Contract analysis

I. Introduction and Purpose This firm represents Vantage Mobility Systems Corp. ("Vantage"), a corporation organized and existing under the laws of the State of Delaware, with its principal place of business located at 4280 Mound Road, Sterling Heights, Michigan 48310, in connection with the ongoing warranty-chargeback dispute initiated by your client, Meridian Powertrain Holdings, Inc. ("Meridian"). We write in resp

II. Identification of the Disputed Chargeback Notices For the sake of clarity and completeness, Vantage identifies below the specific chargeback notices being contested in this letter, the monetary amounts claimed in each, the parts at issue, and the aggregate exposure across all three notices that Meridian has now issued in connection with the same underlying product line. A. Warranty Chargeback Notice WCN-2022-0103

III. Vantage's Substantive Defenses Vantage raises the following substantive defenses to the chargebacks asserted in WCN-2022-0103 and WCN-2022-0289. Each of these defenses is independently sufficient to defeat Meridian's claims. Taken together, they demonstrate that Meridian's chargebacks are not only contractually unfounded but are contradicted by the available technical evidence and undermined by Meridian's own pr

Section 9.3 of the LTSA defines the categories of costs that are recoverable through the warranty-chargeback mechanism. Those recoverable categories include the direct cost of replacement parts, reasonable and documented labor costs incurred by the OEM dealer network in diagnosing and replacing the defective component, and the buyer's reasonable and documented costs for failure analysis and reverse logistics. Section

IV. Meridian's Unilateral Deductions Constitute a Material Breach of the LTSA Vantage must raise an additional and independently significant issue that compounds the harm caused by Meridian's unsubstantiated chargebacks. Beginning with the January 2022 payment cycle, Meridian has unilaterally withheld chargeback amounts from Vantage's open accounts receivable without Vantage's consent, without prior written notice of

V. Reservation of Rights Vantage expressly reserves all rights, claims, defenses, and remedies available to it under the LTSA, at law, and in equity, without limitation, including but not limited to the following: (a) The right to seek damages for Meridian's material breach of the LTSA payment terms, including but not limited to direct damages, consequential damages to the extent not limited by the LTSA, and late-pay

VI. Proposal for Meet-and-Confer Session Notwithstanding Vantage's strong substantive and procedural objections to the chargebacks detailed above, Vantage recognizes the importance and mutual value of the longstanding commercial relationship between Vantage and Meridian. The parties' supply relationship dates to approximately 2016 — predating the current LTSA — and has historically been characterized by productive co

VII. Closing In summary, and for the reasons set forth in this letter and in Vantage's prior response letter dated March 11, 2022 (incorporated herein by reference), Vantage demands that Meridian take the following actions: (a) Immediately reverse all unilateral deductions that Meridian has taken from Vantage's accounts receivable in connection with the disputed warranty chargebacks, and restore all withheld amounts