1045-00007 · Client 1045 · Engagement

engagement-letter-brb.docx DOCUMENT Litigation

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CALDERWOOD & HARKNESS LLP Counsellors at Law

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

Telephone: (212) 558-4000 Facsimile: (212) 558-4001 www.calderwoodharkness.com

September 20, 2023

VIA HAND DELIVERY AND ELECTRONIC MAIL

Derek Sung, Esq. General Counsel & Chief Legal Officer Belmont Ridge Bank National Association 200 Park Avenue South, 38th Floor New York, New York 10003

Re: Engagement of Calderwood & Harkness LLP by Belmont Ridge Bank National Association — SEC Division of Enforcement Investigation, File No. HO-14287

Matter No.: SC-MAT-2023-4172

Dear Derek:

We are writing to confirm the terms and conditions of the engagement of Calderwood & Harkness LLP ("C&H" or the "Firm") by Belmont Ridge Bank National Association ("BRB" or the "Company") in connection with the matter referenced above. This letter (the "Engagement Letter") sets forth our mutual understanding regarding the scope of the engagement, client identity, staffing, fee arrangements, confidentiality, and related matters. We ask that you review this letter carefully and, if the terms are acceptable, execute and return the enclosed counterpart copy as provided in Section 15 below.

We value the confidence that BRB's leadership and Board of Directors have placed in the Firm, and we look forward to representing the Company in this important matter.

1. Engagement and Scope of Representation

Calderwood & Harkness LLP is pleased to confirm that Belmont Ridge Bank National Association has retained the Firm to represent BRB in connection with the investigation by the U.S. Securities and Exchange Commission ("SEC"), Division of Enforcement, designated as File No. HO-14287 (the "Investigation").

The Investigation relates to the SEC's inquiry into BRB's public disclosures regarding loan-loss provisioning and the methodology underlying its allowance for credit losses ("ACL") related to the Company's digital lending platform, known as "BridgeFin," as reflected in: (i) BRB's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (filed with the SEC on February 28, 2023); (ii) BRB's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023 (filed with the SEC on May 10, 2023); and (iii) BRB's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023 (filed with the SEC on August 9, 2023). The Investigation appears to focus on whether the ACL methodology disclosed in those filings, and the related quantitative estimates and qualitative disclosures, were materially accurate and consistent with applicable accounting standards, including ASC 326 (Financial Instruments—Credit Losses), and with the requirements of Regulation S-K, Regulation S-X, and the antifraud provisions of the federal securities laws.

The scope of our engagement encompasses the following activities in connection with the Investigation:

(a) Responding to the SEC Staff's voluntary request letter dated September 18, 2023, and any supplements or follow-up requests thereto;

(b) Responding to any subpoenas, formal orders of investigation, or other compulsory process that may be issued by the SEC in connection with the Investigation;

(c) Conducting internal fact-gathering, including interviews of BRB personnel, review of relevant documents, data, and electronically stored information, and analysis of the Company's ACL methodology and BridgeFin loss-rate modeling;

(d) Managing and supervising the collection, review, and production of documents and electronically stored information responsive to SEC requests, including the establishment and maintenance of appropriate privilege review protocols;

(e) Preparing witnesses for investigative testimony before the SEC Staff, including any testimony pursuant to formal orders of investigation;

(f) Preparing any written submissions to the SEC Staff, including any responses to Staff inquiries, white papers, presentations, and, if applicable, any submission pursuant to SEC Rule 5(c) (a "Wells Submission");

(g) Advising BRB's Board of Directors and the Audit Committee of the Board of Directors (the "Audit Committee") regarding the Investigation, including attending meetings and providing periodic reports as may be requested; and

(h) Such other matters as are reasonably related to the foregoing and as may be mutually agreed upon by the Firm and BRB.

Notwithstanding the foregoing, the scope of this engagement expressly does not include:

(i) Representation of any individual director, officer, employee, or agent of BRB in their personal capacity in connection with the Investigation or any related matter;

(ii) Representation of BRB in any related private securities litigation, shareholder derivative actions, class actions, or securities fraud actions, whether pending or threatened;

(iii) Representation of BRB in any regulatory proceedings initiated by, or investigations conducted by, any regulatory agency other than the SEC Division of Enforcement, including but not limited to the Office of the Comptroller of the Currency ("OCC"), the Federal Deposit Insurance Corporation ("FDIC"), any state banking or securities regulator, or the Department of Justice;

(iv) Advice regarding BRB's ongoing SEC reporting obligations, including the preparation, review, or filing of periodic reports on Forms 10-K, 10-Q, or 8-K, current reports, proxy statements, or any other filings with the SEC, which obligations remain the province of BRB's securities reporting counsel, Caldwell Pratt & Stein LLP (lead partner, Martin Caldwell); and

(v) Any other legal matter not specifically described in this Section 1.

Any expansion of the scope of this engagement beyond the matters described herein shall require the mutual written agreement of C&H and BRB, which agreement may take the form of an amendment to this Engagement Letter or a separate engagement letter, as the parties may determine.

2. Client Identity — Upjohn / Corporate Representation Protocol

It is essential that the identity of our client in this engagement be clearly understood by all parties, including BRB's directors, officers, employees, and agents who may interact with the Firm during the course of the Investigation.

The Firm represents Belmont Ridge Bank National Association as a corporate entity. The Firm does not represent, and will not represent in connection with this engagement, any individual director, officer, employee, or agent of BRB in his or her personal or individual capacity.

All communications between the Firm and BRB personnel in connection with this engagement are made in the Firm's capacity as counsel to the corporate entity. The attorney-client privilege with respect to those communications belongs exclusively to BRB, and not to the individual who participates in the communication. The privilege may be waived only by BRB, acting through its authorized representatives — specifically, the General Counsel, the Audit Committee, or the full Board of Directors — in their discretion and in accordance with BRB's internal governance procedures. No individual employee, officer, or director may unilaterally waive, assert, or control BRB's attorney-client privilege.

Individual employees, officers, and directors who provide information to C&H in connection with this engagement — whether through interviews, document production, correspondence, or otherwise — do so in their capacity as representatives of the corporate entity. Such individuals are not clients of C&H and should be made aware of this distinction. This understanding is consistent with the principles set forth in Upjohn Co. v. United States, 449 U.S. 383 (1981), and its progeny, as well as Rule 1.13 of the New York Rules of Professional Conduct.

To ensure that all BRB personnel are fully informed of these principles, C&H will administer what are commonly known as "Upjohn warnings" or "corporate representation advisories" at the commencement of each interview or witness preparation session conducted with BRB personnel. These warnings will inform each individual, among other things, that: (i) C&H represents the Company and not the individual; (ii) the attorney-client privilege belongs to the Company; (iii) the Company may elect to waive the privilege and disclose the contents of the communication to third parties, including the SEC, without the individual's consent; and (iv) the individual may wish to retain separate, personal counsel. The specific form and content of these warnings will be set forth in a separate Upjohn / Corporate Representation Advisory Memorandum, which C&H will circulate to BRB's General Counsel promptly following the execution of this Engagement Letter.

If at any point during the engagement the interests of any individual BRB director, officer, or employee appear to diverge from, or come into conflict with, the interests of the Company, C&H will promptly notify BRB's General Counsel and, where appropriate, the Audit Committee. In such circumstances, the affected individual should be advised to retain separate, personal counsel at his or her own expense (subject to any advancement or indemnification rights the individual may have under BRB's bylaws, charter, or applicable insurance policies). C&H will cooperate with any such personal counsel to the extent consistent with the Firm's duties to the Company.

3. Staffing

The following attorneys will be principally responsible for representing BRB in connection with the Investigation:

Victoria Chambers — Responsible Partner, White Collar Defense & Investigations Practice Group. Ms. Chambers will serve as the primary relationship partner for this engagement. She will have overall responsibility for the strategic direction of the representation, supervisory oversight of all work performed by the engagement team, and primary responsibility for communications with the SEC Staff, BRB's senior management, and the Board of Directors and Audit Committee. Ms. Chambers has over twenty-five years of experience in SEC enforcement matters, internal investigations, and securities regulation.

Howard Quinn — Billing Partner, White Collar Defense & Investigations Practice Group. Mr. Quinn will serve as the billing partner for the engagement and will have secondary supervisory responsibility. Mr. Quinn will be responsible for overseeing the Firm's billing practices in connection with the matter, ensuring compliance with the fee arrangements described in Section 4 below, and addressing any billing-related inquiries from BRB. Mr. Quinn also brings extensive experience in SEC enforcement defense and will be available to contribute substantively to the representation as needed.

Jasmine Thornton — Lead Associate. Ms. Thornton will serve as the day-to-day lead attorney for the engagement. Her responsibilities will include managing the document collection, review, and production process; coordinating witness preparation sessions; conducting and supervising legal research and analysis; drafting correspondence, memoranda, and submissions to the SEC Staff; and serving as the primary point of day-to-day contact for BRB's legal department.

Liam Donahue — Working Associate. Mr. Donahue will support the engagement team in all phases of the matter, including document review and production management, privilege review, legal research and memoranda preparation, and assistance with witness preparation. Mr. Donahue will work under the supervision of Ms. Thornton and the engagement partners.

Additional attorneys, paralegals, litigation support professionals, and other support staff may be assigned to the engagement from time to time as the needs of the matter require. BRB will be notified in advance of any material changes to the staffing of the engagement, including the assignment of any additional partner-level attorneys or the departure of any of the above-named timekeepers from the matter.

The Firm may also engage contract document reviewers, working under the supervision of C&H attorneys, to assist with large-scale privilege review and document production. Such contract reviewers will be appropriately supervised by Firm attorneys and will be subject to the Firm's confidentiality obligations. Their time will be billed at a reduced rate as described in Section 4 below.

4. Fee Arrangement

4.1 Hourly Billing Rates

Fees for professional services rendered by the Firm in connection with this engagement will be calculated on an hourly basis at the Firm's standard rates for the identified timekeepers, as follows:

The hourly rates for any additional attorneys, paralegals, contract document reviewers, or other timekeepers assigned to the engagement will be communicated to BRB at the time of their assignment. Current standard rates for associates in the Firm's White Collar Defense & Investigations Practice Group range from $595 to $1,050 per hour depending on seniority. Current standard rates for paralegals range from $350 to $475 per hour. Contract document reviewers engaged for privilege review are typically billed at rates ranging from $175 to $295 per hour, reflecting a significant reduction from standard associate rates.

The Firm's hourly rates are subject to annual adjustment, which typically takes effect on or about January 1 of each calendar year. BRB will be notified in writing in advance of any rate increase applicable to this engagement. Any adjusted rates will apply to services rendered on or after the effective date of the adjustment.

4.2 Annual Fee Cap

In recognition of the scope and anticipated duration of the Investigation, and as a result of discussions between the parties, C&H and BRB have agreed to an annual fee cap for this engagement. Specifically, total professional fees billed by the Firm for services rendered in connection with this engagement shall not exceed Four Million Five Hundred Thousand Dollars ($4,500,000.00) in any twelve-month period (the "Annual Cap"), with each twelve-month period measured from the date of this Engagement Letter (i.e., the first period running from September 20, 2023, through September 19, 2024, and each successive period running for twelve months thereafter).

The following terms and conditions apply to the Annual Cap:

(a) The Annual Cap applies exclusively to professional fees — that is, charges for the time of C&H attorneys, paralegals, and contract reviewers. The Annual Cap does not apply to, and does not include, out-of-pocket disbursements, third-party costs, or fees of third-party consultants, all of which are governed by Section 4.3 below.

(b) If gross calculated professional fees for any capped twelve-month period would exceed $4,500,000.00, the Firm will apply a pro rata reduction to the final invoice or invoices of the applicable period sufficient to bring total professional fees within the Annual Cap. For the avoidance of doubt, any such reduction shall be reflected on the face of the relevant invoice(s).

(c) Based on the Firm's current staffing projections and preliminary estimates of the anticipated workload for the first twelve-month period, the Annual Cap is expected to produce an effective reduction of approximately 19.3% from gross calculated fees for that period. This estimate is provided for reference only and is subject to change based on actual staffing levels, the pace and scope of the Investigation, and other factors that cannot be predicted with certainty at this time.

(d) The Annual Cap does not carry over from one twelve-month period to any subsequent period. Unused capacity under the Annual Cap in one period does not increase the cap in any succeeding period, nor does any overage in one period (which should not occur given the mechanisms described above) reduce the cap in any succeeding period.

(e) The Annual Cap does not create any minimum-fee obligation on BRB's part. BRB's obligation is limited to payment of actual fees incurred, subject to the cap, and BRB is not obligated to pay any amount in excess of fees actually billed merely because the Annual Cap has not been reached.

(f) If the scope of the engagement is materially expanded pursuant to Section 1, the parties will discuss in good faith whether an adjustment to the Annual Cap is appropriate in light of the expanded scope.

4.3 Disbursements and Third-Party Costs

In addition to professional fees, BRB will be responsible for reimbursing the Firm for reasonable out-of-pocket disbursements incurred in connection with the engagement. Disbursements may include, but are not limited to, the following categories:

(a) Travel expenses, including airfare, ground transportation, lodging, and meals, incurred in connection with witness preparation, SEC testimony, meetings with the SEC Staff, and other engagement-related activities (travel expenses will be incurred in accordance with the Firm's standard travel policies, which are generally consistent with BRB's corporate travel policy as communicated to the Firm);

(b) Document reproduction, printing, and binding costs;

(c) Electronic discovery costs, including collection, processing, hosting, review platform licensing (e.g., Relativity), and production of electronically stored information;

(d) Messenger and courier services, including overnight delivery;

(e) Computerized legal research charges (e.g., Westmark Data Systems, Sundial Solutions, Cascade Services Inc.);

(f) Court filing fees, if any;

(g) Telecommunications charges associated with the engagement; and

(h) Other reasonable out-of-pocket costs directly related to the representation.

Fees and costs of third-party consultants retained at C&H's direction and with BRB's prior written approval (including any forensic accounting consultant retained pursuant to Section 5 below) will be billed directly to BRB by such consultants pursuant to the consultant's own engagement terms, or, in certain circumstances and at BRB's request, advanced by C&H and passed through to BRB at cost without markup. All third-party consultant costs are outside the scope of, and are not subject to, the Annual Fee Cap described in Section 4.2.

4.4 Billing and Payment

The Firm will issue invoices on a monthly basis, reflecting professional fees and disbursements incurred during the preceding calendar month. Invoices will typically be issued within ten (10) business days following the close of each calendar month.

All invoices are due and payable within thirty (30) days of the invoice date. Payments should be made by wire transfer or check to the account designated on the invoice. In the event that any invoice remains unpaid more than sixty (60) days past due, the Firm reserves the right to assess a late-payment charge at the rate of 1.0% per month on the outstanding balance, to the extent permitted by applicable law and rules of professional conduct.

Each invoice will include the following detail for each timekeeper entry: the name of the timekeeper, the date of service, the number of hours billed (in increments of one-tenth of an hour), the applicable hourly rate, and a narrative description of the services rendered. Narrative descriptions will be sufficiently detailed to permit BRB to evaluate the nature of the work performed, subject to applicable attorney-client privilege and work-product protections. In the event that any portion of a narrative description would, if disclosed, risk waiver of applicable privileges, C&H may redact or generalize such descriptions and make more detailed descriptions available for review on a privileged and confidential basis.

All billing inquiries, including questions regarding invoice detail, rate adjustments, and payment arrangements, should be directed to Howard Quinn, Billing Partner, at hquinn@calderwoodharkness.com or (212) 558-4187.

5. Engagement of Third-Party Consultants

Given the technical nature of the issues under investigation — in particular, the quantitative modeling underlying BRB's allowance for credit losses and the BridgeFin loss-rate methodology — C&H anticipates that it will be advisable to retain a forensic accounting consultant to assist the Firm and the Company with the analysis of these issues. The engagement of any such consultant will require BRB's prior written approval, including approval of the proposed consultant's identity, scope of work, and estimated fees.

Any forensic accounting consultant (or other expert consultant) retained in connection with this engagement will be retained by C&H on behalf of BRB, at the direction of counsel, for the express purpose of assisting the Firm in rendering legal advice to the Company. This structure is intended to preserve the protections of the attorney work-product doctrine and, where applicable, to bring the consultant's communications within the scope of the attorney-client privilege under the doctrine established in United States v. Kovel, 296 F.2d 918 (2d Cir. 1961). Under the Kovel framework, communications between the consultant and C&H (and, to the extent directed by C&H, between the consultant and BRB) may be protected as privileged communications made for the purpose of facilitating legal representation, provided that the consultant is functioning as the functional equivalent of an employee or agent of the law firm for purposes of the engagement.

The engagement of any third-party consultant will be governed by a separate engagement letter between the consultant and C&H (on behalf of BRB), which will include appropriate confidentiality, privilege, and conflict-of-interest provisions. A copy of any such engagement letter will be provided to BRB's General Counsel for review and approval prior to execution.

As noted in Section 4.3, the fees and costs of any third-party consultant will be the responsibility of BRB and are not subject to the Annual Fee Cap set forth in Section 4.2.

6. Confidentiality and Privilege

All communications between C&H and BRB in connection with this engagement — whether oral, written, or electronic — are intended to be, and shall be treated as, confidential and protected by the attorney-client privilege and/or the attorney work-product doctrine to the fullest extent permitted by applicable law. This includes, without limitation, communications regarding legal strategy, factual analysis, risk assessment, settlement discussions, and the Firm's mental impressions, conclusions, and opinions formed in the course of the representation.

BRB agrees to use reasonable efforts to maintain the confidentiality of all such communications, including by limiting the internal distribution of privileged communications on a need-to-know basis. BRB should ensure that privileged communications are not forwarded to, or shared with, individuals who do not have a legitimate need for the information in connection with the Investigation, and that privileged documents are not commingled with non-privileged business records in a manner that could undermine the privilege.

C&H recognizes that, in the course of the engagement, it may be necessary to communicate with or in the presence of certain third parties whose involvement could, if not properly managed, create a risk of waiver of applicable privileges. In particular, C&H will establish and implement protocols for preserving privilege in communications involving:

(a) BRB's independent auditor, Whitfield Keane LLP (PCAOB Registration No. 2847), to the extent that communications with or in the presence of the auditor are necessary in connection with the Investigation; and

(b) Any forensic accounting consultant retained pursuant to Section 5 above, including protocols to ensure that the Kovel doctrine's protections are preserved.

These protocols will be set forth in detail in a separate Privilege Protocol & Document Preservation Memorandum, which C&H will prepare and circulate to BRB's General Counsel promptly following the execution of this Engagement Letter. BRB's legal department and relevant personnel should adhere to the protocols described in that memorandum.

Neither C&H nor BRB will waive any applicable attorney-client privilege or work-product protection in connection with this engagement without the other's prior written consent. This provision is subject, however, to BRB's ultimate authority as the holder of the attorney-client privilege; BRB retains the right, in its sole discretion and acting through its authorized representatives (as described in Section 2), to waive the privilege. In the event that BRB contemplates waiving any privilege, C&H respectfully requests advance notice and the opportunity to consult with BRB regarding the scope and implications of any such waiver.

7. Document Preservation

BRB acknowledges its obligation, arising from the commencement of the Investigation and the SEC's voluntary request letter, to preserve all documents, records, and electronically stored information ("ESI") that are or may be potentially relevant to the Investigation. This obligation extends to all forms of documents and data, including but not limited to paper files, electronic files, emails, instant messages, text messages, voicemails, databases, spreadsheets, presentations, handwritten notes, and metadata.

C&H will prepare and issue a detailed litigation hold notice and document preservation memorandum addressed to BRB's General Counsel for prompt distribution to all relevant custodians and data stewards within the Company. The litigation hold notice will identify the categories of materials to be preserved, the time period covered, and the specific actions required of each custodian to ensure compliance with preservation obligations.

BRB agrees to cooperate fully with C&H in connection with document preservation, including by:

(a) Promptly identifying all custodians (current and former employees, officers, and directors) who may possess, or have access to, documents and ESI potentially relevant to the Investigation;

(b) Identifying all data sources and repositories — including email systems, shared drives, personal devices, cloud storage, backup tapes, and third-party platforms — where potentially responsive documents and ESI may reside;

(c) Suspending any routine document destruction, recycling, or auto-deletion policies as they apply to potentially relevant materials for the duration of the Investigation;

(d) Ensuring that all custodians identified in the litigation hold notice acknowledge receipt and understanding of their preservation obligations; and

(e) Promptly notifying C&H of any actual or suspected loss, destruction, or alteration of potentially relevant documents or ESI.

The importance of robust and timely document preservation cannot be overstated. Failure to preserve relevant materials could result in adverse consequences in the Investigation, including adverse inferences, sanctions, or additional regulatory scrutiny. C&H will work closely with BRB's legal department and information technology personnel to implement an effective preservation program.

8. Cooperation and Communications

The effectiveness of C&H's representation depends upon the full cooperation of BRB and its personnel throughout the course of the Investigation. BRB agrees to cooperate fully with C&H, including by:

(a) Making BRB's officers, employees, and agents available on a timely basis for interviews, witness preparation sessions, and, if necessary, investigative testimony;

(b) Providing timely access to documents, data, systems, and other information requested by C&H in connection with the engagement;

(c) Keeping C&H promptly informed of any material developments relating to the Investigation or the subject matter of the Investigation, including any communications received from the SEC, other regulators, auditors, or third parties;

(d) Keeping C&H informed of any other legal proceedings, regulatory inquiries, or significant business developments that may be relevant to the Investigation or to the Firm's representation; and

(e) Responding promptly to requests for information, approvals, and decisions necessary to the progress of the representation.

With respect to communications from C&H to BRB, the Firm will keep the following individuals informed of material developments in the Investigation on an ongoing basis:

• Derek Sung, General Counsel & Chief Legal Officer — as the Firm's primary day-to-day contact and the authorized representative of BRB for purposes of this engagement;

• Marcus R. Ellingham, Chief Executive Officer — as appropriate and as directed by the General Counsel;

• Gwendolyn Prescott, Audit Committee Chair — in her capacity as chair of the Audit Committee, as described below;

• Patricia Navarrete, Chief Financial Officer — as appropriate and to the extent relevant to financial reporting and accounting matters implicated by the Investigation; and

• Annette Kowalski, Chief Risk Officer — as appropriate and to the extent relevant to risk management issues implicated by the BridgeFin platform and ACL methodology.

In addition, C&H will report regularly to the Audit Committee of BRB's Board of Directors regarding the status of the Investigation, the progress of the Firm's work, and any material developments or strategic recommendations. The frequency and format of such reports will be determined in consultation with the Audit Committee Chair, Ms. Prescott, and the General Counsel, and may include written memoranda, oral presentations at Audit Committee meetings (whether in person or by videoconference), and such other communications as the Audit Committee may direct.

9. Insurance

BRB has advised C&H that the Company maintains directors' and officers' liability insurance policies that may provide coverage for defense costs incurred in connection with the Investigation. Based on information provided to the Firm, BRB's current D&O insurance program includes the following relevant policies:

(a) Primary Policy: Northcastle Mutual Assurance Company, Policy No. NMA-DO-2023-11847, with a primary limit of liability of $15,000,000 per policy period, an entity retention (self-insured retention) of $2,500,000, and a policy period of July 1, 2023, through July 1, 2024; and

(b) First Excess Layer: Cascade Omnivrel Insurance Group, Policy No. CFIG-XS1-2023-5598, with a limit of liability of $10,000,000 in excess of the Northcastle primary policy, following form to the primary policy.

C&H will assist BRB in tendering the Investigation to BRB's D&O insurer(s) on a timely basis, including preparing or reviewing any notice of claim or notice of circumstances required under the applicable policies and engaging in coverage discussions with the carriers or their coverage counsel as needed.

Notwithstanding the availability of D&O insurance, C&H's engagement and fees are not contingent upon D&O coverage or reimbursement. BRB remains solely and unconditionally responsible for the payment of C&H's fees and disbursements as provided in this Engagement Letter, regardless of whether any or all of such fees and disbursements are ultimately covered, reimbursed, or advanced by BRB's D&O insurer(s). In the event that an insurer disputes coverage or delays reimbursement, BRB's payment obligations to C&H are not suspended or deferred.

BRB should coordinate all insurance-related matters, including policy review, coverage analysis, and communications with carriers, through its D&O insurance broker, Ridgeline Governance Advisors LLC (contact: Melinda Tran, Senior Vice President, mtran@ridgelinegov.com). C&H will cooperate with Ridgeline as necessary to support BRB's insurance recovery efforts.

10. Conflicts of Interest

The Firm has conducted a conflicts check in accordance with its standard procedures and the requirements of the New York Rules of Professional Conduct, and, based on the information available to it at this time, is not aware of any conflict of interest that would preclude its representation of BRB in this matter.

BRB acknowledges that C&H is a large law firm with offices in multiple jurisdictions and a diverse client base. C&H may currently represent, and in the future may undertake to represent, other clients in matters that are unrelated to this engagement and that may, in some instances, involve positions or interests that are adverse to BRB. BRB consents to such representations, provided that C&H will not represent any party directly adverse to BRB in any matter that is the same as, or substantially related to, the subject matter of this engagement without first obtaining BRB's informed written consent.

If an actual or potential conflict of interest arises during the course of the engagement, C&H will promptly notify BRB and the parties will discuss the conflict and its resolution in accordance with the applicable provisions of the New York Rules of Professional Conduct (particularly Rules 1.7 and 1.10) and any other applicable ethical rules or standards. If the conflict cannot be resolved through disclosure and consent, C&H will take appropriate steps, which may include withdrawal from this engagement or from the conflicting representation, as the circumstances require.

11. Termination

Either party may terminate this engagement at any time upon written notice to the other party. Termination by either party will not relieve BRB of its obligation to pay all fees and disbursements incurred through the date on which termination becomes effective, in accordance with the fee arrangements set forth in Section 4 above.

In the event of termination, C&H will take reasonable steps to protect BRB's interests, including facilitating an orderly transition of the matter to successor counsel designated by BRB (if applicable), transferring relevant files and work product to successor counsel, and cooperating in the preparation of any transition memoranda or other materials reasonably necessary to ensure continuity of representation. BRB acknowledges that the Firm's ability to withdraw from the representation may be subject to applicable rules of professional conduct and, if the matter is then pending before any tribunal, the approval of such tribunal.

The Firm's obligations regarding confidentiality and the protection of attorney-client privilege and work product, as described in Section 6 above, will survive the termination of this engagement and will continue in full force and effect thereafter.

12. No Guarantee of Outcome

BRB acknowledges that the Firm has made no promises or guarantees regarding the outcome of the Investigation, including whether the SEC Staff will close the Investigation without action, issue a Wells notice, recommend the filing of an enforcement action, or take any other particular course of action. The outcome of any SEC investigation depends on numerous factors, many of which are beyond the control of the Company and its counsel.

Any expressions of opinion regarding probable outcomes, potential risks, or likely courses of action by the SEC Staff are based on the Firm's experience in similar matters and the professional judgment of its attorneys, informed by the facts and circumstances as they are understood at the time such opinions are expressed. Such opinions are not, and should not be construed as, guarantees, warranties, or assurances of any particular result. Facts and circumstances may change as the Investigation progresses, and the Firm's assessments and recommendations will evolve accordingly.

13. File Retention

Following the conclusion of the engagement, C&H will retain the engagement file in accordance with the Firm's standard document retention policies. The engagement file includes, without limitation, the Firm's work product, internal memoranda, correspondence, copies of document productions, interview memoranda, and other materials generated or compiled by the Firm in the course of the representation.

Under the Firm's current document retention policies, engagement files are retained for a minimum of seven (7) years following the conclusion of the engagement, after which they may be destroyed in accordance with the Firm's standard procedures without further notice to BRB. If BRB wishes to request that the Firm retain any materials beyond the standard retention period, BRB should provide written notice to the Firm prior to the expiration of the seven-year period.

Original client documents — that is, original documents or materials that were provided by BRB to C&H during the course of the engagement and that belong to BRB — will be returned to BRB upon written request. BRB should direct any such requests to the Responsible Partner for the engagement.

14. Governing Law and Dispute Resolution

This Engagement Letter shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflicts-of-law principles.

In the event of any dispute, controversy, or claim arising out of or relating to this Engagement Letter or the engagement contemplated herein, including any dispute regarding the Firm's fees, the parties agree that such dispute shall be resolved by binding arbitration conducted in New York, New York, in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. The arbitration shall be conducted before a single arbitrator, who shall be a licensed attorney with experience in legal malpractice or attorney fee disputes. The arbitrator's award shall be final and binding on the parties, and judgment upon the award may be entered in any court of competent jurisdiction. Each party shall bear its own costs and attorneys' fees in connection with any arbitration, unless the arbitrator determines that an award of costs or fees is appropriate.

Notwithstanding the foregoing, nothing in this Section 14 shall preclude either party from seeking injunctive or other equitable relief in a court of competent jurisdiction to the extent necessary to protect confidential information or preserve the status quo pending resolution of any arbitration.

15. Acceptance and Execution

If the foregoing terms and conditions are acceptable to BRB, please indicate your agreement by signing this Engagement Letter in the space provided below and returning a fully executed counterpart copy to:

Victoria Chambers, Partner Calderwood & Harkness LLP 425 Lexington Avenue, 30th Floor New York, New York 10017 vchambers@calderwoodharkness.com

This Engagement Letter may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Execution and delivery of this Engagement Letter by electronic means (including PDF transmitted by email) shall be effective for all purposes.

We greatly appreciate the confidence that BRB has placed in Calderwood & Harkness LLP, and we look forward to working with you and your team on this important matter.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Victoria Chambers, Partner Responsible Partner, White Collar Defense & Investigations Practice Group

By: ________

Howard Quinn, Partner Billing Partner, White Collar Defense & Investigations Practice Group

ACCEPTED AND AGREED as of September 20, 2023:

BELMONT RIDGE BANK NATIONAL ASSOCIATION

By: ________

Name: Derek Sung, Esq.

Title: General Counsel & Chief Legal Officer

Date: ________

Enclosures

The following documents are referenced herein and will be circulated to BRB's General Counsel promptly following execution of this Engagement Letter:

1. Upjohn / Corporate Representation Advisory Memorandum — setting forth the form and content of the corporate representation warnings to be administered to BRB personnel in connection with witness interviews and preparation sessions (see Section 2).

2. Privilege Protocol & Document Preservation Memorandum — setting forth detailed protocols for preserving attorney-client privilege and work-product protection in communications involving BRB's independent auditor, Whitfield Keane LLP, and any forensic accounting consultant retained pursuant to Section 5, as well as the Firm's detailed litigation hold notice and document preservation instructions (see Sections 6 and 7).

3. Firm Biographical Information — biographical summaries for the attorneys staffed on this engagement (Victoria Chambers, Howard Quinn, Jasmine Thornton, and Liam Donahue) (optional appendix, available upon request).

cc: Marcus R. Ellingham, Chief Executive Officer, Belmont Ridge Bank National Association (via electronic mail)

cc: Gwendolyn Prescott, Audit Committee Chair, Belmont Ridge Bank National Association (via separate confidential delivery)

Timekeeper	Role	Hourly Rate
Victoria Chambers	Partner (Responsible Partner)	$1,475.00
Howard Quinn	Partner (Billing Partner)	$1,350.00
Jasmine Thornton	Associate (Lead Associate)	$895.00
Liam Donahue	Associate (Working Associate)	$695.00

CALDERWOOD & HARKNESS LLP Counsellors at Law
425 Lexington Avenue, 30th Floor New York, New York 10017
Telephone: (212) 558-4000 Facsimile: (212) 558-4001 www.calderwoodharkness.com
September 20, 2023
VIA HAND DELIVERY AND ELECTRONIC MAIL
Derek Sung, Esq. General Counsel & Chief Legal Officer Belmont Ridge Bank National Association 200 Park Avenue South, 38th Floor New York, New York 10003
Re: Engagement of Calderwood & Harkness LLP by Belmont Ridge Bank National Association — SEC Division of Enforcement Investigation, File No. HO-14287
Matter No.: SC-MAT-2023-4172
Dear Derek:
We are writing to confirm the terms and conditions of the engagement of Calderwood & Harkness LLP ("C&H" or the "Firm") by Belmont Ridge Bank National Association ("BRB" or the "Company") in connection with the matter referenced above. This letter (the "Engagement Letter") sets forth our mutual understanding regarding the scope of the engagement, client identity, staffing, fee arrangements, confidentiality, and related matters. We ask that you review this letter carefully and, if the terms are acceptable, execute and return the enclosed counterpart copy as provided in Section 15 below.
We value the confidence that BRB's leadership and Board of Directors have placed in the Firm, and we look forward to representing the Company in this important matter.
1. Engagement and Scope of Representation
Calderwood & Harkness LLP is pleased to confirm that Belmont Ridge Bank National Association has retained the Firm to represent BRB in connection with the investigation by the U.S. Securities and Exchange Commission ("SEC"), Division of Enforcement, designated as File No. HO-14287 (the "Investigation").
The Investigation relates to the SEC's inquiry into BRB's public disclosures regarding loan-loss provisioning and the methodology underlying its allowance for credit losses ("ACL") related to the Company's digital lending platform, known as "BridgeFin," as reflected in: (i) BRB's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (filed with the SEC on February 28, 2023); (ii) BRB's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023 (filed with the SEC on May 10, 2023); and (iii) BRB's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023 (filed with the SEC on August 9, 2023). The Investigation appears to focus on whether the ACL methodology disclosed in those filings, and the related quantitative estimates and qualitative disclosures, were materially accurate and consistent with applicable accounting standards, including ASC 326 (Financial Instruments—Credit Losses), and with the requirements of Regulation S-K, Regulation S-X, and the antifraud provisions of the federal securities laws.
The scope of our engagement encompasses the following activities in connection with the Investigation:
(a) Responding to the SEC Staff's voluntary request letter dated September 18, 2023, and any supplements or follow-up requests thereto;
(b) Responding to any subpoenas, formal orders of investigation, or other compulsory process that may be issued by the SEC in connection with the Investigation;
(c) Conducting internal fact-gathering, including interviews of BRB personnel, review of relevant documents, data, and electronically stored information, and analysis of the Company's ACL methodology and BridgeFin loss-rate modeling;
(d) Managing and supervising the collection, review, and production of documents and electronically stored information responsive to SEC requests, including the establishment and maintenance of appropriate privilege review protocols;
(e) Preparing witnesses for investigative testimony before the SEC Staff, including any testimony pursuant to formal orders of investigation;
(f) Preparing any written submissions to the SEC Staff, including any responses to Staff inquiries, white papers, presentations, and, if applicable, any submission pursuant to SEC Rule 5(c) (a "Wells Submission");
(g) Advising BRB's Board of Directors and the Audit Committee of the Board of Directors (the "Audit Committee") regarding the Investigation, including attending meetings and providing periodic reports as may be requested; and
(h) Such other matters as are reasonably related to the foregoing and as may be mutually agreed upon by the Firm and BRB.
Notwithstanding the foregoing, the scope of this engagement expressly does not include:
(i) Representation of any individual director, officer, employee, or agent of BRB in their personal capacity in connection with the Investigation or any related matter;
(ii) Representation of BRB in any related private securities litigation, shareholder derivative actions, class actions, or securities fraud actions, whether pending or threatened;
(iii) Representation of BRB in any regulatory proceedings initiated by, or investigations conducted by, any regulatory agency other than the SEC Division of Enforcement, including but not limited to the Office of the Comptroller of the Currency ("OCC"), the Federal Deposit Insurance Corporation ("FDIC"), any state banking or securities regulator, or the Department of Justice;
(iv) Advice regarding BRB's ongoing SEC reporting obligations, including the preparation, review, or filing of periodic reports on Forms 10-K, 10-Q, or 8-K, current reports, proxy statements, or any other filings with the SEC, which obligations remain the province of BRB's securities reporting counsel, Caldwell Pratt & Stein LLP (lead partner, Martin Caldwell); and
(v) Any other legal matter not specifically described in this Section 1.
Any expansion of the scope of this engagement beyond the matters described herein shall require the mutual written agreement of C&H and BRB, which agreement may take the form of an amendment to this Engagement Letter or a separate engagement letter, as the parties may determine.
2. Client Identity — Upjohn / Corporate Representation Protocol
It is essential that the identity of our client in this engagement be clearly understood by all parties, including BRB's directors, officers, employees, and agents who may interact with the Firm during the course of the Investigation.
The Firm represents Belmont Ridge Bank National Association as a corporate entity. The Firm does not represent, and will not represent in connection with this engagement, any individual director, officer, employee, or agent of BRB in his or her personal or individual capacity.
All communications between the Firm and BRB personnel in connection with this engagement are made in the Firm's capacity as counsel to the corporate entity. The attorney-client privilege with respect to those communications belongs exclusively to BRB, and not to the individual who participates in the communication. The privilege may be waived only by BRB, acting through its authorized representatives — specifically, the General Counsel, the Audit Committee, or the full Board of Directors — in their discretion and in accordance with BRB's internal governance procedures. No individual employee, officer, or director may unilaterally waive, assert, or control BRB's attorney-client privilege.
Individual employees, officers, and directors who provide information to C&H in connection with this engagement — whether through interviews, document production, correspondence, or otherwise — do so in their capacity as representatives of the corporate entity. Such individuals are not clients of C&H and should be made aware of this distinction. This understanding is consistent with the principles set forth in Upjohn Co. v. United States, 449 U.S. 383 (1981), and its progeny, as well as Rule 1.13 of the New York Rules of Professional Conduct.
To ensure that all BRB personnel are fully informed of these principles, C&H will administer what are commonly known as "Upjohn warnings" or "corporate representation advisories" at the commencement of each interview or witness preparation session conducted with BRB personnel. These warnings will inform each individual, among other things, that: (i) C&H represents the Company and not the individual; (ii) the attorney-client privilege belongs to the Company; (iii) the Company may elect to waive the privilege and disclose the contents of the communication to third parties, including the SEC, without the individual's consent; and (iv) the individual may wish to retain separate, personal counsel. The specific form and content of these warnings will be set forth in a separate Upjohn / Corporate Representation Advisory Memorandum, which C&H will circulate to BRB's General Counsel promptly following the execution of this Engagement Letter.
If at any point during the engagement the interests of any individual BRB director, officer, or employee appear to diverge from, or come into conflict with, the interests of the Company, C&H will promptly notify BRB's General Counsel and, where appropriate, the Audit Committee. In such circumstances, the affected individual should be advised to retain separate, personal counsel at his or her own expense (subject to any advancement or indemnification rights the individual may have under BRB's bylaws, charter, or applicable insurance policies). C&H will cooperate with any such personal counsel to the extent consistent with the Firm's duties to the Company.
3. Staffing
The following attorneys will be principally responsible for representing BRB in connection with the Investigation:
Victoria Chambers — Responsible Partner, White Collar Defense & Investigations Practice Group. Ms. Chambers will serve as the primary relationship partner for this engagement. She will have overall responsibility for the strategic direction of the representation, supervisory oversight of all work performed by the engagement team, and primary responsibility for communications with the SEC Staff, BRB's senior management, and the Board of Directors and Audit Committee. Ms. Chambers has over twenty-five years of experience in SEC enforcement matters, internal investigations, and securities regulation.
Howard Quinn — Billing Partner, White Collar Defense & Investigations Practice Group. Mr. Quinn will serve as the billing partner for the engagement and will have secondary supervisory responsibility. Mr. Quinn will be responsible for overseeing the Firm's billing practices in connection with the matter, ensuring compliance with the fee arrangements described in Section 4 below, and addressing any billing-related inquiries from BRB. Mr. Quinn also brings extensive experience in SEC enforcement defense and will be available to contribute substantively to the representation as needed.
Jasmine Thornton — Lead Associate. Ms. Thornton will serve as the day-to-day lead attorney for the engagement. Her responsibilities will include managing the document collection, review, and production process; coordinating witness preparation sessions; conducting and supervising legal research and analysis; drafting correspondence, memoranda, and submissions to the SEC Staff; and serving as the primary point of day-to-day contact for BRB's legal department.
Liam Donahue — Working Associate. Mr. Donahue will support the engagement team in all phases of the matter, including document review and production management, privilege review, legal research and memoranda preparation, and assistance with witness preparation. Mr. Donahue will work under the supervision of Ms. Thornton and the engagement partners.
Additional attorneys, paralegals, litigation support professionals, and other support staff may be assigned to the engagement from time to time as the needs of the matter require. BRB will be notified in advance of any material changes to the staffing of the engagement, including the assignment of any additional partner-level attorneys or the departure of any of the above-named timekeepers from the matter.
The Firm may also engage contract document reviewers, working under the supervision of C&H attorneys, to assist with large-scale privilege review and document production. Such contract reviewers will be appropriately supervised by Firm attorneys and will be subject to the Firm's confidentiality obligations. Their time will be billed at a reduced rate as described in Section 4 below.
4. Fee Arrangement
4.1 Hourly Billing Rates
Fees for professional services rendered by the Firm in connection with this engagement will be calculated on an hourly basis at the Firm's standard rates for the identified timekeepers, as follows:
The hourly rates for any additional attorneys, paralegals, contract document reviewers, or other timekeepers assigned to the engagement will be communicated to BRB at the time of their assignment. Current standard rates for associates in the Firm's White Collar Defense & Investigations Practice Group range from $595 to $1,050 per hour depending on seniority. Current standard rates for paralegals range from $350 to $475 per hour. Contract document reviewers engaged for privilege review are typically billed at rates ranging from $175 to $295 per hour, reflecting a significant reduction from standard associate rates.
The Firm's hourly rates are subject to annual adjustment, which typically takes effect on or about January 1 of each calendar year. BRB will be notified in writing in advance of any rate increase applicable to this engagement. Any adjusted rates will apply to services rendered on or after the effective date of the adjustment.
4.2 Annual Fee Cap
In recognition of the scope and anticipated duration of the Investigation, and as a result of discussions between the parties, C&H and BRB have agreed to an annual fee cap for this engagement. Specifically, total professional fees billed by the Firm for services rendered in connection with this engagement shall not exceed Four Million Five Hundred Thousand Dollars ($4,500,000.00) in any twelve-month period (the "Annual Cap"), with each twelve-month period measured from the date of this Engagement Letter (i.e., the first period running from September 20, 2023, through September 19, 2024, and each successive period running for twelve months thereafter).
The following terms and conditions apply to the Annual Cap:
(a) The Annual Cap applies exclusively to professional fees — that is, charges for the time of C&H attorneys, paralegals, and contract reviewers. The Annual Cap does not apply to, and does not include, out-of-pocket disbursements, third-party costs, or fees of third-party consultants, all of which are governed by Section 4.3 below.
(b) If gross calculated professional fees for any capped twelve-month period would exceed $4,500,000.00, the Firm will apply a pro rata reduction to the final invoice or invoices of the applicable period sufficient to bring total professional fees within the Annual Cap. For the avoidance of doubt, any such reduction shall be reflected on the face of the relevant invoice(s).
(c) Based on the Firm's current staffing projections and preliminary estimates of the anticipated workload for the first twelve-month period, the Annual Cap is expected to produce an effective reduction of approximately 19.3% from gross calculated fees for that period. This estimate is provided for reference only and is subject to change based on actual staffing levels, the pace and scope of the Investigation, and other factors that cannot be predicted with certainty at this time.
(d) The Annual Cap does not carry over from one twelve-month period to any subsequent period. Unused capacity under the Annual Cap in one period does not increase the cap in any succeeding period, nor does any overage in one period (which should not occur given the mechanisms described above) reduce the cap in any succeeding period.
(e) The Annual Cap does not create any minimum-fee obligation on BRB's part. BRB's obligation is limited to payment of actual fees incurred, subject to the cap, and BRB is not obligated to pay any amount in excess of fees actually billed merely because the Annual Cap has not been reached.
(f) If the scope of the engagement is materially expanded pursuant to Section 1, the parties will discuss in good faith whether an adjustment to the Annual Cap is appropriate in light of the expanded scope.
4.3 Disbursements and Third-Party Costs
In addition to professional fees, BRB will be responsible for reimbursing the Firm for reasonable out-of-pocket disbursements incurred in connection with the engagement. Disbursements may include, but are not limited to, the following categories:
(a) Travel expenses, including airfare, ground transportation, lodging, and meals, incurred in connection with witness preparation, SEC testimony, meetings with the SEC Staff, and other engagement-related activities (travel expenses will be incurred in accordance with the Firm's standard travel policies, which are generally consistent with BRB's corporate travel policy as communicated to the Firm);
(b) Document reproduction, printing, and binding costs;
(c) Electronic discovery costs, including collection, processing, hosting, review platform licensing (e.g., Relativity), and production of electronically stored information;
(d) Messenger and courier services, including overnight delivery;
(e) Computerized legal research charges (e.g., Westmark Data Systems, Sundial Solutions, Cascade Services Inc.);
(f) Court filing fees, if any;
(g) Telecommunications charges associated with the engagement; and
(h) Other reasonable out-of-pocket costs directly related to the representation.
Fees and costs of third-party consultants retained at C&H's direction and with BRB's prior written approval (including any forensic accounting consultant retained pursuant to Section 5 below) will be billed directly to BRB by such consultants pursuant to the consultant's own engagement terms, or, in certain circumstances and at BRB's request, advanced by C&H and passed through to BRB at cost without markup. All third-party consultant costs are outside the scope of, and are not subject to, the Annual Fee Cap described in Section 4.2.
4.4 Billing and Payment
The Firm will issue invoices on a monthly basis, reflecting professional fees and disbursements incurred during the preceding calendar month. Invoices will typically be issued within ten (10) business days following the close of each calendar month.
All invoices are due and payable within thirty (30) days of the invoice date. Payments should be made by wire transfer or check to the account designated on the invoice. In the event that any invoice remains unpaid more than sixty (60) days past due, the Firm reserves the right to assess a late-payment charge at the rate of 1.0% per month on the outstanding balance, to the extent permitted by applicable law and rules of professional conduct.
Each invoice will include the following detail for each timekeeper entry: the name of the timekeeper, the date of service, the number of hours billed (in increments of one-tenth of an hour), the applicable hourly rate, and a narrative description of the services rendered. Narrative descriptions will be sufficiently detailed to permit BRB to evaluate the nature of the work performed, subject to applicable attorney-client privilege and work-product protections. In the event that any portion of a narrative description would, if disclosed, risk waiver of applicable privileges, C&H may redact or generalize such descriptions and make more detailed descriptions available for review on a privileged and confidential basis.
All billing inquiries, including questions regarding invoice detail, rate adjustments, and payment arrangements, should be directed to Howard Quinn, Billing Partner, at hquinn@calderwoodharkness.com or (212) 558-4187.
5. Engagement of Third-Party Consultants
Given the technical nature of the issues under investigation — in particular, the quantitative modeling underlying BRB's allowance for credit losses and the BridgeFin loss-rate methodology — C&H anticipates that it will be advisable to retain a forensic accounting consultant to assist the Firm and the Company with the analysis of these issues. The engagement of any such consultant will require BRB's prior written approval, including approval of the proposed consultant's identity, scope of work, and estimated fees.
Any forensic accounting consultant (or other expert consultant) retained in connection with this engagement will be retained by C&H on behalf of BRB, at the direction of counsel, for the express purpose of assisting the Firm in rendering legal advice to the Company. This structure is intended to preserve the protections of the attorney work-product doctrine and, where applicable, to bring the consultant's communications within the scope of the attorney-client privilege under the doctrine established in United States v. Kovel, 296 F.2d 918 (2d Cir. 1961). Under the Kovel framework, communications between the consultant and C&H (and, to the extent directed by C&H, between the consultant and BRB) may be protected as privileged communications made for the purpose of facilitating legal representation, provided that the consultant is functioning as the functional equivalent of an employee or agent of the law firm for purposes of the engagement.
The engagement of any third-party consultant will be governed by a separate engagement letter between the consultant and C&H (on behalf of BRB), which will include appropriate confidentiality, privilege, and conflict-of-interest provisions. A copy of any such engagement letter will be provided to BRB's General Counsel for review and approval prior to execution.
As noted in Section 4.3, the fees and costs of any third-party consultant will be the responsibility of BRB and are not subject to the Annual Fee Cap set forth in Section 4.2.
6. Confidentiality and Privilege
All communications between C&H and BRB in connection with this engagement — whether oral, written, or electronic — are intended to be, and shall be treated as, confidential and protected by the attorney-client privilege and/or the attorney work-product doctrine to the fullest extent permitted by applicable law. This includes, without limitation, communications regarding legal strategy, factual analysis, risk assessment, settlement discussions, and the Firm's mental impressions, conclusions, and opinions formed in the course of the representation.
BRB agrees to use reasonable efforts to maintain the confidentiality of all such communications, including by limiting the internal distribution of privileged communications on a need-to-know basis. BRB should ensure that privileged communications are not forwarded to, or shared with, individuals who do not have a legitimate need for the information in connection with the Investigation, and that privileged documents are not commingled with non-privileged business records in a manner that could undermine the privilege.
C&H recognizes that, in the course of the engagement, it may be necessary to communicate with or in the presence of certain third parties whose involvement could, if not properly managed, create a risk of waiver of applicable privileges. In particular, C&H will establish and implement protocols for preserving privilege in communications involving:
(a) BRB's independent auditor, Whitfield Keane LLP (PCAOB Registration No. 2847), to the extent that communications with or in the presence of the auditor are necessary in connection with the Investigation; and
(b) Any forensic accounting consultant retained pursuant to Section 5 above, including protocols to ensure that the Kovel doctrine's protections are preserved.
These protocols will be set forth in detail in a separate Privilege Protocol & Document Preservation Memorandum, which C&H will prepare and circulate to BRB's General Counsel promptly following the execution of this Engagement Letter. BRB's legal department and relevant personnel should adhere to the protocols described in that memorandum.
Neither C&H nor BRB will waive any applicable attorney-client privilege or work-product protection in connection with this engagement without the other's prior written consent. This provision is subject, however, to BRB's ultimate authority as the holder of the attorney-client privilege; BRB retains the right, in its sole discretion and acting through its authorized representatives (as described in Section 2), to waive the privilege. In the event that BRB contemplates waiving any privilege, C&H respectfully requests advance notice and the opportunity to consult with BRB regarding the scope and implications of any such waiver.
7. Document Preservation
BRB acknowledges its obligation, arising from the commencement of the Investigation and the SEC's voluntary request letter, to preserve all documents, records, and electronically stored information ("ESI") that are or may be potentially relevant to the Investigation. This obligation extends to all forms of documents and data, including but not limited to paper files, electronic files, emails, instant messages, text messages, voicemails, databases, spreadsheets, presentations, handwritten notes, and metadata.
C&H will prepare and issue a detailed litigation hold notice and document preservation memorandum addressed to BRB's General Counsel for prompt distribution to all relevant custodians and data stewards within the Company. The litigation hold notice will identify the categories of materials to be preserved, the time period covered, and the specific actions required of each custodian to ensure compliance with preservation obligations.
BRB agrees to cooperate fully with C&H in connection with document preservation, including by:
(a) Promptly identifying all custodians (current and former employees, officers, and directors) who may possess, or have access to, documents and ESI potentially relevant to the Investigation;
(b) Identifying all data sources and repositories — including email systems, shared drives, personal devices, cloud storage, backup tapes, and third-party platforms — where potentially responsive documents and ESI may reside;
(c) Suspending any routine document destruction, recycling, or auto-deletion policies as they apply to potentially relevant materials for the duration of the Investigation;
(d) Ensuring that all custodians identified in the litigation hold notice acknowledge receipt and understanding of their preservation obligations; and
(e) Promptly notifying C&H of any actual or suspected loss, destruction, or alteration of potentially relevant documents or ESI.
The importance of robust and timely document preservation cannot be overstated. Failure to preserve relevant materials could result in adverse consequences in the Investigation, including adverse inferences, sanctions, or additional regulatory scrutiny. C&H will work closely with BRB's legal department and information technology personnel to implement an effective preservation program.
8. Cooperation and Communications
The effectiveness of C&H's representation depends upon the full cooperation of BRB and its personnel throughout the course of the Investigation. BRB agrees to cooperate fully with C&H, including by:
(a) Making BRB's officers, employees, and agents available on a timely basis for interviews, witness preparation sessions, and, if necessary, investigative testimony;
(b) Providing timely access to documents, data, systems, and other information requested by C&H in connection with the engagement;
(c) Keeping C&H promptly informed of any material developments relating to the Investigation or the subject matter of the Investigation, including any communications received from the SEC, other regulators, auditors, or third parties;
(d) Keeping C&H informed of any other legal proceedings, regulatory inquiries, or significant business developments that may be relevant to the Investigation or to the Firm's representation; and
(e) Responding promptly to requests for information, approvals, and decisions necessary to the progress of the representation.
With respect to communications from C&H to BRB, the Firm will keep the following individuals informed of material developments in the Investigation on an ongoing basis:
•  Derek Sung, General Counsel & Chief Legal Officer — as the Firm's primary day-to-day contact and the authorized representative of BRB for purposes of this engagement;
•  Marcus R. Ellingham, Chief Executive Officer — as appropriate and as directed by the General Counsel;
•  Gwendolyn Prescott, Audit Committee Chair — in her capacity as chair of the Audit Committee, as described below;
•  Patricia Navarrete, Chief Financial Officer — as appropriate and to the extent relevant to financial reporting and accounting matters implicated by the Investigation; and
•  Annette Kowalski, Chief Risk Officer — as appropriate and to the extent relevant to risk management issues implicated by the BridgeFin platform and ACL methodology.
In addition, C&H will report regularly to the Audit Committee of BRB's Board of Directors regarding the status of the Investigation, the progress of the Firm's work, and any material developments or strategic recommendations. The frequency and format of such reports will be determined in consultation with the Audit Committee Chair, Ms. Prescott, and the General Counsel, and may include written memoranda, oral presentations at Audit Committee meetings (whether in person or by videoconference), and such other communications as the Audit Committee may direct.
9. Insurance
BRB has advised C&H that the Company maintains directors' and officers' liability insurance policies that may provide coverage for defense costs incurred in connection with the Investigation. Based on information provided to the Firm, BRB's current D&O insurance program includes the following relevant policies:
(a) Primary Policy: Northcastle Mutual Assurance Company, Policy No. NMA-DO-2023-11847, with a primary limit of liability of $15,000,000 per policy period, an entity retention (self-insured retention) of $2,500,000, and a policy period of July 1, 2023, through July 1, 2024; and
(b) First Excess Layer: Cascade Omnivrel Insurance Group, Policy No. CFIG-XS1-2023-5598, with a limit of liability of $10,000,000 in excess of the Northcastle primary policy, following form to the primary policy.
C&H will assist BRB in tendering the Investigation to BRB's D&O insurer(s) on a timely basis, including preparing or reviewing any notice of claim or notice of circumstances required under the applicable policies and engaging in coverage discussions with the carriers or their coverage counsel as needed.
Notwithstanding the availability of D&O insurance, C&H's engagement and fees are not contingent upon D&O coverage or reimbursement. BRB remains solely and unconditionally responsible for the payment of C&H's fees and disbursements as provided in this Engagement Letter, regardless of whether any or all of such fees and disbursements are ultimately covered, reimbursed, or advanced by BRB's D&O insurer(s). In the event that an insurer disputes coverage or delays reimbursement, BRB's payment obligations to C&H are not suspended or deferred.
BRB should coordinate all insurance-related matters, including policy review, coverage analysis, and communications with carriers, through its D&O insurance broker, Ridgeline Governance Advisors LLC (contact: Melinda Tran, Senior Vice President, mtran@ridgelinegov.com). C&H will cooperate with Ridgeline as necessary to support BRB's insurance recovery efforts.
10. Conflicts of Interest
The Firm has conducted a conflicts check in accordance with its standard procedures and the requirements of the New York Rules of Professional Conduct, and, based on the information available to it at this time, is not aware of any conflict of interest that would preclude its representation of BRB in this matter.
BRB acknowledges that C&H is a large law firm with offices in multiple jurisdictions and a diverse client base. C&H may currently represent, and in the future may undertake to represent, other clients in matters that are unrelated to this engagement and that may, in some instances, involve positions or interests that are adverse to BRB. BRB consents to such representations, provided that C&H will not represent any party directly adverse to BRB in any matter that is the same as, or substantially related to, the subject matter of this engagement without first obtaining BRB's informed written consent.
If an actual or potential conflict of interest arises during the course of the engagement, C&H will promptly notify BRB and the parties will discuss the conflict and its resolution in accordance with the applicable provisions of the New York Rules of Professional Conduct (particularly Rules 1.7 and 1.10) and any other applicable ethical rules or standards. If the conflict cannot be resolved through disclosure and consent, C&H will take appropriate steps, which may include withdrawal from this engagement or from the conflicting representation, as the circumstances require.
11. Termination
Either party may terminate this engagement at any time upon written notice to the other party. Termination by either party will not relieve BRB of its obligation to pay all fees and disbursements incurred through the date on which termination becomes effective, in accordance with the fee arrangements set forth in Section 4 above.
In the event of termination, C&H will take reasonable steps to protect BRB's interests, including facilitating an orderly transition of the matter to successor counsel designated by BRB (if applicable), transferring relevant files and work product to successor counsel, and cooperating in the preparation of any transition memoranda or other materials reasonably necessary to ensure continuity of representation. BRB acknowledges that the Firm's ability to withdraw from the representation may be subject to applicable rules of professional conduct and, if the matter is then pending before any tribunal, the approval of such tribunal.
The Firm's obligations regarding confidentiality and the protection of attorney-client privilege and work product, as described in Section 6 above, will survive the termination of this engagement and will continue in full force and effect thereafter.
12. No Guarantee of Outcome
BRB acknowledges that the Firm has made no promises or guarantees regarding the outcome of the Investigation, including whether the SEC Staff will close the Investigation without action, issue a Wells notice, recommend the filing of an enforcement action, or take any other particular course of action. The outcome of any SEC investigation depends on numerous factors, many of which are beyond the control of the Company and its counsel.
Any expressions of opinion regarding probable outcomes, potential risks, or likely courses of action by the SEC Staff are based on the Firm's experience in similar matters and the professional judgment of its attorneys, informed by the facts and circumstances as they are understood at the time such opinions are expressed. Such opinions are not, and should not be construed as, guarantees, warranties, or assurances of any particular result. Facts and circumstances may change as the Investigation progresses, and the Firm's assessments and recommendations will evolve accordingly.
13. File Retention
Following the conclusion of the engagement, C&H will retain the engagement file in accordance with the Firm's standard document retention policies. The engagement file includes, without limitation, the Firm's work product, internal memoranda, correspondence, copies of document productions, interview memoranda, and other materials generated or compiled by the Firm in the course of the representation.
Under the Firm's current document retention policies, engagement files are retained for a minimum of seven (7) years following the conclusion of the engagement, after which they may be destroyed in accordance with the Firm's standard procedures without further notice to BRB. If BRB wishes to request that the Firm retain any materials beyond the standard retention period, BRB should provide written notice to the Firm prior to the expiration of the seven-year period.
Original client documents — that is, original documents or materials that were provided by BRB to C&H during the course of the engagement and that belong to BRB — will be returned to BRB upon written request. BRB should direct any such requests to the Responsible Partner for the engagement.
14. Governing Law and Dispute Resolution
This Engagement Letter shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflicts-of-law principles.
In the event of any dispute, controversy, or claim arising out of or relating to this Engagement Letter or the engagement contemplated herein, including any dispute regarding the Firm's fees, the parties agree that such dispute shall be resolved by binding arbitration conducted in New York, New York, in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. The arbitration shall be conducted before a single arbitrator, who shall be a licensed attorney with experience in legal malpractice or attorney fee disputes. The arbitrator's award shall be final and binding on the parties, and judgment upon the award may be entered in any court of competent jurisdiction. Each party shall bear its own costs and attorneys' fees in connection with any arbitration, unless the arbitrator determines that an award of costs or fees is appropriate.
Notwithstanding the foregoing, nothing in this Section 14 shall preclude either party from seeking injunctive or other equitable relief in a court of competent jurisdiction to the extent necessary to protect confidential information or preserve the status quo pending resolution of any arbitration.
15. Acceptance and Execution
If the foregoing terms and conditions are acceptable to BRB, please indicate your agreement by signing this Engagement Letter in the space provided below and returning a fully executed counterpart copy to:
Victoria Chambers, Partner Calderwood & Harkness LLP 425 Lexington Avenue, 30th Floor New York, New York 10017 vchambers@calderwoodharkness.com
This Engagement Letter may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Execution and delivery of this Engagement Letter by electronic means (including PDF transmitted by email) shall be effective for all purposes.
We greatly appreciate the confidence that BRB has placed in Calderwood & Harkness LLP, and we look forward to working with you and your team on this important matter.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Victoria Chambers, Partner Responsible Partner, White Collar Defense & Investigations Practice Group
By: ________
Howard Quinn, Partner Billing Partner, White Collar Defense & Investigations Practice Group
ACCEPTED AND AGREED as of September 20, 2023:
BELMONT RIDGE BANK NATIONAL ASSOCIATION
By: ________
Name: Derek Sung, Esq.
Title: General Counsel & Chief Legal Officer
Date: ________
Enclosures
The following documents are referenced herein and will be circulated to BRB's General Counsel promptly following execution of this Engagement Letter:
1.  Upjohn / Corporate Representation Advisory Memorandum — setting forth the form and content of the corporate representation warnings to be administered to BRB personnel in connection with witness interviews and preparation sessions (see Section 2).
2.  Privilege Protocol & Document Preservation Memorandum — setting forth detailed protocols for preserving attorney-client privilege and work-product protection in communications involving BRB's independent auditor, Whitfield Keane LLP, and any forensic accounting consultant retained pursuant to Section 5, as well as the Firm's detailed litigation hold notice and document preservation instructions (see Sections 6 and 7).
3.  Firm Biographical Information — biographical summaries for the attorneys staffed on this engagement (Victoria Chambers, Howard Quinn, Jasmine Thornton, and Liam Donahue) (optional appendix, available upon request).
cc: Marcus R. Ellingham, Chief Executive Officer, Belmont Ridge Bank National Association (via electronic mail)
cc: Gwendolyn Prescott, Audit Committee Chair, Belmont Ridge Bank National Association (via separate confidential delivery)
Timekeeper | Role | Hourly Rate
Victoria Chambers | Partner (Responsible Partner) | $1,475.00
Howard Quinn | Partner (Billing Partner) | $1,350.00
Jasmine Thornton | Associate (Lead Associate) | $895.00
Liam Donahue | Associate (Working Associate) | $695.00

CALDERWOOD & HARKNESS LLP Counsellors at Law

VIA HAND DELIVERY AND ELECTRONIC MAIL

CALDERWOOD & HARKNESS LLP

BELMONT RIDGE BANK NATIONAL ASSOCIATION

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