Contract analysis

I. Executive Summary This memorandum presents our preliminary analysis and structural recommendation in connection with the prospective acquisition by Belmont Ridge Bank NA ("BRB"), a national banking association chartered under federal law (OCC Charter No. 24-00781), of Tessera Lending, Inc. ("Tessera"), a Delaware corporation (Delaware file number 6847312). BRB is headquartered at 600 Lexington Avenue, 34th Floor,

II. Background on the Parties A. Belmont Ridge Bank NA (Buyer) Belmont Ridge Bank NA is a national banking association organized and existing under the laws of the United States, with its principal executive offices located at 600 Lexington Avenue, 34th Floor, New York, NY 10022. BRB's common stock is listed and traded on the New York Stock Exchange under the ticker symbol "BRMG," and BRB files periodic reports with

III. Recommended Transaction Structure: Reverse Triangular Merger A. Overview of the Reverse Triangular Merger Under the recommended structure, BRB will form a wholly owned, single-purpose Delaware corporation — BRB Acquisition Sub, Inc. ("Acquisition Sub") — for the sole purpose of effecting the merger. Acquisition Sub will be organized under the DGCL and will have no assets, liabilities, or operations other than th

1. Formation of Acquisition Sub. BRB will cause Acquisition Sub to be incorporated under the DGCL as a wholly owned subsidiary of BRB. Acquisition Sub's certificate of incorporation and bylaws will be in standard form, and its sole authorized share of common stock will be issued to and held by BRB.

2. Execution of the Merger Agreement. BRB, Acquisition Sub, and Tessera will enter into the Merger Agreement, which will set forth the terms and conditions of the merger, including the merger consideration, representations and warranties, covenants, closing conditions, indemnification provisions, and termination rights.

3. Stockholder Approval. The merger will be submitted for approval by Tessera's stockholders, as described in Section V below.

4. Regulatory Approvals. The parties will obtain all required regulatory approvals, as described in Section VI below.

5. Closing and Filing. Upon satisfaction or waiver of all closing conditions, the parties will execute and file a certificate of merger with the Secretary of State of the State of Delaware, and the merger will become effective at the time specified in the certificate of merger (or, if no time is specified, upon filing).

6. Conversion of Shares at the Effective Time. At the Effective Time: (i) Each outstanding share of Tessera common stock (other than shares held by BRB, Acquisition Sub, or Tessera, if any, and other than dissenting shares, if applicable) will be converted into the right to receive $4.00 in cash, without interest (the "Per-Share Merger Consideration"); (ii) The sole outstanding share of Acquisition Sub common stock w

7. Certificate of Merger. A certificate of merger complying with DGCL § 251(c) will be prepared, executed, and filed with the Delaware Secretary of State. The Effective Time will be the date and time specified in the certificate of merger. The governing law of the merger and all aspects of the Merger Agreement is expected to be the State of Delaware. C. Rationale for the Reverse Triangular Merger Structure We recomme

IV. Merger Consideration and Funds Flow A. Aggregate and Per-Share Consideration The aggregate merger consideration for the acquisition of 100% of Tessera's fully diluted equity is $48,000,000 (Forty-Eight Million Dollars), payable entirely in cash. No equity component (e.g., BRB common stock) is currently contemplated as part of the merger consideration. The per-share merger consideration is $4.00 per share, calcula

V. Stockholder Approval Mechanics A. Required Approval Threshold Under DGCL § 251(c), the merger of Tessera with Acquisition Sub must be approved and adopted by the holders of a majority of the outstanding shares of Tessera common stock entitled to vote thereon. On a fully diluted basis, the majority approval threshold requires the affirmative vote or consent of holders of more than 6,000,000 shares (representing mor

1. Stockholder Agreements and Investor Rights Agreements. Tessera's institutional investors — Pinnacle Ventures Fund III, LP and Broadleaf Growth Capital, LLC — may hold contractual consent rights, information rights, drag-along or tag-along rights, or board-level approval rights under one or more stockholder agreements, investor rights agreements, or similar contractual arrangements entered into in connection with T

2. Voting Agreements or Support Agreements. To provide certainty of stockholder approval at signing, BRB may enter into voting agreements or support agreements with the co-founders (and potentially with the institutional investors) concurrently with the execution of the Merger Agreement. Under such agreements, the signing stockholders would agree to execute the written consent in favor of the merger and to refrain fr

3. Appraisal Rights. Under DGCL § 262, stockholders of a Delaware corporation may, in certain circumstances, exercise appraisal rights and demand judicial determination of the "fair value" of their shares in lieu of receiving the merger consideration. However, the availability of appraisal rights in the context of an all-cash merger of a non-publicly traded corporation where stockholder approval is obtained by writte

VI. Regulatory Approval Requirements A. Office of the Comptroller of the Currency (OCC) BRB, as a national banking association (OCC Charter No. 24-00781, FDIC Certificate No. 09463), must obtain prior approval from the Office of the Comptroller of the Currency before acquiring Tessera as a subsidiary. The acquisition of a non-bank subsidiary by a national bank is subject to regulatory review under the applicable prov

1. Change-of-Control Definition. The definition of "change of control" in the program agreement must be reviewed to determine whether the reverse triangular merger — in which Tessera survives as a legal entity but becomes a wholly owned subsidiary of BRB — constitutes a change of control triggering the consent requirement. Many change-of-control definitions capture a change in the majority ownership or voting control

2. Consent Requirement vs. Termination Right. We must determine whether the program agreement requires Ridgeline's affirmative consent to the change of control (in which case, obtaining such consent would be a closing condition) or merely provides Ridgeline with a right to terminate the agreement following a change of control (in which case, the risk analysis is different).

3. Closing Condition. Depending on the terms of the program agreement, obtaining Ridgeline's consent may be a condition to closing in the Merger Agreement. The Merger Agreement should be structured to address the risk that Ridgeline's consent is not obtained or is conditioned on terms unacceptable to BRB.

4. Post-Closing Strategy. Following the closing, BRB must evaluate whether to continue, renegotiate, or terminate the Ridgeline partnership. Because BRB holds its own national bank charter (OCC Charter No. 24-00781) and has its own lending capabilities, BRB may determine that the Ridgeline partnership is no longer necessary or desirable post-closing. Alternatively, BRB may elect to maintain the partnership during a t

VII. Tax Considerations (Summary) A separate detailed tax structuring memorandum is currently being prepared by Sylvia Hartwell, Specialist Partner (Tax), Calderwood & Harkness LLP, and is expected to be circulated to the deal team on or about January 30, 2026. The tax memorandum will address in detail the federal, state, and local income tax consequences of the proposed transaction for BRB, Tessera, and Tessera's st

Section 338(h)(10) Election. The deal team is currently evaluating the potential benefits of a joint election under IRC § 338(h)(10) with respect to the acquisition of Tessera. If the Section 338(h)(10) election is made, Tessera would be treated for federal income tax purposes as having sold all of its assets in a single, taxable transaction on the closing date, and BRB (through the Surviving Corporation) would obtai

VIII. Alternative Structures Considered and Rejected In arriving at our recommendation of the reverse triangular merger structure, we considered and ultimately rejected the following alternative transaction structures: A. Forward Merger (Direct Merger of Tessera into BRB or Acquisition Sub) Description. Under a forward merger structure, Tessera would merge directly into BRB (or into Acquisition Sub), with BRB (or Acq

1. Loss of Tessera's Corporate Identity and Regulatory Licenses. Because Tessera would not survive the forward merger, its corporate existence would terminate at the Effective Time. This would jeopardize Tessera's lending licenses in 42 states and the District of Columbia, many of which are non-transferable and would require re-issuance or new applications in the name of the surviving entity. The re-licensing process

2. Contractual Anti-Assignment Risk. While a forward merger generally operates as an assignment by operation of law (which may override contractual anti-assignment provisions in some circumstances), the doctrine of assignment by operation of law may not fully protect against anti-assignment provisions in key contracts. In particular, the Ridgeline Community Bank program agreement (TLI-RCB-2020-001) and certain vendor

3. Complex Regulatory Transition. A forward merger would require a significantly more complex and time-consuming regulatory transition process, including the transfer or re-issuance of licenses, notifications to regulators in each jurisdiction, and potential re-examination of the surviving entity by state regulators.

4. Inconsistency with Post-Closing Integration Plan. BRB's preferred post-closing integration plan contemplates operating Tessera initially as a distinct wholly owned subsidiary, preserving its separate brand, technology platform, and operational infrastructure. A forward merger would be incompatible with this approach, as Tessera would cease to exist as a separate entity. B. Asset Purchase Description. Under an asse

1. Non-Transferability of Lending Licenses. Lending licenses in 42 states and the District of Columbia are generally non-transferable. In an asset purchase, the acquiring entity would need to apply for and obtain new lending licenses in each jurisdiction, a process that would involve significant delay (potentially six months or more per jurisdiction), substantial regulatory filing fees, and the risk that certain appl

2. Contract Assignment Challenges. The Ridgeline bank-partnership program agreement and other material contracts (including technology vendor agreements, customer agreements, and data processing agreements) may not be assignable without the prior written consent of the counterparty. While counterparty consent would also be required in certain circumstances under a merger structure, the mechanics of contract assignmen

3. Bulk Transfer Laws and Tax Exposure. An asset purchase may trigger compliance obligations under state bulk transfer laws (to the extent applicable in the relevant jurisdictions) and may give rise to sales and use tax exposure on the transfer of certain categories of assets.

4. Employee Transition Complexity. In an asset purchase, employees of the target company do not automatically become employees of the acquiring entity. Instead, the acquiring entity must offer new employment to each employee it wishes to retain, which creates administrative complexity and potential disruption to Tessera's workforce. By contrast, in the reverse triangular merger, Tessera's employees remain employed by

5. Loss of Corporate History and Regulatory Track Record. BRB would not obtain the benefit of Tessera's existing corporate history, regulatory track record, and established relationships with state regulators, all of which have value in the regulatory context.

6. No Meaningful Tax Advantage. An asset purchase does not present meaningful tax advantages over the reverse triangular merger structure, particularly if a Section 338(h)(10) election is made in the merger context (which can achieve a stepped-up basis in Tessera's assets without the operational and regulatory disadvantages of an asset purchase). C. Stock Purchase Description. Under a stock purchase structure, BRB wo

1. Minority Stockholder Holdout Risk. A stock purchase requires BRB to negotiate and execute individual stock purchase agreements with each of Tessera's five distinct holder groups (two co-founders, two institutional investors, and the employee/angel pool). Any individual stockholder could refuse to sell or demand a higher price, creating holdout risk. The reverse triangular merger eliminates this risk because the me

2. Squeeze-Out Mechanics. Under the DGCL, the reverse triangular merger provides an inherent squeeze-out mechanism: once the merger is approved by the requisite stockholder vote or consent, all stockholders (including those who did not vote in favor) are bound by the merger and their shares are converted into the right to receive the merger consideration. This feature is not available in a stock purchase.

3. Tax Equivalence. The tax treatment of a stock purchase is generally equivalent to the tax treatment of the reverse triangular merger — both are taxable transactions for Tessera's stockholders, and a Section 338(h)(10) election remains available in either case (assuming the applicable requirements are met). Accordingly, the stock purchase structure does not offer any tax advantage over the recommended structure.

4. Market Practice. The reverse triangular merger is the standard market structure for private company acquisitions of this type and is the structure most commonly seen in fintech M&A transactions. Using the market-standard structure simplifies negotiation, reduces execution risk, and aligns with the expectations of all parties and their advisors.

IX. Key Open Issues and Next Steps A. Formation of BRB Acquisition Sub, Inc. A certificate of incorporation for BRB Acquisition Sub, Inc. must be prepared and filed with the Delaware Secretary of State. The registered agent for Acquisition Sub will be Crowne Albany Corporation, located at Cobalt Ridge Technologies, 1209 Orange Street, Wilmington, DE 19801. A single share of common stock will be authorized and issued