1045-00007 · Client 1045 · Engagement

crestview-consulting-engagement-letter.docx DOCUMENT Litigation

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CALDERWOOD & HARKNESS LLP Attorneys at Law

425 Lexington Avenue, 30th Floor New York, New York 10017

Telephone: (212) 555-7400 Facsimile: (212) 555-7401

October 10, 2023

VIA HAND DELIVERY AND ELECTRONIC MAIL

Dr. Franklin Osei, CPA, CFF Engagement Lead Brindoval Analytic Partners LLC 350 South Grand Avenue, Suite 2100 Los Angeles, California 90071

Re: Engagement of Brindoval Analytic Partners LLC — Forensic Accounting Consulting Services In the Matter of Belmont Ridge Bank National Association SEC Investigation File No. HO-14287 Calderwood & Harkness Matter No. SC-MAT-2023-4172

Dear Dr. Osei:

This letter (together with all schedules and appendices attached hereto, this "Engagement Letter") sets forth the terms and conditions upon which Calderwood & Harkness LLP ("C&H" or the "Firm") engages Brindoval Analytic Partners LLC ("Brindoval" or the "Consultant") to provide forensic accounting analysis and consulting services in connection with the matter referenced above. We appreciate Brindoval's willingness to undertake this engagement and look forward to a productive collaboration.

1. Introduction and Purpose of Engagement

Calderwood & Harkness LLP represents Belmont Ridge Bank National Association ("BRB" or the "Client"), a national banking association chartered under the Office of the Comptroller of the Currency ("OCC"), OCC Charter No. 24891, with its principal executive offices located at 200 Park Avenue South, 38th Floor, New York, New York 10003. BRB is publicly traded on the Nasdaq Stock Market under the ticker symbol "BRDG" and is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

BRB is the subject of a formal investigation by the United States Securities and Exchange Commission (the "SEC"), Division of Enforcement, designated as Investigation File No. HO-14287, pursuant to a Formal Order of Investigation, No. EN-2023-0947, issued on October 12, 2023 (the "Formal Order"). The investigation concerns BRB's public disclosures regarding its allowance for credit losses ("ACL") related to its digital consumer lending platform, marketed and operated under the brand name "BridgeFin," as reported in the following public filings made by BRB with the SEC:

(a) BRB's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 28, 2023 (the "2022 10-K");

(b) BRB's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023 (the first fiscal quarter of 2023, "Q1 2023"), filed with the SEC on May 10, 2023 (the "Q1 2023 10-Q"); and

(c) BRB's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023 (the second fiscal quarter of 2023, "Q2 2023"), filed with the SEC on August 9, 2023 (the "Q2 2023 10-Q," and together with the 2022 10-K and the Q1 2023 10-Q, the "Subject Filings").

The SEC Staff's investigation focuses, among other things, on the adequacy and accuracy of BRB's reported ACL for the BridgeFin loan portfolio, BRB's methodology for estimating expected credit losses under the current expected credit loss ("CECL") framework, and BRB's treatment and disclosure of re-aged or modified loans within the BridgeFin portfolio. The potential legal and regulatory implications of this investigation are significant, and the defense of BRB's interests requires the assistance of forensic accounting professionals with specialized expertise in CECL modeling, credit loss estimation, bank regulatory accounting, and SEC enforcement matters.

C&H is engaging Brindoval to provide forensic accounting analysis and consulting services to assist C&H in rendering legal advice to BRB in connection with the defense of this investigation and any related proceedings that may arise therefrom. This engagement is being undertaken at C&H's direction and under C&H's supervision for the purpose of enabling C&H to provide informed, comprehensive legal counsel to BRB.

The following C&H professionals are assigned to this matter:

• Victoria Chambers, Partner — Responsible Partner for the engagement;

• Howard Quinn, Partner — Billing Partner;

• Jasmine Thornton — Lead Associate; and

• Liam Donahue — Working Associate.

This Engagement Letter sets forth the complete terms and conditions governing Brindoval's engagement, including the scope of services, privilege framework, fees, confidentiality obligations, and other material provisions. By executing this Engagement Letter, the parties acknowledge their agreement to be bound by its terms.

2. Kovel Doctrine / Work-Product Protection Framework

The parties acknowledge and agree that the preservation of the attorney-client privilege and the attorney work-product doctrine is of paramount importance to this engagement. The structure and terms of this engagement are specifically designed to ensure that the protections afforded by these doctrines are maintained in full.

2.1 Brindoval is being retained at the direction of, and under the supervision of, C&H, as outside legal counsel to BRB, for the express purpose of assisting C&H in providing legal advice to BRB and in anticipation of litigation, enforcement proceedings, or other adversarial proceedings that may arise from or in connection with the SEC investigation referenced herein. This engagement is structured under the principles articulated by the United States Court of Appeals for the Second Circuit in United States v. Kovel, 296 F.2d 918 (2d Cir. 1961), and its progeny, including In re Grand Jury Subpoena Dated March 24, 2003, 265 F. Supp. 2d 321 (S.D.N.Y. 2003), and Cavallaro v. United States, 284 F.3d 236 (1st Cir. 2002). Under these principles, communications between C&H, BRB, and Brindoval, and work product prepared by Brindoval at C&H's direction, are intended to be fully protected by the attorney-client privilege and/or the attorney work-product doctrine under Federal Rule of Civil Procedure 26(b)(3) and its state-law equivalents.

2.2 All analyses, memoranda, reports (whether draft or final), work papers, spreadsheets, data compilations, databases, presentations, summaries, correspondence, and any other documents or communications prepared by Brindoval or any of its professionals in connection with this engagement (collectively, "Brindoval Work Product") are prepared at the direction of counsel, for the primary purpose of assisting counsel in rendering legal advice to BRB, and are intended to be protected as attorney work product, encompassing both fact work product and opinion work product, as those terms are understood under applicable federal and state law.

2.3 Brindoval shall not disclose any information, documents, analyses, data, findings, conclusions, opinions, or communications related to this engagement to any third party, whether governmental or private, without the prior written consent of C&H. This prohibition applies to all forms of disclosure, whether oral, written, electronic, or otherwise, and extends to all Brindoval professionals and support staff involved in or aware of this engagement.

2.4 Brindoval shall mark all written Brindoval Work Product, including but not limited to reports, memoranda, analyses, presentations, work papers, and email communications, with the following legend, prominently displayed on the first page of each document and, where practical, on each subsequent page:

"PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — PREPARED AT THE DIRECTION OF COUNSEL"

2.5 In the event that any third party, including but not limited to any government agency, regulatory body, legislative body, court, arbitral tribunal, or private litigant, issues or serves any subpoena, request, demand, order, or other process seeking to compel the production, disclosure, or testimony regarding any Brindoval Work Product or any communications related to this engagement (a "Third-Party Demand"), Brindoval shall:

(a) immediately, and in no event later than twenty-four (24) hours after receipt of such Third-Party Demand, notify C&H of such Third-Party Demand, providing a copy of the demand and all related correspondence;

(b) refrain from producing, disclosing, or providing testimony regarding any materials or communications related to this engagement without C&H's prior written authorization;

(d) take all reasonable steps, at C&H's direction, to resist or limit the scope of such Third-Party Demand, including making available such declarations or affidavits as C&H may reasonably request in support of any motion to quash or for a protective order.

2.6 Brindoval acknowledges that any unauthorized disclosure of privileged or work-product-protected materials may result in a waiver of the applicable privilege or protection, with potentially severe consequences for BRB's defense. Brindoval shall exercise the utmost care to prevent any such unauthorized disclosure.

3. Scope of Engagement / Services

Brindoval shall provide the forensic accounting analysis and consulting services described in this Section 3 (collectively, the "Services"), in each case at the direction of and under the supervision of C&H. The scope of the Services may be modified, expanded, or narrowed by C&H in its sole discretion, upon written notice to Brindoval, to reflect the evolving needs of BRB's defense. Any such modification shall be confirmed in writing by C&H.

3.1 Primary Scope — CECL Methodology Analysis

Brindoval shall review and analyze BRB's current expected credit loss ("CECL") methodology as adopted under Accounting Standards Codification Topic 326, Financial Instruments — Credit Losses ("ASC 326"), which was promulgated by the Financial Accounting Standards Board ("FASB") in Accounting Standards Update 2016-13 and which BRB adopted effective January 1, 2020, in accordance with the transition provisions applicable to SEC filers.

Specifically, Brindoval shall:

(a) Evaluate the reasonableness of BRB's ACL estimation for the BridgeFin loan portfolio, which comprised approximately $4.1 billion in outstanding loans as of December 31, 2022. As of that date, BRB reported an ACL of $143.5 million, representing 3.50% of total BridgeFin outstanding loans. The SEC Staff's preliminary view, as communicated in the course of the investigation to date, suggests that the ACL should have been approximately $180.8 million, or 4.41% of BridgeFin outstanding loans, representing a potential understatement of approximately $37.3 million (approximately 26.0% of the reported ACL);

(b) Analyze the vintage-cohort approach used by BRB in its CECL model, including but not limited to the methodology for estimating lifetime loss rates across origination vintages, the selection and application of historical loss data, the incorporation of reasonable and supportable forecasts, and the reversion methodology employed for periods beyond the reasonable and supportable forecast horizon;

(c) Assess the inputs, assumptions, and data sources underlying BRB's CECL model as applied to the BridgeFin portfolio, including the segmentation of the portfolio by risk characteristics, the use of macroeconomic factors, and the calibration of model parameters;

(d) Evaluate BRB's qualitative adjustment framework (sometimes referred to as "Q-factor" adjustments) and the basis for any qualitative adjustments applied to the BridgeFin ACL;

(e) Identify areas of judgment within BRB's CECL methodology that are subject to reasonable differences of opinion among accounting professionals, and assess the defensibility of BRB's positions in light of the applicable accounting standards and regulatory guidance; and

(f) Provide an assessment of whether BRB's CECL methodology, as applied to the BridgeFin portfolio, was within the range of reasonable approaches available under ASC 326 and related interpretive guidance, including guidance issued by the SEC Staff, the OCC, the Federal Reserve, and the FDIC.

3.2 Re-Aged / Modified Loan Analysis

A central area of inquiry in the SEC investigation concerns BRB's treatment of certain re-aged or modified loans within the BridgeFin portfolio. Brindoval shall specifically evaluate this treatment, as follows:

(a) Analyze BRB's treatment of 12,847 re-aged or modified BridgeFin loans with an aggregate outstanding balance of approximately $236.4 million as of December 31, 2022, representing approximately 5.77% of the total BridgeFin portfolio by outstanding balance;

(b) Assess whether BRB's practice of treating these modified loans as "current" — that is, resetting the delinquency clocks for such loans following modification, such that previously delinquent loans were reclassified as performing and current upon execution of a loan modification — was consistent with the requirements of ASC 326, applicable interpretive guidance, and relevant regulatory guidance, including but not limited to applicable provisions of the OCC Comptroller's Handbook (including the "Allowances for Credit Losses" booklet and the "Troubled Debt Restructurings" booklet, to the extent applicable), and any relevant interagency guidance on loan modifications;

(c) Analyze the impact of alternative classification approaches on BRB's ACL estimates, including but not limited to an approach under which re-aged loans would be retained in their original vintage delinquency buckets rather than being reclassified as current, and an approach under which re-aged loans would be assigned to a separate risk segment with distinct loss-rate assumptions;

(d) Evaluate the resulting difference in net charge-off rates under alternative classification approaches. BRB reported a net charge-off rate of 2.14% for the BridgeFin portfolio as of December 31, 2022; the SEC Staff's preliminary view suggests that the net charge-off rate would be approximately 3.05% when re-aged loans are retained in their original vintage delinquency buckets, a difference of approximately 91 basis points;

(e) Evaluate the resulting difference in 90+ day delinquency rates under alternative classification approaches. BRB reported a 90+ day delinquency rate of 1.72% for the BridgeFin portfolio as of December 31, 2022; the SEC Staff contends that this rate would be approximately 2.38% when re-aged loans are included in the delinquency calculation consistent with their pre-modification status, a difference of approximately 66 basis points; and

(f) Assess the reasonableness of BRB's disclosures regarding its modification and re-aging practices in the Subject Filings, including the adequacy of BRB's narrative and quantitative disclosures under ASC 310-40, ASC 326, and applicable SEC disclosure requirements under Regulation S-X and Regulation S-K.

3.3 Peer Comparison Analysis

To provide context for BRB's reported ACL and related metrics, Brindoval shall conduct a peer comparison analysis, as follows:

(a) Compile and analyze ACL coverage ratios (ACL as a percentage of outstanding loans), net charge-off rates, provision for credit loss amounts and trends, and delinquency disclosure practices of comparable digital-lending banks and fintech-oriented banking institutions, as well as other national banking associations with significant unsecured consumer lending portfolios;

(b) Identify and select an appropriate peer group, in consultation with C&H, taking into account factors such as asset size, portfolio composition, lending channel (digital versus branch-based), geographic concentration, borrower credit profile, and regulatory classification;

(c) Determine whether BRB's reported ACL ratio of 3.50% for the BridgeFin portfolio falls within the interquartile range of ACL coverage ratios reported by similarly situated peer institutions, and assess the statistical and analytical significance of any observed deviations;

(d) Analyze the extent to which differences in BRB's reported metrics relative to peer institutions may be attributable to legitimate differences in portfolio composition, risk profile, underwriting standards, macroeconomic assumptions, or other factors unrelated to any alleged deficiency in BRB's CECL methodology; and

(e) Prepare a peer comparison table and supporting narrative analysis suitable for potential use in advocacy before the SEC Staff, including in connection with a Wells Submission or other written submission to the SEC.

3.4 Expert Report Preparation

At C&H's direction, Brindoval shall prepare a forensic accounting expert report (the "Expert Report") suitable for submission to the SEC Staff, addressing the reasonableness of BRB's CECL methodology and the matters set forth in Sections 3.1 through 3.3 above. The Expert Report shall:

(a) Address the reasonableness of BRB's CECL methodology, including but not limited to the vintage-cohort approach, the treatment of re-aged loans, the application of qualitative adjustment factors, and the overall ACL estimation for the BridgeFin portfolio;

(b) Be prepared to a standard of quality, rigor, and thoroughness suitable for inclusion as an exhibit to a Wells Submission or other formal advocacy document submitted to the SEC Staff in connection with the investigation;

(c) Include appropriate qualifications, assumptions, limitations, and disclaimers, as determined by Brindoval in consultation with C&H;

(d) Be provided to C&H in draft form for review and comment prior to finalization; and

(e) Be subject to revision at C&H's direction to ensure consistency with the overall legal strategy and advocacy approach.

The timing, format, and scope of the Expert Report shall be determined by C&H in its sole discretion, in light of the status and trajectory of the SEC investigation.

3.5 General Consulting

In addition to the specific tasks identified in Sections 3.1 through 3.4 above, Brindoval shall provide general forensic accounting consulting support to C&H as requested from time to time, including but not limited to:

(a) Review and analysis of BRB documents and data produced in connection with the SEC investigation, including responses to SEC subpoenas and document requests;

(b) Assistance with the analysis and evaluation of SEC Staff positions, including any preliminary views, preliminary findings, or Wells notices communicated by the SEC Staff;

(c) Preparation for and support of witness testimony preparation, including assistance with preparation of C&H attorneys and BRB personnel for testimony before the SEC Staff, depositions, or other proceedings;

(d) Attendance at meetings, conferences, or calls with C&H and/or BRB personnel at C&H's request;

(e) Assistance with the evaluation and analysis of documents and data produced by third parties in connection with the investigation; and

(f) Any other forensic accounting or consulting services reasonably related to the defense of the SEC investigation, as may be requested by C&H from time to time.

4. Brindoval Engagement Team

The engagement team assigned by Brindoval to this matter shall be led by:

Dr. Franklin Osei, CPA, CFF — Engagement Lead and primary point of contact for all matters arising under this Engagement Letter.

Dr. Osei's qualifications include, without limitation: Certified Public Accountant, licensed in the State of California (License No. CPA-98421); Certified in Financial Forensics (CFF), a credential awarded by the American Institute of Certified Public Accountants; extensive experience in CECL/ASC 326 analysis, bank regulatory accounting matters, and SEC enforcement defense consulting; and prior experience providing forensic accounting services in connection with SEC and banking regulatory investigations involving credit loss estimation, financial statement restatements, and related disclosure matters.

Brindoval may assign additional professionals, including senior consultants, analysts, and support staff, to the engagement team as necessary to fulfill its obligations under this Engagement Letter. However, any material changes to the composition of the engagement team, including the addition of new senior professionals (at the manager level or above) or the replacement of Dr. Osei as Engagement Lead, shall be communicated to C&H in advance and are subject to C&H's prior written approval, which shall not be unreasonably withheld. Brindoval shall ensure that all members of the engagement team are qualified to perform the tasks assigned to them and have been informed of, and agree to be bound by, the confidentiality and privilege obligations set forth in this Engagement Letter.

5. Reporting and Direction

5.1 Brindoval shall report to and take direction exclusively from C&H in connection with this engagement. The primary points of contact at C&H for the direction and supervision of Brindoval's work shall be Victoria Chambers, Partner, and Jasmine Thornton, Lead Associate, or such other designees as C&H may identify from time to time. All substantive questions, requests for guidance, and deliverables shall be directed to the designated C&H contacts.

5.2 All communications between Brindoval and BRB personnel, including but not limited to document and data requests, interviews, and discussions regarding BRB's accounting practices or financial data, shall be coordinated through and at the direction of C&H. Brindoval shall not initiate direct communications with BRB personnel without C&H's prior authorization.

5.3 Brindoval shall not communicate directly, whether orally or in writing, with any of the following without C&H's prior written consent:

(a) The SEC, including any member of the SEC Staff assigned to Investigation File No. HO-14287 or any other SEC representative;

(b) The OCC, including any OCC examiner, supervisory official, or enforcement attorney;

(c) Whitfield Keane LLP, BRB's independent registered public accounting firm (PCAOB Registration No. 2847), or any partner, employee, or representative thereof;

(d) Hargrove & Millstein LLP, counsel to Whitfield Keane LLP in connection with the SEC investigation, or any partner, employee, or representative thereof; or

(e) Any other third party regarding this engagement, the SEC investigation, or any matter relating to BRB's financial statements, accounting practices, or regulatory compliance.

5.4 Brindoval shall provide regular status updates to C&H regarding the progress of the Services, the status of deliverables, and any significant issues or findings, at intervals to be determined by mutual agreement of the parties. It is anticipated that, at a minimum, weekly telephonic or video-conference status calls will be scheduled between the Brindoval engagement team and the C&H matter team, at times to be mutually agreed upon.

6. Access to Information and Documents

6.1 C&H will facilitate Brindoval's access to BRB documents, data, and personnel as reasonably necessary for Brindoval to perform the Services described in this Engagement Letter. C&H will coordinate all such access with BRB and will use commercially reasonable efforts to ensure that requested documents and data are made available to Brindoval in a timely manner.

6.2 Documents and data that may be provided to Brindoval in connection with this engagement include, without limitation:

(a) BRB financial statements, including the Subject Filings and related notes and schedules;

(b) CECL model documentation, including model specifications, validation reports, model governance documentation, and model change logs;

(c) BridgeFin portfolio data, including loan-level data tapes, vintage stratifications, delinquency aging reports, modification and re-aging logs, and charge-off and recovery data;

(d) Internal audit reports and work papers related to the ACL estimation process, the BridgeFin portfolio, and loan modification practices;

(e) Board of directors and audit committee materials, including meeting minutes, presentations, reports, and memoranda related to the ACL, the BridgeFin portfolio, and the SEC investigation;

(f) Correspondence and submissions to and from the SEC, the OCC, and other regulatory authorities related to the matters under investigation;

(g) Work papers and reports of Whitfield Keane LLP, to the extent produced in the investigation and authorized for Brindoval's review by C&H; and

(h) Such other documents and data as C&H may direct from time to time.

6.3 Derek Sung, General Counsel and Chief Legal Officer of BRB, and Raymond Hu, Chief Accounting Officer of BRB, have been identified as the primary internal contacts at BRB for the coordination of data and information requests in connection with this engagement. All communications with Mr. Sung, Mr. Hu, and any other BRB personnel shall be coordinated through C&H in accordance with Section 5.2 above.

6.4 All documents and data provided to Brindoval in connection with this engagement remain the property of BRB and are subject to the confidentiality and privilege protections described in this Engagement Letter. Brindoval shall not retain copies of any BRB documents or data beyond the termination or completion of this engagement, except as expressly authorized by C&H in writing or as required by applicable law or professional standards, and subject to the return and destruction obligations set forth in Section 8 below.

7. Fees and Billing

7.1 Hourly Rates. Brindoval shall bill for the Services at its standard hourly rates for engagement professionals, as set forth in the rate schedule attached hereto as Schedule A and incorporated herein by reference. Brindoval represents that the rates set forth in Schedule A are Brindoval's standard rates for engagements of this nature and are consistent with rates charged by Brindoval to similarly situated clients. Brindoval shall provide C&H with at least sixty (60) days' prior written notice of any changes to its standard hourly rates.

7.2 Monthly Invoicing. Brindoval shall submit monthly invoices to C&H for services rendered and expenses incurred during the preceding calendar month. Invoices shall be submitted no later than the fifteenth (15th) day of the month following the month in which the services were rendered. Invoices shall be directed to C&H at the following address:

Calderwood & Harkness LLP

Attn: Howard Quinn, Partner — Billing Partner

425 Lexington Avenue, 30th Floor New York, New York 10017

Email: hquinn@calderwoodharkness.com

7.3 Invoice Detail. Each invoice shall include, at a minimum:

(a) A description of the services performed during the billing period, at a level of detail sufficient to enable C&H and BRB to assess the nature and value of the work performed, while maintaining the confidentiality and privilege of the underlying work product (e.g., time entries should describe the category of work performed without disclosing privileged analysis, conclusions, or mental impressions);

(b) The identity of each professional who performed services during the billing period;

(d) The applicable hourly rate for each professional;

(e) The total fees for the billing period;

(f) An itemized listing of all expenses incurred during the billing period, with supporting documentation as reasonably requested; and

(g) A cumulative total of fees and expenses billed to date under this engagement.

7.4 Payment. C&H will coordinate with BRB for the payment of Brindoval's invoices. BRB is the ultimate payor of Brindoval's fees and expenses under this engagement. Payment of undisputed invoice amounts shall be made within thirty (30) days of C&H's receipt of a properly submitted invoice. C&H shall promptly notify Brindoval of any disputed items on an invoice, and the parties shall work in good faith to resolve any such disputes.

7.5 Expenses. Reasonable out-of-pocket expenses incurred by Brindoval in the performance of the Services, including but not limited to travel expenses (airfare, lodging, ground transportation, and meals), data hosting and storage costs, copying and printing costs, and other reasonable expenses directly related to the engagement, shall be reimbursed at cost, without markup. Any single expense item exceeding Five Thousand Dollars ($5,000.00) requires C&H's prior written approval before being incurred. Travel expenses shall be incurred in accordance with reasonable business standards (e.g., coach-class airfare for domestic flights, business-class airfare for international flights exceeding six hours, and lodging at mid-range business hotels).

7.6 Insurance Billing. The parties acknowledge that Brindoval's fees and expenses incurred in connection with this engagement may be submitted as part of BRB's defense costs to BRB's directors and officers liability insurance carriers. The following insurance policies have been identified as potentially applicable:

• Primary Carrier: Northcastle Mutual Assurance Company, Directors and Officers Liability Insurance Policy No. NMA-DO-2023-11847; and

• First Excess Carrier: Cascade Omnivrel Insurance Group, Excess Directors and Officers Liability Insurance Policy No. CFIG-XS1-2023-5598.

Brindoval's invoices should be prepared in a manner consistent with insurer billing guidelines as may be communicated by C&H from time to time. C&H will provide Brindoval with copies of any applicable insurer billing guidelines promptly upon receipt. Brindoval shall cooperate with C&H and BRB in providing such information as may be reasonably necessary to support the submission of Brindoval's fees and expenses to the applicable insurance carriers.

8. Confidentiality

8.1 Brindoval acknowledges and agrees that all information, documents, data, and communications provided to Brindoval or generated by Brindoval in connection with this engagement, including but not limited to information concerning BRB's business operations, financial condition, accounting practices, internal controls, personnel, legal strategy, and the SEC investigation (collectively, "Confidential Information"), are strictly confidential and proprietary. Brindoval shall hold all Confidential Information in the strictest confidence and shall not disclose, disseminate, publish, or otherwise make available any Confidential Information to any person or entity, except as expressly authorized by C&H in writing or as required by applicable law or professional standards (and subject to the notification and cooperation obligations set forth in Section 2.5 above).

8.2 Brindoval shall implement and maintain appropriate administrative, technical, and physical safeguards to protect the confidentiality, integrity, and security of all Confidential Information and all Brindoval Work Product, including but not limited to:

(a) Restricting access to Confidential Information and Brindoval Work Product to authorized members of the Brindoval engagement team who have a need to know such information in connection with the performance of the Services;

(b) Maintaining all electronic files containing Confidential Information on secure, encrypted, and access-controlled systems, with appropriate password protections and audit trails;

(c) Ensuring that all hard-copy documents containing Confidential Information are stored in locked and access-controlled locations when not in active use;

(d) Using secure methods for the transmission of Confidential Information, including encrypted email and secure file transfer protocols; and

(e) Conducting periodic reviews of its information security practices to ensure continued compliance with the obligations set forth herein.

8.3 Upon the termination or completion of this engagement, or at any time upon C&H's written request, Brindoval shall, at C&H's direction:

(a) Return to C&H all originals and copies of BRB documents and data in Brindoval's possession, custody, or control; or

(b) Destroy all originals and copies of BRB documents and data in Brindoval's possession, custody, or control, using methods appropriate to the medium (e.g., shredding for paper documents, secure deletion or degaussing for electronic media).

Brindoval shall certify such return or destruction in writing within fifteen (15) business days of completion of the return or destruction process, signed by Dr. Osei or another duly authorized representative of Brindoval. Notwithstanding the foregoing, Brindoval may retain one archival copy of its own work papers solely to the extent required by applicable professional standards or regulations governing the retention of accountants' work papers, provided that any such retained materials remain subject to the confidentiality and privilege obligations set forth in this Engagement Letter for the duration of their retention.

9. Conflicts of Interest

9.1 Brindoval represents and warrants that it has conducted a thorough and diligent conflicts check in accordance with its standard professional practices and that, as of the date of this Engagement Letter, Brindoval has no current engagement, client relationship, business relationship, financial interest, or other circumstance that would create a conflict of interest with respect to this engagement or that would impair Brindoval's ability to perform the Services in an objective, impartial, and unbiased manner.

9.2 Without limiting the generality of Section 9.1, Brindoval specifically confirms and represents that it does not currently:

(a) Represent or provide consulting, advisory, or other professional services to the SEC, any division or office thereof, or any individual member of the SEC Staff assigned to or involved in Investigation File No. HO-14287;

(b) Represent or provide consulting, advisory, or other professional services to Whitfield Keane LLP or any partner, employee, or affiliate thereof;

(c) Represent or provide consulting, advisory, or other professional services to Hargrove & Millstein LLP or any partner, employee, or affiliate thereof;

(d) Represent or provide consulting, advisory, or other professional services to any person or entity known to Brindoval to be an adverse party to BRB in connection with the SEC investigation or any matter relating to the Subject Filings; or

(e) Have any financial interest, direct or indirect, in BRB or any BRB affiliate, including any ownership of BRB securities.

9.3 Brindoval shall promptly notify C&H in writing of any actual or potential conflict of interest that may arise during the term of this engagement, including any new engagement, relationship, or circumstance that could reasonably be viewed as creating a conflict or the appearance of a conflict. Upon receipt of such notice, C&H and Brindoval shall discuss in good faith whether the identified matter constitutes a disqualifying conflict and, if so, the appropriate steps to be taken to address or resolve the conflict, up to and including termination of this engagement.

10. Independence and Non-Testifying Status

10.1 Brindoval is retained under this Engagement Letter as a consulting expert, not as a testifying expert. The Services performed by Brindoval and all Brindoval Work Product generated in connection with this engagement are intended to remain protected as attorney work product and are not intended for disclosure to any party outside the attorney-client relationship, except as C&H may determine in its sole discretion.

10.2 C&H reserves the right, in its sole discretion, to designate Dr. Osei or any other Brindoval professional as a testifying expert in connection with the SEC investigation or any related proceeding. In the event that C&H determines that such a designation is appropriate, C&H and Brindoval shall enter into a supplemental agreement or amendment to this Engagement Letter addressing the terms and conditions of any testimony-related obligations, including the scope of testimony, the preparation of any expert report required to be disclosed under applicable rules (including Rule 26(a)(2) of the Federal Rules of Civil Procedure, if applicable), applicable fee arrangements for testimony preparation and testimony, and the impact of such designation on privilege and work-product protections.

10.3 Nothing in this Engagement Letter, and nothing in the performance of the Services by Brindoval, shall be construed to impair, compromise, or otherwise affect the independence of BRB's independent registered public accounting firm, Whitfield Keane LLP. Brindoval is not being engaged to perform audit, review, compilation, attest, or other services that would be subject to the independence requirements of the PCAOB, the AICPA, or applicable SEC independence rules (including Rule 2-01 of Regulation S-X). Brindoval is not, and shall not be considered, a member of BRB's audit engagement team, and Brindoval's services under this Engagement Letter are forensic accounting consulting services provided at the direction of legal counsel for the purpose of assisting in the defense of the SEC investigation.

11. Term and Termination

11.1 This engagement shall commence on October 10, 2023 (the "Effective Date") and shall continue in effect until the earliest of the following:

(a) The date on which C&H notifies Brindoval in writing that the engagement is terminated;

(b) The date on which the SEC investigation designated as File No. HO-14287 is concluded, as determined by C&H, including by the closing of the investigation without action, the entry into a settlement, or the conclusion of any enforcement action, appeal, or related proceeding; or

11.2 Either party may terminate this engagement upon thirty (30) days' prior written notice to the other party, delivered in accordance with the notice provisions set forth herein. Termination of this engagement shall not affect or release either party from any obligation that, by its nature, is intended to survive termination, including but not limited to the obligations set forth in Section 2 (Kovel Doctrine / Work-Product Protection Framework), Section 8 (Confidentiality), Section 9 (Conflicts of Interest), Section 12 (Limitation of Liability and Indemnification), and Section 13 (Governing Law and Dispute Resolution).

11.3 Upon termination of this engagement for any reason, Brindoval shall be entitled to payment for all Services rendered and expenses properly incurred through the effective date of termination, in accordance with the fee and billing provisions set forth in Section 7. Brindoval shall provide a final invoice within thirty (30) days of the effective date of termination.

11.4 Upon termination, Brindoval shall, at C&H's direction, deliver to C&H all Brindoval Work Product, whether in draft or final form, prepared through the effective date of termination, and shall comply with the document return and destruction obligations set forth in Section 8.3.

12. Limitation of Liability and Indemnification

12.1 Limitation of Liability. To the maximum extent permitted by applicable law, Brindoval's aggregate liability to C&H, BRB, and their respective affiliates, officers, directors, employees, and agents for any and all claims, losses, damages, costs, and expenses (including attorneys' fees) arising out of or relating to this engagement or the Services, whether based on contract, tort, negligence, strict liability, or any other theory, shall not exceed the total fees actually paid to Brindoval under this Engagement Letter as of the date the applicable claim is first asserted. The foregoing limitation shall not apply to liability arising from Brindoval's willful misconduct, gross negligence, fraud, or intentional breach of the confidentiality or privilege obligations set forth in this Engagement Letter.

12.2 Indemnification. BRB, acting through C&H as its legal counsel, shall indemnify, defend, and hold harmless Brindoval and its members, partners, principals, officers, directors, employees, and agents (collectively, the "Brindoval Indemnified Parties") from and against any and all claims, actions, suits, proceedings, losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees and costs of defense) brought or asserted by any third party against any Brindoval Indemnified Party arising out of or relating to Brindoval's good-faith performance of the Services under this Engagement Letter, except to the extent that such claims, losses, damages, or expenses are caused by, result from, or are attributable to the negligence, willful misconduct, fraud, or material breach of this Engagement Letter by Brindoval or any Brindoval Indemnified Party.

12.3 Consequential Damages Waiver. In no event shall either party be liable to the other party for any indirect, incidental, consequential, special, punitive, or exemplary damages arising out of or relating to this engagement, regardless of the form of action or the theory of liability, even if such party has been advised of the possibility of such damages.

13. Governing Law and Dispute Resolution

13.1 Governing Law. This Engagement Letter shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.

13.2 Dispute Resolution. Any dispute, controversy, or claim arising out of or relating to this Engagement Letter, or the breach, termination, or validity thereof, shall be resolved by binding arbitration administered by the American Arbitration Association ("AAA") in accordance with the AAA's Commercial Arbitration Rules and Mediation Procedures then in effect. The arbitration shall be conducted in New York, New York, before a single arbitrator selected in accordance with the AAA's rules. The arbitrator shall have the authority to award any remedy or relief that a court of competent jurisdiction could order, including but not limited to injunctive or equitable relief, specific performance, and monetary damages. The arbitrator's award shall be final and binding on the parties, and judgment on the award may be entered in any court of competent jurisdiction. The prevailing party in any arbitration or related proceeding shall be entitled to recover its reasonable attorneys' fees and costs from the non-prevailing party.

13.3 Confidentiality of Proceedings. Any arbitration proceeding initiated under this Section 13 shall be conducted on a confidential basis, and the parties shall not disclose the existence, content, or results of any such proceeding to any third party, except as may be required by applicable law or as necessary to confirm, vacate, or enforce an arbitral award.

14. Miscellaneous Provisions

14.1 Entire Agreement. This Engagement Letter, including all schedules and appendices attached hereto and incorporated herein by reference, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, between the parties with respect to such subject matter.

14.2 Amendments. This Engagement Letter may not be amended, modified, supplemented, or waived except by a written instrument duly executed by authorized representatives of both C&H and Brindoval. No course of dealing between the parties, and no failure or delay by either party in exercising any right or remedy under this Engagement Letter, shall operate as an amendment, modification, or waiver of any provision hereof.

14.3 Assignment. Neither party may assign, delegate, or otherwise transfer this Engagement Letter or any of its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld, conditioned, or delayed. Any purported assignment in violation of this Section 14.3 shall be void and of no force or effect. Subject to the foregoing, this Engagement Letter shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.

14.4 Counterparts. This Engagement Letter may be executed in any number of counterparts (including by means of electronic signature or facsimile transmission), each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Engagement Letter by electronic mail (including PDF or any electronic signature complying with the U.S. federal ESIGN Act of 2000) shall be effective as delivery of a manually executed counterpart.

14.5 Notices. All notices, requests, consents, and other communications required or permitted under this Engagement Letter shall be in writing and shall be deemed to have been duly given when: (a) delivered in person; (b) sent by certified or registered mail, return receipt requested, postage prepaid; (c) sent by nationally recognized overnight courier service; or (d) sent by electronic mail with confirmation of receipt, in each case to the addresses set forth in the preamble of this Engagement Letter or to such other address as a party may designate by written notice to the other party.

14.6 Severability. If any provision of this Engagement Letter is held by a court or arbitrator of competent jurisdiction to be invalid, illegal, or unenforceable, such provision shall be modified to the minimum extent necessary to make it valid, legal, and enforceable, and the remaining provisions of this Engagement Letter shall continue in full force and effect.

14.7 No Third-Party Beneficiaries. This Engagement Letter is entered into solely for the benefit of the parties hereto, and nothing herein, express or implied, is intended to or shall confer upon any third party any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Engagement Letter, except as expressly provided in Section 12.2 with respect to the Brindoval Indemnified Parties.

14.8 Waiver. No waiver by either party of any breach of or default under this Engagement Letter shall be deemed a waiver of any subsequent breach or default, nor shall any single or partial exercise of any right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy.

15. Acceptance and Execution

If the foregoing terms and conditions are acceptable to Brindoval, please indicate your acceptance by signing and returning a copy of this Engagement Letter in the space provided below. We have also included a countersignature block for BRB's General Counsel, Derek Sung, to confirm BRB's awareness of and consent to this engagement.

We look forward to working with Brindoval on this important matter and are confident that your forensic accounting expertise will be of great value to BRB's defense. Please do not hesitate to contact Victoria Chambers or Jasmine Thornton with any questions.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Name: Victoria Chambers

Title: Partner

Date: ________

ACKNOWLEDGED AND ACCEPTED BY BRINDOVAL ANALYTIC PARTNERS LLC:

By executing below, the undersigned, on behalf of Brindoval Analytic Partners LLC, acknowledges receipt of this Engagement Letter, confirms that the undersigned has read and understood its terms, and agrees to be bound by all terms and conditions set forth herein.

BRINDOVAL ANALYTIC PARTNERS LLC

By: ________

Name: Dr. Franklin Osei, CPA, CFF

Title: Engagement Lead

Date: ________

ACKNOWLEDGED AND CONSENTED TO BY BELMONT RIDGE BANK NATIONAL ASSOCIATION:

By executing below, the undersigned, on behalf of Belmont Ridge Bank National Association, acknowledges awareness of and consents to the engagement of Brindoval Analytic Partners LLC on the terms and conditions set forth in this Engagement Letter, confirms that BRB authorizes C&H to direct Brindoval's work in connection with the SEC investigation referenced herein, and acknowledges BRB's obligation as ultimate payor of Brindoval's fees and expenses in accordance with Section 7.

BELMONT RIDGE BANK NATIONAL ASSOCIATION

By: ________

Name: Derek Sung

Title: General Counsel / Chief Legal Officer

Date: ________

CALDERWOOD & HARKNESS LLP Attorneys at Law
425 Lexington Avenue, 30th Floor New York, New York 10017
Telephone: (212) 555-7400 Facsimile: (212) 555-7401
October 10, 2023
VIA HAND DELIVERY AND ELECTRONIC MAIL
Dr. Franklin Osei, CPA, CFF Engagement Lead Brindoval Analytic Partners LLC 350 South Grand Avenue, Suite 2100 Los Angeles, California 90071
Re: Engagement of Brindoval Analytic Partners LLC — Forensic Accounting Consulting Services In the Matter of Belmont Ridge Bank National Association SEC Investigation File No. HO-14287 Calderwood & Harkness Matter No. SC-MAT-2023-4172
Dear Dr. Osei:
This letter (together with all schedules and appendices attached hereto, this "Engagement Letter") sets forth the terms and conditions upon which Calderwood & Harkness LLP ("C&H" or the "Firm") engages Brindoval Analytic Partners LLC ("Brindoval" or the "Consultant") to provide forensic accounting analysis and consulting services in connection with the matter referenced above. We appreciate Brindoval's willingness to undertake this engagement and look forward to a productive collaboration.
1. Introduction and Purpose of Engagement
Calderwood & Harkness LLP represents Belmont Ridge Bank National Association ("BRB" or the "Client"), a national banking association chartered under the Office of the Comptroller of the Currency ("OCC"), OCC Charter No. 24891, with its principal executive offices located at 200 Park Avenue South, 38th Floor, New York, New York 10003. BRB is publicly traded on the Nasdaq Stock Market under the ticker symbol "BRDG" and is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
BRB is the subject of a formal investigation by the United States Securities and Exchange Commission (the "SEC"), Division of Enforcement, designated as Investigation File No. HO-14287, pursuant to a Formal Order of Investigation, No. EN-2023-0947, issued on October 12, 2023 (the "Formal Order"). The investigation concerns BRB's public disclosures regarding its allowance for credit losses ("ACL") related to its digital consumer lending platform, marketed and operated under the brand name "BridgeFin," as reported in the following public filings made by BRB with the SEC:
(a) BRB's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 28, 2023 (the "2022 10-K");
(b) BRB's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023 (the first fiscal quarter of 2023, "Q1 2023"), filed with the SEC on May 10, 2023 (the "Q1 2023 10-Q"); and
(c) BRB's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023 (the second fiscal quarter of 2023, "Q2 2023"), filed with the SEC on August 9, 2023 (the "Q2 2023 10-Q," and together with the 2022 10-K and the Q1 2023 10-Q, the "Subject Filings").
The SEC Staff's investigation focuses, among other things, on the adequacy and accuracy of BRB's reported ACL for the BridgeFin loan portfolio, BRB's methodology for estimating expected credit losses under the current expected credit loss ("CECL") framework, and BRB's treatment and disclosure of re-aged or modified loans within the BridgeFin portfolio. The potential legal and regulatory implications of this investigation are significant, and the defense of BRB's interests requires the assistance of forensic accounting professionals with specialized expertise in CECL modeling, credit loss estimation, bank regulatory accounting, and SEC enforcement matters.
C&H is engaging Brindoval to provide forensic accounting analysis and consulting services to assist C&H in rendering legal advice to BRB in connection with the defense of this investigation and any related proceedings that may arise therefrom. This engagement is being undertaken at C&H's direction and under C&H's supervision for the purpose of enabling C&H to provide informed, comprehensive legal counsel to BRB.
The following C&H professionals are assigned to this matter:
•  Victoria Chambers, Partner — Responsible Partner for the engagement;
•  Howard Quinn, Partner — Billing Partner;
•  Jasmine Thornton — Lead Associate; and
•  Liam Donahue — Working Associate.
This Engagement Letter sets forth the complete terms and conditions governing Brindoval's engagement, including the scope of services, privilege framework, fees, confidentiality obligations, and other material provisions. By executing this Engagement Letter, the parties acknowledge their agreement to be bound by its terms.
2. Kovel Doctrine / Work-Product Protection Framework
The parties acknowledge and agree that the preservation of the attorney-client privilege and the attorney work-product doctrine is of paramount importance to this engagement. The structure and terms of this engagement are specifically designed to ensure that the protections afforded by these doctrines are maintained in full.
2.1 Brindoval is being retained at the direction of, and under the supervision of, C&H, as outside legal counsel to BRB, for the express purpose of assisting C&H in providing legal advice to BRB and in anticipation of litigation, enforcement proceedings, or other adversarial proceedings that may arise from or in connection with the SEC investigation referenced herein. This engagement is structured under the principles articulated by the United States Court of Appeals for the Second Circuit in United States v. Kovel, 296 F.2d 918 (2d Cir. 1961), and its progeny, including In re Grand Jury Subpoena Dated March 24, 2003, 265 F. Supp. 2d 321 (S.D.N.Y. 2003), and Cavallaro v. United States, 284 F.3d 236 (1st Cir. 2002). Under these principles, communications between C&H, BRB, and Brindoval, and work product prepared by Brindoval at C&H's direction, are intended to be fully protected by the attorney-client privilege and/or the attorney work-product doctrine under Federal Rule of Civil Procedure 26(b)(3) and its state-law equivalents.
2.2 All analyses, memoranda, reports (whether draft or final), work papers, spreadsheets, data compilations, databases, presentations, summaries, correspondence, and any other documents or communications prepared by Brindoval or any of its professionals in connection with this engagement (collectively, "Brindoval Work Product") are prepared at the direction of counsel, for the primary purpose of assisting counsel in rendering legal advice to BRB, and are intended to be protected as attorney work product, encompassing both fact work product and opinion work product, as those terms are understood under applicable federal and state law.
2.3 Brindoval shall not disclose any information, documents, analyses, data, findings, conclusions, opinions, or communications related to this engagement to any third party, whether governmental or private, without the prior written consent of C&H. This prohibition applies to all forms of disclosure, whether oral, written, electronic, or otherwise, and extends to all Brindoval professionals and support staff involved in or aware of this engagement.
2.4 Brindoval shall mark all written Brindoval Work Product, including but not limited to reports, memoranda, analyses, presentations, work papers, and email communications, with the following legend, prominently displayed on the first page of each document and, where practical, on each subsequent page:
"PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — PREPARED AT THE DIRECTION OF COUNSEL"
2.5 In the event that any third party, including but not limited to any government agency, regulatory body, legislative body, court, arbitral tribunal, or private litigant, issues or serves any subpoena, request, demand, order, or other process seeking to compel the production, disclosure, or testimony regarding any Brindoval Work Product or any communications related to this engagement (a "Third-Party Demand"), Brindoval shall:
(a) immediately, and in no event later than twenty-four (24) hours after receipt of such Third-Party Demand, notify C&H of such Third-Party Demand, providing a copy of the demand and all related correspondence;
(b) refrain from producing, disclosing, or providing testimony regarding any materials or communications related to this engagement without C&H's prior written authorization;
(c) cooperate fully with C&H in asserting all applicable privileges and protections; and
(d) take all reasonable steps, at C&H's direction, to resist or limit the scope of such Third-Party Demand, including making available such declarations or affidavits as C&H may reasonably request in support of any motion to quash or for a protective order.
2.6 Brindoval acknowledges that any unauthorized disclosure of privileged or work-product-protected materials may result in a waiver of the applicable privilege or protection, with potentially severe consequences for BRB's defense. Brindoval shall exercise the utmost care to prevent any such unauthorized disclosure.
3. Scope of Engagement / Services
Brindoval shall provide the forensic accounting analysis and consulting services described in this Section 3 (collectively, the "Services"), in each case at the direction of and under the supervision of C&H. The scope of the Services may be modified, expanded, or narrowed by C&H in its sole discretion, upon written notice to Brindoval, to reflect the evolving needs of BRB's defense. Any such modification shall be confirmed in writing by C&H.
3.1 Primary Scope — CECL Methodology Analysis
Brindoval shall review and analyze BRB's current expected credit loss ("CECL") methodology as adopted under Accounting Standards Codification Topic 326, Financial Instruments — Credit Losses ("ASC 326"), which was promulgated by the Financial Accounting Standards Board ("FASB") in Accounting Standards Update 2016-13 and which BRB adopted effective January 1, 2020, in accordance with the transition provisions applicable to SEC filers.
Specifically, Brindoval shall:
(a) Evaluate the reasonableness of BRB's ACL estimation for the BridgeFin loan portfolio, which comprised approximately $4.1 billion in outstanding loans as of December 31, 2022. As of that date, BRB reported an ACL of $143.5 million, representing 3.50% of total BridgeFin outstanding loans. The SEC Staff's preliminary view, as communicated in the course of the investigation to date, suggests that the ACL should have been approximately $180.8 million, or 4.41% of BridgeFin outstanding loans, representing a potential understatement of approximately $37.3 million (approximately 26.0% of the reported ACL);
(b) Analyze the vintage-cohort approach used by BRB in its CECL model, including but not limited to the methodology for estimating lifetime loss rates across origination vintages, the selection and application of historical loss data, the incorporation of reasonable and supportable forecasts, and the reversion methodology employed for periods beyond the reasonable and supportable forecast horizon;
(c) Assess the inputs, assumptions, and data sources underlying BRB's CECL model as applied to the BridgeFin portfolio, including the segmentation of the portfolio by risk characteristics, the use of macroeconomic factors, and the calibration of model parameters;
(d) Evaluate BRB's qualitative adjustment framework (sometimes referred to as "Q-factor" adjustments) and the basis for any qualitative adjustments applied to the BridgeFin ACL;
(e) Identify areas of judgment within BRB's CECL methodology that are subject to reasonable differences of opinion among accounting professionals, and assess the defensibility of BRB's positions in light of the applicable accounting standards and regulatory guidance; and
(f) Provide an assessment of whether BRB's CECL methodology, as applied to the BridgeFin portfolio, was within the range of reasonable approaches available under ASC 326 and related interpretive guidance, including guidance issued by the SEC Staff, the OCC, the Federal Reserve, and the FDIC.
3.2 Re-Aged / Modified Loan Analysis
A central area of inquiry in the SEC investigation concerns BRB's treatment of certain re-aged or modified loans within the BridgeFin portfolio. Brindoval shall specifically evaluate this treatment, as follows:
(a) Analyze BRB's treatment of 12,847 re-aged or modified BridgeFin loans with an aggregate outstanding balance of approximately $236.4 million as of December 31, 2022, representing approximately 5.77% of the total BridgeFin portfolio by outstanding balance;
(b) Assess whether BRB's practice of treating these modified loans as "current" — that is, resetting the delinquency clocks for such loans following modification, such that previously delinquent loans were reclassified as performing and current upon execution of a loan modification — was consistent with the requirements of ASC 326, applicable interpretive guidance, and relevant regulatory guidance, including but not limited to applicable provisions of the OCC Comptroller's Handbook (including the "Allowances for Credit Losses" booklet and the "Troubled Debt Restructurings" booklet, to the extent applicable), and any relevant interagency guidance on loan modifications;
(c) Analyze the impact of alternative classification approaches on BRB's ACL estimates, including but not limited to an approach under which re-aged loans would be retained in their original vintage delinquency buckets rather than being reclassified as current, and an approach under which re-aged loans would be assigned to a separate risk segment with distinct loss-rate assumptions;
(d) Evaluate the resulting difference in net charge-off rates under alternative classification approaches. BRB reported a net charge-off rate of 2.14% for the BridgeFin portfolio as of December 31, 2022; the SEC Staff's preliminary view suggests that the net charge-off rate would be approximately 3.05% when re-aged loans are retained in their original vintage delinquency buckets, a difference of approximately 91 basis points;
(e) Evaluate the resulting difference in 90+ day delinquency rates under alternative classification approaches. BRB reported a 90+ day delinquency rate of 1.72% for the BridgeFin portfolio as of December 31, 2022; the SEC Staff contends that this rate would be approximately 2.38% when re-aged loans are included in the delinquency calculation consistent with their pre-modification status, a difference of approximately 66 basis points; and
(f) Assess the reasonableness of BRB's disclosures regarding its modification and re-aging practices in the Subject Filings, including the adequacy of BRB's narrative and quantitative disclosures under ASC 310-40, ASC 326, and applicable SEC disclosure requirements under Regulation S-X and Regulation S-K.
3.3 Peer Comparison Analysis
To provide context for BRB's reported ACL and related metrics, Brindoval shall conduct a peer comparison analysis, as follows:
(a) Compile and analyze ACL coverage ratios (ACL as a percentage of outstanding loans), net charge-off rates, provision for credit loss amounts and trends, and delinquency disclosure practices of comparable digital-lending banks and fintech-oriented banking institutions, as well as other national banking associations with significant unsecured consumer lending portfolios;
(b) Identify and select an appropriate peer group, in consultation with C&H, taking into account factors such as asset size, portfolio composition, lending channel (digital versus branch-based), geographic concentration, borrower credit profile, and regulatory classification;
(c) Determine whether BRB's reported ACL ratio of 3.50% for the BridgeFin portfolio falls within the interquartile range of ACL coverage ratios reported by similarly situated peer institutions, and assess the statistical and analytical significance of any observed deviations;
(d) Analyze the extent to which differences in BRB's reported metrics relative to peer institutions may be attributable to legitimate differences in portfolio composition, risk profile, underwriting standards, macroeconomic assumptions, or other factors unrelated to any alleged deficiency in BRB's CECL methodology; and
(e) Prepare a peer comparison table and supporting narrative analysis suitable for potential use in advocacy before the SEC Staff, including in connection with a Wells Submission or other written submission to the SEC.
3.4 Expert Report Preparation
At C&H's direction, Brindoval shall prepare a forensic accounting expert report (the "Expert Report") suitable for submission to the SEC Staff, addressing the reasonableness of BRB's CECL methodology and the matters set forth in Sections 3.1 through 3.3 above. The Expert Report shall:
(a) Address the reasonableness of BRB's CECL methodology, including but not limited to the vintage-cohort approach, the treatment of re-aged loans, the application of qualitative adjustment factors, and the overall ACL estimation for the BridgeFin portfolio;
(b) Be prepared to a standard of quality, rigor, and thoroughness suitable for inclusion as an exhibit to a Wells Submission or other formal advocacy document submitted to the SEC Staff in connection with the investigation;
(c) Include appropriate qualifications, assumptions, limitations, and disclaimers, as determined by Brindoval in consultation with C&H;
(d) Be provided to C&H in draft form for review and comment prior to finalization; and
(e) Be subject to revision at C&H's direction to ensure consistency with the overall legal strategy and advocacy approach.
The timing, format, and scope of the Expert Report shall be determined by C&H in its sole discretion, in light of the status and trajectory of the SEC investigation.
3.5 General Consulting
In addition to the specific tasks identified in Sections 3.1 through 3.4 above, Brindoval shall provide general forensic accounting consulting support to C&H as requested from time to time, including but not limited to:
(a) Review and analysis of BRB documents and data produced in connection with the SEC investigation, including responses to SEC subpoenas and document requests;
(b) Assistance with the analysis and evaluation of SEC Staff positions, including any preliminary views, preliminary findings, or Wells notices communicated by the SEC Staff;
(c) Preparation for and support of witness testimony preparation, including assistance with preparation of C&H attorneys and BRB personnel for testimony before the SEC Staff, depositions, or other proceedings;
(d) Attendance at meetings, conferences, or calls with C&H and/or BRB personnel at C&H's request;
(e) Assistance with the evaluation and analysis of documents and data produced by third parties in connection with the investigation; and
(f) Any other forensic accounting or consulting services reasonably related to the defense of the SEC investigation, as may be requested by C&H from time to time.
4. Brindoval Engagement Team
The engagement team assigned by Brindoval to this matter shall be led by:
Dr. Franklin Osei, CPA, CFF — Engagement Lead and primary point of contact for all matters arising under this Engagement Letter.
Dr. Osei's qualifications include, without limitation: Certified Public Accountant, licensed in the State of California (License No. CPA-98421); Certified in Financial Forensics (CFF), a credential awarded by the American Institute of Certified Public Accountants; extensive experience in CECL/ASC 326 analysis, bank regulatory accounting matters, and SEC enforcement defense consulting; and prior experience providing forensic accounting services in connection with SEC and banking regulatory investigations involving credit loss estimation, financial statement restatements, and related disclosure matters.
Brindoval may assign additional professionals, including senior consultants, analysts, and support staff, to the engagement team as necessary to fulfill its obligations under this Engagement Letter. However, any material changes to the composition of the engagement team, including the addition of new senior professionals (at the manager level or above) or the replacement of Dr. Osei as Engagement Lead, shall be communicated to C&H in advance and are subject to C&H's prior written approval, which shall not be unreasonably withheld. Brindoval shall ensure that all members of the engagement team are qualified to perform the tasks assigned to them and have been informed of, and agree to be bound by, the confidentiality and privilege obligations set forth in this Engagement Letter.
5. Reporting and Direction
5.1 Brindoval shall report to and take direction exclusively from C&H in connection with this engagement. The primary points of contact at C&H for the direction and supervision of Brindoval's work shall be Victoria Chambers, Partner, and Jasmine Thornton, Lead Associate, or such other designees as C&H may identify from time to time. All substantive questions, requests for guidance, and deliverables shall be directed to the designated C&H contacts.
5.2 All communications between Brindoval and BRB personnel, including but not limited to document and data requests, interviews, and discussions regarding BRB's accounting practices or financial data, shall be coordinated through and at the direction of C&H. Brindoval shall not initiate direct communications with BRB personnel without C&H's prior authorization.
5.3 Brindoval shall not communicate directly, whether orally or in writing, with any of the following without C&H's prior written consent:
(a) The SEC, including any member of the SEC Staff assigned to Investigation File No. HO-14287 or any other SEC representative;
(b) The OCC, including any OCC examiner, supervisory official, or enforcement attorney;
(c) Whitfield Keane LLP, BRB's independent registered public accounting firm (PCAOB Registration No. 2847), or any partner, employee, or representative thereof;
(d) Hargrove & Millstein LLP, counsel to Whitfield Keane LLP in connection with the SEC investigation, or any partner, employee, or representative thereof; or
(e) Any other third party regarding this engagement, the SEC investigation, or any matter relating to BRB's financial statements, accounting practices, or regulatory compliance.
5.4 Brindoval shall provide regular status updates to C&H regarding the progress of the Services, the status of deliverables, and any significant issues or findings, at intervals to be determined by mutual agreement of the parties. It is anticipated that, at a minimum, weekly telephonic or video-conference status calls will be scheduled between the Brindoval engagement team and the C&H matter team, at times to be mutually agreed upon.
6. Access to Information and Documents
6.1 C&H will facilitate Brindoval's access to BRB documents, data, and personnel as reasonably necessary for Brindoval to perform the Services described in this Engagement Letter. C&H will coordinate all such access with BRB and will use commercially reasonable efforts to ensure that requested documents and data are made available to Brindoval in a timely manner.
6.2 Documents and data that may be provided to Brindoval in connection with this engagement include, without limitation:
(a) BRB financial statements, including the Subject Filings and related notes and schedules;
(b) CECL model documentation, including model specifications, validation reports, model governance documentation, and model change logs;
(c) BridgeFin portfolio data, including loan-level data tapes, vintage stratifications, delinquency aging reports, modification and re-aging logs, and charge-off and recovery data;
(d) Internal audit reports and work papers related to the ACL estimation process, the BridgeFin portfolio, and loan modification practices;
(e) Board of directors and audit committee materials, including meeting minutes, presentations, reports, and memoranda related to the ACL, the BridgeFin portfolio, and the SEC investigation;
(f) Correspondence and submissions to and from the SEC, the OCC, and other regulatory authorities related to the matters under investigation;
(g) Work papers and reports of Whitfield Keane LLP, to the extent produced in the investigation and authorized for Brindoval's review by C&H; and
(h) Such other documents and data as C&H may direct from time to time.
6.3 Derek Sung, General Counsel and Chief Legal Officer of BRB, and Raymond Hu, Chief Accounting Officer of BRB, have been identified as the primary internal contacts at BRB for the coordination of data and information requests in connection with this engagement. All communications with Mr. Sung, Mr. Hu, and any other BRB personnel shall be coordinated through C&H in accordance with Section 5.2 above.
6.4 All documents and data provided to Brindoval in connection with this engagement remain the property of BRB and are subject to the confidentiality and privilege protections described in this Engagement Letter. Brindoval shall not retain copies of any BRB documents or data beyond the termination or completion of this engagement, except as expressly authorized by C&H in writing or as required by applicable law or professional standards, and subject to the return and destruction obligations set forth in Section 8 below.
7. Fees and Billing
7.1 Hourly Rates. Brindoval shall bill for the Services at its standard hourly rates for engagement professionals, as set forth in the rate schedule attached hereto as Schedule A and incorporated herein by reference. Brindoval represents that the rates set forth in Schedule A are Brindoval's standard rates for engagements of this nature and are consistent with rates charged by Brindoval to similarly situated clients. Brindoval shall provide C&H with at least sixty (60) days' prior written notice of any changes to its standard hourly rates.
7.2 Monthly Invoicing. Brindoval shall submit monthly invoices to C&H for services rendered and expenses incurred during the preceding calendar month. Invoices shall be submitted no later than the fifteenth (15th) day of the month following the month in which the services were rendered. Invoices shall be directed to C&H at the following address:
Calderwood & Harkness LLP
Attn: Howard Quinn, Partner — Billing Partner
425 Lexington Avenue, 30th Floor New York, New York 10017
Email: hquinn@calderwoodharkness.com
7.3 Invoice Detail. Each invoice shall include, at a minimum:
(a) A description of the services performed during the billing period, at a level of detail sufficient to enable C&H and BRB to assess the nature and value of the work performed, while maintaining the confidentiality and privilege of the underlying work product (e.g., time entries should describe the category of work performed without disclosing privileged analysis, conclusions, or mental impressions);
(b) The identity of each professional who performed services during the billing period;
(c) The number of hours billed by each professional;
(d) The applicable hourly rate for each professional;
(e) The total fees for the billing period;
(f) An itemized listing of all expenses incurred during the billing period, with supporting documentation as reasonably requested; and
(g) A cumulative total of fees and expenses billed to date under this engagement.
7.4 Payment. C&H will coordinate with BRB for the payment of Brindoval's invoices. BRB is the ultimate payor of Brindoval's fees and expenses under this engagement. Payment of undisputed invoice amounts shall be made within thirty (30) days of C&H's receipt of a properly submitted invoice. C&H shall promptly notify Brindoval of any disputed items on an invoice, and the parties shall work in good faith to resolve any such disputes.
7.5 Expenses. Reasonable out-of-pocket expenses incurred by Brindoval in the performance of the Services, including but not limited to travel expenses (airfare, lodging, ground transportation, and meals), data hosting and storage costs, copying and printing costs, and other reasonable expenses directly related to the engagement, shall be reimbursed at cost, without markup. Any single expense item exceeding Five Thousand Dollars ($5,000.00) requires C&H's prior written approval before being incurred. Travel expenses shall be incurred in accordance with reasonable business standards (e.g., coach-class airfare for domestic flights, business-class airfare for international flights exceeding six hours, and lodging at mid-range business hotels).
7.6 Insurance Billing. The parties acknowledge that Brindoval's fees and expenses incurred in connection with this engagement may be submitted as part of BRB's defense costs to BRB's directors and officers liability insurance carriers. The following insurance policies have been identified as potentially applicable:
•  Primary Carrier: Northcastle Mutual Assurance Company, Directors and Officers Liability Insurance Policy No. NMA-DO-2023-11847; and
•  First Excess Carrier: Cascade Omnivrel Insurance Group, Excess Directors and Officers Liability Insurance Policy No. CFIG-XS1-2023-5598.
Brindoval's invoices should be prepared in a manner consistent with insurer billing guidelines as may be communicated by C&H from time to time. C&H will provide Brindoval with copies of any applicable insurer billing guidelines promptly upon receipt. Brindoval shall cooperate with C&H and BRB in providing such information as may be reasonably necessary to support the submission of Brindoval's fees and expenses to the applicable insurance carriers.
8. Confidentiality
8.1 Brindoval acknowledges and agrees that all information, documents, data, and communications provided to Brindoval or generated by Brindoval in connection with this engagement, including but not limited to information concerning BRB's business operations, financial condition, accounting practices, internal controls, personnel, legal strategy, and the SEC investigation (collectively, "Confidential Information"), are strictly confidential and proprietary. Brindoval shall hold all Confidential Information in the strictest confidence and shall not disclose, disseminate, publish, or otherwise make available any Confidential Information to any person or entity, except as expressly authorized by C&H in writing or as required by applicable law or professional standards (and subject to the notification and cooperation obligations set forth in Section 2.5 above).
8.2 Brindoval shall implement and maintain appropriate administrative, technical, and physical safeguards to protect the confidentiality, integrity, and security of all Confidential Information and all Brindoval Work Product, including but not limited to:
(a) Restricting access to Confidential Information and Brindoval Work Product to authorized members of the Brindoval engagement team who have a need to know such information in connection with the performance of the Services;
(b) Maintaining all electronic files containing Confidential Information on secure, encrypted, and access-controlled systems, with appropriate password protections and audit trails;
(c) Ensuring that all hard-copy documents containing Confidential Information are stored in locked and access-controlled locations when not in active use;
(d) Using secure methods for the transmission of Confidential Information, including encrypted email and secure file transfer protocols; and
(e) Conducting periodic reviews of its information security practices to ensure continued compliance with the obligations set forth herein.
8.3 Upon the termination or completion of this engagement, or at any time upon C&H's written request, Brindoval shall, at C&H's direction:
(a) Return to C&H all originals and copies of BRB documents and data in Brindoval's possession, custody, or control; or
(b) Destroy all originals and copies of BRB documents and data in Brindoval's possession, custody, or control, using methods appropriate to the medium (e.g., shredding for paper documents, secure deletion or degaussing for electronic media).
Brindoval shall certify such return or destruction in writing within fifteen (15) business days of completion of the return or destruction process, signed by Dr. Osei or another duly authorized representative of Brindoval. Notwithstanding the foregoing, Brindoval may retain one archival copy of its own work papers solely to the extent required by applicable professional standards or regulations governing the retention of accountants' work papers, provided that any such retained materials remain subject to the confidentiality and privilege obligations set forth in this Engagement Letter for the duration of their retention.
9. Conflicts of Interest
9.1 Brindoval represents and warrants that it has conducted a thorough and diligent conflicts check in accordance with its standard professional practices and that, as of the date of this Engagement Letter, Brindoval has no current engagement, client relationship, business relationship, financial interest, or other circumstance that would create a conflict of interest with respect to this engagement or that would impair Brindoval's ability to perform the Services in an objective, impartial, and unbiased manner.
9.2 Without limiting the generality of Section 9.1, Brindoval specifically confirms and represents that it does not currently:
(a) Represent or provide consulting, advisory, or other professional services to the SEC, any division or office thereof, or any individual member of the SEC Staff assigned to or involved in Investigation File No. HO-14287;
(b) Represent or provide consulting, advisory, or other professional services to Whitfield Keane LLP or any partner, employee, or affiliate thereof;
(c) Represent or provide consulting, advisory, or other professional services to Hargrove & Millstein LLP or any partner, employee, or affiliate thereof;
(d) Represent or provide consulting, advisory, or other professional services to any person or entity known to Brindoval to be an adverse party to BRB in connection with the SEC investigation or any matter relating to the Subject Filings; or
(e) Have any financial interest, direct or indirect, in BRB or any BRB affiliate, including any ownership of BRB securities.
9.3 Brindoval shall promptly notify C&H in writing of any actual or potential conflict of interest that may arise during the term of this engagement, including any new engagement, relationship, or circumstance that could reasonably be viewed as creating a conflict or the appearance of a conflict. Upon receipt of such notice, C&H and Brindoval shall discuss in good faith whether the identified matter constitutes a disqualifying conflict and, if so, the appropriate steps to be taken to address or resolve the conflict, up to and including termination of this engagement.
10. Independence and Non-Testifying Status
10.1 Brindoval is retained under this Engagement Letter as a consulting expert, not as a testifying expert. The Services performed by Brindoval and all Brindoval Work Product generated in connection with this engagement are intended to remain protected as attorney work product and are not intended for disclosure to any party outside the attorney-client relationship, except as C&H may determine in its sole discretion.
10.2 C&H reserves the right, in its sole discretion, to designate Dr. Osei or any other Brindoval professional as a testifying expert in connection with the SEC investigation or any related proceeding. In the event that C&H determines that such a designation is appropriate, C&H and Brindoval shall enter into a supplemental agreement or amendment to this Engagement Letter addressing the terms and conditions of any testimony-related obligations, including the scope of testimony, the preparation of any expert report required to be disclosed under applicable rules (including Rule 26(a)(2) of the Federal Rules of Civil Procedure, if applicable), applicable fee arrangements for testimony preparation and testimony, and the impact of such designation on privilege and work-product protections.
10.3 Nothing in this Engagement Letter, and nothing in the performance of the Services by Brindoval, shall be construed to impair, compromise, or otherwise affect the independence of BRB's independent registered public accounting firm, Whitfield Keane LLP. Brindoval is not being engaged to perform audit, review, compilation, attest, or other services that would be subject to the independence requirements of the PCAOB, the AICPA, or applicable SEC independence rules (including Rule 2-01 of Regulation S-X). Brindoval is not, and shall not be considered, a member of BRB's audit engagement team, and Brindoval's services under this Engagement Letter are forensic accounting consulting services provided at the direction of legal counsel for the purpose of assisting in the defense of the SEC investigation.
11. Term and Termination
11.1 This engagement shall commence on October 10, 2023 (the "Effective Date") and shall continue in effect until the earliest of the following:
(a) The date on which C&H notifies Brindoval in writing that the engagement is terminated;
(b) The date on which the SEC investigation designated as File No. HO-14287 is concluded, as determined by C&H, including by the closing of the investigation without action, the entry into a settlement, or the conclusion of any enforcement action, appeal, or related proceeding; or
(c) The date on which the parties mutually agree in writing to terminate the engagement.
11.2 Either party may terminate this engagement upon thirty (30) days' prior written notice to the other party, delivered in accordance with the notice provisions set forth herein. Termination of this engagement shall not affect or release either party from any obligation that, by its nature, is intended to survive termination, including but not limited to the obligations set forth in Section 2 (Kovel Doctrine / Work-Product Protection Framework), Section 8 (Confidentiality), Section 9 (Conflicts of Interest), Section 12 (Limitation of Liability and Indemnification), and Section 13 (Governing Law and Dispute Resolution).
11.3 Upon termination of this engagement for any reason, Brindoval shall be entitled to payment for all Services rendered and expenses properly incurred through the effective date of termination, in accordance with the fee and billing provisions set forth in Section 7. Brindoval shall provide a final invoice within thirty (30) days of the effective date of termination.
11.4 Upon termination, Brindoval shall, at C&H's direction, deliver to C&H all Brindoval Work Product, whether in draft or final form, prepared through the effective date of termination, and shall comply with the document return and destruction obligations set forth in Section 8.3.
12. Limitation of Liability and Indemnification
12.1 Limitation of Liability. To the maximum extent permitted by applicable law, Brindoval's aggregate liability to C&H, BRB, and their respective affiliates, officers, directors, employees, and agents for any and all claims, losses, damages, costs, and expenses (including attorneys' fees) arising out of or relating to this engagement or the Services, whether based on contract, tort, negligence, strict liability, or any other theory, shall not exceed the total fees actually paid to Brindoval under this Engagement Letter as of the date the applicable claim is first asserted. The foregoing limitation shall not apply to liability arising from Brindoval's willful misconduct, gross negligence, fraud, or intentional breach of the confidentiality or privilege obligations set forth in this Engagement Letter.
12.2 Indemnification. BRB, acting through C&H as its legal counsel, shall indemnify, defend, and hold harmless Brindoval and its members, partners, principals, officers, directors, employees, and agents (collectively, the "Brindoval Indemnified Parties") from and against any and all claims, actions, suits, proceedings, losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees and costs of defense) brought or asserted by any third party against any Brindoval Indemnified Party arising out of or relating to Brindoval's good-faith performance of the Services under this Engagement Letter, except to the extent that such claims, losses, damages, or expenses are caused by, result from, or are attributable to the negligence, willful misconduct, fraud, or material breach of this Engagement Letter by Brindoval or any Brindoval Indemnified Party.
12.3 Consequential Damages Waiver. In no event shall either party be liable to the other party for any indirect, incidental, consequential, special, punitive, or exemplary damages arising out of or relating to this engagement, regardless of the form of action or the theory of liability, even if such party has been advised of the possibility of such damages.
13. Governing Law and Dispute Resolution
13.1 Governing Law. This Engagement Letter shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.
13.2 Dispute Resolution. Any dispute, controversy, or claim arising out of or relating to this Engagement Letter, or the breach, termination, or validity thereof, shall be resolved by binding arbitration administered by the American Arbitration Association ("AAA") in accordance with the AAA's Commercial Arbitration Rules and Mediation Procedures then in effect. The arbitration shall be conducted in New York, New York, before a single arbitrator selected in accordance with the AAA's rules. The arbitrator shall have the authority to award any remedy or relief that a court of competent jurisdiction could order, including but not limited to injunctive or equitable relief, specific performance, and monetary damages. The arbitrator's award shall be final and binding on the parties, and judgment on the award may be entered in any court of competent jurisdiction. The prevailing party in any arbitration or related proceeding shall be entitled to recover its reasonable attorneys' fees and costs from the non-prevailing party.
13.3 Confidentiality of Proceedings. Any arbitration proceeding initiated under this Section 13 shall be conducted on a confidential basis, and the parties shall not disclose the existence, content, or results of any such proceeding to any third party, except as may be required by applicable law or as necessary to confirm, vacate, or enforce an arbitral award.
14. Miscellaneous Provisions
14.1 Entire Agreement. This Engagement Letter, including all schedules and appendices attached hereto and incorporated herein by reference, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, between the parties with respect to such subject matter.
14.2 Amendments. This Engagement Letter may not be amended, modified, supplemented, or waived except by a written instrument duly executed by authorized representatives of both C&H and Brindoval. No course of dealing between the parties, and no failure or delay by either party in exercising any right or remedy under this Engagement Letter, shall operate as an amendment, modification, or waiver of any provision hereof.
14.3 Assignment. Neither party may assign, delegate, or otherwise transfer this Engagement Letter or any of its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld, conditioned, or delayed. Any purported assignment in violation of this Section 14.3 shall be void and of no force or effect. Subject to the foregoing, this Engagement Letter shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.
14.4 Counterparts. This Engagement Letter may be executed in any number of counterparts (including by means of electronic signature or facsimile transmission), each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Engagement Letter by electronic mail (including PDF or any electronic signature complying with the U.S. federal ESIGN Act of 2000) shall be effective as delivery of a manually executed counterpart.
14.5 Notices. All notices, requests, consents, and other communications required or permitted under this Engagement Letter shall be in writing and shall be deemed to have been duly given when: (a) delivered in person; (b) sent by certified or registered mail, return receipt requested, postage prepaid; (c) sent by nationally recognized overnight courier service; or (d) sent by electronic mail with confirmation of receipt, in each case to the addresses set forth in the preamble of this Engagement Letter or to such other address as a party may designate by written notice to the other party.
14.6 Severability. If any provision of this Engagement Letter is held by a court or arbitrator of competent jurisdiction to be invalid, illegal, or unenforceable, such provision shall be modified to the minimum extent necessary to make it valid, legal, and enforceable, and the remaining provisions of this Engagement Letter shall continue in full force and effect.
14.7 No Third-Party Beneficiaries. This Engagement Letter is entered into solely for the benefit of the parties hereto, and nothing herein, express or implied, is intended to or shall confer upon any third party any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Engagement Letter, except as expressly provided in Section 12.2 with respect to the Brindoval Indemnified Parties.
14.8 Waiver. No waiver by either party of any breach of or default under this Engagement Letter shall be deemed a waiver of any subsequent breach or default, nor shall any single or partial exercise of any right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy.
15. Acceptance and Execution
If the foregoing terms and conditions are acceptable to Brindoval, please indicate your acceptance by signing and returning a copy of this Engagement Letter in the space provided below. We have also included a countersignature block for BRB's General Counsel, Derek Sung, to confirm BRB's awareness of and consent to this engagement.
We look forward to working with Brindoval on this important matter and are confident that your forensic accounting expertise will be of great value to BRB's defense. Please do not hesitate to contact Victoria Chambers or Jasmine Thornton with any questions.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Victoria Chambers
Title: Partner
Date: ________
ACKNOWLEDGED AND ACCEPTED BY BRINDOVAL ANALYTIC PARTNERS LLC:
By executing below, the undersigned, on behalf of Brindoval Analytic Partners LLC, acknowledges receipt of this Engagement Letter, confirms that the undersigned has read and understood its terms, and agrees to be bound by all terms and conditions set forth herein.
BRINDOVAL ANALYTIC PARTNERS LLC
By: ________
Name: Dr. Franklin Osei, CPA, CFF
Title: Engagement Lead
Date: ________
ACKNOWLEDGED AND CONSENTED TO BY BELMONT RIDGE BANK NATIONAL ASSOCIATION:
By executing below, the undersigned, on behalf of Belmont Ridge Bank National Association, acknowledges awareness of and consents to the engagement of Brindoval Analytic Partners LLC on the terms and conditions set forth in this Engagement Letter, confirms that BRB authorizes C&H to direct Brindoval's work in connection with the SEC investigation referenced herein, and acknowledges BRB's obligation as ultimate payor of Brindoval's fees and expenses in accordance with Section 7.
BELMONT RIDGE BANK NATIONAL ASSOCIATION
By: ________
Name: Derek Sung
Title: General Counsel / Chief Legal Officer
Date: ________
SCHEDULE A
BRINDOVAL ANALYTIC PARTNERS LLC STANDARD HOURLY RATE SCHEDULE Effective October 1, 2023
The following standard hourly rates shall apply to services rendered by Brindoval professionals in connection with this engagement:
The foregoing rates are subject to annual adjustment, with no less than sixty (60) days' prior written notice to C&H, in accordance with Section 7.1 of the Engagement Letter. Rates for any professionals not listed above shall be communicated to C&H in advance of such professionals performing work on this engagement.
APPENDIX 1
SUMMARY OF SEC INVESTIGATION BACKGROUND For Reference by Brindoval Analytic Partners LLC
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — PREPARED AT THE DIRECTION OF COUNSEL
Subject Entity: Belmont Ridge Bank National Association ("BRB"), a national banking association (OCC Charter No. 24891), headquartered at 200 Park Avenue South, 38th Floor, New York, NY 10003; publicly traded on Nasdaq (ticker: BRDG).
Investigation Designation: U.S. Securities and Exchange Commission, Division of Enforcement, Investigation File No. HO-14287; Formal Order of Investigation No. EN-2023-0947 (issued October 12, 2023).
Subject Filings:
•  Form 10-K for fiscal year ended December 31, 2022 (filed February 28, 2023)
•  Form 10-Q for Q1 2023 (quarter ended March 31, 2023; filed May 10, 2023)
•  Form 10-Q for Q2 2023 (quarter ended June 30, 2023; filed August 9, 2023)
Core Issues Under Investigation:
1.  ACL Estimation for BridgeFin Portfolio: Whether BRB's reported allowance for credit losses for its BridgeFin digital consumer lending platform (approximately $4.1 billion in outstanding loans as of December 31, 2022) was materially understated. BRB reported an ACL of $143.5 million (3.50%); the SEC Staff's preliminary view suggests the ACL should have been approximately $180.8 million (4.41%), a potential understatement of $37.3 million.
2.  Treatment of Re-Aged / Modified Loans: Whether BRB's practice of resetting delinquency clocks for 12,847 modified BridgeFin loans ($236.4 million aggregate outstanding balance), thereby treating them as "current," was consistent with ASC 326 and applicable regulatory guidance, and whether BRB's public disclosures adequately described this practice and its impact on reported metrics.
3.  Impact on Reported Metrics: The SEC Staff contends that alternative treatment of re-aged loans would result in a net charge-off rate of approximately 3.05% (versus BRB's reported 2.14%) and a 90+ day delinquency rate of approximately 2.38% (versus BRB's reported 1.72%).
Outside Counsel: Calderwood & Harkness LLP (Victoria Chambers, Partner — Responsible Partner; Howard Quinn, Partner — Billing Partner; Jasmine Thornton, Lead Associate; Liam Donahue, Working Associate). C&H Matter No. SC-MAT-2023-4172.
Independent Auditor: Whitfield Keane LLP (PCAOB Reg. No. 2847). Auditor's Counsel: Hargrove & Millstein LLP.
BRB Internal Contacts: Derek Sung (General Counsel / CLO); Raymond Hu (Chief Accounting Officer).
D&O Insurance: Primary: Northcastle Mutual Assurance Company (Policy No. NMA-DO-2023-11847). First Excess: Cascade Omnivrel Insurance Group (Policy No. CFIG-XS1-2023-5598).
This summary is provided for the sole purpose of orienting the Brindoval engagement team and is subject to all privilege and confidentiality protections set forth in the Engagement Letter.
Professional Level | Hourly Rate
Engagement Lead / Managing Director (Dr. Franklin Osei) | $895.00
Senior Director / Director | $750.00
Senior Manager | $625.00
Manager | $525.00
Senior Consultant | $425.00
Staff Consultant | $325.00
Paraprofessional / Data Analyst | $225.00

CALDERWOOD & HARKNESS LLP Attorneys at Law

VIA HAND DELIVERY AND ELECTRONIC MAIL

CALDERWOOD & HARKNESS LLP

ACKNOWLEDGED AND ACCEPTED BY BRINDOVAL ANALYTIC PARTNERS LLC:

BRINDOVAL ANALYTIC PARTNERS LLC

ACKNOWLEDGED AND CONSENTED TO BY BELMONT RIDGE BANK NATIONAL ASSOCIATION:

BELMONT RIDGE BANK NATIONAL ASSOCIATION

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