Contract analysis

I. Purpose and Overview This memorandum is intended to prepare Raymond Hess ("Hess") for his deposition by counsel for plaintiff Vantor Holdings Corp. ("Vantor") in the above-captioned action. The deposition has been noticed for July 27, 2023, and is expected to be taken by Jason Whitford of Caldwell Royce & Shapiro LLP ("CRS"), although Harrison Caldwell or Alina Petrov may participate as well. Patrick Gallagher wil

1. The Cure Notice Drafting Process — including who instructed Hess to issue the Cure Notice, who contributed to or reviewed drafts, and the extent of outside counsel involvement;

2. The Underlying Metric Calculations and Data Sources — including how each of the five SLO metrics cited in the Cure Notice was derived, verified, and documented, and whether VTS had an opportunity to dispute them; and

3. Hess's Communications with Ashford Meridian LLP — Stonefield's commercial and transactional counsel — during the 30-day cure period, which CRS has attempted to probe for privilege-challenge purposes. In addition, CRS is likely to pursue secondary lines of inquiry regarding Hess's awareness of the upcoming April 2022 rate adjustment under Section 5.3 of the TSA, Hess's knowledge of the September 22, 2021 Kirkwood e

II. Witness Background and Role A. Professional Background Raymond Hess currently holds the position of Director, Contract Compliance, at Stonefield Logistics Group Inc., where he has served in that capacity since approximately 2017. In this role, Hess reports directly to Carlos Medina, Senior Vice President of Operations. Hess's responsibilities include monitoring carrier compliance with contractual service level ob

III. Key Documents for Witness Review The following documents should be provided to Hess in advance of the preparation session scheduled for July 24, 2023, with the exception of privilege-protected Ashford Meridian communications, which should be discussed during the session but should not be provided in hard copy to the witness (to avoid any argument that copies in the witness's possession are discoverable). Helen T

1. Transportation Services Agreement (TSA) The TSA is dated March 15, 2019, and was entered into between Stonefield Logistics Group Inc. (in its capacity as "Shipper-Broker") and Vantor Transport Services LLC (in its capacity as "Carrier-Provider"). The agreement is governed by New York law. Hess should review the TSA in its entirety but should pay particular attention to the following provisions, which are expected

2. Cure Notice (January 18, 2022) The Cure Notice was issued by Raymond Hess to Sandra Milescu (COO, Vantor/VTS). The notice identified the following alleged material breaches based on Q4 2021 performance data: • On-time pickup rate: 78.2% (vs. 95% SLO threshold) • On-time delivery rate: 81.6% (vs. 93% SLO threshold) • Tender acceptance rate: 71.4% (vs. 90% SLO threshold) • Equipment availability: 62% of committed fl

3. Vantor's Response to Cure Notice (February 14, 2022) The response was sent by Derek Pruitt (VP, Business Development, Vantor) to Janet Kirkwood (VP, Carrier Relations, Stonefield). The response acknowledged "operational challenges" but asserted that the performance failures were caused by: (i) a nationwide driver shortage affecting the entire transportation industry; (ii) Stonefield's alleged failure to tender the

4. Termination Letter (March 4, 2022) The Termination Letter was issued by Tobias Wren (General Counsel, Stonefield) and addressed to Vantor Holdings Corp. and Vantor Transport Services LLC. The letter stated that VTS had "failed to cure the material breaches identified in the Cure Notice dated January 18, 2022" within the 30-day cure period. The letter terminated the TSA effective immediately pursuant to Section 13.

5. VTS Q4 2021 Performance Report This is an internal VTS document reflecting actual performance metrics for October through December 2021. The document was produced by Vantor in discovery (Bates range VHC-012830 through VHC-012847) and shows actual metrics materially below SLO thresholds across all five categories measured under the TSA. This document corroborates the metrics cited in the Cure Notice and demonstrate

6. VTS Carrier Performance Portal Data This is the source data from VTS's own online reporting platform — the VTS Carrier Performance Portal — from which Hess compiled the Q4 2021 performance metrics cited in the Cure Notice. The Portal was maintained by VTS and made available to shipper-broker customers like Stonefield for the purpose of monitoring carrier performance. Hess independently accessed and verified all me

7. Communications Between Hess and Ashford Meridian LLP During January and February 2022 — the period spanning the issuance of the Cure Notice and the 30-day cure period — Hess communicated with attorneys at Ashford Meridian LLP, specifically Lorraine Beckwith and Troy Nakamura, regarding the interpretation of the TSA's cure provisions, the drafting and finalization of the Cure Notice, and post-cure-period enforcemen

8. Hess's Internal Emails and Memoranda (Q3–Q4 2021) Internal correspondence between Hess and Janet Kirkwood (VP, Carrier Relations), Carlos Medina (SVP, Operations), and Tobias Wren (General Counsel) regarding VTS performance deterioration and options for enforcement. These emails document Hess's escalating concerns about VTS performance in the period leading up to the issuance of the Cure Notice and are consistent

9. Sandra Milescu November 12, 2021 Email to Nikolai Vantorovich (VHC-008417) This email, produced by Vantor in discovery, contains the following language: "We've pulled 85 tractors off the SLG dedicated lanes to cover [redacted] commitments. SLG won't notice until January." This email is significant because it suggests that VTS's equipment availability failure was not the result of the nationwide driver shortage (as

10. Janet Kirkwood September 22, 2021 Email to Carlos Medina This email contains the following language: "VTS is a mess. We're already moving volume to Cascade and Briarwood on Lanes 8–14. If VTS doesn't get its act together by Q1 I think we pull the plug on the whole contract." This email has already been the subject of significant examination in the Kirkwood deposition (July 14, 2023). CRS is likely to ask Hess whe

11. Ashford Meridian Rate Adjustment Analysis Memo (February 2022) This memorandum, prepared by Ashford Meridian LLP in February 2022, analyzes the impact of the April 2022 rate adjustment under Section 5.3 of the TSA. The analysis shows that the rate adjustment would increase per-mile rates from a weighted average of $2.87 to $3.28 — a 14.3% increase — adding approximately $6.2 million in annual transportation costs

IV. Anticipated Lines of Questioning and Recommended Approaches This section addresses the principal lines of questioning we anticipate CRS will pursue and provides recommended approaches for Hess's testimony on each topic. These recommendations are intended to guide Hess toward truthful, precise, and strategically sound testimony while protecting privilege and avoiding unnecessary risk. A. Cure Notice Drafting Proce

V. General Deposition Preparation Instructions A. Ground Rules for the Witness The following ground rules should be reviewed with Hess at the preparation session and reinforced immediately before the deposition begins:

1. Listen carefully to each question. Do not begin answering until the question is fully stated. If the questioner pauses, wait to make sure the question is complete before answering.

2. Answer only the question asked. Do not volunteer information beyond what is necessary to answer the question. Short, direct answers are preferred. Do not explain, justify, or elaborate unless specifically asked to do so.

3. If you do not understand a question, say so. You have the right to ask for clarification, to have the question rephrased, or to have the question read back by the court reporter. Never guess at the meaning of a question — if it is unclear, say "I don't understand the question" or "Could you rephrase that?"

4. If you do not know the answer, say "I don't know." Do not guess, estimate, or speculate. There is nothing wrong with not knowing the answer to a question. It is far better to say "I don't know" than to offer an inaccurate answer that can be used against Stonefield.

5. If you do not remember, say "I don't recall." The events at issue occurred more than 18 months ago in some cases. It is entirely acceptable not to remember every detail of events, conversations, or documents from that period. Do not fabricate or reconstruct memories to fill gaps.

6. Do not characterize documents you have not been shown. If CRS refers to a document by title, date, or description, ask to see the document before answering any questions about it. You are entitled to review the document before testifying about its contents.

7. Do not make legal conclusions. Testify to facts within your personal knowledge. Questions about the meaning of contract terms, the legal significance of events, or the application of legal standards are for attorneys, not for fact witnesses. If asked for a legal conclusion, state that you are testifying based on your understanding of the facts, not as a legal expert.

8. Watch for compound questions. If a question contains multiple sub-parts or asks about more than one topic, ask that it be broken into separate questions. Answering a compound question may result in an ambiguous or inaccurate response.

9. If Patrick Gallagher interposes an objection, stop talking immediately. Do not continue answering while an objection is being stated. Wait for the objection to be completed and for instruction from Gallagher. If Gallagher instructs you not to answer on privilege grounds, do not answer the question — simply state that you have been instructed not to answer.

10. Take breaks as needed. If you feel fatigued, confused, overwhelmed, or need to confer with counsel for any reason, request a break. However, be aware that you cannot confer with counsel during a pending question — that is, if a question has been asked and is awaiting your answer, you must answer the question (or have it withdrawn) before taking a break to confer.

11. Be truthful at all times. Your testimony is given under oath. Never speculate, guess, shade, or mischaracterize facts. Truthful testimony, even when unfavorable, is always preferable to inaccurate testimony that can be used to impeach your credibility. B. Demeanor Guidance Hess's demeanor throughout the deposition should be professional, calm, and measured. He should not be adversarial or argumentative with CRS c

VI. Preparation Session Logistics The preparation session for Hess's deposition is planned as follows: Attendees: • Raymond Hess (witness) • Patrick Gallagher (defending counsel) • Simone Laroche (associate) • Helen Tsao (senior paralegal — for notes and document coordination) Materials to Be Provided to the Witness in Advance: Helen Tsao should compile and deliver to Hess by July 21, 2023, copies of all documents li

1. Document review. Walk through the key documents identified in Section III with Hess, confirming his familiarity with each document and identifying any documents he has not previously seen or does not recall.

2. Discussion of anticipated questioning areas. Review each of the anticipated lines of questioning identified in Section IV above, discussing the recommended approaches and confirming that Hess is comfortable with the substance and framing of his expected testimony.

3. Mock examination on key topics. Patrick Gallagher should conduct a mock examination of Hess, focusing on the moderate- and higher-risk areas identified in Section VIII below — particularly the privilege boundary, the rate adjustment motive, and the September 22, 2021 Kirkwood email. The mock examination should simulate CRS's likely questioning style (based on observations from the Pruitt and Kirkwood depositions)

4. Review of privilege protocol. Walk through the privilege and instruction-not-to-answer protocol described in Section V.C above, with specific examples of the types of questions that will trigger objections and instructions not to answer.

5. Logistics and demeanor review. Cover the ground rules (Section V.A), demeanor guidance (Section V.B), and practical logistics for the deposition day, including arrival time, location, document handling, and break procedures.

VII. Cross-Reference to Other Depositions Hess's testimony should be consistent with the factual record established in the depositions already taken in this matter. The following depositions are particularly relevant: Derek Pruitt Deposition (July 10, 2023) Derek Pruitt, VP of Business Development at Vantor, was deposed by Patrick Gallagher on July 10, 2023. Key takeaways relevant to the Hess deposition include: • Pr