e) Broadleaf Capital Partners LP owns approximately 6.1% of the outstanding Company Common Stock;
WHEREAS, as a condition and inducement to Parent's willingness to enter into the Merger Agreement, Parent has required that each Stockholder enter into this Agreement; and
WHEREAS, each Stockholder acknowledges that Parent is entering into the Merger Agreement in reliance on the representations, warranties, covenants, and agreements of the Stockholders set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Merger Agreement.
ARTICLE I — DEFINITIONS
Section 1.1 Definitions
As used in this Agreement, the following terms shall have the meanings set forth below:
"Agreement" means this Stockholder Support Agreement, including all Schedules and Exhibits hereto, as may be amended, supplemented, or modified from time to time in accordance with Section 7.3 hereof.
"Company" means VeloPay Systems, Inc., a Delaware corporation.
"Company Common Stock" means shares of common stock, par value $0.001 per share, of the Company.
"Covered Shares" means, with respect to each Stockholder, (a) all Owned Shares of such Stockholder, plus (b) any additional shares of Company Common Stock or other equity securities of the Company (including shares of Company Common Stock issued upon the exercise, conversion, or exchange of any options, warrants, restricted stock units, convertible notes, or other convertible or exchangeable securities) that such Stockholder acquires record or beneficial ownership of after the date hereof, whether by purchase, conversion, exercise, dividend, distribution, or otherwise, during the term of this Agreement.
"DGCL" means the Delaware General Corporation Law, as amended from time to time.
"Expiration Date" means the earliest to occur of (a) the Effective Time (as defined in the Merger Agreement), (b) the valid termination of the Merger Agreement in accordance with its terms, and (c) the date of any amendment, modification, or waiver of any provision of the Merger Agreement that reduces the Per Share Merger Consideration or changes the form of consideration payable to the stockholders of the Company from all cash, unless such amendment, modification, or waiver has been consented to in writing by the affected Stockholder.
"Merger" has the meaning set forth in the Recitals.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of March 18, 2025, by and among Parent, Merger Sub, and the Company, as may be amended, supplemented, or modified from time to time in accordance with its terms.
"Merger Sub" means Harrowgate Velocity Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of Parent.
"Owned Shares" means, with respect to each Stockholder, the shares of Company Common Stock set forth opposite such Stockholder's name on Schedule A hereto.
"Parent" means Harrowgate Private Equity Fund IV LP, a Delaware limited partnership.
"Per Share Merger Consideration" means Twenty Dollars ($20.00) per share of Company Common Stock in cash, without interest and subject to applicable withholding taxes, as set forth in the Merger Agreement.
"Permitted Transferee" means, with respect to any Stockholder, (a) any affiliate of such Stockholder (including, in the case of a Stockholder that is a limited partnership, such Stockholder's general partner, any limited partner of such Stockholder, or any fund managed by the same general partner or investment advisor as such Stockholder), (b) in the case of a Stockholder that is an individual, any member of such Stockholder's immediate family (including such Stockholder's spouse, children, grandchildren, parents, and siblings, and the spouses of each of the foregoing), (c) any trust established for the benefit of such Stockholder or any of the persons described in clause (b), (d) any individual retirement account or similar tax-advantaged account for the benefit of such Stockholder, or (e) any corporation, partnership, limited liability company, or other entity wholly owned, directly or indirectly, by such Stockholder; provided that, in each case, such Permitted Transferee executes a joinder agreement, in form and substance reasonably satisfactory to Parent, agreeing to be bound by all of the terms of this Agreement with respect to the Covered Shares so transferred, prior to or simultaneously with such Transfer.
"Rollover Agreement" means those certain Rollover Agreements of even date herewith, by and among Parent, Harrowgate Velocity Co-Invest LP, and each of Nathan Aldridge and Sonia Reyes-Watkins, respectively, pursuant to which such persons have agreed to roll over a portion of their merger proceeds into equity interests in Harrowgate Velocity Co-Invest LP.
"Transfer" means any direct or indirect sale, assignment, transfer, pledge, hypothecation, encumbrance, grant of a security interest in, or other disposition of (whether by merger, consolidation, operation of law, or otherwise), or the entry into any contract, option, or other arrangement or understanding with respect to the sale, assignment, transfer, pledge, hypothecation, encumbrance, grant of a security interest in, or other disposition of, any Covered Shares or any interest therein, including any swap, hedge, or similar transaction or agreement that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of any Covered Shares, whether or not any such swap, hedge, or similar transaction or agreement is to be settled by delivery of securities, in cash, or otherwise.
"Written Consent" means the written consent of stockholders in lieu of a meeting of stockholders of the Company, adopting and approving the Merger Agreement, the Merger, and the other transactions contemplated by the Merger Agreement, in accordance with Section 228 of the DGCL.
Section 1.2 Interpretation
Unless the context otherwise requires, the following rules of interpretation shall apply to this Agreement:
(a) References to "Sections," "Articles," "Schedules," and "Exhibits" shall refer to Sections and Articles of, and Schedules and Exhibits to, this Agreement unless otherwise indicated.
(b) The headings and captions of the Articles, Sections, and other subdivisions of this Agreement are for convenience of reference only, shall not be considered a part of this Agreement, and shall not be employed in the construction or interpretation of any provision of this Agreement.
(c) The word "including" and words of similar import shall mean "including without limitation" and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.
(d) Words in the singular shall be held to include the plural and vice versa, and words of one gender shall be held to include the other gender as the context requires.
(e) The terms "hereof," "herein," "hereby," "hereto," and derivative or similar words refer to this entire Agreement.
(f) References to any statute, rule, or regulation are to such statute, rule, or regulation as amended, modified, supplemented, or replaced from time to time (and, in the case of any statute, include any rules and regulations promulgated under such statute), and references to any section of any statute, rule, or regulation include any successor to such section.
(g) References to any person include such person's successors and permitted assigns.
(h) References to "days" mean calendar days unless business days are expressly specified, and references to "business days" mean any day other than a Saturday, Sunday, or day on which banking institutions in Wilmington, Delaware, New York, New York, or Austin, Texas are authorized or required by law or executive order to close.
(i) The word "or" shall not be exclusive.
(j) The word "extent" in the phrase "to the extent" shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply "if."
ARTICLE II — AGREEMENT TO VOTE / DELIVER WRITTEN CONSENT
Section 2.1 Agreement to Deliver Written Consent and Vote
(a) Each Stockholder irrevocably and unconditionally agrees that, promptly (and in any event within two (2) business days) following the execution and delivery of this Agreement, or at any time hereafter at the written request of Parent, such Stockholder shall execute and deliver (or cause to be executed and delivered) a Written Consent with respect to all of such Stockholder's Covered Shares in favor of:
(i) the adoption and approval of the Merger Agreement and the approval of the Merger and the other transactions contemplated thereby;
(ii) the approval of each of the other transactions contemplated by the Merger Agreement, including the conversion of shares of Company Common Stock into the right to receive the Per Share Merger Consideration; and
(iii) any other matters necessary or advisable for the consummation of the transactions contemplated by the Merger Agreement that are submitted for the vote or written consent of the stockholders of the Company.
(b) Each Stockholder acknowledges and confirms that the Written Consent was executed and delivered simultaneously with this Agreement on March 18, 2025, with respect to the Owned Shares held by such Stockholder as of such date. Each Stockholder agrees that, to the extent such Stockholder acquires beneficial or record ownership of any additional shares of Company Common Stock after the date hereof and prior to the Expiration Date (such that such shares become Covered Shares), such Stockholder shall promptly (and in any event within two (2) business days following such acquisition) execute and deliver (or cause to be executed and delivered) a supplemental Written Consent or other instrument covering such additional Covered Shares, in each case in form and substance reasonably satisfactory to Parent.
(c) If, notwithstanding the delivery of a Written Consent pursuant to this Section 2.1, for any reason the Merger Agreement and the Merger are submitted for adoption and approval at a meeting of stockholders of the Company (whether annual or special, and at every adjournment or postponement thereof), each Stockholder shall:
(i) appear at each such meeting or otherwise cause all of such Stockholder's Covered Shares to be counted as present thereat for purposes of calculating a quorum; and
(ii) vote (or cause to be voted), in person or by proxy, all of such Stockholder's Covered Shares in favor of the adoption and approval of the Merger Agreement, the approval of the Merger, and the approval of each of the other transactions contemplated by the Merger Agreement and any actions required in furtherance thereof.
(d) Each Stockholder agrees that the obligations set forth in this Section 2.1 shall apply regardless of whether the Board of Directors of the Company or any committee thereof shall have effected an Adverse Recommendation Change (as defined in the Merger Agreement) or shall have recommended any Acquisition Proposal to the stockholders of the Company, and irrespective of any other action or recommendation by the Board of Directors of the Company or any committee thereof.
Section 2.2 Agreement to Vote Against Competing Proposals
Each Stockholder irrevocably and unconditionally agrees that, from the date hereof until the Expiration Date, at any meeting of the stockholders of the Company (whether annual or special, and at every adjournment or postponement thereof) and on every action or approval by Written Consent of the stockholders of the Company for which such Stockholder's vote or consent is solicited, such Stockholder shall vote (or cause to be voted) or deliver a Written Consent (or cause a Written Consent to be delivered) covering all of such Stockholder's Covered Shares against:
(a) any Acquisition Proposal (as defined in the Merger Agreement) or any proposal made in furtherance of, or that is intended to or could reasonably be expected to facilitate, any Acquisition Proposal;
(b) any action, proposal, transaction, or agreement that would reasonably be expected to (i) result in a breach of any covenant, representation, or warranty or other obligation of the Company contained in the Merger Agreement, (ii) result in any of the conditions to the consummation of the Merger set forth in the Merger Agreement not being fulfilled or satisfied, or (iii) impede, interfere with, delay, postpone, discourage, or adversely affect the timely consummation of the Merger or any of the other transactions contemplated by the Merger Agreement or this Agreement;
(c) any extraordinary corporate transaction, including any dissolution, liquidation, winding up, recapitalization, extraordinary dividend or distribution, reorganization, restructuring, or similar transaction, involving the Company or any of its subsidiaries (other than the Merger); and
(d) any change in the corporate structure, business, or capital structure of the Company or any of its subsidiaries, or any other action or agreement, that is inconsistent with any of the transactions contemplated by the Merger Agreement or this Agreement.
Section 2.3 Revocation of Proxies
(a) Each Stockholder hereby represents that any proxies, powers of attorney, instructions, or other authority heretofore given by such Stockholder in respect of the voting of any of such Stockholder's Covered Shares that would be inconsistent with the obligations of such Stockholder under this Article II are hereby revoked, and that no subsequent proxy, power of attorney, instruction, or authority (other than as contemplated by this Agreement) shall be given by such Stockholder.
(b) Each Stockholder agrees not to, directly or indirectly, grant any proxy, consent, or power of attorney with respect to any Covered Shares, deposit any Covered Shares into a voting trust, or enter into a voting agreement or arrangement with respect to any Covered Shares, in each case that is inconsistent with the obligations of such Stockholder under this Agreement. Any attempt by a Stockholder to grant any such proxy, consent, or power of attorney, or to deposit any Covered Shares into any such voting trust, or to enter into any such voting agreement or arrangement, shall be null and void and of no force or effect.
ARTICLE III — REPRESENTATIONS AND WARRANTIES OF EACH STOCKHOLDER
Each Stockholder hereby severally and not jointly represents and warrants to Parent as follows:
Section 3.1 Authority; Binding Agreement
(a) If such Stockholder is an entity: such Stockholder is duly organized or formed, validly existing, and in good standing under the laws of its jurisdiction of organization or formation. Without limiting the generality of the foregoing: (i) Ridgeline Ventures Fund III LP is a limited partnership duly formed, validly existing, and in good standing under the laws of the State of Delaware; (ii) Apex Growth Partners II LP is a limited partnership duly formed, validly existing, and in good standing under the laws of the State of Delaware; and (iii) Broadleaf Capital Partners LP is a limited partnership duly formed, validly existing, and in good standing under the laws of the State of Delaware.
(b) If such Stockholder is an individual: such Stockholder has full legal capacity, right, and authority to enter into this Agreement and to perform his or her obligations hereunder. Without limiting the generality of the foregoing, each of Nathan Aldridge and Sonia Reyes-Watkins represents that he or she is of legal age and has the legal capacity to enter into and perform his or her obligations under this Agreement, and that the execution and delivery of this Agreement by such Stockholder and the consummation by such Stockholder of the transactions contemplated hereby will not require the consent or approval of any other person under any community property, marital property, or similar law or arrangement.
(c) This Agreement has been duly and validly executed and delivered by such Stockholder and constitutes a legal, valid, and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms, subject to (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or similar laws relating to or affecting the enforcement of creditors' rights generally, and (ii) the effect of general principles of equity, whether considered in a proceeding in equity or at law (including the possible unavailability of specific performance or injunctive relief) (collectively, the "Enforceability Exceptions").
(d) In the case of each entity Stockholder, all necessary limited partnership, limited liability company, or other applicable entity actions have been duly taken to authorize the execution, delivery, and performance of this Agreement by such Stockholder, including all necessary actions by such Stockholder's general partner or managing member, as applicable. No other entity-level proceedings on the part of such Stockholder are necessary to authorize the execution, delivery, and performance of this Agreement or to consummate the transactions contemplated hereby.
Section 3.2 Ownership of Shares
(a) Such Stockholder is the record and/or beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of the number of Owned Shares of Company Common Stock set forth opposite such Stockholder's name on Schedule A hereto. As of the date hereof, the Owned Shares set forth on Schedule A constitute all of the shares of Company Common Stock owned of record or beneficially by such Stockholder.
(b) Such Stockholder has good and valid title to such Stockholder's Owned Shares, free and clear of all liens, claims, charges, pledges, security interests, mortgages, options, rights of first refusal, preemptive rights, proxies, voting trusts, voting agreements, or other encumbrances of any kind or nature whatsoever (collectively, "Liens"), other than (i) Liens created by this Agreement, (ii) restrictions on transfer arising under applicable federal and state securities laws, (iii) Liens arising under or pursuant to the Company's certificate of incorporation, bylaws, or other organizational documents, and (iv) any restrictions or obligations arising under that certain Third Amended and Restated Investors' Rights Agreement, dated as of September 12, 2021, among the Company and the stockholders party thereto, or that certain Third Amended and Restated Stockholders' Agreement, dated as of September 12, 2021, among the Company and the stockholders party thereto, in each case as heretofore disclosed to Parent.
(c) Such Stockholder has, and will have at all times through the Expiration Date, full voting power and full power of disposition, in each case with respect to all of such Stockholder's Owned Shares, and such Stockholder has not entered into any agreement or arrangement (other than this Agreement) that would limit, restrict, or impair such Stockholder's ability to exercise its voting power with respect to the Owned Shares or to otherwise comply with and perform its covenants and obligations under this Agreement.
(d) Other than such Stockholder's Owned Shares, such Stockholder does not own, beneficially or of record, any shares of capital stock of the Company, any securities convertible into or exchangeable for shares of capital stock of the Company, or any other right (contingent or otherwise) to acquire shares of capital stock of the Company, except as set forth on Schedule A hereto. For the avoidance of doubt, Schedule A sets forth any stock options, restricted stock units ("RSUs"), warrants, or other rights to acquire Company Common Stock held by individual Stockholders Nathan Aldridge and Sonia Reyes-Watkins, to the extent applicable. Such additional equity rights are not "Owned Shares" for purposes of this Agreement unless and until exercised or settled prior to the Expiration Date.
Section 3.3 No Conflicts
The execution, delivery, and performance of this Agreement by such Stockholder, and the consummation of the transactions contemplated hereby, will not (a) if such Stockholder is an entity, violate, conflict with, or result in any breach of any provision of such Stockholder's certificate of limited partnership, limited partnership agreement, certificate of formation, limited liability company agreement, or other organizational or governing document, (b) result in a violation of, or conflict with, or constitute (with or without notice or lapse of time or both) a default under, any judgment, order, writ, decree, injunction, statute, law, ordinance, rule, or regulation of any governmental authority applicable to such Stockholder or such Stockholder's Owned Shares, or (c) result in any breach of, or constitute a default (or an event that, with the giving of notice, the lapse of time, or both, would become a default) under, or give rise to any right of termination, amendment, acceleration, or cancellation of, any material contract, agreement, indenture, instrument, or obligation to which such Stockholder is a party or by which such Stockholder or any of such Stockholder's properties or assets (including the Owned Shares) are bound, in each case of clauses (a), (b), and (c), except as would not, individually or in the aggregate, prevent or materially delay the performance by such Stockholder of its obligations under this Agreement.
Section 3.4 No Litigation
There is no action, suit, claim, proceeding, arbitration, or investigation pending or, to the knowledge of such Stockholder, threatened in writing against such Stockholder or any of such Stockholder's properties or assets (including the Owned Shares) before or by any court, arbitrator, or governmental authority that would reasonably be expected to impair, prevent, or materially delay such Stockholder's ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby on a timely basis.
Section 3.5 No Finder's Fees
No broker, finder, investment banker, financial advisor, or other intermediary is entitled to any brokerage, finder's, or similar fee or commission from Parent, Merger Sub, or any of their respective affiliates in connection with this Agreement or the transactions contemplated hereby based upon arrangements made by or on behalf of such Stockholder. For the avoidance of doubt, this representation does not apply to any fees payable to Velthryn Greer & Associates as the Company's financial advisor in connection with the Merger, the engagement of which is disclosed in the Merger Agreement and is an obligation of the Company.
Section 3.6 Reliance
Such Stockholder understands and acknowledges that Parent and Merger Sub are entering into the Merger Agreement in reliance upon such Stockholder's execution and delivery of this Agreement and the representations, warranties, covenants, and agreements of such Stockholder contained herein. Such Stockholder has had the opportunity to review the Merger Agreement and this Agreement with such Stockholder's own legal counsel and other advisors.
ARTICLE IV — COVENANTS OF EACH STOCKHOLDER
Section 4.1 Restriction on Transfer
(a) From the date hereof until the Expiration Date, each Stockholder shall not, directly or indirectly, (i) Transfer any of such Stockholder's Covered Shares or any interest therein, (ii) enter into any agreement, arrangement, or understanding (whether or not in writing) with any person with respect to any Transfer of any Covered Shares or any interest therein, or (iii) grant any proxy, power of attorney, or other authorization or consent with respect to any of such Stockholder's Covered Shares that is inconsistent with such Stockholder's obligations under this Agreement. Any Transfer or attempted Transfer in violation of this Section 4.1 shall be null and void ab initio and of no force or effect.
(b) Notwithstanding the foregoing, the restrictions set forth in Section 4.1(a) shall not apply to:
(i) any Transfer to a Permitted Transferee, provided that (A) such Permitted Transferee executes a joinder agreement, in form and substance reasonably satisfactory to Parent, agreeing to be bound by all of the terms of this Agreement with respect to the Covered Shares so transferred, prior to or simultaneously with such Transfer, and (B) the transferring Stockholder provides Parent with written notice of such Transfer not less than three (3) business days prior to the consummation thereof (or, if such advance notice is not reasonably practicable, as promptly as reasonably practicable but in no event later than one (1) business day following such Transfer);
(ii) Transfers expressly contemplated by the Merger Agreement, including the treatment of equity awards, stock options, RSUs, and warrants as set forth in the Merger Agreement, and including the cancellation of shares of Company Common Stock and the payment of the Per Share Merger Consideration in connection with the Merger;
(iii) in the case of Nathan Aldridge and Sonia Reyes-Watkins, the rollover of a portion of their merger proceeds into equity interests in Harrowgate Velocity Co-Invest LP pursuant to the Rollover Agreement of even date herewith. For the avoidance of doubt, the rollover amounts are as follows: Nathan Aldridge — Fourteen Million Two Hundred Thousand Dollars ($14,200,000); Sonia Reyes-Watkins — Nine Million Seven Hundred Thousand Dollars ($9,700,000). Such rollover transactions shall not constitute a prohibited Transfer under this Agreement; and
(iv) Transfers required by order of a court of competent jurisdiction; provided that (A) the Stockholder provides Parent with reasonable prior written notice of such required Transfer (to the extent not prohibited by such court order), and (B) the transferee executes a joinder agreement, in form and substance reasonably satisfactory to Parent, agreeing to be bound by all of the terms of this Agreement with respect to the Covered Shares so transferred.
(c) For the avoidance of doubt, in the event of any permitted Transfer pursuant to Section 4.1(b), the transferring Stockholder shall remain liable for the performance of its obligations under this Agreement unless and until the applicable transferee has executed and delivered a joinder agreement in accordance with the foregoing provisions.
Section 4.2 No Solicitation
(a) From the date hereof until the Expiration Date, each Stockholder shall not, directly or indirectly, and shall not authorize or permit any of its officers, directors, partners, members, managers, employees, agents, advisors, representatives (including attorneys, accountants, and financial advisors), or other persons acting on behalf of such Stockholder (collectively, such Stockholder's "Representatives") to, directly or indirectly:
(i) solicit, initiate, propose, or knowingly encourage, induce, or facilitate (including by furnishing non-public information) the making, submission, or announcement of any inquiry, proposal, or offer that constitutes, or would reasonably be expected to lead to, any Acquisition Proposal (as defined in the Merger Agreement);
(ii) enter into, continue, or otherwise participate in any discussions or negotiations with any person (other than Parent, Merger Sub, or their respective affiliates or Representatives) with respect to, or furnish to any person (other than Parent, Merger Sub, or their respective affiliates or Representatives) any non-public information relating to the Company or any of its subsidiaries in connection with, any Acquisition Proposal or any inquiry, proposal, or offer that would reasonably be expected to lead to an Acquisition Proposal; or
(iii) approve, endorse, or recommend, or enter into any letter of intent, memorandum of understanding, merger agreement, acquisition agreement, joint venture agreement, or similar agreement (whether binding or non-binding) relating to any Acquisition Proposal.
(b) Each Stockholder shall promptly (and in any event within twenty-four (24) hours) notify Parent in writing if such Stockholder or any of its Representatives receives any Acquisition Proposal, or any inquiry, indication of interest, or request for information that would reasonably be expected to lead to an Acquisition Proposal, from any third party. Such notice shall include the identity of the person making such proposal, inquiry, indication of interest, or request and the material terms and conditions thereof (including, to the extent available, copies of any written proposals, term sheets, or other documents received in connection therewith). Each Stockholder shall keep Parent reasonably informed on a prompt basis (and in any event within twenty-four (24) hours) of any material developments regarding any such Acquisition Proposal, inquiry, indication of interest, or request.
(c) Notwithstanding anything to the contrary in this Section 4.2, nothing in this Agreement shall restrict, limit, or affect any action or inaction taken by any Stockholder, or by any designee, partner, officer, director, or employee of any Stockholder, in his, her, or its capacity as a director or officer of the Company, and no such action or inaction shall be deemed a violation of this Agreement. Without limiting the generality of the foregoing, the covenants set forth in this Section 4.2 are not intended to and shall not restrict or limit any actions taken by Nathan Aldridge, Sonia Reyes-Watkins, Kwame Asante (as a designee of Ridgeline Ventures Fund III LP serving on the Board of Directors of the Company), or Catherine Lindström (as a designee of Apex Growth Partners II LP serving on the Board of Directors of the Company), in each case solely in their respective capacities as directors of the Company, including any actions taken in connection with or relating to the Board of Directors' exercise of its fiduciary duties as addressed in the Merger Agreement.
Section 4.3 Further Assurances
From the date hereof until the Expiration Date, each Stockholder shall, from time to time, execute and deliver, or cause to be executed and delivered, such additional or further consents, documents, instruments, and other writings, and take or cause to be taken such further actions, as may be reasonably requested by Parent to carry out and effectuate the purposes and intent of this Agreement, including assisting Parent in connection with obtaining any necessary governmental approvals, consents, or authorizations required in connection with the Merger, to the extent such assistance is reasonably within the control of such Stockholder.
Section 4.4 Waiver of Appraisal Rights
Each Stockholder hereby irrevocably and unconditionally waives, and agrees not to exercise, assert, or perfect (or attempt to exercise, assert, or perfect), any rights of appraisal, any rights to dissent from the Merger, or any similar rights under Section 262 of the DGCL or otherwise that may be available to such Stockholder in connection with the Merger or the other transactions contemplated by the Merger Agreement, in each case with respect to all of such Stockholder's Covered Shares. Each Stockholder agrees not to commence, join in, or otherwise participate in (or facilitate or encourage the commencement of) any claim, demand, suit, action, or proceeding in any forum asserting appraisal rights or rights of dissent with respect to any Covered Shares. Each Stockholder acknowledges that this waiver is a material inducement to Parent's willingness to enter into the Merger Agreement.
Section 4.5 Notification of Certain Events
Each Stockholder shall promptly (and in any event within two (2) business days) notify Parent in writing of: (a) any material change in the number of Covered Shares held by such Stockholder (including any acquisition or disposition of shares of Company Common Stock), (b) any development or occurrence that would, or would reasonably be expected to, make any representation or warranty of such Stockholder contained in this Agreement untrue or inaccurate in any material respect, or (c) any failure by such Stockholder to comply with or satisfy in any material respect any covenant, condition, or agreement to be complied with or satisfied by such Stockholder under this Agreement.
Section 4.6 Information Statement
Each Stockholder shall reasonably cooperate with the Company and Parent in connection with the preparation and mailing of the Information Statement to the Company's stockholders pursuant to Section 228(e) of the DGCL and Rule 14c-2 under the Securities Exchange Act of 1934, as amended, including by providing, promptly upon reasonable request, any information regarding such Stockholder, such Stockholder's ownership of Covered Shares, and the delivery of the Written Consent that is required or reasonably requested in connection with the preparation, filing, and mailing of the Information Statement. The parties acknowledge that the Information Statement is expected to be mailed on or about April 14, 2025. Each Stockholder represents that all information supplied or to be supplied by such Stockholder for inclusion or incorporation by reference in the Information Statement, at the time of mailing, will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.
Section 4.7 Adjustments
In the event that, between the date of this Agreement and the Expiration Date, any change in the outstanding shares of Company Common Stock shall occur by reason of any reclassification, recapitalization, stock split (including a reverse stock split), stock combination, exchange, readjustment, stock dividend, or stock distribution, or similar transaction, or any record date for any of the foregoing is established during such period, the terms "Owned Shares" and "Covered Shares" shall be deemed to refer to and include such shares as so reclassified, recapitalized, split, combined, exchanged, readjusted, or distributed, and all provisions of this Agreement shall be appropriately adjusted to reflect such change. Any additional shares of Company Common Stock or other securities of the Company received by a Stockholder as a result of any such event shall be subject to the terms and conditions of this Agreement as Covered Shares.
ARTICLE V — REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to each Stockholder as follows:
Section 5.1 Organization and Authority
Parent is a limited partnership duly formed, validly existing, and in good standing under the laws of the State of Delaware. Parent has full limited partnership power and authority to execute, deliver, and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. Harrowgate Capital Management IV LLC, a Delaware limited liability company, as general partner of Parent, has duly authorized the execution, delivery, and performance of this Agreement on behalf of Parent, and no other limited partnership or other entity-level proceedings on the part of Parent are necessary to authorize the execution, delivery, and performance of this Agreement.
Section 5.2 Binding Agreement
This Agreement has been duly and validly executed and delivered by Parent and constitutes a legal, valid, and binding obligation of Parent, enforceable against Parent in accordance with its terms, subject to the Enforceability Exceptions.
Section 5.3 No Conflicts
The execution, delivery, and performance of this Agreement by Parent, and the consummation of the transactions contemplated hereby, will not (a) violate, conflict with, or result in any breach of any provision of the certificate of limited partnership, limited partnership agreement, or other organizational or governing document of Parent or Harrowgate Capital Management IV LLC, (b) result in a violation of, or conflict with, any judgment, order, writ, decree, injunction, statute, law, ordinance, rule, or regulation of any governmental authority applicable to Parent or any of its properties or assets, or (c) result in any breach of, or constitute a default (or an event that, with the giving of notice, the lapse of time, or both, would become a default) under, any material contract, agreement, indenture, instrument, or obligation to which Parent is a party or by which Parent or any of its properties or assets are bound, in each case of clauses (a), (b), and (c), except as would not, individually or in the aggregate, prevent or materially delay the performance by Parent of its obligations under this Agreement.
Section 5.4 Merger Agreement
Parent has entered into the Merger Agreement, and the Merger Agreement is in full force and effect as of the date hereof. The Merger Agreement has been duly authorized, executed, and delivered by Parent and, to the knowledge of Parent, has been duly authorized, executed, and delivered by each of the other parties thereto.
ARTICLE VI — TERMINATION
Section 6.1 Termination
This Agreement shall automatically terminate and be of no further force or effect, without any notice or other action by any party hereto, upon the earliest to occur of the following:
(a) the Effective Time of the Merger (at which point the obligations of the Stockholders hereunder shall have been fully performed and the Merger consummated);
(b) the valid termination of the Merger Agreement in accordance with Article VIII thereof;
(c) the mutual written agreement of Parent and each of the Stockholders to terminate this Agreement; and
(d) any amendment, modification, or waiver of any provision of the Merger Agreement that (i) decreases the Per Share Merger Consideration below $20.00, (ii) changes the form of consideration payable to the stockholders of the Company from all cash to any other form of consideration (in whole or in part), or (iii) imposes any additional material conditions to the closing of the Merger that are not set forth in the Merger Agreement as of the date hereof, in each case without the prior written consent of the affected Stockholder(s); provided that, in the case of this clause (d), termination shall be effective only with respect to the affected Stockholder(s) that has (have) not consented to such amendment, modification, or waiver, and this Agreement shall remain in full force and effect with respect to all other Stockholders.
Section 6.2 Effect of Termination
(a) Upon termination of this Agreement pursuant to Section 6.1, this Agreement shall thereupon become void and of no further force or effect, and there shall be no liability on the part of any party hereto to any other party hereto or any other person under or in respect of this Agreement or the transactions contemplated hereby, and all obligations of the parties under this Agreement shall terminate and be of no further force or effect.
(b) Notwithstanding the foregoing, (i) no such termination shall relieve any party hereto from any liability for any willful and material breach of any representation, warranty, covenant, or agreement contained in this Agreement that occurred prior to such termination, and (ii) the provisions of this Article VI and Article VII (Miscellaneous) shall survive any termination of this Agreement and remain in full force and effect insofar as applicable to post-termination rights, remedies, and obligations of the parties, including the provisions of Section 7.2 (Specific Performance), Section 7.8 (Governing Law; Jurisdiction), Section 7.9 (Waiver of Jury Trial), and Section 7.12 (Expenses).
ARTICLE VII — MISCELLANEOUS
Section 7.1 No Ownership Interest
Nothing contained in this Agreement shall be deemed to vest in Parent any direct or indirect ownership or incidence of ownership of or with respect to any Covered Shares. All rights, ownership, and economic benefits of and relating to the Covered Shares shall remain vested in and belong to the respective Stockholder, and Parent shall have no authority to manage, direct, superintend, restrict, regulate, govern, or administer any of the policies or operations of the Company or exercise any power or authority to direct any Stockholder in the voting of any of the Covered Shares, except as otherwise expressly provided herein with respect to the voting and disposition obligations set forth in Articles II and IV of this Agreement.
Section 7.2 Specific Performance
(a) The parties hereto agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that any provision of this Agreement were not performed in accordance with the terms hereof. The parties acknowledge and agree that the rights of each party to consummate the transactions contemplated hereby are unique and recognize and affirm that, in the event of a breach or threatened breach of this Agreement by any party, the other parties would be irreparably harmed and could not be made whole by monetary damages.
(b) Accordingly, each party hereto shall be entitled to an injunction or injunctions, specific performance, or other equitable relief to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which such party may be entitled at law or in equity. It is hereby agreed that the right of specific performance and other equitable relief is an integral part of the transactions contemplated by this Agreement and without such right, none of the parties hereto would have entered into this Agreement.
(c) Each party hereto agrees that it will not oppose the granting of an injunction, specific performance, or other equitable relief on the basis that the other parties have an adequate remedy at law or that an award of specific performance is not an appropriate remedy for any reason at law or in equity. No party hereto shall be required to provide or post any bond or other security in connection with any action for specific performance or other equitable relief hereunder.
Section 7.3 Amendments and Waivers
(a) This Agreement may not be amended, modified, or supplemented in any manner, whether by course of conduct or otherwise, except by a written instrument signed by Parent and each of the Stockholders.
(b) No failure or delay by any party in exercising any right, power, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. Any agreement on the part of a party hereto to any waiver shall be valid only if set forth in a written instrument executed and delivered by such party. No waiver of any provision of this Agreement shall constitute a waiver of, or estoppel with respect to, any other provision of this Agreement, nor shall any waiver of any breach of any provision constitute a waiver of any subsequent or other breach of such provision.
Section 7.4 Notices
All notices, requests, claims, demands, and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by an internationally recognized overnight courier service, or by email (with confirmation of receipt) to the respective parties hereto at the following addresses (or at such other address for a party as shall be specified by like notice):
If to Parent:
Harrowgate Private Equity Fund IV LP c/o Harrowgate Capital Management IV LLC 300 King Street, Suite 4200 Wilmington, Delaware 19801
Attention: Priya Deshmukh, Managing Partner
Email: pdeshmukh@harrowgatecapital.com
with a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 787 Seventh Avenue, 38th Floor New York, New York 10019
Attention: Sandra Tung
Email: stung@calderwoodharkness.com
If to Ridgeline Ventures Fund III LP:
88 Battery Street, Suite 3100 San Francisco, California 94111
Attention: Kwame Asante, Managing Partner
Email: kasante@ridgelineventures.com
If to Apex Growth Partners II LP:
450 Lexington Avenue, 29th Floor New York, New York 10017
Attention: Catherine Lindström, Managing Partner
Email: clindstrom@apexgrowthpartners.com
If to Broadleaf Capital Partners LP:
200 Clarendon Street, Suite 5500 Boston, Massachusetts 02116
Attention: Graham Whitfield, Managing Director
Email: gwhitfield@broadleafcapital.com
If to Nathan Aldridge:
c/o VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759
Email: naldridge@velopay.com
If to Sonia Reyes-Watkins:
c/o VeloPay Systems, Inc. 1455 Innovation Parkway, Suite 800 Austin, Texas 78759
Email: sreyeswatkins@velopay.com
In each case with a copy (which shall not constitute notice) to:
Whitford Jessup & Crane LLP 600 Congress Avenue, Suite 2400 Austin, Texas 78701
Attention: Rebecca Thornton-Hayes
Email: rthorntonhayes@whitfordjessup.com
Any party may change its address for the purpose of this Section 7.4 by giving the other parties written notice of its new address in the manner set forth above.
Section 7.5 Severability
If any term or other provision of this Agreement is invalid, illegal, or unenforceable under any applicable law, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party hereto. Upon a determination that any term or other provision is invalid, illegal, or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby may be consummated as originally contemplated to the greatest extent possible.
Section 7.6 Counterparts; Electronic Signatures
This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile transmission or portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Agreement. The words "execution," "signed," "signature," "delivery," and words of similar import in or relating to this Agreement shall be deemed to include electronic signatures in compliance with the federal ESIGN Act of 2000, the Uniform Electronic Transactions Act, or any other applicable law, and each of which shall be of the same legal effect, validity, or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, to the extent permitted by applicable law.
Section 7.7 Entire Agreement
This Agreement (together with the Merger Agreement, the Rollover Agreements, and the other documents and instruments referred to herein and therein, including the Schedules and Exhibits hereto and thereto) constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, understandings, representations, and warranties, both written and oral, among the parties hereto with respect to the subject matter hereof. No representations or warranties have been made by any party hereto in connection herewith other than those expressly set forth in this Agreement.
Section 7.8 Governing Law; Jurisdiction
(a) This Agreement and all claims or causes of action (whether in contract, tort, equity, or otherwise) that may be based upon, arise out of, or relate to this Agreement or the negotiation, execution, or performance of this Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without regard to conflicts-of-law principles that would require the application of the laws of another jurisdiction.
(b) Each party hereto irrevocably and unconditionally submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, the Superior Court of the State of Delaware (Complex Commercial Division), or, if subject matter jurisdiction over the matter that is the subject of the action or proceeding is vested exclusively in the federal courts of the United States of America, the United States District Court for the District of Delaware) for the purposes of any action, suit, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, and each party hereto irrevocably and unconditionally waives any objection to the laying of venue of any action, suit, or proceeding in any such court, and further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit, or proceeding brought in any such court has been brought in an inconvenient forum.
(c) Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 7.4 of this Agreement. Nothing in this Agreement shall affect the right of any party hereto to serve process in any other manner permitted by applicable law.
Section 7.9 Waiver of Jury Trial
EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT, PROCEEDING, CLAIM, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SUIT, OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.9.
Section 7.10 Assignment
Neither this Agreement nor any of the rights, interests, or obligations of any party hereunder shall be assigned, in whole or in part, by operation of law or otherwise, by any party without the prior written consent of the other parties hereto; provided, however, that Parent may assign its rights (but not its obligations) under this Agreement, in whole or in part, to any affiliate of Parent without the consent of any Stockholder; provided, further, that no such assignment shall relieve Parent of any of its obligations hereunder. Subject to the foregoing, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the parties hereto and their respective successors and permitted assigns.
Section 7.11 No Third-Party Beneficiaries
Except as provided in this Section 7.11, nothing in this Agreement, express or implied, is intended to or shall confer upon any person other than the parties hereto (and their respective successors and permitted assigns) any right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement. Notwithstanding the foregoing, the Company is an intended third-party beneficiary of the obligations of the Stockholders set forth in Article II (Agreement to Vote / Deliver Written Consent), Article IV (Covenants of Each Stockholder), and the representations and warranties of the Stockholders set forth in Article III, and shall be entitled to enforce such provisions against the Stockholders directly and to seek the remedies set forth in Section 7.2 with respect to such provisions.