Contract analysis

From: Linda Osei <losei@calderwoodharkness.com> To: Dominic Hale <dominic.hale@northgatetelecom.com> Cc: Priya Anand <panand@calderwoodharkness.com> Subject: PRIVILEGED & CONFIDENTIAL — Deposition Recap: Voss, Calloway, Henley & Sandoval — Meridian Infrastructure Partners LLC v. Northgate Fiber Americas Inc. (Index No. 654321/2024)

**PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION**

I am writing to provide a high-level strategic synthesis of the four fact depositions completed between November 12 and December 11, 2024, in the above-referenced matter (C&H Matter No. 1022-00005). Detailed, transcript-based deposition summaries for each witness have been or will be circulated separately. The purpose of this email is to give you a candid assessment of the key takeaways, areas of concern, and strateg

As a preliminary matter, I want to note the remaining fact depositions on the schedule:

- **Bridget Yeung** (Meridian COO) — February 4, 2025 - **Helena Bright** (NTP CFO, by commission in London) — February 18, 2025 - **Dominic Hale** — noticed by Meridian for February 25, 2025 (privilege objection pending; addressed below) - **Frank DiBello** (Crestline CEO, non-party) — March 4, 2025

I address each completed deposition in turn below, followed by a discussion of strategic implications.

**I. Renata Voss (VP, US Network Infrastructure, NFA) — November 12–13, 2024**

*Favorable testimony.* Renata was a strong witness on the core termination justification. She clearly articulated the escalating pattern of Meridian's schedule failures across all three phases: Milestone 3 (Phase 1) was 47 days late; Milestones 5, 6, and 7 (Phase 2) fell increasingly behind by 22, 68, and 91 days, respectively; and Milestone 8 was never completed. She testified in detail about the 287 non-conformance

Renata walked through the Cure Notice process methodically: Cure Notice No. 1 (January 18, 2024), Cure Notice No. 2 (February 19, 2024), and Northgate's rejection of Meridian's Corrective Action Plan on March 12, 2024, as inadequate — a rejection underscored by the 12 additional critical NCRs issued during February 2024 alone. She confirmed that the decision to terminate for cause under MCA § 14.1 on April 1, 2024, w

*Areas of concern.* Thomas Deluca (HDS) pressed Renata on Northgate's internal discussions about bringing fiber construction in-house. She acknowledged awareness of "preliminary feasibility analyses" at the London HQ level, though she maintained these were unrelated to the termination decision. Deluca also explored the 14 alleged scope changes that Meridian contends were never formalized as Change Orders under MCA §

*Takeaway:* Renata was a strong witness on the core termination justification and quality failures. However, the in-house feasibility analysis and permitting delays are areas Meridian will continue to exploit, and we should be prepared for both themes to recur throughout the remaining depositions and at trial.

**II. Sean Calloway (Director, Construction Management, NFA) — November 19, 2024**

*Favorable testimony.* Sean served as the day-to-day contract administrator and testified extensively about the NCR documentation process, providing granular detail on defect types, remediation demands, and Meridian's inadequate responses. He confirmed the milestone tracking methodology and the liquidated damages calculations — $175,000 per day per milestone, with assessments totaling $49 million across Phases 1 and

*Areas of concern.* Under cross-examination, Sean acknowledged that some NCRs were issued with "lag time" and that Meridian occasionally cured non-critical defects that were subsequently re-categorized. Deluca will likely argue the NCR process was inconsistently applied. Sean also admitted he was not involved in the Crestline replacement contractor procurement and had limited knowledge of the $712 million replacement

*Takeaway:* Sean corroborates the documentary record on delays and quality failures. The minor vulnerability on NCR process consistency is something we should proactively address in Dr. Chazen's expert report to blunt the impact at trial.

**III. Marcus Henley (VP, Field Operations — Northeast Division, Meridian) — December 3–4, 2024**

*Key admissions favorable to the defense.* Henley admitted that Meridian experienced significant crew shortages during Phase 2, particularly in 2022–2023, acknowledging that Meridian struggled to recruit and retain qualified splicers and directional boring operators. When confronted with specific critical NCRs, he conceded that certain splice loss failures and conduit depth violations were attributable to undertraine

*Unfavorable testimony.* Henley testified that NFA's field inspectors were "inconsistent" in their application of NS-FIBER-2020 standards and that some NCRs reflected "differing site conditions" rather than workmanship failures. He attributed substantial portions of delay to NFA's permitting failures in Connecticut and western Massachusetts, claiming Meridian crews were idle for weeks awaiting municipal approvals. He

*Takeaway:* Henley's admissions regarding crew shortages and the aspirational nature of the Corrective Action Plan are significant. These directly undercut Meridian's narrative that delays were Owner-caused. Dr. Chazen should incorporate these admissions into the critical path analysis, and we should ensure they feature prominently in our summary judgment papers if we move forward on that front.

**IV. Victor Sandoval (Managing Member / CEO, Meridian) — December 10–11, 2024**

*Key admissions favorable to the defense.* Sandoval acknowledged awareness of the escalating milestone delays and quality issues as early as mid-2022 and admitted that Meridian's internal reports flagged "resource constraints" as a root cause. He confirmed that Ridgepoint Capital Group LP has been funding Meridian's litigation costs, with an estimated litigation war chest of approximately $12 million based on his tes

*Unfavorable testimony.* Sandoval testified at length about Northgate's alleged pretext for termination, claiming that NFA's senior leadership — including references to discussions with London HQ — explored in-sourcing the fiber build to capitalize on declining construction costs in late 2023 and early 2024. He asserted that Meridian verbally raised the 14 scope changes with NFA project managers on multiple occasions

*Key financial testimony.* Sandoval confirmed Meridian's FY2023 revenue of $620 million and EBITDA of approximately $58.9 million (9.5% margin). He acknowledged Ridgepoint's 2018 acquisition of the 55% stake for $285 million and confirmed that the Northgate contract was a "cornerstone" of Ridgepoint's investment thesis. He also testified regarding Meridian's $150 million revolving credit facility with Dralvecen Comme

*Takeaway:* Sandoval is a polished witness. His pretext narrative and "paper it later" claim on scope changes are concerning but are not yet corroborated in the documentary record. We should prioritize reviewing the 187 documents Meridian has withheld under common interest privilege (Meridian-Ridgepoint communications). Our cross-motion for a protective order, to be argued on January 27, 2025, is critical to that eff

Expert reports are due March 31, 2025, with rebuttal reports due May 15, 2025.

Dr. Elinor Chazen (Lakeview Consulting Group LLC — construction and delay expert) should incorporate Henley's crew shortage admissions and Sandoval's acknowledgment of internal resource constraints into her critical path analysis. Her preliminary findings already show that delays were predominantly Contractor-caused, but we need to affirmatively address Meridian's permitting-delay defense with a jurisdiction-by-juris

Prof. Gordon Whitfield (Pinnacle Economics LLC — damages expert) should use Sandoval's financial testimony and Meridian's discovery responses to challenge the lost-profits methodology underlying Count I ($92.4M). Sandoval's testimony regarding the backlog reduction also supports our argument that Count IV's $34.1 million reputational-harm claim is speculative and barred by MCA § 20.1's consequential damages waiver.

We also need to anticipate the opinions of Meridian's experts: James Ochoa, PE (Keystone Project Advisory LLC) on Owner-caused delay, and Dr. Natalie Forster (Westbrook Valuation Services Inc.) on lost profits. Memos from Yuki Nakamura on anticipated rebuttal positions are in progress.

Jeffrey Park will be circulating an expert report work plan and timeline this week.

**B. Privilege Motion / Upcoming Oral Argument**

Oral argument on both Meridian's motion to compel production of our 214 privileged documents and our cross-motion for a protective order regarding Meridian's 187 Ridgepoint communications is scheduled for January 27, 2025, before Justice Ricci (Part 49). The outcome could materially affect both sides' positions. If we lose on the 214 documents, Meridian gains ammunition for its pretext theory. If we prevail on the 18

- *Bridget Yeung (Meridian COO) — February 4, 2025:* Focus on operational management, subcontractor oversight, and scope change documentation. - *Helena Bright (NTP CFO) — February 18, 2025, by commission in London:* We anticipate questions on financial and budget decisions and the internal feasibility analyses for in-house construction. We will prepare privilege instruction points carefully. - *Dominic Hale — notice

The deposition record, while favorable on the whole, reveals genuine litigation risk in several areas — pretext, permitting delays, and the scope-change defense. Northgate's total counterclaims of $149 million (comprising $49M in liquidated damages, $81.7M in excess completion costs, and $18.3M in remediation costs) substantially offset Meridian's $200 million claim, but the cross-exposure is real and the risk is not

In my view, the appropriate time for a deeper settlement analysis will be after (i) the privilege motion ruling and (ii) the exchange of expert reports. I will be preparing a privileged settlement analysis memo, which I expect to circulate around January 10, 2025. That said, Ridgepoint's estimated $12 million litigation war chest suggests Meridian has the resources and resolve to take this matter through trial.

I would recommend scheduling a call with you — and Helena Bright if she is available — in early January to discuss settlement parameters and authority ahead of the January 27 oral argument.

I would welcome the opportunity to discuss the foregoing at your convenience. Would you have availability for a call early the week of January 6, 2025?

I would also ask that you forward this email to Helena for her awareness. Our Q4 2024 status report, which will contain a more comprehensive update, will be sent separately on January 5, 2025. If you would like the detailed deposition summaries for any or all of the four witnesses, I am happy to provide them.

Finally, a reminder: this communication is privileged and confidential and should not be forwarded outside of Northgate's legal department without Calderwood & Harkness's prior approval.

Thank you, Dominic. We will be in touch shortly with the additional materials referenced above.

**Linda Osei** Partner Calderwood & Harkness LLP 425 Park Avenue, 33rd Floor New York, NY 10022 Tel: (212) 555-4100 Email: losei@calderwoodharkness.com

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