Contract analysis

I. PURPOSE AND SCOPE OF MEMORANDUM The purpose of this memorandum is to prepare Dr. Evelyn Rosser, Managing Director of Kensington Analytics Group LLC ("KAG"), located at 1700 Market Street, Suite 2800, Philadelphia, Pennsylvania 19103, for her anticipated deposition by plaintiff's counsel in the above-captioned matter. Dr. Rosser has been retained as Stonefield Logistics Group Inc.'s ("Stonefield" or "SLG") rebuttal

II. DEPOSITION LOGISTICS (PRELIMINARY / PLACEHOLDER) The following logistical details are preliminary and subject to change based on the status of the case and the identity of any substitute counsel retained by Vantor. Many of these details were never finalized due to the suspension of expert discovery. Anticipated Deposition Date. Dr. Rosser's deposition has not yet been noticed. Under the original CMO, the expert d

III. OVERVIEW OF DR. ROSSER'S REBUTTAL EXPERT REPORT A. Summary of Opinions Dr. Rosser's final rebuttal expert report, comprising 48 pages exclusive of exhibits and appendices, was served on CRS on August 25, 2023. The report was prepared in rebuttal to the expert report of Dr. Philip Trask of Trask Greystone & Associates, which was served on behalf of Vantor on May 15, 2023. Dr. Rosser's report contains three princi

1. Primary Opinion — Termination Valid for Cause: $0 in Damages. Dr. Rosser's primary opinion addresses the scenario in which the Court determines that Stonefield's termination of the TSA (Contract Ref. No. SLG-VTS-2019-0315) was valid "for Cause" under Section 13.1(a) of the agreement. Under this scenario, Dr. Rosser opines that Vantor is entitled to zero dollars in damages. This conclusion rests on the straightforw

2. Alternative Opinion — Wrongful Termination Scenario: Maximum Damages of $8.2 Million. Dr. Rosser's second opinion addresses the alternative scenario — assumed arguendo — in which the Court determines that Stonefield's termination was not valid for Cause and therefore constituted a breach of the TSA by Stonefield. Under this scenario, Dr. Rosser opines that the maximum damages recoverable by Vantor are $8.2 million

3. Liquidated Damages Unenforceability Support: Disproportionality Analysis. Dr. Rosser's third opinion addresses the economic analysis relevant to the enforceability of the liquidated damages clause in Section 14.2 of the TSA. Under the formula set forth in that section, the liquidated damages amount triggered by the termination would be $67.23 million, consisting of $64.8 million for the two full remaining years of

1. The Transportation Services Agreement (Contract Ref. No. SLG-VTS-2019-0315, dated March 15, 2019), together with all schedules, exhibits, and amendments thereto, including Schedule C (Exclusivity/Primary Lanes).

2. The VTS Q4 2021 Performance Report, an internal VTS document produced during discovery, which sets forth VTS's performance against the five SLOs for the fourth quarter of 2021.

3. VTS financial statements for fiscal years 2019 through 2022, including income statements, balance sheets, and segment-level reporting.

4. The Milescu-to-Vantorovich email dated November 12, 2021 (Bates No. VHC-008417), in which Sandra Milescu, VTS's Vice President of Operations, communicated the decision to pull 85 tractors off SLG-dedicated lanes and redeploy them to other accounts.

5. Fleet redeployment records from VTS's supplemental production, documenting the redirection of the 85 tractors from SLG lanes to the Northwind Distribution Co. account.

6. Stonefield freight tender data for Contract Years 1 through 3, including volume, lane-level data, and rate information.

7. Freight market indices and spot rate data for Q1 through Q3 2022, sourced from industry publications and publicly available databases.

8. Dr. Philip Trask's expert report, served on behalf of Vantor on May 15, 2023, together with all exhibits and appendices thereto.

9. Deposition transcripts of: Derek Pruitt (Stonefield's Director of Carrier Procurement), taken July 10, 2023; Raymond Hess (Stonefield's Vice President of Supply Chain Operations), taken July 27, 2023; and Sandra Milescu (Vantor's Vice President of Operations), taken August 4, 2023.

10. The Cure Notice issued by Stonefield to Vantor on January 18, 2022, and Vantor's written response thereto dated February 14, 2022.

11. The Ashford Meridian LLP rate adjustment analysis memorandum, dated February 2022, analyzing the anticipated 14.3% rate increase under Section 5.3 of the TSA.

IV. ANTICIPATED AREAS OF EXAMINATION BY OPPOSING COUNSEL This section identifies and analyzes the areas most likely to be explored by opposing counsel during Dr. Rosser's deposition. For each area, this memorandum sets forth the anticipated lines of questioning, the relevant facts and documents, and preliminary guidance for Dr. Rosser's responses. Specific Q&A frameworks for the most challenging questions are to be d

1. Operating Margin Calculation: 5.8% Versus 12%. This is likely to be the most heavily contested methodological issue in the deposition. Dr. Trask's report uses a 12% operating margin to calculate VTS's lost profits from the SLG account. Dr. Rosser's report demonstrates that this 12% figure reflects Vantor's company-wide blended margin across all accounts and business lines, rather than the margin specifically attri

2. Mitigation Analysis Assumptions. Dr. Rosser's mitigation analysis assumes that VTS could have replaced a significant portion of the SLG freight volume within approximately 90 days of the March 2, 2022 termination, based on the exceptionally favorable freight market conditions prevailing during that period. Opposing counsel will challenge the feasibility of this replacement timeline on several grounds. Counsel may

3. Volume Shortfall Offset Methodology. Dr. Rosser's report adjusts her damages calculation to account for Stonefield's excess volume tenders during CY2. Specifically, Stonefield's actual tenders during CY2, adjusted for the force majeure period (April through September 2020), were $31.8 million, which exceeded the adjusted ACV of $21.6 million by $10.2 million. Dr. Rosser's methodology offsets this CY2 overage again

1. Liquidated Damages ($67.23 Million) Dr. Rosser's opinion that the liquidated damages figure of $67.23 million is grossly disproportionate to any actual harm is a central component of her report and can be expected to draw extensive cross-examination. Opposing counsel will approach this topic from multiple angles. Reasonableness at the Time of Contracting. Opposing counsel will argue that the 75% multiplier applied

2. Lost Profits ($18.7 Million per Trask) Dr. Trask's report claims lost profits of $18.7 million for VTS based on the remaining term of the TSA. Dr. Rosser's rebuttal concludes that lost profits, properly calculated using appropriate methodologies and data, would be substantially less than $18.7 million and in any event are subsumed within and far less than the liquidated damages claim. Moreover, Dr. Rosser's report

3. Consequential Damages Components Dr. Trask's report includes three categories of consequential damages totaling $9.47 million: stranded assets ($5.2 million), workforce reduction costs ($2.87 million), and mitigation costs ($1.4 million). Dr. Rosser's report addresses each of these categories from an economic perspective, noting that they are consequential in nature and subject to the mutual waiver of consequentia

V. DOCUMENT REVIEW LIST FOR PREPARATION SESSION The following is a comprehensive list of documents that Dr. Rosser should review prior to the pre-deposition preparation session. These documents include the materials she relied upon in preparing her report, as well as additional materials that may be the subject of questioning during the deposition. Dr. Rosser should be thoroughly familiar with each of these documents

1. Dr. Rosser's Final Rebuttal Expert Report (served August 25, 2023) — 48 pages, including all text, tables, charts, and footnotes.

2. All Exhibits and Appendices to the Rebuttal Report — including all supporting schedules, data tables, and demonstrative exhibits referenced in or attached to the report.

3. All Underlying Workpapers and Data Files — including spreadsheets, financial models, data inputs, calculation files, and any other work product generated by Dr. Rosser and Michael Chung in connection with the preparation of the report. Dr. Rosser should be able to explain the construction and methodology of each workpaper and to reproduce key calculations if questioned.

4. Dr. Philip Trask's Expert Report (served May 15, 2023) — together with all exhibits and appendices thereto. Dr. Rosser should be prepared to identify and explain each point of disagreement with Dr. Trask's methodology, data, and conclusions.

5. The Transportation Services Agreement (Contract Ref. No. SLG-VTS-2019-0315, dated March 15, 2019) — with particular attention to the following provisions: • Section 5.3 (Rate Adjustment Mechanism) • Section 12.1 (Force Majeure) • Section 13.1 (Termination for Cause) • Section 13.2 (Cure Notice) • Section 14.2 (Liquidated Damages) • Section 15.1 (Consequential Damages Waiver) • Schedule C (Exclusivity/Primary Lanes

6. KAG Engagement Letter (dated October 28, 2022) — Dr. Rosser should be familiar with the terms of her engagement, including her scope of work and compensation terms, as these will be subject to questioning.

7. Expert Scope Memorandum from C&H (dated November 14, 2022, from Patrick Gallagher) — outlining the key issues for Dr. Rosser's analysis. Dr. Rosser should be prepared to discuss the scope of her engagement and any instructions she received.

8. Memorandum to KAG re Trask Report Rebuttal Issues (dated May 25, 2023) — this memorandum from C&H identified specific issues in Dr. Trask's report for Dr. Rosser's attention in preparing her rebuttal.

9. Patrick Gallagher's Comments on Draft Rebuttal Report (dated August 15, 2023, redline version) — see Section VI.B below regarding preparation for questions about draft reports and attorney comments. [Note: privilege implications of this document require further analysis; see discussion below.]

10. Milescu-to-Vantorovich Email (dated November 12, 2021; Bates No. VHC-008417) — documenting VTS's decision to pull 85 tractors off SLG-dedicated lanes.

11. Kirkwood-to-Medina Email (dated September 22, 2021) — referenced in the case record; Dr. Rosser should be familiar with this document even though she did not rely on it in her report, as opposing counsel may use it during the deposition to probe her understanding of Stonefield's decision-making process.

12. VTS Q4 2021 Performance Report — the internal VTS document setting forth performance against all five SLOs during Q4 2021.

13. Cure Notice (dated January 18, 2022) and Vantor Response (dated February 14, 2022) — these documents are central to the termination-for-cause analysis and Dr. Rosser's primary opinion.

14. Ashford Meridian Rate Adjustment Analysis Memorandum (dated February 2022) — analyzing the anticipated 14.3% rate increase and its projected cost impact.

15. Deposition Transcripts: • Derek Pruitt (Stonefield Director of Carrier Procurement) — July 10, 2023 • Raymond Hess (Stonefield Vice President of Supply Chain Operations) — July 27, 2023 • Sandra Milescu (Vantor Vice President of Operations) — August 4, 2023

16. Communications Between Dr. Rosser/Michael Chung and C&H Attorneys — These communications should be reviewed for privilege purposes. Under FRCP 26(b)(4)(C), as amended in 2010, communications between an attorney and a retained expert are generally protected from discovery, with three exceptions: communications relating to (i) the expert's compensation, (ii) facts or data provided by counsel that the expert conside

17. VTS Financial Statements Relied Upon in Analysis — including all income statements, balance sheets, segment reports, and account-level profitability data from the supplemental production (Bates Nos. VHC-029001 through VHC-033218).

18. Freight Market Data and Indices Cited in the Report — including spot rate data, carrier demand metrics, and any industry publications or databases referenced in Dr. Rosser's mitigation analysis.

VI. KEY PREPARATION POINTS AND COACHING NOTES A. General Deposition Conduct The following general guidance should be reviewed with Dr. Rosser during the preparation session. While Dr. Rosser has prior experience as a testifying expert, it is essential to reinforce these principles in the context of this specific engagement, given the complexity of the issues and the aggressive style of cross-examination that was anti