Contract analysis

I. Purpose and Scope of Memorandum This memorandum provides a comprehensive, section-by-section analysis of the Transportation Services Agreement dated March 15, 2019 (the "TSA" or the "Agreement") between Stonefield Logistics Group Inc. ("Stonefield" or "SLG"), in its capacity as "Shipper-Broker," and Vantor Transport Services LLC ("VTS"), in its capacity as "Carrier-Provider." The TSA was drafted by Ashford Meridia

II. Executive Summary of Key Findings The TSA is a detailed and heavily negotiated commercial agreement between two sophisticated parties operating in the truckload transportation industry. It is governed by New York law pursuant to Section 17.1 and contains a forum selection clause designating the United States District Court for the Southern District of New York, or in the alternative, the Supreme Court of the Stat

Section 13.1 — Termination for Cause. Section 13.1 provides a facially robust framework for termination for Cause, enumerating four grounds including material breach uncured after notice. However, the TSA does not independently define the term "material breach," and the provision thus defaults to the multi-factor common-law standard applied by New York courts. This introduces significant interpretive ambiguity, as wh

Section 13.2 — Cure Notice. The Cure Notice provision requires that the terminating party specify the alleged breaches "with reasonable particularity." Stonefield's January 18, 2022 Cure Notice, issued by Raymond Hess (Director, Contract Compliance) to Sandra Milescu (COO, Vantor/VTS), identifies all five Service Level Obligation ("SLO") categories, specific contractual thresholds and actual performance figures, docu

Section 14.2 — Liquidated Damages. The liquidated damages clause presents both an offensive opportunity and a significant defensive risk. If the court determines that Stonefield's termination was "other than for Cause," Stonefield's exposure under Section 14.2 is $67.23 million (75% of the Annual Committed Volume multiplied by the remaining term). Stonefield has strong arguments that the clause is an unenforceable pe

Section 12.1 — Force Majeure. The force majeure clause supports Stonefield's defense against Vantor's allegation that Stonefield failed to tender the Annual Committed Volume in Contract Year 2 (April 2020–March 2021). Stonefield properly invoked Section 12.1 for the six-month period of April through September 2020, citing the COVID-19 pandemic, and the adjusted ACV for that period reflects that Stonefield actually ex

Section 15.1 — Consequential Damages Waiver. The mutual consequential damages waiver may bar several categories of Vantor's claimed damages totaling approximately $9.47 million, including stranded asset costs, workforce reduction costs, and mitigation costs. The interplay between Section 15.1 and the liquidated damages provision in Section 14.2 is complex and requires further analysis in a separate memorandum.

III. Overview of the TSA A. Parties and Signatories The TSA was executed between the following parties: Stonefield Logistics Group Inc. ("Stonefield" or "SLG"), designated as "Shipper-Broker" under the Agreement. Stonefield is a Delaware corporation with its principal place of business at 4200 Commerce Parkway, Suite 800, Fort Worth, Texas 76102. Stonefield is one of the largest third-party logistics and freight brok

Section 17.1 of the TSA provides that the Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict-of-laws principles. Section 17.2 establishes an exclusive forum selection clause, providing that any action or proceeding arising out of or relating to the Agreement shall be brought in the United States District Court for the Southern District of

Section 17.3 provides for a mutual waiver of jury trial: both parties irrevocably waive any right to trial by jury in any action or proceeding arising out of or relating to the Agreement. Jury trial waivers are generally enforced under New York law between sophisticated commercial parties that have negotiated the waiver at arm's length, particularly where (as here) the waiver is conspicuously included in a separately

IV. Section 13.1 — Termination for Cause A. Text of Section 13.1

Section 13.1 of the TSA provides, in relevant part, as follows: 13.1 Termination for Cause. Either party may terminate this Agreement upon the occurrence of any of the following events (each, "Cause"): (a) A material breach of any provision of this Agreement by the other party that remains uncured for thirty (30) calendar days after the non-breaching party delivers written notice to the breaching party specifying the

Section 8.1 of the TSA and Schedule D establish five Service Level Obligations that VTS is required to maintain throughout the term of the Agreement. These SLOs are expressed as quantitative performance thresholds measured on a quarterly basis: The cargo claims data reflects 16 documented cargo claims filed during November and December 2021, totaling $387,400 in claimed losses — more than double the 0.5% contractual

Section 8.3 provides, in relevant part, that upon a failure to meet one or more SLO thresholds in any quarterly reporting period, "the parties may develop a performance improvement plan setting forth specific remedial actions, milestones, and timelines for restoring performance to SLO thresholds." The provision further states that "[t]he parties shall cooperate in good faith in the development and implementation of a

V. Section 13.2 — Cure Notice Requirements A. Text of Section 13.2

Section 13.2 of the TSA provides, in relevant part, as follows: 13.2 Cure Notice. Prior to terminating this Agreement for Cause under Section 13.1(a) or Section 13.1(c), the terminating party shall deliver a written notice to the breaching party (a "Cure Notice") specifying with reasonable particularity the alleged breach or breaches giving rise to the right of termination and providing the breaching party the applic

VI. Section 14.2 — Liquidated Damages A. Text of Section 14.2

Section 14.2 of the TSA provides, in relevant part, as follows: 14.2 Liquidated Damages for Termination Other Than for Cause. In the event that the Shipper-Broker terminates this Agreement other than for Cause (as defined in Section 13.1), the Shipper-Broker shall pay to the Carrier-Provider, as liquidated damages and not as a penalty, an amount equal to seventy-five percent (75%) of the Annual Committed Volume multi

Section 14.2 is structured as the exclusive remedy for termination "other than for Cause." The provision does not state in express terms that it is the exclusive measure of damages, but its structure — providing a specific formula for calculating the damages resulting from early termination — strongly implies that it is intended to be comprehensive. The provision states that the liquidated damages represent "the dama

VII. Section 12.1 — Force Majeure A. Text of Section 12.1

Section 12.1 of the TSA provides, in relevant part, as follows: 12.1 Force Majeure. Neither party shall be liable for any failure or delay in performing its obligations under this Agreement (including, without limitation, volume commitments under Section 4.1 and service obligations under Section 8.1) to the extent that such failure or delay is caused by, results from, or arises out of events or circumstances beyond t

VIII. Section 7.4 — Substitute Equipment and Surge Capacity A. Text of Section 7.4

Section 7.4 of the TSA provides, in relevant part, as follows: 7.4 Substitute Equipment and Surge Capacity. In the event that the Carrier-Provider is unable to meet the Shipper-Broker's tender requirements through its committed dedicated fleet, the Carrier-Provider shall use commercially reasonable efforts to provide substitute equipment or surge capacity to fulfill such tender requirements. The Carrier-Provider shal