Contract analysis

Section 18.1 of the TSA provides that the agreement is governed by the laws of the State of New York. Section 18.2 provides for exclusive jurisdiction in the United States District Court for the Southern District of New York or, alternatively, the Supreme Court of the State of New York, New York County. C. The Liquidated Damages Clause (Section 14.2)

Section 14.2 of the TSA contains the liquidated damages provision at the center of Vantor's principal claim. That section provides, in relevant part: If Shipper-Broker terminates this Agreement other than "for Cause" (as defined in Section 13.1), Shipper-Broker shall pay to Carrier-Provider, as liquidated damages, an amount equal to seventy-five percent (75%) of the Annual Committed Volume multiplied by the number of

Section 13.1 of the TSA permits either party to terminate the agreement for "Cause." As defined therein, "Cause" includes: (a) a material breach of the agreement that remains uncured for 30 calendar days after written notice specifying the breach with reasonable particularity; (b) the insolvency, bankruptcy, or assignment for the benefit of creditors of the other party; (c) failure by the other party to maintain the

Section 13.2 of the TSA establishes a Cure Notice requirement. Before exercising a termination right under Section 13.1(a), the terminating party must deliver a written Cure Notice to the other party specifying, with reasonable particularity, the alleged material breach and affording the breaching party the applicable cure period of 30 calendar days. E. Stonefield's Termination of the TSA On January 18, 2022, Raymond

Section 18.1 of the TSA contains an express choice-of-law provision selecting the substantive law of the State of New York to govern all issues arising under or in connection with the agreement. All substantive questions concerning the enforceability of the liquidated damages clause, the adequacy of the damages pleading, and the permissibility of the claimed damages theories are therefore governed by New York law. Th

I. VANTOR'S CLAIM FOR LIQUIDATED DAMAGES UNDER SECTION 14.2 SHOULD BE DISMISSED BECAUSE THE CLAUSE IS AN UNENFORCEABLE PENALTY A. New York Law on Liquidated Damages. The New York Court of Appeals has long held that a liquidated damages clause is enforceable only if it satisfies a well-established two-part test. First, the amount fixed as liquidated damages must "bear[] a reasonable proportion to the probable loss" an

II. VANTOR'S LOST PROFITS CLAIM SHOULD BE DISMISSED FOR FAILURE TO PLEAD DAMAGES WITH REQUISITE CERTAINTY A. New York's Heightened Standard for Lost Profits. Under New York law, lost profits may be recovered as damages for breach of contract, but only where they are "not merely speculative, possible or imaginary, but . . . reasonably certain and . . . directly traceable to the breach." Kenford Co. v. County of Erie,

1. Dismissing Vantor's liquidated damages claim under Section 14.2 of the TSA (Count I of the Complaint) with prejudice, on the ground that the liquidated damages clause is an unenforceable penalty under New York law;

2. Dismissing Vantor's lost profits claim (Count II of the Complaint) with prejudice, on the grounds that (a) the Complaint fails to plead lost profits with the reasonable certainty required under New York law, and

3. Granting Defendant such other and further relief as the Court deems just and proper. Respectfully submitted, CALDERWOOD & HARKNESS LLP CALDERWOOD & HARKNESS LLP By: ________ Samuel Eklund 200 Park Avenue, 38th Floor New York, New York 10166 Telephone: (212) 555-7400 Patrick Gallagher Attorneys for Defendant Stonefield Logistics Group Inc. — INTERNAL NOTES AND ANNOTATIONS — NOT FOR FILING PRIVILEGED AND CONFIDENTIA

1. Standing Argument (Vantor Holdings Corp. vs. VTS). The Complaint was filed by Vantor Holdings Corp., which is not a signatory to the TSA. The actual contracting party is VTS, the operating subsidiary. Per Simone Laroche's December 2021 research memorandum, this presents a potential additional ground for dismissal under FRCP 17 (real party in interest). However, Vantor would likely seek leave to amend to add VTS as

2. Section 15.1 Consequential Damages Waiver. Section 15.1 of the TSA contains a mutual waiver of consequential, incidental, and indirect damages. This provision may provide an independent basis to strike the stranded assets claim ($5.2M), workforce reduction costs claim ($2.87M), and mitigation costs claim ($1.4M) — totaling approximately $9.47M. The current draft does not include this argument in order to keep the

3. Case Citations. Simone is completing the September 19, 2022 research memorandum on liquidated damages enforceability under New York law. Final authority list will be supplied and integrated upon completion. That memorandum's preliminary conclusion is that there is a "moderate" likelihood of an unenforceability finding given the magnitude of the disproportion, but Simone flags New York courts' general reluctance to

5. Anticipation of Opposition Arguments. The current draft does not include an express section addressing anticipated counter-arguments from Vantor's counsel (Caldwell Royce & Shapiro LLP, led by Harrison Caldwell and Meredith Shapiro, with Jason Whitford and Alina Petrov as associates). A brief likely opposition arguments may be Relationship to Defense Strategy Outline (September 26, 2022) This motion corresponds to