Contract analysis

I. Background — The MTSA and the Parties' Relationship CPS is an Ohio limited liability company with its principal offices located at 4500 Needmore Road, Dayton, Ohio 45424. CPS is engaged in the business of specialty packaging manufacturing and industrial chemical coatings, servicing clients throughout the United States. Given the nature of its operations, CPS relies heavily on dependable, cost-effective freight tra

Section 5.2 of the MTSA provides for an annual rate escalator of 2.5%, effective each April 15 during the term of the agreement. By its express terms, this escalator applies solely to the base rates set forth in Exhibit B and does not apply to the fuel surcharge component of any invoice. The fuel surcharge component of each invoice was to be calculated in accordance with the formula set forth in Exhibit C of the MTSA

II. The Overcharges — Detailed Breakdown A comprehensive, line-item audit of all Ridgeway invoices submitted during the twenty-six-month period from February 2019 through March 2021 has revealed that Ridgeway engaged in systematic overbilling of CPS in the aggregate amount of $1,847,632.19. This audit was conducted by CPS's internal accounts payable department in conjunction with an independent forensic accounting re

III. Prior Dispute Notice and Failed Good-Faith Resolution CPS has fully complied with the dispute resolution procedures set forth in the MTSA prior to issuing this demand. On February 8, 2021, CPS's General Counsel, Harold Inman, sent Ridgeway a formal written invoice dispute notice in strict compliance with Section 11.2 of the MTSA. That notice identified $1,412,088.74 in overcharges, which represented the prelimin

Section 11.2 of the MTSA requires that any invoice dispute be raised by written notice to the other party within sixty (60) days of the date of the disputed invoice, and provides that the parties shall thereafter engage in good-faith discussions for a period of thirty (30) days in an effort to resolve the dispute. CPS's February 8, 2021 notice satisfied the written notice requirement, and CPS has at all times acted i

IV. Demand for Payment Based on the foregoing, CPS hereby demands that Ridgeway pay the following amounts in full within fourteen (14) days of the date of this letter — that is, on or before July 2, 2021:

1. Principal — Overcharges: $1,847,632.19, representing the aggregate amount of overcharges billed by Ridgeway and paid by CPS during the audit period, as detailed in Section II above.

2. Contractual Interest: $221,715.86, calculated at the rate of 1.5% per month as provided by Section 10.3 of the MTSA, applied on a rolling basis from the date of each individual overpayment through the date of this letter, June 18, 2021. Please be advised that contractual interest at the rate of 1.5% per month continues to accrue on a daily basis on the unpaid principal balance and will be added to any judgment obt

V. Consequences of Non-Payment If Ridgeway fails to make payment in full of the entire amount demanded within the fourteen-day period specified above, CPS will pursue all available legal remedies without further notice to Ridgeway. Specifically, CPS will file suit in the state district courts of Tarrant County, Texas, as required by the mandatory forum selection clause set forth in Section 14.4 of the MTSA. The MTSA

VI. Litigation Preservation Demand In connection with the foregoing and in anticipation of litigation, CPS hereby demands that Ridgeway immediately take all steps necessary to identify, locate, and preserve all documents, electronically stored information ("ESI"), and tangible things in Ridgeway's possession, custody, or control that relate in any way to the MTSA, CPS's account, and the matters described in this lett

VII. Direction of Future Communications All further communications regarding this matter should be directed exclusively to the undersigned counsel. Please do not contact CPS or any of its officers, directors, or employees directly regarding the claims described in this letter. All correspondence should be directed to: Francesca Morano, Partner Calderwood & Harkness LLP 1001 Fannin Street, Suite 4200 Houston, TX 77002