Contract analysis

From: Beatrice Holloway <bholloway@calderwoodharkness.com> To: "Catherine A. Royce" <catherine.royce@belmontridgebank.com> Cc: "Derek S. Whitmore" <derek.whitmore@belmontridgebank.com> Date: Wed, 28 Jan 2026 04:17:00 -0000 Subject: Tessera Lending Acquisition — Preliminary Structuring Overview and Next Steps [1045-00005]

I hope this finds you well. Following our engagement opened on January 22 in connection with Belmont Ridge Bank NA's prospective acquisition of Tessera Lending, Inc., I am pleased to report that we have completed our preliminary structuring analysis. Please find attached the full Preliminary Structuring Memorandum — Acquisition of Tessera Lending, Inc. (structuring-memorandum.docx), dated today, which was prepared by

I have set out below a summary of our principal recommendations, the key deal parameters as we currently understand them, and the action items for which we will need your authorization to proceed. The attached memorandum contains the full supporting analysis; this email is intended to give you and Derek a working overview.

**RECOMMENDED TRANSACTION STRUCTURE — REVERSE TRIANGULAR MERGER**

We recommend structuring the acquisition as a reverse triangular merger under the Delaware General Corporation Law. Under this structure, BRB would form a wholly owned, single-purpose Delaware merger subsidiary — **BRB Acquisition Sub, Inc.** — which would merge with and into Tessera Lending, Inc. Tessera would survive the merger as a wholly owned subsidiary of Belmont Ridge Bank NA.

This structure is preferred for several important reasons. Most significantly, it preserves Tessera's existing contracts, lending licenses across 42 states and the District of Columbia, and the Ridgeline Community Bank bank-partnership program agreement (Reference No. TLI-RCB-2020-001, dated March 15, 2020, renewed through December 31, 2027) by operation of law, thereby avoiding the need for individual contract assig

We considered and ultimately rejected both a forward merger structure and an asset purchase structure. The reasoning for those conclusions is detailed in Sections III and IV of the attached memorandum.

Based on our discussions with you and the information provided to date, the principal economic terms are as follows:

- **Aggregate Merger Consideration:** $48,000,000, all-cash, payable at closing. No equity component is currently contemplated. - **Per-Share Merger Consideration:** $4.00 per share, based on 12,000,000 shares of Tessera common stock outstanding on a fully diluted basis (inclusive of all in-the-money options and RSUs). - **Indemnification Escrow:** $4,800,000 (10% of deal value), to be held by Caravel Trust Company,

Our preliminary understanding of Tessera's fully diluted capitalization (12,000,000 shares total) is as follows:

| Stockholder | Shares | Percentage | |---|---|---| | Vikram S. Narayan | 3,744,000 | 31.2% | | Elena M. Castillo | 2,736,000 | 22.8% | | Pinnacle Ventures Fund III, LP | 3,180,000 | 26.5% | | Broadleaf Growth Capital, LLC | 1,440,000 | 12.0% | | Employee/angel pool (options & RSUs) | 900,000 | 7.5% |

Naomi is separately preparing a detailed capitalization and consideration allocation workbook, which we expect to circulate to you shortly.

For context, the $48 million aggregate consideration implies the following valuation metrics:

- **EV/Revenue:** 1.25× (based on Tessera FY2025 revenue of $38.4 million) - **EV/Adjusted EBITDA:** Approximately 9.41× (based on Tessera FY2025 adjusted EBITDA of $5.1 million)

Tessera is debt-free at this stage, so no net-debt adjustment is required — though this will be subject to confirmatory diligence. As you know, Hargrove Mercer & Co. (Phillip N. Godfrey, Managing Director) is separately advising on valuation matters, and our team will coordinate with Phillip as the engagement progresses.

This transaction involves a meaningful regulatory workstream, which we have outlined in detail in the memorandum. The key elements are:

- **OCC Approval (Required).** As a national bank holding OCC charter number 24-00781 (FDIC certificate number 09463), BRB must obtain prior approval from the Office of the Comptroller of the Currency for the acquisition of a fintech lending subsidiary. We have also flagged a potential FDIC notification requirement, which we are reviewing. - **HSR Act.** Based on our current analysis, the $48,000,000 deal value falls

Sylvia Hartwell (Specialist Partner, Tax) is preparing a separate tax structuring memorandum addressing the federal income tax consequences of the all-cash reverse triangular merger. Her analysis will cover, among other things, the Section 338(h)(10) election analysis and the treatment of Tessera employee stock options and RSUs. As an initial matter, I will note that the transaction will be taxable to Tessera stockho

| Milestone | Target Date | |---|---| | Mutual NDA execution (NDA-BRB-TLI-2026-001) | On or about February 14, 2026 | | Preliminary draft merger agreement circulated to client | February 5, 2026 (target) | | Due diligence phase commencement | March 2026 | | Signing of definitive agreement | Q2 2026 | | Regulatory approval period | Q2–Q3 2026 | | Closing | Q3 2026 (targeted) |

For your reference, Tessera Lending is represented by **Kessler, Aldrich & Voss LLP** (Randall T. Kessler, Partner, Corporate/M&A) as outside legal counsel, and by **Ashford Keane Partners LLC** (Diane R. Okamoto, Partner), a boutique technology-focused investment bank based in San Francisco, as its financial advisor. Once the mutual NDA is executed, we will be in direct communication with Kessler, Aldrich & Voss on

**NEXT STEPS — ACTION ITEMS REQUIRING CLIENT AUTHORIZATION**

We would appreciate your feedback and authorization on the following items at your earliest convenience:

1. **Structuring Feedback.** Your and Derek's comments on the attached structuring memorandum and our recommendation to proceed with the reverse triangular merger structure.

2. **Draft Merger Agreement.** Authorization to prepare the preliminary draft Agreement and Plan of Merger. We are targeting circulation to you and Derek by February 5, 2026.

3. **Draft Mutual NDA.** Authorization to prepare the draft mutual non-disclosure agreement (NDA-BRB-TLI-2026-001) for circulation to Kessler, Aldrich & Voss LLP, targeting execution on or about February 14, 2026.

4. **Formation of BRB Acquisition Sub, Inc.** Authorization to file the certificate of incorporation for BRB Acquisition Sub, Inc. in Delaware (registered agent: Cobalt Ridge Technologies, 1209 Orange Street, Wilmington, DE 19801). We will also need to obtain an EIN for the Acquisition Sub upon formation.

5. **R&W Insurance Process.** Authorization to begin preliminary discussions with Meridian Indemnity Group, Inc. regarding a buyer-side representations and warranties insurance application.

6. **Coordination with Hargrove Mercer.** We will coordinate with Phillip Godfrey at Hargrove Mercer on valuation support and diligence planning as we move forward.

7. **Scheduling.** I would suggest a call or meeting early next week — Monday or Tuesday — to walk through the memorandum and discuss the foregoing items. Please let me know what works for your and Derek's schedules, and I will coordinate on our end with James.

As a brief note on fees, the structuring phase is tracking within the estimated fee range of $125,000–$175,000 as set forth in our engagement letter. Our full-transaction estimate of $650,000–$850,000 remains unchanged at this time. We will continue to keep you apprised as the matter develops.

Thank you, Catherine. We are enthusiastic about this transaction and look forward to your thoughts on the analysis. Please do not hesitate to reach out if you have any questions in the interim.

**Beatrice Holloway** Partner, Mergers & Acquisitions Calderwood & Harkness LLP 1 World Financial Center, 42nd Floor New York, NY 10281 Phone: (212) 506-4100 Email: bholloway@calderwoodharkness.com Matter No. 1045-00005

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