Contract analysis

I. Background — The Dedicated Freight Services Agreement On April 15, 2022, Stonefield, as "Shipper," and Ridgeline, as "Carrier," entered into the DFSA, a comprehensive dedicated transportation services agreement governing the provision of freight carriage services for Stonefield's Texas retail distribution operations. The Agreement was the product of extensive arm's-length negotiations between the parties and was e

II. Ridgeline's Material Breach of the DFSA Despite Ridgeline's clear and unequivocal contractual commitment to provide a minimum of twelve (12) dedicated Class 8 tractor-trailers for Stonefield's distribution lanes, Ridgeline has materially breached the DFSA by progressively reducing the number of trucks available and ultimately ceasing freight operations entirely. The timeline of Ridgeline's default is as follows:

III. Damages Demanded Based on the foregoing material breach and the applicable provisions of the DFSA, Stonefield demands payment of the following amounts: A. Liquidated Damages Under Section 14.3 of the DFSA

Section 14.3 of the DFSA provides that, upon Carrier's material default and failure to cure within the thirty (30) day cure period set forth in Section 14.1, Carrier shall be obligated to pay liquidated damages to Shipper in an amount equal to the greater of: (a) twenty-five percent (25%) of the remaining unpaid Minimum Monthly Revenue Commitment for the unexpired portion of the Term; or (b) Five Hundred Thousand Dol

Section 14.4 of the DFSA provides a consequential damages carve-out that specifically permits Stonefield to recover its actual, documented re-procurement costs incurred as a direct result of Carrier's material default, to the extent such costs exceed or are not otherwise captured by the liquidated damages amount under Section 14.3. This provision reflects the parties' negotiated agreement that certain categories of c

IV. Personal Guaranty of Gerald Brashear As noted above, Mr. Brashear executed a personal, unconditional guaranty of Ridgeline's obligations arising under Section 14 of the DFSA. The Personal Guaranty, set forth at Section 14.5 of the Agreement, is absolute and unconditional, and is not subject to any conditions precedent other than the occurrence of a material default by Ridgeline and the expiration of the applicabl

V. Demand for Payment and Deadline Stonefield hereby demands that Ridgeline Freight Carriers LLC and Gerald Brashear, jointly and severally, pay the sum of Two Million Four Hundred Thirty-Seven Thousand Five Hundred Dollars ($2,437,500.00) within ten (10) calendar days of receipt of this letter. Payment should be made by one of the following methods: (a) Wire Transfer. Payment may be made by wire transfer to an accou

VI. Consequences of Failure to Pay If full payment of the amount demanded is not received within the ten (10) calendar day period specified above, Stonefield will promptly file suit against Ridgeline Freight Carriers LLC and Gerald Brashear, individually, in the District Court of Dallas County, Texas, or such other court of competent jurisdiction in Dallas County as may be appropriate, consistent with the forum selec

VII. Reservation of Rights This letter is not intended to be, and shall not be construed as, a waiver of any of Stonefield's rights or remedies under the DFSA, under applicable law, or otherwise. Stonefield expressly reserves all such rights and remedies, including but not limited to the right to seek additional damages that may be discovered or that may continue to accrue, the right to amend or supplement its claims

VIII. Direction of Communications All communications regarding this matter should be directed exclusively to the undersigned at Calderwood & Harkness LLP. Please do not contact Stonefield or any of its officers, directors, or employees directly regarding the subject matter of this letter. If Ridgeline or Mr. Brashear is currently represented by legal counsel, we respectfully request that such counsel contact the unde

1. Copy of Dedicated Freight Services Agreement dated April 15, 2022 (including Personal Guaranty at § 14.5)

2. Copy of Stonefield's Written Cure Notice dated October 18, 2023

3. Copy of Stonefield's Formal Demand Letter dated December 22, 2023 Category | Amount Liquidated Damages Under § 14.3 | $1,381,250.00 Re-Procurement Damages Under § 14.4 | $1,056,250.00 Total | $2,437,500.00