Contract analysis

I. Introduction and Purpose This memorandum is directed to Kensington Analytics Group LLC ("KAG") for the purpose of identifying and assigning specific areas requiring rebuttal analysis in response to the expert report of Dr. Philip Trask, Founder and Lead Expert of Trask Greystone & Associates. Dr. Trask's report was served by plaintiff Vantor Holdings Corp. ("Vantor") on May 15, 2023, and purports to quantify Vanto

II. Summary of Dr. Trask's Damages Model Before turning to KAG's specific rebuttal assignments, it is useful to summarize the structure and content of the Trask report in order to provide context for the analyses that follow. Dr. Trask's report, which was served on May 15, 2023, runs to 147 pages, exclusive of appendices, and presents a damages model organized around six discrete categories of claimed loss. Dr. Trask

III. Priority Rebuttal Areas and Specific Assignments Based on C&H's internal analysis and the preliminary scope of work discussed with Dr. Rosser and Mr. Chung, we have identified eight priority rebuttal areas. Each area is discussed below, together with the specific analytical assignments for KAG. We ask that KAG address each of these areas in its rebuttal report, organized in a manner that responds systematically

1. Blended vs. Account-Specific Margins. Dr. Trask appears to derive his 12% margin assumption from VTS's blended corporate operating margin, calculated across VTS's entire portfolio of carrier accounts. However, not all accounts are equally profitable, and the margin on the SLG account may differ significantly from VTS's overall corporate margin. Freight brokerage and managed transportation relationships involve var

2. Rate Adjustment and Margin Inflation. Additionally, Dr. Trask inflates his margin assumption by incorporating the projected April 2022 rate adjustment. The TSA's rate adjustment mechanism, set forth in Section 5.3, provides for annual rate adjustments each April 1, indexed to a blend of 70% diesel fuel index and 30% CPI-U (Consumer Price Index for All Urban Consumers). An analysis prepared by Ashford Meridian LLP

1. The Milescu Email and Fleet Diversion. The most significant piece of evidence on this issue is the email from Sandra Milescu, Chief Operating Officer of Vantor and VTS, to Nikolai Vantorovich, Chief Executive Officer of Vantor, dated November 12, 2021 (document reference VHC-008417). In that email, Ms. Milescu wrote: "We've pulled 85 tractors off the SLG dedicated lanes to cover [redacted] commitments. SLG won't n

2. Service Level Failures. The fleet diversion directly caused VTS to fall materially below all five of its Service Level Obligations under the TSA during Q4 2021: The cargo claims ratio of 1.07% was based on 16 separate claims totaling $387,400 during November and December 2021 alone, more than double the permissible threshold. These performance failures were pervasive and sustained, reflecting a systemic degradatio

3. Analytical Assignments for KAG. KAG should model the impact of VTS's own performance failures on the value that VTS would have derived from the remaining contract term. A carrier that was already unable — or, as the evidence suggests, unwilling — to meet its contractual commitments cannot claim the full economic value of the contract as damages. Specifically, KAG should: (a) Analyze whether VTS's Q4 2021 performan

1. Contract Year 2 (April 2020 – March 2021). The unadjusted ACV for CY2 was $43.2 million. However, on or about April 6, 2020, Stonefield invoked the force majeure provision of the TSA (Section 12.1) due to the COVID-19 pandemic, which caused severe disruptions to freight volumes, supply chains, and business operations across the logistics industry. The force majeure declaration covered the period from April 2020 th

2. Contract Year 3 (April 2021 – March 2022). CY3 is a partial contract year because the TSA was terminated on March 4, 2022, ten months into the twelve-month period. Actual tenders through January 2022 (the last full month before termination) totaled $36.5 million. Vantor calculates a $6.7 million shortfall against the full $43.2 million ACV, but this comparison is misleading for two reasons. First, since CY3 was a

3. Causal disconnect. If Vantor asserts that Stonefield's alleged volume shortfalls were the cause of VTS's performance failures (i.e., that SLG's reduced volume caused VTS to redeploy assets elsewhere), KAG should demonstrate the causal disconnect. The Milescu email of November 12, 2021, and the supplemental discovery documents establish that VTS diverted 85 tractors to the Northwind Distribution Co. account in Octo

1. Market Conditions at Time of Termination. KAG should analyze the freight market conditions prevailing at the time of the TSA's termination (March 2022) and in the months immediately following. As KAG is likely aware, the first and second quarters of 2022 were characterized by exceptionally favorable conditions for carriers: • Spot market rates for truckload freight were elevated approximately 35% above historical

2. Deposition Testimony Regarding Mitigation. The deposition testimony obtained to date underscores Vantor's failure to mitigate. Derek Pruitt, Vice President of Business Development for Vantor, testified at his deposition on July 10, 2023, that he "could not identify specific mitigation steps" taken by VTS after the termination of the TSA. This admission is striking, as Mr. Pruitt is the individual most directly res

3. Analytical Assignment. KAG should model the replacement revenue that VTS could reasonably have obtained had it made diligent efforts to mitigate its losses following the TSA termination. This analysis should take into account the prevailing market conditions described above, VTS's fleet capacity, its regional presence, and the replacement rates available in the market during Q1–Q2 2022. KAG should then calculate t

1. Classification Analysis. KAG should opine on the proper classification of these damages categories. From an economic standpoint, stranded asset costs (accelerated depreciation and lease termination expenses), workforce reduction costs (severance and unemployment expenses), and mitigation costs (business development expenses incurred in seeking replacement volume) are all consequences that flow indirectly from the

2. Alternative Quantification. Even if the Court were to permit some or all of these claims notwithstanding the Section 15.1 waiver, KAG should analyze whether the amounts claimed by Dr. Trask are properly documented and economically supportable. In particular: (a) Stranded Assets: Vantor's claim of $5.2 million for stranded assets should be offset by the residual value of the equipment at the time of termination, as

IV. Key Depositions and Testimony to Consider In preparing the rebuttal report, KAG should review the transcripts of the following depositions, which contain testimony relevant to the damages analysis. C&H will provide full deposition transcripts and any deposition exhibits through the secure document transfer platform described in Section IX below.

1. Derek Pruitt — Vice President, Business Development, Vantor Deposition taken July 10, 2023 (duration: approximately 7 hours). Mr. Pruitt made key admissions that VTS "struggled" to maintain committed fleet capacity on the SLG account during Q4 2021. He was unable to identify specific mitigation steps undertaken by VTS or Vantor following the termination of the TSA. Mr. Pruitt's testimony is particularly relevant t

2. Janet Kirkwood — Vice President, Carrier Relations, Stonefield Deposition taken July 14, 2023 (duration: approximately 6.5 hours). Ms. Kirkwood confirmed that Stonefield diverted certain freight volume to Cascade Freight Systems Inc. and Briarwood Trucking Co. following VTS's performance failures, but testified that this diversion was limited to Lanes 8 through 14 (classified as "Secondary Lanes" under Schedule C

3. Raymond Hess — Director, Contract Compliance, Stonefield Deposition taken July 27, 2023 (duration: approximately 5 hours). Mr. Hess testified that the performance metrics cited in Stonefield's January 18, 2022 cure notice were derived directly from VTS's own Carrier Performance Portal data, and that VTS did not dispute the accuracy of these metrics in its February 14, 2022 response to the cure notice. This testimo

4. Sandra Milescu — Chief Operating Officer, Vantor/VTS Deposition taken August 4, 2023 (duration: approximately 7 hours). Ms. Milescu confirmed that 85 tractors were reassigned from the SLG dedicated lanes to the Northwind Distribution Co. account in October 2021. She characterized the reassignment as "temporary" and driven by "commercial necessity," but she could not explain why Stonefield was not notified of the r

5. Nikolai Vantorovich — Chief Executive Officer, Vantor Deposition taken August 18, 2023 (duration: approximately 4.5 hours, partially completed). Mr. Vantorovich claimed illness, and the deposition was suspended before completion. During the completed portion, Mr. Vantorovich testified that he was "not involved in day-to-day fleet decisions" and deferred to Ms. Milescu on operational matters. He expressed frustrati

V. Key Documents Enclosed / To Be Provided The following documents from the discovery productions in this action are being provided to KAG under the Protective Order entered by Judge Calloway on February 17, 2023, and are subject to the privilege and work product protections applicable to expert consultation materials under Fed. R. Civ. P. 26(b)(4). KAG is reminded that all documents designated "Confidential" or "Hig

1. VTS income statements and balance sheets for Fiscal Year 2019, Fiscal Year 2020, Fiscal Year 2021, and available Fiscal Year 2022 data. These documents were produced as part of Vantor's first document production on April 28, 2023 (consisting of 28,914 documents comprising approximately 112,000 pages), with supplemental documents produced on June 22, 2023 (consisting of 4,218 additional documents).

2. VTS account-level profitability reports for the SLG account, to the extent such reports are available in the production. If account-level profitability reports are not available, KAG should identify what alternative data sources or analytical methods can be used to reconstruct account-specific margins.

3. VTS fleet management records for the period Q3 2021 through Q1 2022, including fleet deployment schedules, tractor and trailer utilization reports, and maintenance records for equipment assigned to SLG lanes.

4. VTS Carrier Performance Portal data for Q4 2021, including the metrics for on-time pickup, on-time delivery, tender acceptance, equipment availability, and cargo claims.

5. VTS Q4 2021 Performance Report — an internal VTS document that confirms actual performance metrics materially below all SLO thresholds. This report was produced as part of the supplemental production and appears to be VTS's own contemporaneous assessment of its performance during this critical period.

6. Fleet redeployment records produced pursuant to Judge Calloway's June 9, 2023 order, documenting the reassignment of 85 tractors to the Northwind Distribution Co. account in October 2021, including any internal approvals, fleet deployment orders, or related communications.

7. Vantor Holdings Corp. consolidated revenue data: FY 2021 approximately $385 million; FY 2022 approximately $310 million (the decline reflecting the loss of the SLG contract and broader market conditions). B. Stonefield Financial and Operational Documents (from Stonefield Production)

1. SLG consolidated revenue data: FY 2021 approximately $1.42 billion; FY 2022 approximately $1.28 billion; FY 2022 EBITDA approximately $118 million.

2. SLG volume tender records for Contract Years 1, 2, and 3, documenting the actual freight volumes tendered to VTS under the TSA on a monthly and quarterly basis.

3. SLG force majeure notice and related correspondence from April 2020, including the initial notice invoking TSA Section 12.1 and any subsequent communications regarding the scope and duration of the force majeure period.

4. SLG Cure Notice dated January 18, 2022, from Raymond Hess (Director, Contract Compliance, Stonefield) to Sandra Milescu (COO, Vantor/VTS), setting forth the specific SLO failures and demanding cure within the contractually specified cure period.

5. Vantor's response to the Cure Notice dated February 14, 2022, from Derek Pruitt (VP, Business Development, Vantor) to Janet Kirkwood (VP, Carrier Relations, Stonefield), which acknowledged receipt of the cure notice but, as Mr. Hess testified, did not dispute the accuracy of the underlying performance metrics.

6. SLG termination letter dated March 4, 2022, from Tobias Wren (General Counsel, Stonefield) to Vantor/VTS, formally terminating the TSA effective immediately based on VTS's failure to cure the material breaches identified in the January 18, 2022 cure notice. C. Key Internal Communications

1. Sandra Milescu email to Nikolai Vantorovich, dated November 12, 2021 (Bates No. VHC-008417): "We've pulled 85 tractors off the SLG dedicated lanes to cover [redacted] commitments. SLG won't notice until January." This is the central document establishing VTS's deliberate diversion of dedicated fleet capacity and is relevant to Rebuttal Areas 4, 5, and 6.

2. Janet Kirkwood email to Carlos Medina, dated September 22, 2021, regarding the diversion of freight volume to Cascade Freight Systems Inc. and Briarwood Trucking Co. on Lanes 8 through 14 (Secondary Lanes). Note: This is a Stonefield internal email that Vantor may reference as evidence that Stonefield was engaged in premeditated termination planning. KAG should be aware of this document for context, but the rebutt

1. Transportation Services Agreement dated March 15, 2019 (Contract Reference No. SLG-VTS-2019-0315), including all schedules and appendices. Of particular relevance are: • Schedule B (Rate Structure), setting forth the per-mile rates by lane, equipment type, and service level; • Schedule C (Exclusivity/Lane Designations), designating Primary Lanes (subject to VTS exclusivity) and Secondary Lanes (not subject to excl

2. Ashford Meridian LLP rate adjustment analysis memorandum, dated February 2022, projecting an April 2022 rate increase of 14.3%, from a weighted average of $2.87 per mile to $3.28 per mile, which would add approximately $6.2 million in annual transportation costs to Stonefield's expenditure under the TSA. E. Trask Greystone Expert Report

1. Full report of Dr. Philip Trask, Founder and Lead Expert, Trask Greystone & Associates, served on behalf of Vantor Holdings Corp. on May 15, 2023, together with all appendices, supporting data, and workpapers. F. Market Data

1. Freight market indices and spot rate data for Q1 through Q2 2022, to support the mitigation analysis described in Rebuttal Area 6. If KAG does not have independent access to the relevant industry data sources (e.g., Tarrant Software, Dunmore Systems, Tidewater Services Inc.), C&H will source and provide the necessary data. Please advise at the initial call whether KAG requires C&H to obtain this data or whether KA

VI. Format and Structure of Rebuttal Report To ensure maximum effectiveness and compliance with applicable procedural requirements, KAG's rebuttal report should adhere to the following format and structural guidelines.

1. Organization. The rebuttal report should be organized to address each of the six damages categories in Dr. Trask's report, in the same order as presented in his report, followed by KAG's affirmative alternative damages model. This parallel structure will facilitate the Court's and the jury's ability to compare the competing expert analyses on a category-by-category basis.

2. Section Structure. For each damages category, the rebuttal report should: (a) Identify the specific methodology employed by Dr. Trask; (b) Explain the deficiency or deficiencies in Dr. Trask's methodology, with reference to specific data, assumptions, or analytical errors; (c) Present KAG's alternative analysis, including the data sources, methodology, and assumptions employed by KAG; and (d) Quantify the impact o

3. Summary Tables. The report should include clear summary tables comparing Dr. Trask's claimed damages to KAG's rebuttal figures for each category, as well as an aggregate comparison showing the total claimed damages versus KAG's total rebuttal figure.

4. Testifying Expert. Dr. Rosser should be designated as the testifying expert and should be prepared to testify at deposition and, if necessary, at trial regarding all opinions expressed in the report. Mr. Chung may be identified as supporting the analysis under Dr. Rosser's supervision but should not be designated as a separate testifying expert unless we determine that such designation is advisable.

5. Rule 26(a)(2)(B) Compliance. The report must comply with the requirements of Federal Rule of Civil Procedure 26(a)(2)(B), including: (a) A complete statement of all opinions the witness will express and the basis and reasons for them; (b) The facts or data considered by the witness in forming the opinions; (c) Any exhibits that will be used to summarize or support the opinions; (d) The qualifications of the witnes

1. Budget. The prior budget estimate for KAG's engagement, as set forth in the October 28, 2022 retention letter, was $180,000 to $250,000 for the full scope of work, including review of the plaintiff's expert report, preparation of the rebuttal expert report, and deposition preparation and testimony. Applicable hourly rates, as established in the retention letter, are $625 per hour for Dr. Rosser and $375 per hour f

2. Timeline. The following target dates apply to the rebuttal report phase of KAG's engagement: Expert deposition preparation will be scheduled following service of the final report. Based on the current case schedule and anticipated notice periods, we anticipate that Dr. Rosser's deposition will be taken in the October through November 2023 timeframe. C&H will coordinate with Vantor's counsel on scheduling and will

VIII. Confidentiality and Privilege Reminder We take this opportunity to remind KAG of the confidentiality and privilege obligations that govern our engagement and all communications related to this matter. All communications between C&H and KAG, including this memorandum and any responses, interim analyses, draft reports, and working papers, are protected by the attorney work product doctrine and the consulting and

IX. Contact Information and Next Steps For all communications regarding the rebuttal report and this memorandum, the primary point of contact at C&H is: Patrick Gallagher, Lead Associate Calderwood & Harkness LLP 200 Park Avenue, 38th Floor New York, NY 10166 Telephone: (212) 555-7800 (direct) Email: p.gallagher@calderwoodharkness.com Also available and authorized to communicate with KAG on matters related to this en