Contract analysis

I. Executive Summary This memorandum provides a summary of significant activity in the above-captioned matter during the reporting period of January 1 through January 31, 2023. Four key developments occurred during the reporting period: First, on January 13, 2023, Calderwood & Harkness filed Stonefield's Answer, Affirmative Defenses, and Counterclaim for Declaratory Judgment in response to Vantor's Amended Complaint.

II. Case Background (Standing Summary) The following is a standing summary of the key background facts and procedural posture of the matter, provided for ease of reference. This section is updated as necessary in each monthly report. Nature of Claims. Vantor Holdings Corp. ("Vantor") alleges that Stonefield Logistics Group Inc. ("Stonefield" or the "Company") wrongfully terminated a five-year Transportation Services

III. Activity During Reporting Period A. Filing of Answer, Affirmative Defenses, and Counterclaim (January 13, 2023) On January 13, 2023, Calderwood & Harkness filed Stonefield's Answer and Affirmative Defenses to Vantor's Amended Complaint, together with a Counterclaim for Declaratory Judgment, with the Clerk of the United States District Court for the Southern District of New York (ECF No. 28). The filing was made

1. Answer. The Answer is 42 pages in length and responds to each of the 187 paragraphs of the Amended Complaint. The Answer denies all material allegations of wrongful termination, including Vantor's claims that: • Stonefield terminated the TSA without valid Cause; • Stonefield's stated grounds for termination were pretextual and motivated by a desire to avoid a projected rate increase; • Stonefield breached the TSA

2. Affirmative Defenses The Answer asserts fourteen affirmative defenses, each of which has been carefully considered and preserved to protect Stonefield's interests as the case proceeds. The affirmative defenses are as follows:

1. Valid Termination for Cause — Termination of the TSA was validly exercised for Cause under TSA Section 13.1(a), based on VTS's material breach of its service level obligations in Q4 2021 and failure to cure within the 30-day cure period following the January 18, 2022 Cure Notice.

2. Unenforceable Penalty — The liquidated damages clause in TSA Section 14.2, which yields the single largest component of Vantor's claimed damages ($67.23 million), constitutes an unenforceable penalty under New York law because the stipulated amount is grossly disproportionate to any reasonably foreseeable harm at the time of contracting and because Vantor's actual damages are readily ascertainable.

3. Failure to Mitigate Damages — Vantor and VTS failed to take reasonable steps to mitigate their alleged damages following termination of the TSA, including by failing to pursue available alternative contracts and carrier arrangements.

4. Force Majeure — TSA Section 12.1 (Force Majeure) excuses Stonefield's alleged volume shortfall during the COVID-19 period (April through September 2020), during which global supply chain disruptions materially affected Stonefield's transportation needs and rendered strict compliance with the ACV impracticable.

5. Unclean Hands — Vantor and VTS come to this Court with unclean hands, having themselves committed material breaches of the TSA, including sustained failure to meet contractual SLOs, and are not entitled to equitable relief.

6. Contributory/First Material Breach — VTS committed the first material breach of the TSA by failing to meet SLOs, thereby excusing Stonefield's subsequent performance obligations and entitling Stonefield to terminate for Cause.

7. Waiver — Vantor and/or VTS waived certain claims and defenses through their course of conduct during the performance of the TSA.

8. Estoppel — Vantor and/or VTS are estopped from asserting certain claims based on their representations and conduct.

9. Setoff — Stonefield is entitled to set off against any damages awarded the amounts VTS owes or may owe to Stonefield.

10. Bar on Consequential Damages — TSA Section 15.1 contains a mutual waiver of consequential, incidental, special, and punitive damages, which bars significant components of Vantor's claimed damages, including lost profits and certain categories of stranded costs.

11. Duplicative Recovery — Vantor seeks overlapping and duplicative categories of damages that, if awarded in full, would result in an impermissible double recovery.

12. Standing — Vantor Holdings Corp. is a non-signatory parent holding company. The TSA was executed by VTS, Vantor's wholly owned operating subsidiary. To the extent Vantor Holdings lacks standing to assert contractual claims under Federal Rule of Civil Procedure 17, its claims are barred. While VTS was subsequently added as a nominal plaintiff in the Amended Complaint, the standing defense is preserved as to Vantor

13. Statute of Frauds — To the extent any of Vantor's claims are predicated on oral modifications or side agreements not reflected in the written TSA, such claims are barred by the statute of frauds.

14. Reservation of Rights — Stonefield reserves the right to assert additional affirmative defenses as discovery progresses and additional facts are developed.

3. Counterclaim for Declaratory Judgment In addition to the Answer and Affirmative Defenses, Stonefield asserted a counterclaim seeking a declaratory judgment pursuant to 28 U.S.C. § 2201 and Federal Rule of Civil Procedure 57. Specifically, the Counterclaim requests that the Court enter a declaratory judgment that: (i) the termination of the TSA effective March 4, 2022 was valid and exercised for Cause under TSA Sec

IV. Upcoming Events and Deadlines A. Initial Pretrial Conference — February 10, 2023 The Initial Pretrial Conference ("IPC") before Judge Calloway is scheduled for February 10, 2023, at 10:00 a.m. in Courtroom 12B of the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, New York, New York. The IPC was noticed by the Court on January 19, 2023 (ECF No. 30). In preparation for the IPC, the following st

1. Interrogatories and Requests for Production First sets of interrogatories (Rule 33) and requests for production of documents (Rule 34) are being drafted for service promptly following the entry of the CMO. We anticipate serving these discovery requests in early-to-mid March 2023, depending on the deadlines established in the CMO. Key targets of our initial written discovery to Vantor and VTS include: • The factual

2. Requests for Admission First requests for admission (Rule 36) are also being drafted, targeting undisputed facts that should narrow the issues for trial or summary judgment. Key topics include: • VTS's Q4 2021 performance metrics across all five SLO categories (as reflected in the Stonefield-VTS Quarterly Performance Reports); • VTS's receipt of the January 18, 2022 Cure Notice and the content thereof; • VTS's fai

3. Document Collection and Review Coordination is ongoing with Pinnacle Forensics LLC ("Pinnacle"), which was engaged in September 2022 to provide eDiscovery and forensic data processing services for this matter (Project ID: PF-SLG-2022-0914). Pinnacle has processed and is hosting Stonefield's document collection on its Relativity-based eDiscovery review platform. David Moretti, Calderwood & Harkness's Litigation Sup

4. Stonefield Document Hold Litigation holds remain in effect for all key custodians identified in connection with this matter. The following individuals are subject to active litigation holds, all of which were issued in September 2022 upon the filing of the original Complaint: • Tobias Wren, General Counsel • Priya Ramachandran, Chief Financial Officer • Carlos Medina, Senior Vice President, Operations • Janet Kirk

5. Privilege Review Simone Laroche (Associate) is conducting a preliminary analysis of the privilege status of pre-litigation communications between Stonefield and Ashford Meridian LLP, the law firm that drafted the TSA and provided initial pre-litigation guidance to Stonefield in connection with the contemplated termination and the Cure Notice process. This analysis is necessary to determine which documents in Stone

V. Budget and Billing Update The following is a summary of fees and disbursements incurred during Q4 2022 (October through December 2022), which is the most recent period for which billing has been finalized: For reference, the current billing rates for the Calderwood & Harkness team members assigned to this matter are as follows: The above associate rates reflect the 10% courtesy discount extended to Ridgeline Capit

VI. Insurance and Lender Notifications A. Insurance Coverage Directors and Officers Liability Coverage. Graymark Insurance Company declined coverage under Stonefield's Directors and Officers Liability Policy, Policy No. GLG-DO-1025-00008 ($15 million aggregate limit), by letter dated October 3, 2022. Graymark determined that the Vantor claims arise from a commercial contract dispute and are excluded under the policy'

VII. Settlement and Resolution There was no settlement activity during the reporting period. Neither party initiated any settlement discussions, and no mediation or other alternative dispute resolution process has been proposed or discussed. Stonefield's settlement authority remains at $0 to $4.5 million (nuisance value / litigation cost avoidance range), as authorized in November 2022 by Mr. Wren (General Counsel),

VIII. Key Risks and Considerations We have identified the following key risks and considerations that merit continued attention as the case progresses. These are discussed with Mr. Wren and Mr. Eklund on a regular basis and are monitored as part of our ongoing case strategy. A. The Kirkwood Email (September 22, 2021) Janet Kirkwood's internal email to Carlos Medina dated September 22, 2021, which was identified durin

IX. Action Items and Next Steps The following action items and next steps are planned for the upcoming period:

1. Initial Pretrial Conference (February 10, 2023). Attend the IPC before Judge Calloway and obtain the Case Management Order establishing deadlines for fact discovery, expert discovery, and dispositive motions.

2. First Sets of Written discovery (Target: Early March 2023). Finalize and serve the First Set of Interrogatories, First Request for Production of Documents, and First Set of Requests for Admission promptly following the entry of the CMO.

3. Document Collection and Review Protocol. Complete the document review protocol with Pinnacle Forensics and begin first-phase document collection and processing from Stonefield custodian files.

4. Privilege Analysis. Continue and complete the privilege analysis of pre-litigation Ashford Meridian LLP communications, with a target completion date of mid-February 2023.

5. Vantor's Written discovery. Prepare for the anticipated receipt of Vantor's first set of written discovery requests, which we expect to be served in mid-March 2023. Begin assembling responsive documents and coordinating with Stonefield personnel to prepare interrogatory responses.

6. Expert Coordination. Continue coordination with Dr. Rosser and Mr. Chung at Kensington Analytics Group regarding rebuttal expert scope, materials, and preliminary analyses.

7. Next Monthly Report. Provide the next monthly status report covering February 2023 activities, with a target delivery date of early March 2023.

X. Conclusion The matter is proceeding on schedule and in accordance with the litigation plan. With the pleadings now closed on all claims and counterclaims, the case will transition into active discovery in the coming weeks. We anticipate a busy and intensive period from March through September 2023 as initial written discovery is exchanged, document productions are prepared and reviewed, and depositions are conduct