Contract analysis

I. Executive Summary Marcus Henley, Meridian Infrastructure Partners LLC's ("Meridian") Vice President of Field Operations for the Northeast Division, was deposed over two days on December 3 and 4, 2024, at the offices of Calderwood & Harkness LLP. The deposition was taken by Jeffrey Park, Lead Associate, on behalf of our client Northgate Fiber Americas Inc. ("NFA" or "Northgate"). Mr. Henley was represented at the d

II. Witness Background and Role A. Professional Background Marcus Henley testified that he has been employed by Meridian Infrastructure Partners LLC since 2015, initially in a senior project manager role overseeing fiber construction projects in the Mid-Atlantic region. He was promoted to Vice President of Field Operations for the Northeast Division in January 2020, shortly before the Master Construction Agreement ("

III. Day 1 Testimony (December 3, 2024) — Phase 1 and Phase 2 Performance A. Phase 1 (New York Metro & Northern New Jersey — Milestones 1–4)

1. General Performance Henley's testimony on Day 1 began with an overview of Phase 1 of the fiber build-out program, which encompassed the New York metropolitan area and northern New Jersey. Henley confirmed that Phase 1 covered approximately 3,200 route miles of fiber optic cable installation and related civil infrastructure, with a total milestone value of approximately $208 million under the MCA. Phase 1 was divid

2. Admission: Crew Shortages in Phase 1 One of the most significant admissions from Henley's Day 1 testimony concerned the root causes of crew shortages during Phase 1. When questioned by Mr. Park about why Meridian was unable to achieve planned production rates during the Milestone 3 period, Henley testified as follows: Key Admission: Henley admitted that Meridian was unable to fully staff its Phase 1 crews as plann

3. Liquidated Damages for Milestone 3 Henley testified that he was aware that Northgate assessed liquidated damages of $8,225,000 for the 47-day Milestone 3 delay, calculated at the contractual rate of $175,000 per day. This assessment was communicated to Meridian via letter dated November 5, 2021, from Renata Voss on behalf of NFA. When asked whether he disputed the calculation at the time, Henley testified that he

1. Escalating Schedule Delays Henley's testimony regarding Phase 2 revealed a pattern of dramatically escalating schedule delays that accelerated with each successive milestone. Phase 2 covered the construction footprint in Connecticut, western Massachusetts, and southern Pennsylvania, and was divided into Milestones 5 through 8. Henley confirmed the following delays for each Phase 2 milestone: Henley testified that

2. Root Causes of Crew Shortages (Phase 2) Henley's testimony regarding the root causes of Phase 2 crew shortages was among the most consequential portions of the two-day deposition. Henley attributed Phase 2 crew shortages to three interrelated factors: (a) General labor market tightness in the fiber construction industry post-COVID-19. Henley testified that the fiber construction industry experienced acute labor sh

3. Ridgepoint's Cost-Reduction Pressure Building on his testimony regarding crew shortages, Henley provided detailed and damaging testimony about the specific ways in which Ridgepoint Capital Group LP's cost-reduction pressure affected Meridian's ability to perform on the Northgate project. Henley testified that beginning in approximately the second quarter of 2022, Graham Latimer, the Managing Partner of Ridgepoint,

4. Liquidated Damages Assessment (Phase 2) Henley confirmed his awareness that Northgate assessed liquidated damages for each of the Phase 2 milestones. The Phase 2 liquidated damages assessments are as follows: With respect to Milestone 8, Henley confirmed that the contractual liquidated damages cap of 10% of the milestone value applied, resulting in a capped assessment of $9,100,000 (10% of the $91 million Mileston

1. Volume and Severity of NCRs Henley confirmed that he was aware of all 287 non-conformance reports issued during the course of the Northgate project. Of these, 43 were classified as "critical" NCRs, reflecting defects or deviations of sufficient severity to require mandatory remediation before the affected segments could be accepted by Northgate. The remaining 244 NCRs were classified as non-critical. Henley testif

2. Admission: NCRs Caused by Inadequate Training and Supervision Key Admission: When asked to identify the root causes of the 43 critical NCRs, Henley testified that the "majority" of these critical defects were attributable to two related factors: (a) inadequate training of subcontractor crews on Northgate's Technical Specification NS-FIBER-2020, and (b) insufficient field supervision resulting from the crew reducti

3. Splice Loss Failures Henley testified in considerable detail about the splice loss NCRs, which he confirmed were the most common category of critical NCR on the project. Splice loss is a critical quality metric in fiber optic construction, as excessive splice loss degrades signal quality and can render fiber segments non-functional for their intended purpose. Northgate's Technical Specification NS-FIBER-2020 estab

4. Conduit Depth Violations Henley confirmed that 11 of the 43 critical NCRs involved conduit burial depths that failed to meet the minimum requirements established by NS-FIBER-2020 and applicable local building codes. Conduit burial depth is a critical compliance parameter because insufficiently buried conduit is vulnerable to damage from surface activities, third-party excavation, and environmental factors, and may

5. Unauthorized Route Deviations Henley testified that approximately 8 of the 43 critical NCRs involved instances where Meridian's crews deviated from the approved route design without obtaining prior written approval from Northgate. These unauthorized route deviations had the potential to affect network topology, property rights and easements, and regulatory compliance, and triggered remediation obligations under th

6. Remediation Status Henley's testimony regarding the remediation status of the critical NCRs as of the date of termination provides powerful support for Northgate's Counterclaim III for remediation costs. Henley acknowledged that as of the April 1, 2024 termination date, the majority of the 43 critical NCRs remained unresolved. He estimated that Meridian had fully remediated only approximately 12 of the 43 critical

IV. Day 2 Testimony (December 4, 2024) — Phase 3, Cure Notices, Scope Changes, and Permitting A. Phase 3 (Maryland, Virginia, Eastern Pennsylvania — Milestones 9–14)

1. Mobilization Failures Day 2 of the deposition began with Henley's testimony regarding Phase 3 of the fiber build-out program, which encompassed the remaining geographic footprint in Maryland, Virginia, and eastern Pennsylvania and was divided into Milestones 9 through 14. Henley confirmed that Phase 3 was the largest phase of the project by a substantial margin, planned to cover approximately 9,700 route miles of

2. Phase 3 Payment Disputes Henley testified that he was aware of payment disputes between Meridian and Northgate relating to Phase 3 work. He confirmed that Meridian submitted Phase 3 payment applications totaling $48.2 million and that Northgate approved and paid $31.7 million of that amount but disputed $16.5 million. Henley testified that he believed some of the disputed amounts corresponded to legitimate work pe

1. Cure Notice No. 1 (January 18, 2024) Henley confirmed that he was copied on Cure Notice No. 1, dated January 18, 2024, which was sent by Renata Voss, NFA's Vice President of US Network Infrastructure, to Meridian's senior leadership. The Cure Notice cited three categories of material breach under the MCA: (a) Meridian's failure to achieve Milestone 8, which was substantially behind schedule at that point; (b) Meri

2. Meridian's Response (February 2, 2024) Henley confirmed that he contributed to the drafting of Meridian's response to Cure Notice No. 1, which was submitted on February 2, 2024 — within the 30-day cure period. Meridian's response attributed its performance failures to three categories of claimed justification: (a) Northgate's alleged failure to timely obtain municipal permits. Meridian's response asserted that NFA

3. Cure Notice No. 2 (February 19, 2024) and Corrective Action Plan (March 5, 2024) Henley confirmed that Northgate issued a second Cure Notice on February 19, 2024, reiterating the grounds for material breach and noting that Meridian's February 2, 2024 response did not constitute cure of the identified deficiencies. Cure Notice No. 2 provided Meridian with an additional opportunity to present a concrete corrective a

4. Notice of Termination (April 1, 2024) Henley testified that he learned of Northgate's termination of the MCA on April 1, 2024. He stated that he personally believed the termination was "premature," expressing the view that Meridian should have been given additional time and opportunity to implement the Corrective Action Plan. However, Henley acknowledged that he was not involved in the legal analysis of whether ma

1. Henley's Account of the 14 Claimed Scope Changes A substantial portion of Day 2 was devoted to Henley's testimony regarding Meridian's claim that NFA personnel directed 14 scope changes during the project that were never formalized as written Change Orders under MCA § 16.1. This claim is a central component of Meridian's defense, as Meridian contends that the uncompensated scope changes added significant work and

2. Admission: No Written Change Order Requests Submitted by Meridian Key Admission: When questioned about the process by which these scope changes were communicated and documented, Henley made a critical concession. He admitted that for all 14 of the alleged scope changes — including the 9 he could describe and the 5 he could not — Meridian did not submit a formal written Change Order request as required by MCA § 16.

3. Impact on Schedule Henley estimated that the 9 scope changes he could identify added approximately 180 to 240 route miles and 45 to 60 days of additional work to the Phase 2 schedule. He testified that this estimate was based on his "field judgment" and general familiarity with the type and magnitude of the work involved in each change. However, under cross-examination, Henley made several significant concessions

1. Henley's Understanding of Permitting Allocation Henley testified about the allocation of permitting responsibilities between NFA and Meridian under MCA § 5.3. He stated that his understanding was that MCA § 5.3 made NFA responsible for "major" governmental permits and rights-of-way, such as franchise agreements and state-level authorizations, while Meridian was responsible for obtaining routine construction permit

2. Specific Permitting Delays Identified Henley identified permitting delays in five municipalities — three in Connecticut and two in Massachusetts — where he claimed NFA was late in securing right-of-way agreements that Meridian needed to commence or continue construction. He testified that these delays affected Meridian's ability to deploy crews in the affected areas and contributed to Phase 2 schedule slippage. Ho

1. COVID-19 and Supply Chain Henley's Day 2 testimony also addressed the force majeure defense in connection with COVID-19's impact on labor availability and fiber cable supply chains. Henley testified that COVID-19 aftereffects did affect labor availability and supply chains through approximately mid-2022, consistent with his Day 1 testimony on this topic. Key Admission (reiterated from Day 1): When asked to address

V. Key Admissions Summary (Favorable to Northgate) The following is a consolidated summary of Henley's most significant admissions from the two-day deposition, organized for quick reference. Each of these admissions supports Northgate's defense against Meridian's claims and/or Northgate's affirmative counterclaims:

1. Crew shortages were primarily internal, not force majeure. Henley admitted that Meridian's crew shortages resulted from (a) diversion of experienced workers to other Meridian projects in the Southeast and Midwest, (b) loss of experienced crew foremen to competitors due to uncompetitive wages, and (c) Ridgepoint Capital Group LP's cost-reduction directives that constrained hiring and subcontractor engagement. Henle

2. NCRs caused by Meridian's own failures. Henley testified that the "majority" of the 43 critical NCRs were caused by inadequate training of subcontractor crews on Northgate's Technical Specification NS-FIBER-2020 and by insufficient field supervision resulting from Meridian's crew reductions — problems squarely within Meridian's control.

3. QC program was understaffed. Meridian deployed only 3 full-time QC inspectors to cover the entire Phase 2 footprint across three states, a level Henley himself described as "inadequate." His requests for additional QC personnel were denied due to budget constraints.

4. Splice loss failures tied to outdated equipment. At least 18 critical splice loss NCRs resulted from Meridian's failure to replace outdated fusion splicing equipment, a failure attributable to Ridgepoint-driven capital expenditure limitations.

5. Defective subcontractor terminated by Meridian. Meridian itself terminated its directional boring subcontractor in the third quarter of 2023 for poor workmanship, effectively conceding that the 11 conduit depth violation NCRs were Contractor-caused.

6. Most critical NCRs unremediated at termination. Approximately 31 of 43 critical NCRs remained unresolved as of the April 1, 2024 termination date. Only approximately 12 had been fully remediated.

7. No written Change Order requests submitted. Meridian did not submit formal written Change Order requests as required by MCA § 16.1 for any of the 14 alleged scope changes, relying instead on purported "verbal approvals" from Sean Calloway.

8. Corrective Action Plan crew commitments were "aspirational." As of the March 5, 2024 submission date, Meridian had not secured firm commitments from the additional subcontractor crews identified in the Corrective Action Plan. Henley characterized the commitments as "aspirational" rather than "firm."

9. Permit delays partly Meridian's fault. Of 847 Phase 2 permit applications tracked in Meridian's own internal permit tracker, 213 were returned by municipalities for incompleteness or errors, causing an average 34-day resubmission delay — delays attributable to Meridian, not NFA.

10. Henley personally believed Meridian could not meet the MS8 schedule. By the time Milestone 6 was completed, Henley personally believed that Milestone 8 was unachievable without significant additional resources that Meridian had not committed and had no realistic plan to obtain.

11. Scope change impact insufficient to explain delays. Even crediting Henley's highest estimate of 60 days of schedule impact from the alleged scope changes, this would not account for the cumulative 315+ days of delay across Phase 2 Milestones 5 through 8.

12. Phase 3 mobilization undermined by the same crew shortages. Meridian completed only 340 of 9,700 planned Phase 3 route miles (3.5%) and lacked a realistic staffing plan for Phase 3 while Phase 2 milestones remained incomplete.

VI. Testimony Potentially Favorable to Meridian (Areas of Concern) While Henley's deposition was overwhelmingly favorable to Northgate's position, the following aspects of his testimony should be flagged as areas of concern that may require attention in subsequent depositions, expert work, and trial preparation:

1. Permitting delays (limited). Henley identified three Connecticut municipalities and two Massachusetts municipalities where he claimed NFA was late in securing right-of-way agreements needed for Meridian's construction activities. While he could not provide detailed supporting information and his own internal permit tracker substantially undermined the broader permitting delay claim, Meridian's counsel will likely

2. Scope changes directed verbally by Sean Calloway. Henley consistently testified that Sean Calloway verbally directed scope changes on at least 9 occasions, including route realignments, conduit specification changes, additional handholes, and one acceleration directive. If this testimony is corroborated by other witnesses or contemporaneous documents (such as emails or text messages between Calloway and Henley), i

3. Characterization of termination as "premature." Henley's statement that he personally believed the termination was "premature" is a lay opinion without legal foundation, and Henley conceded that he was not involved in the legal analysis of material breach. Nonetheless, Meridian's counsel may attempt to introduce this characterization at trial to create an impression that even Meridian's own field operations leader