litigation-hold-ack-ramachandran.docx

1012-00005 · Stonefield Logistics Group · Engagement & Administration

litigation-hold-ack-ramachandran.docx DOCUMENT Litigation

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CALDERWOOD & HARKNESS LLP 200 Park Avenue, 38th Floor New York, New York 10166 Telephone: (212) 555-7800 Facsimile: (212) 555-7801 www.calderwoodharkness.com

LITIGATION HOLD ACKNOWLEDGMENT

Calderwood & Harkness Matter No. 1012-00005 Vantor Holdings Corp. v. Stonefield Logistics Group Inc. Case No. 22-cv-07841 (S.D.N.Y.)

September 6, 2022

TO: Patrick Gallagher, Lead Associate, Litigation (General), Calderwood & Harkness LLP

FROM: Priya Ramachandran, Chief Financial Officer, Stonefield Logistics Group Inc.

RE: Acknowledgment of Litigation Hold — Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.)

I. ACKNOWLEDGMENT OF RECEIPT

I, Priya Ramachandran, hereby acknowledge receipt of the Litigation Hold Memorandum dated September 2, 2022 (the "Memorandum" or "Litigation Hold Memorandum"), prepared and transmitted by Patrick Gallagher of Calderwood & Harkness LLP, counsel to Stonefield Logistics Group Inc. ("SLG" or "Stonefield" or the "Company"). I confirm that I received the Memorandum on or about September 3, 2022, via secure email transmitted to my corporate email address at Stonefield Logistics Group Inc.

I confirm that I have carefully read the Litigation Hold Memorandum in its entirety. I understand the instructions, directives, and obligations set forth therein. I have had the opportunity to review the Memorandum and to seek clarification on any matters that were unclear to me. I acknowledge that the contents of the Memorandum have been explained and that I have no outstanding questions regarding my obligations at this time, though I understand that I may direct any future questions to the individuals identified in Section VIII below.

II. IDENTIFICATION OF THE LITIGATION

I understand that this Litigation Hold Acknowledgment relates to the pending litigation captioned Vantor Holdings Corp. v. Stonefield Logistics Group Inc., filed in the United States District Court for the Southern District of New York, bearing Case No. 22-cv-07841 (the "Litigation" or the "Action").

I understand that the Litigation involves breach-of-contract claims arising out of Stonefield's termination of the Transportation Services Agreement dated March 15, 2019 (TSA Contract Reference No. SLG-VTS-2019-0315) (the "TSA" or the "Transportation Services Agreement"), entered into between Stonefield Logistics Group Inc. (as Shipper-Broker) and Vantor Transport Services LLC (as Carrier-Provider). I further understand that Vantor Holdings Corp., as the parent entity of Vantor Transport Services LLC, filed its original Complaint in the Action on August 12, 2022, alleging, among other things, that Stonefield's termination of the TSA was wrongful, constituted a breach of the contractual obligations thereunder, and caused substantial damages to Vantor and its subsidiaries.

I am aware that Calderwood & Harkness LLP was engaged as lead defense counsel for Stonefield Logistics Group Inc. in connection with the Action, effective September 1, 2022, and that the firm is responsible for coordinating the defense of the Litigation, including all discovery-related obligations and document preservation efforts.

III. UNDERSTANDING OF PRESERVATION OBLIGATIONS

I understand my obligation to preserve all documents, communications, and electronically stored information ("ESI") that may be relevant or potentially relevant to the above-referenced Litigation. I acknowledge that this preservation obligation is immediate, ongoing, and continuous in nature, and that it supersedes any routine document retention, archival, or destruction policies of Stonefield Logistics Group Inc., including but not limited to Stonefield's Corporate Records Management Policy (Rev. August 2021) and any applicable departmental retention schedules maintained by the Finance and Accounting departments.

I understand that the terms "documents" and "ESI," as used in the Litigation Hold Memorandum and in this Acknowledgment, are to be construed broadly and include, but are not limited to, the following categories of materials in any format, whether in final form or draft, and regardless of where they are stored:

(a) Emails: All email communications, whether sent, received, or maintained in draft form, together with all attachments thereto, including emails stored on corporate email servers, archived mailboxes, personal folders, local .pst files, and any email accounts used for Stonefield business purposes;

(b) Electronic files: All electronic documents and files, including word processing documents (Ashbury Holdings Word, Stonefield Health IT, or similar), spreadsheets (Ashbury Holdings Excel, Stonefield Services Inc., or similar), presentations (Ashbury Holdings Northgate Services Inc., Pemberton Services Inc., or similar), databases (Access, SQL-based, or similar), and portable document format files (PDFs), whether stored on local drives, network shared drives, cloud-based storage platforms (including Severin Services Inc., Aldermere Systems, Hollowell Health IT, or Larkspur Technologies), or removable media;

(c) Financial records: All financial records, accounting workpapers, general ledger entries, journal entries, trial balances, consolidation schedules, and audit-related materials, including materials prepared for or shared with the Company's external auditors;

(d) Internal memoranda, reports, and analyses: All internal memoranda, management reports, board reports, analytical work product, summaries, briefing documents, and similar materials, regardless of format;

(e) Calendar entries and scheduling records: All calendar entries, meeting invitations, meeting agendas, scheduling records, and related materials maintained in Hollowell Systems, Brightmoor Services Inc., or similar applications;

(f) Messaging communications: All text messages (SMS and MMS), instant messages (including communications sent or received via Northgate Data Systems, Meridian Solutions, or similar enterprise messaging platforms), and voicemail recordings or transcriptions, whether stored on corporate or personal devices;

(g) Hard-copy documents: All physical documents, including printed correspondence, handwritten notes, legal pads, notebooks, annotated documents, physical files, and file folders; and

(h) Metadata: All metadata associated with any of the foregoing documents and ESI, including but not limited to author information, creation dates, modification dates, access histories, file properties, and routing information.

I understand that this list is illustrative and not exhaustive, and that my preservation obligation extends to any materials that may be relevant to the claims, defenses, or subject matter of the Litigation, even if not specifically enumerated above.

IV. SCOPE OF RELEVANT MATERIALS

I acknowledge that the categories of documents and ESI subject to the preservation obligation, as detailed in the September 2, 2022 Litigation Hold Memorandum, include all materials related to the following subjects, matters, and time periods:

(a) The Transportation Services Agreement dated March 15, 2019 (Contract Reference No. SLG-VTS-2019-0315) between Stonefield Logistics Group Inc. (as Shipper-Broker) and Vantor Transport Services LLC (as Carrier-Provider), including all amendments, addenda, exhibits, schedules, side letters, and related ancillary agreements;

(b) The overall business relationship between Stonefield and Vantor Holdings Corp. and/or Vantor Transport Services LLC ("VTS"), including the origination, negotiation, execution, performance, and termination of the TSA, as well as any prior or subsequent agreements, proposals, or discussions between the parties;

(i) the Cure Notice dated January 18, 2022, issued by Stonefield to VTS;

(ii) VTS's response to the Cure Notice, dated February 14, 2022;

(iii) the formal termination letter dated March 4, 2022, issued by Stonefield to VTS;

(iv) all internal deliberations, analyses, memoranda, and communications relating to the decision to issue the Cure Notice and/or to terminate the TSA; and

(v) any post-termination correspondence between the parties;

(d) Performance metrics and service level obligations ("SLOs") under the TSA, including on-time delivery metrics, damage and loss ratios, fleet availability reports, capacity guarantees, and any performance scorecards, dashboards, or periodic performance reviews relating to VTS's performance;

(e) Financial analyses, budgets, forecasts, or reports relating to the Vantor/VTS relationship, including analyses of revenue, volume tenders, rate structures, rate adjustment proposals, cost projections, lane-level profitability analyses, and carrier cost-comparison studies;

(f) Communications with or regarding Vantor Holdings Corp., Vantor Transport Services LLC, or their officers, directors, employees, and representatives, including but not limited to the following individuals: Nikolai Vantorovich, Gregory Fielding, Sandra Milescu, and Derek Pruitt;

(g) Communications with or regarding alternative carriers used by Stonefield, including Cascade Freight Systems Inc. and Briarwood Trucking Co., to the extent such communications relate to lanes, routes, service areas, or services historically covered by or allocated to VTS under the TSA;

(h) Force majeure notices, declarations, analyses, or related correspondence under the TSA, including specifically any COVID-19-related correspondence, notices, or force majeure claims during the period from approximately April 2020 through September 2020, and any internal analyses of the applicability of the force majeure provisions of the TSA during that period;

(i) Internal discussions, communications, and deliberations concerning the decision to terminate the TSA, the evaluation of VTS's performance under the TSA, and any alternatives to termination that were considered;

(j) Any pre-litigation communications with Ashford Meridian LLP or any other outside counsel regarding the TSA, its interpretation, enforceability, or potential termination, including legal opinions, memoranda, or advice provided to Stonefield;

(k) Board of Directors materials, presentations, reports, or memoranda provided to or shared with Ridgeline Capital Partners, LP, or its representatives (including specifically Alison Trang and Brendan Carey), concerning the Vantor/VTS relationship, the performance of the TSA, the decision to terminate the TSA, or the resulting litigation;

(l) Financial statements (audited and unaudited), revenue data, EBITDA analyses, and other financial information for fiscal periods relevant to the dispute, specifically including fiscal years 2019, 2020, 2021, and 2022 (through the current period), to the extent such information relates to or reflects the Vantor/VTS relationship, the TSA, or the financial impact of termination;

(m) Insurance-related communications, including the directors and officers liability insurance tender to Graymark Insurance Company and any commercial general liability ("CGL") coverage analysis conducted under the Brindoval Mutual Insurance Co. policy, as well as any broker communications, reservation of rights letters, or coverage opinions related to the Litigation;

(n) Notifications to Lakeshore National Bank under the Credit Agreement (Reference No. LNB-SLG-2017-CA-4402), specifically notifications made pursuant to Section 6.03(b) thereof regarding the commencement of the Litigation, and any related correspondence with the Bank's representatives; and

(o) Any documents relating to settlement discussions, demand letters (including the April 8, 2022 demand letter from Vantor Holdings Corp. and the April 29, 2022 response from Stonefield), or executive negotiation sessions conducted or contemplated under Section 16 of the TSA, including any term sheets, proposals, or counterproposals exchanged between the parties.

I acknowledge that the foregoing list of categories is intended to be comprehensive, but that additional categories may be identified as the Litigation progresses. I understand that I will be notified promptly if the scope of the Litigation Hold is expanded, narrowed, or modified in any respect.

V. SPECIFIC ACKNOWLEDGMENTS REGARDING CFO ROLE

I acknowledge that, in my capacity as Chief Financial Officer of Stonefield Logistics Group Inc., I may possess or have access to financial records, analyses, communications, and work product that are particularly relevant to the Litigation. Without limitation, I specifically acknowledge that the following categories of materials may be within my possession, custody, or control, or within the possession, custody, or control of my direct reports or departments under my supervision:

(a) Volume Tender Data: Financial data relating to Stonefield's volume tenders under the TSA, including Contract Year 2 tenders of approximately $31.8 million and Contract Year 3 partial tenders of approximately $36.5 million, together with supporting documentation, calculations, and correspondence regarding such tenders;

(b) Annual Committed Volume Analyses: Analyses of the Annual Committed Volume ("ACV") of $43.2 million per year as specified in the TSA, including any shortfall calculations, variance reports, and reconciliation analyses comparing actual volumes tendered to the ACV threshold, as well as any internal memoranda or communications discussing volume shortfalls or compliance with volume commitments;

(c) Rate Adjustment Analyses: Rate adjustment analyses, models, and supporting documentation, including specifically the projected April 2022 rate increase of approximately 14.3% (reflecting an increase from a weighted average of approximately $2.87 per mile to approximately $3.28 per mile), and the corresponding projected annual cost increase of approximately $6.2 million, together with any financial models, sensitivity analyses, or presentations prepared in connection with the evaluation of the proposed rate adjustment;

(d) Contingent Liability and Audit-Related Materials: Financial reporting and disclosures relating to the Vantor Litigation, including any contingent liability analyses prepared for audit or financial reporting purposes, loss accrual analyses, and related communications and work product prepared in coordination with Clarendon Partners LLP (Robert Farraday, Engagement Partner), Stonefield's independent auditors, including but not limited to any audit inquiry letters, management representation letters, and draft or final disclosures under ASC 450 (formerly SFAS No. 5);

(e) Revenue and EBITDA Data: Revenue data for fiscal year 2021 (approximately $1.42 billion) and fiscal year 2022 (approximately $1.28 billion), and EBITDA data (fiscal year 2022: approximately $118 million), to the extent such data is relevant to the dispute, including segment-level or business-line-level revenue and profitability data attributable to the Vantor/VTS relationship; and

(f) Credit Facility Documentation: Credit facility documentation and communications with Lakeshore National Bank (Catherine Devereaux, Senior Vice President, Loan Administration) relating to the litigation notification required under Section 6.03(b) of the $425 million Senior Secured Credit Facility (Credit Agreement Reference No. LNB-SLG-2017-CA-4402), including any formal notifications, waiver requests, compliance certificates, or correspondence regarding the potential impact of the Litigation on the Company's financial covenants or borrowing capacity.

I understand that my role as Chief Financial Officer places me in a position of heightened responsibility with respect to the preservation of these categories of materials, and I accept that responsibility fully.

VI. COMMITMENT TO COMPLIANCE

In light of the foregoing, I hereby commit to the following actions and undertakings in connection with the Litigation Hold:

(a) Cessation of Destruction: I will immediately cease, and will refrain from undertaking, any destruction, deletion, alteration, modification, overwriting, or disposal of any documents or ESI falling within the scope of the Litigation Hold, whether in hard copy or electronic form, and whether stored on corporate systems, personal devices, or third-party platforms;

(b) Affirmative Preservation Steps: I will take affirmative steps to preserve all responsive documents and ESI in my possession, custody, or control, including but not limited to documents and ESI stored on my corporate laptop computer, corporate desktop computer (if applicable), corporate mobile phone, personal mobile phone or tablet (to the extent any such personal device has been used for Stonefield business communications), corporate email account, network shared drives, cloud-based storage, and any physical files maintained in my office or at any other location;

(c) Notification to Subordinates: I will notify any direct reports or subordinates within the Finance and Accounting departments who may possess or have access to relevant documents or ESI about the existence and requirements of the Litigation Hold, to the extent that I am directed to do so by Calderwood & Harkness LLP or by Stonefield's General Counsel, Tobias Wren. I understand that Calderwood & Harkness LLP may issue separate Litigation Hold Memoranda directly to such individuals, and that my notification obligation is supplementary to, and not a substitute for, any direct notifications issued by counsel;

(d) Notification of Loss or Destruction: I will promptly notify Patrick Gallagher at Calderwood & Harkness LLP or Tobias Wren, General Counsel, if I become aware of any documents or ESI that may have been inadvertently destroyed, lost, altered, or rendered inaccessible, whether before or after the issuance of the Litigation Hold Memorandum, so that appropriate remedial measures may be taken;

(e) Identification of Additional Materials: I will promptly notify Patrick Gallagher or Tobias Wren if I identify any additional categories of potentially relevant documents or ESI not specifically covered by the September 2, 2022 Memorandum, so that the scope of the Litigation Hold may be assessed and, if necessary, expanded to encompass such materials; and

(f) Cooperation with Collection Efforts: I will cooperate fully with Calderwood & Harkness LLP and with Pinnacle Forensics LLC (the firm's eDiscovery vendor retained in connection with this matter, Project ID: PF-SLG-2022-0914) in any document collection, preservation imaging, and review efforts, including but not limited to making myself available for interviews, providing access to relevant systems and devices, and responding promptly to requests for information or clarification.

I understand that compliance with the Litigation Hold is not optional and that each of the foregoing commitments constitutes a material obligation that I am required to fulfill for the duration of the Litigation Hold.

VII. ACKNOWLEDGMENT OF CONSEQUENCES

I understand that failure to comply with the obligations set forth in the Litigation Hold Memorandum and in this Acknowledgment may result in serious adverse consequences, including but not limited to:

(a) Legal Consequences: Adverse legal consequences for Stonefield Logistics Group Inc. in the Litigation, including the potential imposition of sanctions by the Court, adverse inference instructions to the jury, evidentiary preclusion, monetary penalties, default judgment, or other penalties or remedies available under the Federal Rules of Civil Procedure (including Rule 37(e)) and applicable case law; and

(b) Disciplinary Action: Disciplinary action by Stonefield Logistics Group Inc., up to and including termination of employment, in accordance with the Company's policies and applicable law.

I further understand that the Litigation Hold remains in full force and effect until I receive formal written notice from Calderwood & Harkness LLP or from Stonefield's General Counsel, Tobias Wren, that the Litigation Hold has been released, modified, or terminated. I will not assume that the Litigation Hold has been lifted based on the passage of time, the resolution of any particular phase of the Litigation, or any informal communications. Only a formal, written release will terminate my preservation obligations under the Litigation Hold.

VIII. CONTACT INFORMATION FOR QUESTIONS

I understand that any questions regarding the scope, application, or interpretation of the Litigation Hold, or regarding my obligations under this Acknowledgment, should be directed to one or both of the following individuals:

Patrick Gallagher Lead Associate, Litigation (General) Calderwood & Harkness LLP 200 Park Avenue, 38th Floor New York, New York 10166 Telephone: (212) 555-7800

Email: pgallagher@calderwoodharkness.com

Tobias Wren General Counsel Stonefield Logistics Group Inc. 4200 Commerce Parkway, Suite 800 Fort Worth, Texas 76102 Telephone: (817) 555-4200

Email: twren@stonefieldlogistics.com

I will not hesitate to contact either Mr. Gallagher or Mr. Wren if I have any uncertainty regarding whether a particular document or category of documents falls within the scope of the Litigation Hold, or if I encounter any circumstances that may affect my ability to comply with the preservation obligations described herein.

SIGNATURE AND EXECUTION

By signing below, I confirm that I have read this Litigation Hold Acknowledgment in its entirety, that I understand the obligations set forth herein and in the September 2, 2022 Litigation Hold Memorandum, and that I agree to comply fully with all such obligations.

ACKNOWLEDGED AND AGREED:

By: ________

Name: Priya Ramachandran

Title: Chief Financial Officer

Organization: Stonefield Logistics Group Inc.

Address: 4200 Commerce Parkway, Suite 800

Fort Worth, Texas 76102

Date: September 6, 2022

cc:

Tobias Wren, General Counsel, Stonefield Logistics Group Inc.

Samuel Eklund, Responsible Partner, Calderwood & Harkness LLP

File — Matter No. 1012-00005

CALDERWOOD & HARKNESS LLP 200 Park Avenue, 38th Floor New York, New York 10166 Telephone: (212) 555-7800 Facsimile: (212) 555-7801 www.calderwoodharkness.com
LITIGATION HOLD ACKNOWLEDGMENT
Calderwood & Harkness Matter No. 1012-00005 Vantor Holdings Corp. v. Stonefield Logistics Group Inc. Case No. 22-cv-07841 (S.D.N.Y.)
September 6, 2022
TO: Patrick Gallagher, Lead Associate, Litigation (General), Calderwood & Harkness LLP
FROM: Priya Ramachandran, Chief Financial Officer, Stonefield Logistics Group Inc.
RE: Acknowledgment of Litigation Hold — Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.)
I. ACKNOWLEDGMENT OF RECEIPT
I, Priya Ramachandran, hereby acknowledge receipt of the Litigation Hold Memorandum dated September 2, 2022 (the "Memorandum" or "Litigation Hold Memorandum"), prepared and transmitted by Patrick Gallagher of Calderwood & Harkness LLP, counsel to Stonefield Logistics Group Inc. ("SLG" or "Stonefield" or the "Company"). I confirm that I received the Memorandum on or about September 3, 2022, via secure email transmitted to my corporate email address at Stonefield Logistics Group Inc.
I confirm that I have carefully read the Litigation Hold Memorandum in its entirety. I understand the instructions, directives, and obligations set forth therein. I have had the opportunity to review the Memorandum and to seek clarification on any matters that were unclear to me. I acknowledge that the contents of the Memorandum have been explained and that I have no outstanding questions regarding my obligations at this time, though I understand that I may direct any future questions to the individuals identified in Section VIII below.
II. IDENTIFICATION OF THE LITIGATION
I understand that this Litigation Hold Acknowledgment relates to the pending litigation captioned Vantor Holdings Corp. v. Stonefield Logistics Group Inc., filed in the United States District Court for the Southern District of New York, bearing Case No. 22-cv-07841 (the "Litigation" or the "Action").
I understand that the Litigation involves breach-of-contract claims arising out of Stonefield's termination of the Transportation Services Agreement dated March 15, 2019 (TSA Contract Reference No. SLG-VTS-2019-0315) (the "TSA" or the "Transportation Services Agreement"), entered into between Stonefield Logistics Group Inc. (as Shipper-Broker) and Vantor Transport Services LLC (as Carrier-Provider). I further understand that Vantor Holdings Corp., as the parent entity of Vantor Transport Services LLC, filed its original Complaint in the Action on August 12, 2022, alleging, among other things, that Stonefield's termination of the TSA was wrongful, constituted a breach of the contractual obligations thereunder, and caused substantial damages to Vantor and its subsidiaries.
I am aware that Calderwood & Harkness LLP was engaged as lead defense counsel for Stonefield Logistics Group Inc. in connection with the Action, effective September 1, 2022, and that the firm is responsible for coordinating the defense of the Litigation, including all discovery-related obligations and document preservation efforts.
III. UNDERSTANDING OF PRESERVATION OBLIGATIONS
I understand my obligation to preserve all documents, communications, and electronically stored information ("ESI") that may be relevant or potentially relevant to the above-referenced Litigation. I acknowledge that this preservation obligation is immediate, ongoing, and continuous in nature, and that it supersedes any routine document retention, archival, or destruction policies of Stonefield Logistics Group Inc., including but not limited to Stonefield's Corporate Records Management Policy (Rev. August 2021) and any applicable departmental retention schedules maintained by the Finance and Accounting departments.
I understand that the terms "documents" and "ESI," as used in the Litigation Hold Memorandum and in this Acknowledgment, are to be construed broadly and include, but are not limited to, the following categories of materials in any format, whether in final form or draft, and regardless of where they are stored:
(a) Emails: All email communications, whether sent, received, or maintained in draft form, together with all attachments thereto, including emails stored on corporate email servers, archived mailboxes, personal folders, local .pst files, and any email accounts used for Stonefield business purposes;
(b) Electronic files: All electronic documents and files, including word processing documents (Ashbury Holdings Word, Stonefield Health IT, or similar), spreadsheets (Ashbury Holdings Excel, Stonefield Services Inc., or similar), presentations (Ashbury Holdings Northgate Services Inc., Pemberton Services Inc., or similar), databases (Access, SQL-based, or similar), and portable document format files (PDFs), whether stored on local drives, network shared drives, cloud-based storage platforms (including Severin Services Inc., Aldermere Systems, Hollowell Health IT, or Larkspur Technologies), or removable media;
(c) Financial records: All financial records, accounting workpapers, general ledger entries, journal entries, trial balances, consolidation schedules, and audit-related materials, including materials prepared for or shared with the Company's external auditors;
(d) Internal memoranda, reports, and analyses: All internal memoranda, management reports, board reports, analytical work product, summaries, briefing documents, and similar materials, regardless of format;
(e) Calendar entries and scheduling records: All calendar entries, meeting invitations, meeting agendas, scheduling records, and related materials maintained in Hollowell Systems, Brightmoor Services Inc., or similar applications;
(f) Messaging communications: All text messages (SMS and MMS), instant messages (including communications sent or received via Northgate Data Systems, Meridian Solutions, or similar enterprise messaging platforms), and voicemail recordings or transcriptions, whether stored on corporate or personal devices;
(g) Hard-copy documents: All physical documents, including printed correspondence, handwritten notes, legal pads, notebooks, annotated documents, physical files, and file folders; and
(h) Metadata: All metadata associated with any of the foregoing documents and ESI, including but not limited to author information, creation dates, modification dates, access histories, file properties, and routing information.
I understand that this list is illustrative and not exhaustive, and that my preservation obligation extends to any materials that may be relevant to the claims, defenses, or subject matter of the Litigation, even if not specifically enumerated above.
IV. SCOPE OF RELEVANT MATERIALS
I acknowledge that the categories of documents and ESI subject to the preservation obligation, as detailed in the September 2, 2022 Litigation Hold Memorandum, include all materials related to the following subjects, matters, and time periods:
(a) The Transportation Services Agreement dated March 15, 2019 (Contract Reference No. SLG-VTS-2019-0315) between Stonefield Logistics Group Inc. (as Shipper-Broker) and Vantor Transport Services LLC (as Carrier-Provider), including all amendments, addenda, exhibits, schedules, side letters, and related ancillary agreements;
(b) The overall business relationship between Stonefield and Vantor Holdings Corp. and/or Vantor Transport Services LLC ("VTS"), including the origination, negotiation, execution, performance, and termination of the TSA, as well as any prior or subsequent agreements, proposals, or discussions between the parties;
(c) Stonefield's termination of the TSA, including without limitation:
(i) the Cure Notice dated January 18, 2022, issued by Stonefield to VTS;
(ii) VTS's response to the Cure Notice, dated February 14, 2022;
(iii) the formal termination letter dated March 4, 2022, issued by Stonefield to VTS;
(iv) all internal deliberations, analyses, memoranda, and communications relating to the decision to issue the Cure Notice and/or to terminate the TSA; and
(v) any post-termination correspondence between the parties;
(d) Performance metrics and service level obligations ("SLOs") under the TSA, including on-time delivery metrics, damage and loss ratios, fleet availability reports, capacity guarantees, and any performance scorecards, dashboards, or periodic performance reviews relating to VTS's performance;
(e) Financial analyses, budgets, forecasts, or reports relating to the Vantor/VTS relationship, including analyses of revenue, volume tenders, rate structures, rate adjustment proposals, cost projections, lane-level profitability analyses, and carrier cost-comparison studies;
(f) Communications with or regarding Vantor Holdings Corp., Vantor Transport Services LLC, or their officers, directors, employees, and representatives, including but not limited to the following individuals: Nikolai Vantorovich, Gregory Fielding, Sandra Milescu, and Derek Pruitt;
(g) Communications with or regarding alternative carriers used by Stonefield, including Cascade Freight Systems Inc. and Briarwood Trucking Co., to the extent such communications relate to lanes, routes, service areas, or services historically covered by or allocated to VTS under the TSA;
(h) Force majeure notices, declarations, analyses, or related correspondence under the TSA, including specifically any COVID-19-related correspondence, notices, or force majeure claims during the period from approximately April 2020 through September 2020, and any internal analyses of the applicability of the force majeure provisions of the TSA during that period;
(i) Internal discussions, communications, and deliberations concerning the decision to terminate the TSA, the evaluation of VTS's performance under the TSA, and any alternatives to termination that were considered;
(j) Any pre-litigation communications with Ashford Meridian LLP or any other outside counsel regarding the TSA, its interpretation, enforceability, or potential termination, including legal opinions, memoranda, or advice provided to Stonefield;
(k) Board of Directors materials, presentations, reports, or memoranda provided to or shared with Ridgeline Capital Partners, LP, or its representatives (including specifically Alison Trang and Brendan Carey), concerning the Vantor/VTS relationship, the performance of the TSA, the decision to terminate the TSA, or the resulting litigation;
(l) Financial statements (audited and unaudited), revenue data, EBITDA analyses, and other financial information for fiscal periods relevant to the dispute, specifically including fiscal years 2019, 2020, 2021, and 2022 (through the current period), to the extent such information relates to or reflects the Vantor/VTS relationship, the TSA, or the financial impact of termination;
(m) Insurance-related communications, including the directors and officers liability insurance tender to Graymark Insurance Company and any commercial general liability ("CGL") coverage analysis conducted under the Brindoval Mutual Insurance Co. policy, as well as any broker communications, reservation of rights letters, or coverage opinions related to the Litigation;
(n) Notifications to Lakeshore National Bank under the Credit Agreement (Reference No. LNB-SLG-2017-CA-4402), specifically notifications made pursuant to Section 6.03(b) thereof regarding the commencement of the Litigation, and any related correspondence with the Bank's representatives; and
(o) Any documents relating to settlement discussions, demand letters (including the April 8, 2022 demand letter from Vantor Holdings Corp. and the April 29, 2022 response from Stonefield), or executive negotiation sessions conducted or contemplated under Section 16 of the TSA, including any term sheets, proposals, or counterproposals exchanged between the parties.
I acknowledge that the foregoing list of categories is intended to be comprehensive, but that additional categories may be identified as the Litigation progresses. I understand that I will be notified promptly if the scope of the Litigation Hold is expanded, narrowed, or modified in any respect.
V. SPECIFIC ACKNOWLEDGMENTS REGARDING CFO ROLE
I acknowledge that, in my capacity as Chief Financial Officer of Stonefield Logistics Group Inc., I may possess or have access to financial records, analyses, communications, and work product that are particularly relevant to the Litigation. Without limitation, I specifically acknowledge that the following categories of materials may be within my possession, custody, or control, or within the possession, custody, or control of my direct reports or departments under my supervision:
(a) Volume Tender Data: Financial data relating to Stonefield's volume tenders under the TSA, including Contract Year 2 tenders of approximately $31.8 million and Contract Year 3 partial tenders of approximately $36.5 million, together with supporting documentation, calculations, and correspondence regarding such tenders;
(b) Annual Committed Volume Analyses: Analyses of the Annual Committed Volume ("ACV") of $43.2 million per year as specified in the TSA, including any shortfall calculations, variance reports, and reconciliation analyses comparing actual volumes tendered to the ACV threshold, as well as any internal memoranda or communications discussing volume shortfalls or compliance with volume commitments;
(c) Rate Adjustment Analyses: Rate adjustment analyses, models, and supporting documentation, including specifically the projected April 2022 rate increase of approximately 14.3% (reflecting an increase from a weighted average of approximately $2.87 per mile to approximately $3.28 per mile), and the corresponding projected annual cost increase of approximately $6.2 million, together with any financial models, sensitivity analyses, or presentations prepared in connection with the evaluation of the proposed rate adjustment;
(d) Contingent Liability and Audit-Related Materials: Financial reporting and disclosures relating to the Vantor Litigation, including any contingent liability analyses prepared for audit or financial reporting purposes, loss accrual analyses, and related communications and work product prepared in coordination with Clarendon Partners LLP (Robert Farraday, Engagement Partner), Stonefield's independent auditors, including but not limited to any audit inquiry letters, management representation letters, and draft or final disclosures under ASC 450 (formerly SFAS No. 5);
(e) Revenue and EBITDA Data: Revenue data for fiscal year 2021 (approximately $1.42 billion) and fiscal year 2022 (approximately $1.28 billion), and EBITDA data (fiscal year 2022: approximately $118 million), to the extent such data is relevant to the dispute, including segment-level or business-line-level revenue and profitability data attributable to the Vantor/VTS relationship; and
(f) Credit Facility Documentation: Credit facility documentation and communications with Lakeshore National Bank (Catherine Devereaux, Senior Vice President, Loan Administration) relating to the litigation notification required under Section 6.03(b) of the $425 million Senior Secured Credit Facility (Credit Agreement Reference No. LNB-SLG-2017-CA-4402), including any formal notifications, waiver requests, compliance certificates, or correspondence regarding the potential impact of the Litigation on the Company's financial covenants or borrowing capacity.
I understand that my role as Chief Financial Officer places me in a position of heightened responsibility with respect to the preservation of these categories of materials, and I accept that responsibility fully.
VI. COMMITMENT TO COMPLIANCE
In light of the foregoing, I hereby commit to the following actions and undertakings in connection with the Litigation Hold:
(a) Cessation of Destruction: I will immediately cease, and will refrain from undertaking, any destruction, deletion, alteration, modification, overwriting, or disposal of any documents or ESI falling within the scope of the Litigation Hold, whether in hard copy or electronic form, and whether stored on corporate systems, personal devices, or third-party platforms;
(b) Affirmative Preservation Steps: I will take affirmative steps to preserve all responsive documents and ESI in my possession, custody, or control, including but not limited to documents and ESI stored on my corporate laptop computer, corporate desktop computer (if applicable), corporate mobile phone, personal mobile phone or tablet (to the extent any such personal device has been used for Stonefield business communications), corporate email account, network shared drives, cloud-based storage, and any physical files maintained in my office or at any other location;
(c) Notification to Subordinates: I will notify any direct reports or subordinates within the Finance and Accounting departments who may possess or have access to relevant documents or ESI about the existence and requirements of the Litigation Hold, to the extent that I am directed to do so by Calderwood & Harkness LLP or by Stonefield's General Counsel, Tobias Wren. I understand that Calderwood & Harkness LLP may issue separate Litigation Hold Memoranda directly to such individuals, and that my notification obligation is supplementary to, and not a substitute for, any direct notifications issued by counsel;
(d) Notification of Loss or Destruction: I will promptly notify Patrick Gallagher at Calderwood & Harkness LLP or Tobias Wren, General Counsel, if I become aware of any documents or ESI that may have been inadvertently destroyed, lost, altered, or rendered inaccessible, whether before or after the issuance of the Litigation Hold Memorandum, so that appropriate remedial measures may be taken;
(e) Identification of Additional Materials: I will promptly notify Patrick Gallagher or Tobias Wren if I identify any additional categories of potentially relevant documents or ESI not specifically covered by the September 2, 2022 Memorandum, so that the scope of the Litigation Hold may be assessed and, if necessary, expanded to encompass such materials; and
(f) Cooperation with Collection Efforts: I will cooperate fully with Calderwood & Harkness LLP and with Pinnacle Forensics LLC (the firm's eDiscovery vendor retained in connection with this matter, Project ID: PF-SLG-2022-0914) in any document collection, preservation imaging, and review efforts, including but not limited to making myself available for interviews, providing access to relevant systems and devices, and responding promptly to requests for information or clarification.
I understand that compliance with the Litigation Hold is not optional and that each of the foregoing commitments constitutes a material obligation that I am required to fulfill for the duration of the Litigation Hold.
VII. ACKNOWLEDGMENT OF CONSEQUENCES
I understand that failure to comply with the obligations set forth in the Litigation Hold Memorandum and in this Acknowledgment may result in serious adverse consequences, including but not limited to:
(a) Legal Consequences: Adverse legal consequences for Stonefield Logistics Group Inc. in the Litigation, including the potential imposition of sanctions by the Court, adverse inference instructions to the jury, evidentiary preclusion, monetary penalties, default judgment, or other penalties or remedies available under the Federal Rules of Civil Procedure (including Rule 37(e)) and applicable case law; and
(b) Disciplinary Action: Disciplinary action by Stonefield Logistics Group Inc., up to and including termination of employment, in accordance with the Company's policies and applicable law.
I further understand that the Litigation Hold remains in full force and effect until I receive formal written notice from Calderwood & Harkness LLP or from Stonefield's General Counsel, Tobias Wren, that the Litigation Hold has been released, modified, or terminated. I will not assume that the Litigation Hold has been lifted based on the passage of time, the resolution of any particular phase of the Litigation, or any informal communications. Only a formal, written release will terminate my preservation obligations under the Litigation Hold.
VIII. CONTACT INFORMATION FOR QUESTIONS
I understand that any questions regarding the scope, application, or interpretation of the Litigation Hold, or regarding my obligations under this Acknowledgment, should be directed to one or both of the following individuals:
Patrick Gallagher Lead Associate, Litigation (General) Calderwood & Harkness LLP 200 Park Avenue, 38th Floor New York, New York 10166 Telephone: (212) 555-7800
Email: pgallagher@calderwoodharkness.com
Tobias Wren General Counsel Stonefield Logistics Group Inc. 4200 Commerce Parkway, Suite 800 Fort Worth, Texas 76102 Telephone: (817) 555-4200
Email: twren@stonefieldlogistics.com
I will not hesitate to contact either Mr. Gallagher or Mr. Wren if I have any uncertainty regarding whether a particular document or category of documents falls within the scope of the Litigation Hold, or if I encounter any circumstances that may affect my ability to comply with the preservation obligations described herein.
SIGNATURE AND EXECUTION
By signing below, I confirm that I have read this Litigation Hold Acknowledgment in its entirety, that I understand the obligations set forth herein and in the September 2, 2022 Litigation Hold Memorandum, and that I agree to comply fully with all such obligations.
ACKNOWLEDGED AND AGREED:
By: ________
Name: Priya Ramachandran
Title: Chief Financial Officer
Organization: Stonefield Logistics Group Inc.
Address: 4200 Commerce Parkway, Suite 800
Fort Worth, Texas 76102
Date: September 6, 2022
cc:
Tobias Wren, General Counsel, Stonefield Logistics Group Inc.
Samuel Eklund, Responsible Partner, Calderwood & Harkness LLP
File — Matter No. 1012-00005