Contract analysis

I. Executive Summary This memorandum synthesizes the testimony from the three depositions of Belmont Ridge Bank NA ("BRB") witnesses conducted between February 18 and March 4, 2025: (1) Derek Whitmore, SVP, Head of Special Assets Group; (2) Joanna Reeves, VP, Special Assets Group; and (3) Philip Aaronson, EVP, Chief Credit Officer. The purpose of this memorandum is to identify key favorable and unfavorable testimony

II. Deposition of Derek Whitmore (February 18, 2025) A. Background and Logistics Deponent: Derek Whitmore, Senior Vice President, Head of Special Assets Group, Belmont Ridge Bank NA. Date: February 18, 2025. Location: Offices of Kestrel Voss & Huang LLP, 780 Third Avenue, 24th Floor, New York, New York 10017. Examining Counsel: Theodore Huang, Partner, Kestrel Voss & Huang LLP (lead examiner); Natasha Orlov, Associat

1. Assumption of the Triton Harbor Relationship Whitmore confirmed that he assumed management of the Triton Harbor Industries, LLC ("Triton Harbor") banking relationship in March 2023, following the internal credit downgrade from "Pass" to "Substandard" (Risk Rating 7) on March 8, 2023. He testified that this downgrade triggered the automatic referral of the relationship from BRB's commercial banking group to the Spe

2. The Aaronson Memorandum (August 22, 2023) Whitmore confirmed that he received the August 22, 2023 memorandum from Philip Aaronson, Executive Vice President and Chief Credit Officer of BRB (the "Aaronson Memorandum"), which recommended a "structured exit from the Triton Harbor relationship within 120 days" and stated that "further extensions of credit are not contemplated under any workout scenario." The memorandum

3. The September 12, 2023 Meeting Whitmore confirmed that an in-person meeting took place on September 12, 2023, at BRB's offices located at 1200 Avenue of the Americas, 38th Floor, New York, New York. The attendees, as confirmed by Whitmore, included himself, Joanna Reeves, Marcus J. Kappel, and Elaine D. Kappel. Whitmore could not recall whether any other BRB personnel attended but stated that he believed it was li

4. The Forbearance and Modification Agreement (October 6, 2023) Whitmore confirmed that he led the negotiation of the forbearance terms on BRB's behalf. He testified that the Kappels were represented by counsel during the negotiation, though he could not recall the name of the attorney (this should be confirmed during the Marcus Kappel deposition). He further confirmed that Triton Harbor had retained Mercer Tidwell &

5. Acceleration Decision Whitmore testified that the decision to issue the Notice of Default and Acceleration on April 15, 2024, was based on Triton Harbor's failure to achieve the covenant-cure milestone set forth in the Forbearance Agreement. Specifically, Triton Harbor's FCCR for the quarter ended March 31, 2024, was 0.94x, which fell short of the required 1.20x minimum. Whitmore stated that he reviewed the March

III. Deposition of Joanna Reeves (February 25, 2025) A. Background and Logistics Deponent: Joanna Reeves, Vice President, Special Assets Group, Belmont Ridge Bank NA. Date: February 25, 2025. Location: Offices of Kestrel Voss & Huang LLP, 780 Third Avenue, 24th Floor, New York, New York 10017. Examining Counsel: Theodore Huang, Partner, Kestrel Voss & Huang LLP (lead examiner); Natasha Orlov, Associate, Kestrel Voss

1. Role on the Triton Harbor Account Reeves confirmed that she was the day-to-day relationship manager for the Triton Harbor account within SAG, reporting directly to Derek Whitmore. She testified that she was responsible for the ongoing monitoring of the account, communication with the borrower and its advisors, preparation of internal status reports, and tracking compliance with forbearance milestones. She particip

2. September 12, 2023 Meeting Reeves' account of the September 12, 2023 meeting was largely consistent with Whitmore's regarding the general structure, attendees, and purpose of the meeting. She confirmed that the meeting was held at BRB's offices, that the four individuals she identified — Whitmore, herself, Marcus Kappel, and Elaine Kappel — were present, and that the meeting lasted approximately two hours. She tes

3. September 18, 2023 Email to Marcus Kappel Reeves was questioned extensively about her September 18, 2023 email to Marcus Kappel (Exhibit 12, BRB-0003871), which stated, in relevant part: "We are optimistic about a path forward and believe this forbearance sets the stage for a renewed credit relationship. We look forward to working with you and your team as we move through this process." Huang focused his examinati

4. September 29, 2023 Internal Email (Draft Term Sheet) Reeves confirmed that she authored and sent to Derek Whitmore an internal email dated September 29, 2023, attaching a draft term sheet for a potential $6.5 million revolving credit facility for Triton Harbor (Exhibit 14, BRB-0004215). The email bore the notation "for discussion purposes only — not approved" in the subject line, and the attached draft term sheet

5. Knowledge of the Aaronson Memorandum Reeves testified that she was not a recipient or copy on the August 22, 2023 Aaronson Memorandum. She confirmed that the memorandum was addressed to Whitmore and copied to Margaret Linden, and that her name did not appear in the distribution. She stated that she first learned of the memorandum's specific content "sometime after the forbearance was signed," possibly in late 2023

IV. Deposition of Philip Aaronson (March 4, 2025) A. Background and Logistics Deponent: Philip Aaronson, Executive Vice President, Chief Credit Officer, Belmont Ridge Bank NA. Date: March 4, 2025. Location: Offices of Kestrel Voss & Huang LLP, 780 Third Avenue, 24th Floor, New York, New York 10017. Examining Counsel: Theodore Huang, Partner, Kestrel Voss & Huang LLP (lead examiner); Natasha Orlov, Associate, Kestrel

1. The August 22, 2023 Memorandum Aaronson confirmed that he authored the August 22, 2023 memorandum and stood behind its contents without qualification. His testimony regarding the memorandum was direct, confident, and internally consistent — a marked contrast to Whitmore's more equivocal treatment of the same document. Aaronson testified that the memorandum reflected his "considered judgment" as Chief Credit Office

2. Approval of the Forbearance Terms Aaronson confirmed that he reviewed and approved the final terms of the October 6, 2023 Forbearance and Modification Agreement. He testified that the forbearance terms were presented to the credit committee by Whitmore and that Aaronson participated in the credit committee discussion as Chief Credit Officer. He stated that the credit committee approved the forbearance terms unanim

3. The Acceleration Decision Aaronson testified that he reviewed and approved the Notice of Default and Acceleration issued on April 15, 2024, following his review of Triton Harbor's March 31, 2024 financial statements, which showed an FCCR of 0.94x — below the covenant-cure milestone of 1.20x set forth in the Forbearance Agreement. He confirmed that the acceleration was recommended by Whitmore and reviewed by the cr

4. Prior Credit Decisions Aaronson confirmed that, in his capacity as Chief Credit Officer, he had approved the original June 15, 2021 credit facility for Triton Harbor, which consisted of a $14 million Term Loan A and an $8 million Revolving Credit Facility. He testified that the original credit approval was based on Triton Harbor's financial performance at the time, which included EBITDA of approximately $11.2 mill

V. Cross-Witness Consistency Analysis A. Areas of Consistency All three BRB witnesses — Whitmore, Reeves, and Aaronson — provided testimony that was consistent on the following topics:

1. Financial deterioration of Triton Harbor. All three witnesses testified consistently regarding the material decline in Triton Harbor's financial condition, including the decline in TTM EBITDA from $9.4 million (FY2022) to $5.1 million, the resulting covenant breaches (FCCR at 0.87x versus the 1.20x minimum; Total Leverage at 4.92x versus the 3.50x maximum), and the loss of the Port of Bridgehaven and Newark Bay co

2. Contractual framework. All three witnesses confirmed the key provisions of the Forbearance Agreement, including the Section 9(c) "No Commitment to Extend Credit" disclaimer and the Section 12(a) integration clause. All three confirmed that these provisions were part of the executed agreement and that the Kappels had the opportunity to review the agreement with counsel before signing.

3. Legitimate business reasons for additional collateral. All three witnesses testified consistently that the additional collateral requirements — the equipment lease assignments and the pledge of the Kappel residence — were based on the significant decline in the value of the existing collateral base (from $18.7 million to $11.2 million, as reflected in the updated Ridgeline Appraisal Group appraisal).

4. Contractual basis for acceleration. All three witnesses confirmed that the April 15, 2024 acceleration was triggered by Triton Harbor's failure to achieve the FCCR covenant-cure milestone (0.94x versus the 1.20x minimum) at March 31, 2024, and that the acceleration was reviewed and approved through BRB's internal credit governance process. 5.