Contract analysis

I. DECLARANT IDENTIFICATION AND CAPACITY

1. I, Samuel Eklund, hereby declare pursuant to 28 U.S.C. § 1746 as follows:

2. I am a partner at the law firm of Calderwood & Harkness LLP, located at 200 Park Avenue, 38th Floor, New York, New York 10166. I have been a partner at Calderwood & Harkness LLP since 2014 and have practiced commercial litigation in the State of New York for over eighteen years.

3. I serve as counsel of record for Defendant Stonefield Logistics Group Inc. ("Stonefield" or "SLG") in the above-captioned action. I am admitted to practice law in the State of New York and am admitted to practice before the United States District Court for the Southern District of New York.

4. This declaration is submitted in support of Defendant Stonefield Logistics Group Inc.'s Motion to Dismiss the Complaint filed by Plaintiff Vantor Holdings Corp. ("Vantor") pursuant to Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim upon which relief can be granted.

5. I have personal knowledge of the facts set forth herein, and if called as a witness, I could and would testify competently thereto. Except where otherwise stated, the matters set forth in this declaration are based on my personal knowledge, my review of documents produced and maintained in the ordinary course of business by Stonefield Logistics Group Inc., and my involvement as counsel for Stonefield in this actio

6. Vantor Holdings Corp. filed its Complaint in this action on August 12, 2022, asserting a single cause of action for breach of contract. The Complaint alleges that Stonefield wrongfully terminated a Transportation Services Agreement dated March 15, 2019 (the "TSA"), bearing Contract Reference No. SLG-VTS-2019-0315.

7. The TSA is a contract between two parties: Stonefield Logistics Group Inc., acting in the capacity of "Shipper-Broker," and Vantor Transport Services LLC ("VTS"), a wholly owned operating subsidiary of Vantor Holdings Corp., acting in the capacity of "Carrier-Provider." The TSA was drafted by the law firm Ashford Meridian LLP on behalf of Stonefield during negotiations that took place between January and March 201

8. The TSA is governed by the laws of the State of New York, without regard to conflict-of-laws principles. The TSA also provides for exclusive jurisdiction in the United States District Court for the Southern District of New York or, in the event that federal subject matter jurisdiction is not available, in the Supreme Court of the State of New York, New York County. The jurisdictional basis for this action is diver

9. Vantor's Complaint alleges that Stonefield wrongfully terminated the TSA effective March 4, 2022, and that such termination was not "for Cause" as defined by the TSA. The Complaint seeks approximately $95.4 million in damages, including the following categories: (a) liquidated damages under Section 14.2 of the TSA, claimed in the amount of approximately $67.23 million; (b) lost profits allegedly resulting from the

10. On September 8, 2022, Calderwood & Harkness LLP filed its Notice of Appearance on behalf of Defendant Stonefield Logistics Group Inc. in this action through the Court's Electronic Case Filing ("ECF") system.

III. PURPOSE OF THE DECLARATION

11. This declaration is submitted for the limited purpose of placing before the Court certain documents that are referenced in and integral to the Complaint, and which the Court may properly consider in connection with a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) without converting the motion to one for summary judgment under Rule 56. See Chambers v. Pinnacle Corporation, 282 F.3d 147, 153 (2d C

12. The documents attached hereto as Exhibits A and B — namely, the TSA and the Cure Notice, respectively — are referenced extensively throughout and are integral to Vantor's Complaint. The TSA is the contract upon which Vantor's breach of contract claim is predicated, and the Cure Notice is the operative document that initiated the contractual termination process challenged by Vantor. The authenticity of neither doc

13. These documents are submitted to enable the Court to evaluate the two principal arguments set forth in Defendant's Motion to Dismiss: (i) that the liquidated damages clause contained in Section 14.2 of the TSA constitutes an unenforceable penalty under New York law; and (ii) that Plaintiff's lost profits claim fails to plead damages with the requisite certainty under the governing standard. The full legal argumen

IV. DESCRIPTION OF EXHIBIT A — TRANSPORTATION SERVICES AGREEMENT

14. Attached hereto as Exhibit A is a true and correct copy of the Transportation Services Agreement dated March 15, 2019 (the "TSA"), Contract Reference No. SLG-VTS-2019-0315, between Stonefield Logistics Group Inc. and Vantor Transport Services LLC. The TSA consists of the main agreement, together with all schedules and exhibits thereto, and is 127 pages in total length.

15. The TSA is referenced in paragraphs 12, 14–17, 22–26, 31–38, 42, 45, 49–53, 58–62, 67, and 71–78 of the Complaint and is the contract at issue in this action. Vantor's breach of contract claim arises solely from the TSA, and the Complaint quotes or paraphrases numerous provisions of the TSA in support of its allegations.

16. I identify below the key provisions of the TSA that are relevant to the issues raised in Defendant's Motion to Dismiss: (a) Term (Section 2). The TSA provides for an initial term of five (5) years, commencing on April 1, 2019 and expiring on March 31, 2024. Section 2.2 of the TSA provides for one (1) automatic two-year renewal period, such that the TSA would renew for an additional term expiring on March 31, 2026

V. DESCRIPTION OF EXHIBIT B — CURE NOTICE

17. Attached hereto as Exhibit B is a true and correct copy of the written Cure Notice dated January 18, 2022 (the "Cure Notice"), sent by Raymond Hess, Director of Contract Compliance at Stonefield Logistics Group Inc., to Sandra Milescu, Chief Operating Officer of Vantor Holdings Corp. and Vantor Transport Services LLC. The Cure Notice was transmitted via overnight delivery service and electronic mail, and was rece

18. The Cure Notice is referenced in paragraphs 39–44, 46–48, and 55–57 of the Complaint, and is central to Vantor's allegation that Stonefield's termination of the TSA was not "for Cause" as defined by the agreement.

19. The Cure Notice identified the following specific material breaches of the TSA by VTS, as measured during the fourth quarter of 2021 (October 1, 2021 through December 31, 2021): (a) On-Time Pickup Rate. VTS's on-time pickup rate fell to 78.2% in Q4 2021, significantly below the 95% threshold required by Section 6 of the TSA. This represented a shortfall of 16.8 percentage points below the contractually required s

20. The Cure Notice specified a thirty (30) calendar-day cure period from the date of receipt, consistent with the cure period set forth in Section 13.1(a) of the TSA. Because the Cure Notice was received on January 18, 2022, the resulting cure deadline was February 17, 2022.

21. The Cure Notice identified the specific contractual provisions that VTS had breached, including Sections 6, 7.4, and Schedule D of the TSA, and set forth the actual performance metrics as compared to the applicable Service Level Obligation thresholds with quantitative specificity. Accordingly, the Cure Notice satisfied the "reasonable particularity" requirement imposed by Section 13.2 of the TSA as a condition pr

VI. ADDITIONAL RELEVANT PROCEDURAL FACTS

22. Following the expiration of the 30-day cure period on February 17, 2022, Stonefield's General Counsel, Tobias Wren, issued a formal termination letter dated March 4, 2022 (the "Termination Letter"), terminating the TSA effective immediately pursuant to Section 13.1(a) of the TSA for VTS's failure to cure the material breaches identified in the Cure Notice within the specified cure period. The Termination Letter i

23. On February 14, 2022 — three days prior to the expiration of the cure period — Derek Pruitt, Vice President of Business Development at Vantor Holdings Corp., sent a written response to the Cure Notice to Janet Kirkwood, Vice President of Carrier Relations at Stonefield Logistics Group Inc. In his response, Mr. Pruitt acknowledged that VTS had experienced "operational challenges" during Q4 2021, but asserted that

24. Prior to filing the Complaint, the parties engaged in the mandatory executive negotiation process required by Section 16 of the TSA. An in-person meeting was held on May 16, 2022, at Stonefield's offices in New York, New York, between Marcus Denton, Chief Executive Officer of Stonefield Logistics Group Inc., and Nikolai Vantorovich, Chief Executive Officer of Vantor Holdings Corp. A second meeting was held teleph

25. Vantor, through its counsel Caldwell Royce & Shapiro LLP, sent a pre-suit demand letter dated April 8, 2022, to Stonefield, claiming total damages of approximately $95.4 million. Stonefield, through Calderwood & Harkness LLP, responded in writing on April 29, 2022, rejecting the demand in its entirety and setting forth Stonefield's position that the termination was for Cause and that no damages were owed.

VII. RELEVANCE OF ATTACHED EXHIBITS TO MOTION TO DISMISS

26. Exhibit A (the TSA) is submitted because the Motion to Dismiss argues, as its primary ground, that the liquidated damages clause contained in Section 14.2 of the TSA is unenforceable as a penalty under New York law. The Court's analysis of whether a liquidated damages clause constitutes an enforceable liquidation of damages or an unenforceable penalty requires examination of the actual contract terms, including t

27. The TSA is also relevant to the Motion's alternative argument that Vantor's liquidated damages and lost profits claims are impermissibly duplicative, as both categories of alleged damages seek to compensate Vantor for the same underlying harm — the lost value of the contract over the remaining term. Under New York law, a plaintiff may not recover both liquidated damages and actual damages for the same breach wher

28. Section 15.1 of the TSA — the mutual consequential damages waiver — is further relevant to the categories of damages that Vantor may pursue in this action. To the extent that certain of Vantor's claimed damages (including stranded asset costs, workforce reduction costs, and lost profits) constitute consequential or indirect damages, they may be barred by the waiver contained in Section 15.1. The Memorandum of Law

29. Exhibit B (the Cure Notice) is submitted to establish the factual predicate for Stonefield's termination for Cause and to demonstrate the nature, scope, and specificity of the material breaches identified by Stonefield. This factual context is directly relevant to the threshold question of whether the liquidated damages clause in Section 14.2 is even implicated by the facts of this case, because, by its express t

30. The remaining term of the TSA at the time of termination was approximately two (2) years and twenty-seven (27) days (March 4, 2022 through March 31, 2024), which is relevant both to the calculation of the liquidated damages amount that Vantor claims and to the Court's assessment of whether the liquidated damages formula produces a result that is grossly disproportionate to the probable loss at the time of contrac

31. I obtained the copies of Exhibits A and B attached hereto from the files of Stonefield Logistics Group Inc., as provided to Calderwood & Harkness LLP by Tobias Wren, General Counsel of Stonefield, in connection with the firm's engagement to represent Stonefield in this matter. Mr. Wren transmitted these documents to me on September 1, 2022, the date on which Calderwood & Harkness LLP was formally engaged as couns

32. I have personally reviewed the documents attached hereto as Exhibits A and B and confirm that they are true and correct copies of the originals, which are maintained in the ordinary course of business by Stonefield Logistics Group Inc. at its offices in New York, New York.

33. Vantor's Complaint references and relies upon both the TSA and the Cure Notice as the foundational documents upon which its breach of contract claim is based. The authenticity of these documents has not been disputed by Vantor at any point during the parties' pre-suit negotiations, the Section 16 executive negotiation process, or in any filing in this action.

IX. CONCLUSION AND VERIFICATION

34. I respectfully submit this declaration to the Court in support of Defendant Stonefield Logistics Group Inc.'s Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), and request that the Court consider the attached Exhibits A and B in connection with its evaluation of the Motion. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correc