Contract analysis

From: Andrew Fitzpatrick <afitzpatrick@calderwoodharkness.com> To: Beatrice Holloway <bholloway@calderwoodharkness.com> Date: Thu, 05 Feb 2026 04:17:00 -0000 Subject: Tessera Acquisition (1045-00005) — Preliminary Draft Merger Agreement for Client Review

**ATTORNEY-CLIENT PRIVILEGED / ATTORNEY WORK PRODUCT**

Attached for your review is the preliminary draft of the Agreement and Plan of Merger for the prospective acquisition of Tessera Lending, Inc. ("Tessera" or the "Company") by Belmont Ridge Bank NA ("BRB") (Matter No. 1045-00005). This is the first complete draft of the merger agreement, prepared for internal Calderwood & Harkness team review before we circulate to the client — specifically Catherine A. Royce (General

**Attachment:** draft-merger-agreement.docx — *Preliminary Draft — Agreement and Plan of Merger (Belmont Ridge Bank NA / BRB Acquisition Sub, Inc. / Tessera Lending, Inc.)*

I want to flag the following key drafting points for the team's attention as you work through the document:

1. **Transaction Structure.** The draft is structured as a reverse triangular merger under the DGCL among Belmont Ridge Bank NA, BRB Acquisition Sub, Inc. (a to-be-formed Delaware wholly owned subsidiary of BRB), and Tessera Lending, Inc. Tessera will survive the merger as a wholly owned subsidiary of BRB. The aggregate all-cash merger consideration is $48,000,000, with per-share merger consideration of $4.00 per sha

2. **Material Adverse Effect Definition.** The MAE definition includes carve-outs for industry-wide regulatory changes, which is particularly important given the evolving fintech regulatory environment in which Tessera operates. Beatrice — I would appreciate your close review of the scope of the carve-outs and whether they are appropriately tailored to this transaction. This will almost certainly be a point of negoti

3. **Interim Operating Covenants.** The draft includes a comprehensive set of interim operating covenants governing Tessera's conduct of business between signing and closing. These are drafted to restrict material actions outside the ordinary course of business, including (among other things) limitations on new lending programs, modifications to the Ridgeline Community Bank bank-partnership arrangement, capital expen

4. **No-Shop Provision with Fiduciary Out.** The draft includes a no-shop/no-solicitation provision restricting Tessera and its board from soliciting or engaging with competing acquisition proposals. Consistent with market practice, the provision includes a customary fiduciary-out permitting the Tessera board to respond to a bona fide unsolicited superior proposal if failure to do so would constitute a breach of the

5. **Treatment of Tessera Stock Options and RSUs.** The draft provides for the cancellation and cash-out of all outstanding Tessera stock options (in-the-money) and restricted stock units at $4.00 per share (less the applicable exercise price in the case of options), consistent with the fully diluted share count of 12,000,000. The employee/angel pool comprises 900,000 shares. Sylvia — please review this section caref

6. **Ridgeline Community Bank Consent.** The draft includes as a condition to closing the receipt of consent from Ridgeline Community Bank under the existing bank-partnership program agreement (reference TLI-RCB-2020-001, dated March 15, 2020, renewed through December 31, 2027) to the change of control of Tessera. We will need to review the actual consent provisions of the program agreement during diligence (commenci

7. **Indemnification Escrow Mechanics.** The draft contemplates a general indemnification escrow of $4,800,000, representing 10% of the $48,000,000 aggregate merger consideration, to be held by Caravel Trust Company, N.A. as escrow agent for a period of 18 months post-closing. The escrow agreement itself will be a separate ancillary document to be negotiated. For reference, the pro forma funds flow is as follows: gro

8. **R&W Insurance — Placeholder Brackets.** The draft contains placeholder brackets for representations and warranties insurance terms, pending receipt of a formal quote from Meridian Indemnity Group, Inc. The contemplated structure is a buyer-side R&W policy with a policy limit of $9,600,000 (20% of deal value) and a retention of $960,000 (2% of deal value). The retention would be split 50/50 between the indemnific

9. **Conditions to Closing.** The key closing conditions as currently drafted are: (a) OCC prior approval (referencing BRB's OCC charter number 24-00781); (b) state lending-license change-of-control approvals in up to 42 states and D.C.; (c) Tessera stockholder approval by written consent (majority of outstanding shares); (d) accuracy of representations and warranties at closing (subject to MAE-qualified bring-down);

10. **Governing Law.** Delaware for the merger agreement, consistent with the structuring memorandum.

The anticipated timeline contemplates: NDA execution with Tessera and Kessler, Aldrich & Voss LLP by February 14, 2026 (reference NDA-BRB-TLI-2026-001); diligence commencing in March 2026; targeted signing in Q2 2026; regulatory approval period in Q2–Q3 2026; and targeted closing in Q3 2026. On that front, Beatrice's introduction letter to Randall T. Kessler at Kessler, Aldrich & Voss is expected to go out shortly. T

Please review the attached draft and provide your comments and redlines by **end of day Saturday, February 7, 2026**. Specifically:

- **Beatrice:** Overall structural review, MAE carve-outs, no-shop/fiduciary-out provisions, and guidance on the R&W insurance application timing with Meridian Indemnity. - **James:** Fee and expense provisions and termination fee mechanics. - **Sylvia:** Tax-related provisions — Section 338(h)(10) election mechanics (cross-referencing your January 30 tax memo), option/RSU cash-out treatment under Sections 409A and 8

Once internal comments are consolidated, the plan is to circulate the draft to Catherine Royce and Derek Whitmore at Belmont Ridge early next week for client review and comment before any external circulation.

Thanks, everyone. I know the turnaround is tight, but I want us to be well-positioned ahead of the NDA execution timeline. Please don't hesitate to reach out if you have questions in the interim.

Andrew Fitzpatrick Partner Calderwood & Harkness LLP 1 World Financial Center, 42nd Floor New York, NY 10281 Direct: (212) 554-7180 afitzpatrick@calderwoodharkness.com Matter: 1045-00005 (Belmont Ridge Bank NA / Tessera Lending, Inc.)

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