Contract analysis

I. Executive Summary Calderwood & Harkness LLP ("C&H") has been engaged by Belmont Ridge Bank National Association ("BRB" or the "Bank") to review and analyze the proposed commercial term sheet (the "Ridgeline Term Sheet" or "Term Sheet") submitted by Ridgeline Data Systems LLC ("Ridgeline") for the provision of a replacement anti-money laundering ("AML") transaction monitoring and sanctions screening platform. The R

II. Background and Context A. Regulatory Context On January 15, 2025, the Office of the Comptroller of the Currency ("OCC") issued Consent Order No. OCC-2025-003 (the "Consent Order") against Belmont Ridge Bank National Association (OCC Charter No. 48271; FDIC Certificate No. 31845). The Consent Order was the culmination of a multi-quarter supervisory review process and examination cycle that identified material defi

III. Summary of Proposed Commercial Terms The following is a summary and analysis of the material commercial terms set forth in the Ridgeline Term Sheet as received by BRB. All references to specific term sheet provisions are to the Ridgeline Data Systems LLC proposed term sheet dated February 2025 (attached hereto as Attachment 1). C&H's observations and recommendations are included within each subsection. A. Partie

IV. Key Negotiation Points and Risk Allocation Issues This section identifies and analyzes the principal areas of concern in the Ridgeline Term Sheet from a risk-allocation and contractual perspective. For each issue, C&H sets forth its assessment and recommended negotiation position. A. Implementation Timeline and Consent Order Deadline Risk This is the most critical concern identified in C&H's review of the Ridgeli

V. Comparative Cost Analysis: Ridgeline vs. Veridian Upgrade This section presents a detailed comparison of the total cost of ownership for the two technology paths under consideration, over a five-year horizon beginning in calendar year 2025. A. Total Cost of Ownership — 5-Year Horizon Veridian TMS v.10.0 Upgrade Path The Veridian upgrade path contemplates an in-place upgrade of the existing Veridian TMS v.8.3 platf

VI. Regulatory and Operational Risk Assessment A. OCC Third-Party Risk Management Compliance Any engagement with Ridgeline — whether as a contingency vendor or as a primary vendor — must be conducted in full compliance with the OCC's third-party risk management guidance, as set forth in OCC Bulletin 2013-29 (Risk Management Guidance for Third-Party Relationships), as updated and supplemented by OCC Bulletin 2023-17,