1012-00005 · Stonefield Logistics Group · Settlement & Negotiation

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PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT DRAFT — NOT FOR DISTRIBUTION

September 1, 2023

DRAFT — SETTLEMENT TERM SHEET

FOR INTERNAL DISCUSSION ONLY

Prepared By: Patrick Gallagher, Lead Associate, Litigation (General), Calderwood & Harkness LLP Matter No.: 1012-00005 Case Reference: Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.) Distribution: Internal only — Samuel Eklund, Linda Osei (Calderwood & Harkness LLP); for review and discussion with client (Tobias Wren, Marcus Denton — Stonefield Logistics Group Inc.) and PE sponsor (Alison Trang — Ridgeline Capital Partners, LP) upon partner approval. Not to be transmitted to opposing party or any third party.

INTRODUCTORY NOTE — INTERNAL COVER MEMORANDUM

September 1, 2023

TO: Samuel Eklund, Partner, Litigation (General)

FROM: Patrick Gallagher, Lead Associate, Litigation (General)

RE: Draft Settlement Term Sheet — Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.) — Matter No. 1012-00005

Sam —

Please find attached a preliminary internal draft settlement term sheet prepared for discussion purposes only. This draft reflects the settlement authority range previously approved by the client and its private equity sponsor — specifically, the range of $0 to $4.5 million authorized pursuant to the Settlement Authority Memorandum dated November 8, 2022, which was subsequently reconfirmed by Ridgeline Capital Partners, LP (Douglas Whitmore and Alison Trang) via email dated November 15, 2022.

This term sheet has not been shared with Vantor Holdings Corp. or its counsel, Caldwell Royce & Shapiro LLP (Harrison Caldwell, lead partner), and should not be transmitted to opposing counsel or any other party outside the firm without your express approval. The document is intended solely as a working framework for internal discussion and, upon your review, for presentation to the client (Tobias Wren, General Counsel, and Marcus Denton, CEO, of Stonefield Logistics Group Inc.) and the PE sponsor (Alison Trang of Ridgeline Capital Partners, LP) to align on settlement posture and parameters should a settlement window open.

As you are aware, opposing counsel at Caldwell Royce & Shapiro LLP signaled openness to resolution discussions during informal exchanges at the most recent status conference. We anticipate a more formal settlement overture from CRS in the near term, particularly given the intelligence we have received suggesting that CRS may be preparing to withdraw from the representation due to a fee dispute and "irreconcilable differences" with Vantorovich and the Vantor board. Such a withdrawal, if it occurs, could materially alter the settlement dynamics in our favor.

Our view is that Stonefield's litigation posture has strengthened considerably following discovery. Several key developments support this assessment:

• The Sandra Milescu email dated September 22, 2021 (Bates No. VTS-00017842), which constitutes a "smoking gun" internal admission by Vantor's own Director of Operations that VTS's fleet compliance rates had fallen below the contractual thresholds for three consecutive quarters and that Vantor leadership was aware of these failures well before Stonefield issued its Cure Notice;

• The deposition admissions of Derek Pruitt (Vantor's VP of Fleet Management), who conceded under examination that VTS failed to achieve the minimum on-time delivery rates specified in Schedule B to the TSA for the periods Q3 2021 and Q4 2021, and that no remediation plan was implemented during the 30-day cure period;

• The fleet redeployment records (Bates Nos. VTS-00023100 through VTS-00023487) demonstrating that Vantor redirected a substantial portion of its dedicated fleet capacity away from the Stonefield account to service a competing contract with Meridian Freight Corp. beginning in August 2021, directly contributing to the service level failures that gave rise to Stonefield's Cure Notice and termination;

• Dr. Evelyn Rosser's rebuttal expert report, served August 25, 2023, which persuasively caps Vantor's maximum damages exposure at $8.2 million under an alternative lost-profits theory — and that figure assumes, arguendo, that the termination was wrongful, which we strongly dispute. Dr. Rosser's analysis adjusts for Vantor's own contributory breaches, its failure to mitigate damages, and applies a market-based calculation methodology that substantially undermines the $95.4 million damages figure advanced by Vantor's expert, Dr. Philip Trask.

The specific settlement amount has been left as $[___] in this draft, pending input from the client and Ridgeline on the precise dollar figure within the authorized range. Our recommendation, which we can discuss further, is that any initial offer should be at or near zero, emphasizing the strength of the Cause defense and Vantor's own first-to-breach conduct, with the understanding that final resolution should not exceed $4.5 million absent further authorization.

As a final note, Ridgeline Capital Partners, LP (which holds approximately 72% of Stonefield's equity through Ridgeline Fund III, LP) continues to prefer an aggressive defense posture. However, Ridgeline has authorized settlement at nuisance and litigation-cost-avoidance levels, recognizing that the total cost of continued defense through summary judgment and potential trial is projected at $5.5 million to $7.2 million, exclusive of the costs already incurred (approximately $4.42 million through projected October 2023 figures). A settlement at $4.5 million or below therefore represents a rational economic outcome relative to continued defense, even under a favorable outcome scenario.

I am available to discuss at your convenience.

— Patrick

DRAFT — SETTLEMENT TERM SHEET

Vantor Holdings Corp. v. Stonefield Logistics Group Inc. Case No. 22-cv-07841 (S.D.N.Y.)

FOR INTERNAL DISCUSSION ONLY — NOT FOR EXTERNAL DISTRIBUTION

SECTION 1: IDENTIFICATION OF PARTIES

1.1 Releasing Parties (Plaintiff Side)

The following individuals and entities shall constitute the "Releasing Parties" for purposes of this Settlement Term Sheet and the definitive Settlement Agreement to be executed by the parties (the "Settlement Agreement"):

(a) Vantor Holdings Corp. ("Vantor"), a corporation organized and existing under the laws of the State of New York, with its principal offices located at 580 Eighth Avenue, 14th Floor, New York, New York 10018;

(b) Vantor Transport Services LLC ("VTS"), a limited liability company organized and existing under the laws of the State of New York, with its sole member being Vantor Holdings Corp., and with its principal offices located at 580 Eighth Avenue, 14th Floor, New York, New York 10018;

(c) Nikolai Vantorovich, individually and in his capacity as Chief Executive Officer and Founder of Vantor Holdings Corp.;

Note to file: Vantorovich is included individually given his approximately 58% personal ownership stake in Vantor Holdings Corp. Including him in his individual capacity ensures a comprehensive release and eliminates the risk of derivative or individual claims being asserted by Vantorovich personally following execution of the Settlement Agreement.

(d) Gregory Fielding, Sandra Milescu, Derek Pruitt, and all other officers, directors, employees, agents, representatives, successors, and assigns of Vantor Holdings Corp. and Vantor Transport Services LLC, whether current or former, in their individual and representative capacities.

1.2 Released Parties (Defendant Side)

The following individuals and entities shall constitute the "Released Parties" for purposes of this Settlement Term Sheet and the Settlement Agreement:

(a) Stonefield Logistics Group Inc. ("Stonefield" or "SLG"), a corporation organized and existing under the laws of the State of Delaware, with its principal offices located at 4200 Commerce Parkway, Suite 800, Fort Worth, Texas 76102, and its registered agent being Capitol Registered Agents LLC, 1209 Orange Street, Wilmington, Delaware 19801;

(b) All current and former officers, directors, employees, agents, and representatives of Stonefield Logistics Group Inc., including without limitation:

(i) Marcus Denton, Chief Executive Officer;

(ii) Priya Ramachandran, Chief Financial Officer;

(iii) Tobias Wren, General Counsel;

(iv) Carlos Medina, Senior Vice President, Operations;

(v) Janet Kirkwood, Vice President, Carrier Relations;

(vi) Raymond Hess, Director, Contract Compliance;

(c) Ridgeline Capital Partners, LP, a limited partnership organized and existing under the laws of the State of Delaware, and Ridgeline Fund III, LP, a limited partnership organized and existing under the laws of the State of Delaware, in their capacities as equity holders of Stonefield Logistics Group Inc., together with their respective general partners, limited partners, officers, directors, employees, agents, and representatives, including without limitation Douglas Whitmore, Alison Trang, and Brendan Carey;

(d) All successors, assigns, parent entities, subsidiaries, and affiliates of each of the foregoing Released Parties.

SECTION 2: RECITALS

2.1 The Underlying Agreement

WHEREAS, Stonefield Logistics Group Inc. and Vantor Transport Services LLC entered into that certain Transportation Services Agreement dated March 15, 2019 (TSA Contract Reference No. SLG-VTS-2019-0315) (the "TSA"), pursuant to which VTS agreed to provide certain dedicated and on-demand transportation and logistics services to Stonefield in exchange for specified service fees and volume commitments;

WHEREAS, the TSA provided for a five-year term commencing on April 1, 2019 and expiring on March 31, 2024, subject to earlier termination as provided therein;

WHEREAS, the TSA was originally drafted by Ashford Meridian LLP on behalf of Stonefield and is governed by the laws of the State of New York, with a forum selection clause designating the United States District Court for the Southern District of New York or the Supreme Court of the State of New York, New York County, as the exclusive forums for resolution of disputes arising under or in connection with the TSA;

WHEREAS, the TSA provided for an annual committed volume ("ACV") of approximately $43.2 million, yielding a total five-year minimum commitment of approximately $216 million, and further imposed Service Level Obligations on VTS as set forth in Schedule B to the TSA, including minimum on-time delivery rates, fleet availability thresholds, and reporting requirements;

2.2 The Termination

WHEREAS, on January 18, 2022, Stonefield issued a Cure Notice to VTS identifying material breaches by VTS of the Service Level Obligations set forth in Schedule B to the TSA during the fourth quarter of 2021 (Q4 2021), including but not limited to sustained failures to achieve minimum on-time delivery rates and fleet availability thresholds, and the failure to provide timely and accurate performance reporting as required under Section 7.3 of the TSA;

WHEREAS, the 30-day cure period specified in Section 13.1(a) of the TSA expired on February 17, 2022, and VTS failed to cure the identified breaches within the cure period or to present a commercially reasonable remediation plan acceptable to Stonefield;

WHEREAS, on March 4, 2022, Stonefield issued a termination letter to VTS, terminating the TSA effective immediately pursuant to Section 13.1(a) of the TSA (Termination for Cause), on the basis of VTS's material, sustained, and uncured breaches of Service Level Obligations;

WHEREAS, at the time of termination, the remaining term of the TSA was approximately two (2) years and twenty-seven (27) days (through March 31, 2024);

2.3 The Litigation

WHEREAS, on August 12, 2022, Vantor Holdings Corp. filed a Complaint against Stonefield Logistics Group Inc. in the United States District Court for the Southern District of New York, which action was assigned Case No. 22-cv-07841 and was assigned to the Honorable Margaret T. Calloway, United States District Judge;

WHEREAS, on December 2, 2022, Vantor filed an Amended Complaint (the "Amended Complaint"), alleging breach of contract and asserting claims for total damages of approximately $95.4 million, comprising the following categories:

(i) Liquidated damages under Section 13.4 of the TSA in the amount of approximately $67.23 million;

(ii) Lost profits in the amount of approximately $18.7 million;

(iii) Stranded assets (equipment, leasehold improvements, and dedicated fleet investments) in the amount of approximately $5.2 million;

(iv) Workforce reduction costs (severance, benefits continuation, and retraining) in the amount of approximately $2.87 million; and

(v) Mitigation costs (costs incurred in seeking replacement business) in the amount of approximately $1.4 million;

WHEREAS, on January 13, 2023, Stonefield filed its Answer to the Amended Complaint, asserting affirmative defenses including but not limited to Vantor's/VTS's own material breach of the TSA, failure to mitigate damages, unclean hands, unenforceability of the liquidated damages clause as a penalty, and the contractual waiver of consequential damages under Section 15.1 of the TSA, together with a Counterclaim for declaratory judgment seeking a declaration that Stonefield's termination of the TSA was valid for Cause under Section 13.1(a);

WHEREAS, the parties have engaged in extensive fact and expert discovery in the Litigation, including the production of documents (Stonefield: 42,387 documents; Vantor: 28,914 documents plus 4,218 supplemental documents produced in response to Stonefield's motion to compel), and the depositions of Derek Pruitt (Vantor VP, Fleet Management), Janet Kirkwood (Stonefield VP, Carrier Relations), Raymond Hess (Stonefield Director, Contract Compliance), Sandra Milescu (Vantor Director, Operations), and Nikolai Vantorovich (CEO, Vantor — deposition partially completed, to be continued);

WHEREAS, Vantor's damages expert, Dr. Philip Trask of Trask Greystone & Associates, served an expert report dated May 15, 2023, opining on Vantor's alleged damages in connection with the termination of the TSA; and Stonefield's rebuttal expert, Dr. Evelyn Rosser of Kensington Analytics Group LLC, served a rebuttal expert report dated August 25, 2023, opining that Vantor's maximum recoverable damages range from $0 (if the termination is determined to have been valid for Cause) to $8.2 million (under an alternative lost-profits theory, assuming arguendo that the termination was wrongful, after adjusting for Vantor's own contributory breaches, failure to mitigate, and applying a market-based damages calculation);

2.4 Denial of Liability

WHEREAS, Stonefield denies all of Vantor's claims and maintains that its termination of the TSA on March 4, 2022 was valid for Cause under Section 13.1(a) of the TSA, based on VTS's sustained, material, and uncured breaches of Service Level Obligations, and that Stonefield has no liability whatsoever to Vantor or VTS in connection with the termination;

WHEREAS, Vantor denies Stonefield's counterclaim, denies that its performance under the TSA constituted a material breach, and denies the validity of Stonefield's affirmative defenses;

WHEREAS, each party desires to resolve the Litigation and all disputes between and among them arising out of or relating to the TSA, the termination thereof, and the Litigation, solely to avoid the burden, expense, distraction, and uncertainty of continued litigation, and not as an admission of liability, wrongdoing, or fault by any party;

NOW, THEREFORE, in consideration of the mutual promises, covenants, and releases set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree to the following terms and conditions:

SECTION 3: SETTLEMENT PAYMENT

3.1 Settlement Amount

Stonefield Logistics Group Inc. shall pay to Vantor Holdings Corp. the aggregate sum of $[___] (the "Settlement Payment"), in full and complete settlement and satisfaction of all claims, counterclaims, demands, causes of action, and disputes between and among the parties arising out of or relating to the TSA, the termination thereof, and the Litigation.

Internal Note to File: The Settlement Payment amount is intentionally left blank pending input from the client (Tobias Wren, Marcus Denton) and Ridgeline Capital Partners (Alison Trang, Douglas Whitmore) on the specific dollar figure within the approved authority range of $0 to $4.5 million. The $4.5 million figure represents the upper end of the nuisance/litigation-cost-avoidance range and was established with reference to the following considerations:

• Total legal spend to date: Stonefield's total Calderwood & Harkness fees incurred through approximately October 2023 are estimated at $3.8 million, plus approximately $620,000 in costs and disbursements (expert fees, court reporter fees, travel, document hosting and review platform costs), for a total of approximately $4.42 million.

• Projected cost of continued litigation: If the case proceeds through summary judgment and potential trial, total legal spend is projected at $5.5 million to $7.2 million (inclusive of costs already incurred), with the range dependent on the scope of any summary judgment briefing, Daubert challenges, trial preparation, and trial duration.

• Cost-avoidance analysis: Settlement at $4.5 million or below represents a rational cost savings relative to the projected cost of continued defense, even assuming a favorable outcome on the merits (i.e., a defense verdict or complete dismissal), because a favorable outcome would still require the expenditure of an additional $1.1 million to $2.8 million in defense costs.

• Maximum exposure: Dr. Rosser's $8.2 million maximum exposure figure represents the worst-case scenario under an alternative lost-profits theory and assumes arguendo that the termination was wrongful. Stonefield's position has strengthened materially through discovery (Milescu email, Pruitt admissions, fleet redeployment records), and actual risk may be meaningfully lower than $8.2 million.

3.2 Payment Terms

The Settlement Payment shall be made by wire transfer of immediately available funds to a bank account designated in writing by Vantor's counsel of record (or by Vantor directly, if Vantor is unrepresented at the time of settlement) within thirty (30) business days following the Effective Date of the Settlement Agreement (the "Payment Deadline").

The Settlement Payment shall be made as a single lump-sum payment. No installment payments, deferred payments, or structured settlement arrangements are contemplated.

In the event that Stonefield fails to make the Settlement Payment within the 30-business-day period specified above, interest shall accrue on the unpaid balance at a rate equal to the federal funds rate as published by the Board of Governors of the Federal Reserve System on the Payment Deadline, plus two percent (2%) per annum, calculated on the basis of a 365-day year and the actual number of days elapsed, commencing on the day immediately following the Payment Deadline and continuing until the Settlement Payment is received in full.

3.3 Tax Treatment

Each party shall be solely responsible for its own tax obligations, if any, arising from or in connection with the Settlement Payment, including but not limited to any federal, state, or local income taxes, payroll taxes, or other taxes or assessments.

Vantor shall provide a completed and duly executed IRS Form W-9 (Request for Taxpayer Identification Number and Certification) to Stonefield or its counsel prior to the disbursement of the Settlement Payment. In the event that Vantor fails to provide a completed Form W-9, or in the event that Stonefield receives any notice from the Internal Revenue Service requiring withholding, Stonefield shall be entitled to withhold from the Settlement Payment such amounts as may be required by applicable law or IRS guidance.

Neither party makes any representation or warranty to the other regarding the tax treatment or tax consequences of the Settlement Payment. Each party agrees to indemnify and hold harmless the other party from any taxes, penalties, or interest assessed against the indemnifying party with respect to its own tax obligations relating to the Settlement Payment.

3.4 Source of Funds

Internal Note to File: The Settlement Payment is expected to be funded from Stonefield's operating funds. No insurance coverage is available for this matter:

• D&O Coverage: Graymark Insurance Company declined coverage under Directors & Officers Liability Policy No. GLG-DO-1025-00008 by coverage denial letter dated October 3, 2022, on the basis that the underlying claims arise from a commercial contract dispute and do not constitute a "Claim" against an "Insured Person" within the meaning of the policy.

• CGL Coverage: Brindoval Mutual Insurance Co. Commercial General Liability Policy No. CGL-SLG-2022-11902 does not provide coverage for breach of contract claims and contains a standard contractual liability exclusion.

Lender Notification Consideration: Counsel and the client should evaluate whether notification to Lakeshore National Bank, N.A. (administrative agent under Stonefield's $425 million senior secured credit facility, Reference No. LNB-SLG-2017-CA-4402) is required in connection with any settlement payment. Under Section 6.03(b) of the Credit Agreement, the notification threshold for litigation matters is $25 million. A settlement within the contemplated $0 to $4.5 million range falls well below this threshold and likely does not trigger additional notification obligations beyond Stonefield's existing quarterly litigation updates. However, Tobias Wren and Priya Ramachandran should confirm this analysis with Lakeshore's relationship manager and, if appropriate, with Stonefield's credit facility counsel at Ashford Meridian LLP.

SECTION 4: MUTUAL GENERAL RELEASE

4.1 Release by Vantor / VTS (Plaintiff Release)

Effective upon the Effective Date, Vantor Holdings Corp., Vantor Transport Services LLC, Nikolai Vantorovich (individually and in his capacity as CEO and Founder of Vantor), and all Releasing Parties as defined in Section 1.1, for themselves and their respective heirs, executors, administrators, successors, and assigns, do hereby fully, finally, unconditionally, and irrevocably release, acquit, and forever discharge Stonefield Logistics Group Inc., all Released Parties as defined in Section 1.2, and their respective successors and assigns, from any and all claims, demands, rights, actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, judgments, extents, executions, obligations, liabilities, damages, losses, costs, and expenses, of whatever kind or nature, whether at law or in equity, whether known or unknown, suspected or unsuspected, contingent or matured, liquidated or unliquidated, direct or derivative, which have existed, do exist, or may hereafter exist, arising out of, relating to, or in any way connected with any of the following:

(a) The Transportation Services Agreement dated March 15, 2019 (TSA Contract Reference No. SLG-VTS-2019-0315), including all schedules, exhibits, amendments, and addenda thereto;

(b) The termination of the TSA by Stonefield's letter dated March 4, 2022, and all events, acts, omissions, and circumstances relating to or leading up to such termination, including without limitation the Cure Notice dated January 18, 2022 and the cure period;

(c) The Litigation styled Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.), including all claims and counterclaims asserted or that could have been asserted therein;

(d) Any and all acts, omissions, transactions, events, circumstances, or occurrences from the inception of the relationship between Stonefield and Vantor/VTS through the Effective Date of the Settlement Agreement, whether or not related to the TSA or the Litigation.

The foregoing release specifically includes, without limitation, all claims asserted or that could have been asserted in the Amended Complaint filed on December 2, 2022, including but not limited to claims for breach of contract, wrongful termination of the TSA, liquidated damages, lost profits, stranded assets, workforce reduction costs, mitigation costs, and any other direct, consequential, incidental, special, exemplary, or punitive damages of any kind.

The foregoing release extends to all claims arising under federal, state, or local statutory, regulatory, or common law, whether at law or in equity, and whether arising under the laws of the State of New York, the State of Delaware, the State of Texas, or any other jurisdiction.

4.2 Release by Stonefield (Defendant Release)

Effective upon the Effective Date, Stonefield Logistics Group Inc. and all Released Parties as defined in Section 1.2, for themselves and their respective successors and assigns, do hereby fully, finally, unconditionally, and irrevocably release, acquit, and forever discharge Vantor Holdings Corp., Vantor Transport Services LLC, Nikolai Vantorovich, and all Releasing Parties as defined in Section 1.1, and their respective heirs, executors, administrators, successors, and assigns, from any and all claims, demands, rights, actions, causes of action, suits, debts, obligations, liabilities, damages, losses, costs, and expenses, of whatever kind or nature, whether at law or in equity, whether known or unknown, suspected or unsuspected, contingent or matured, liquidated or unliquidated, arising out of, relating to, or in any way connected with the same subject matter as identified in Section 4.1 above.

The foregoing release specifically includes, without limitation, the Counterclaim for declaratory judgment asserted by Stonefield in the Answer filed on January 13, 2023, and any and all claims, defenses, or causes of action related to VTS's performance or non-performance under the TSA, including but not limited to any claims for damages arising from VTS's alleged breaches of Service Level Obligations, the alleged diversion of fleet capacity, or any other conduct by Vantor, VTS, or their officers, directors, employees, or agents during the term of the TSA.

4.3 Unknown Claims Waiver

Each party, on behalf of itself and all Releasing Parties or Released Parties (as applicable), expressly waives and relinquishes, to the fullest extent permitted by applicable law, any and all rights and benefits conferred by any statute, rule, regulation, or principle of law of any jurisdiction that provides that a general release does not extend to claims that the releasing party does not know or suspect to exist in his, her, or its favor at the time of executing the release, which, if known or suspected, would have materially affected the releasing party's settlement with the released party.

Each party acknowledges that it may discover facts different from, or in addition to, those that it now knows or believes to be true with respect to the subject matter of the releases contained herein, and each party agrees that the releases set forth in this Section 4 shall remain effective in all respects notwithstanding the discovery of any such different or additional facts.

Carve-Out: Notwithstanding the foregoing, the releases set forth in this Section 4 shall not extend to any rights or obligations arising under the Settlement Agreement itself, including but not limited to the obligation to make the Settlement Payment, the confidentiality obligations set forth in Section 7, and the covenant not to sue set forth in Section 4.4.

4.4 Covenant Not to Sue

Each party, on behalf of itself and all Releasing Parties or Released Parties (as applicable), covenants and agrees that it will not file, commence, prosecute, or participate in (whether individually, as a class member, or otherwise) any action, suit, arbitration, or other proceeding of any kind, in any court, tribunal, or forum, against any released party with respect to any released claim, demand, or cause of action encompassed within the releases set forth in Sections 4.1 and 4.2 above.

In the event that any Releasing Party or Released Party (as applicable) breaches the foregoing covenant not to sue, the breaching party shall indemnify, defend, and hold harmless the non-breaching released party or releasing party (as applicable) from and against any and all costs, fees, expenses, damages, and liabilities (including reasonable attorneys' fees and court costs) incurred by the non-breaching party in connection with the defense or dismissal of any such action, suit, or proceeding, and the non-breaching party shall be entitled to recover such costs and fees from the breaching party in any court of competent jurisdiction.

SECTION 5: DISMISSAL OF LITIGATION

5.1 Stipulation of Dismissal

Within five (5) business days following the confirmed receipt by Vantor (or Vantor's counsel) of the Settlement Payment in full, the parties shall execute and file with the Clerk of Court for the United States District Court for the Southern District of New York a Joint Stipulation of Dismissal (the "Stipulation") dismissing all claims and counterclaims in Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.), with prejudice, with each party bearing its own costs and attorneys' fees.

The Stipulation shall be submitted for approval by the Honorable Margaret T. Calloway, United States District Judge, and the parties shall cooperate in taking all steps necessary or appropriate to effectuate the dismissal, including the execution of any additional documents or filings that may be required by the Court.

5.2 Form of Stipulation

A draft of the Joint Stipulation of Dismissal shall be agreed upon by counsel for both parties (or by Vantor directly, if Vantor is unrepresented at the time of settlement) prior to, or simultaneously with, the execution of the Settlement Agreement. The Stipulation shall provide, in substance, as follows:

"IT IS HEREBY STIPULATED AND AGREED by and between the undersigned parties, through their respective counsel of record, that all claims and counterclaims in the above-captioned action are hereby dismissed with prejudice, without costs or attorneys' fees to any party, pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii)."

The precise form and content of the Stipulation shall be subject to negotiation and mutual agreement, but shall in all events provide for dismissal with prejudice and without costs or fees to any party.

Internal Note: If Vantor remains without counsel at the time of settlement — Caldwell Royce & Shapiro LLP is anticipated to withdraw from the representation, potentially as early as October 2023, based on intelligence regarding a fee dispute and irreconcilable differences between CRS and Vantorovich — the corporate entity Vantor Holdings Corp. will need to retain substitute counsel to execute the Stipulation of Dismissal in federal court. Under settled law in the Second Circuit, a corporation cannot appear pro se in federal court. See Rowland v. Cal. Men's Colony, 506 U.S. 194, 201–02 (1993); Lattanzio v. COMTA, 481 F.3d 137, 140 (2d Cir. 2007). If Vantor fails to retain counsel, the Court may dismiss Vantor's claims for failure to prosecute under Federal Rule of Civil Procedure 41(b), which could eliminate the need for settlement entirely. We should monitor this development closely.

5.3 Court Jurisdiction Retained

The Settlement Agreement shall provide that the United States District Court for the Southern District of New York shall retain jurisdiction over the parties and the subject matter of the Litigation solely for purposes of enforcing the terms of the Settlement Agreement, including without limitation the Settlement Payment, the mutual releases set forth in Section 4, the confidentiality provisions set forth in Section 7, and any other obligations of the parties arising under the Settlement Agreement.

SECTION 6: NO ADMISSION OF LIABILITY

6.1 Express Denial

The Settlement Agreement, the Settlement Payment, and all negotiations, discussions, drafts, term sheets, and communications relating thereto shall not constitute, and shall not be construed or deemed to constitute, an admission of liability, wrongdoing, fault, or the validity or invalidity of any claim, defense, or position by any party.

Stonefield Logistics Group Inc. expressly denies that its termination of the TSA on March 4, 2022 was wrongful or constituted a breach of the TSA, and Stonefield maintains that the termination was valid for Cause under Section 13.1(a) of the TSA based on VTS's material, sustained, and uncured breaches of Service Level Obligations as set forth in Stonefield's Cure Notice dated January 18, 2022, the termination letter dated March 4, 2022, and Stonefield's Answer and Affirmative Defenses filed January 13, 2023. Nothing in the Settlement Agreement shall be construed to alter, modify, or undermine Stonefield's position with respect to the validity of the termination.

Vantor Holdings Corp. expressly denies that VTS's performance under the TSA constituted a material breach of the TSA, denies that Stonefield's termination was valid for Cause, and denies the validity of Stonefield's affirmative defenses and counterclaim. Nothing in the Settlement Agreement shall be construed to alter, modify, or undermine Vantor's position with respect to its claims in the Litigation.

6.2 Inadmissibility. The Settlement Agreement, together with all related negotiations, drafts, term sheets, communications, proposals, and counterproposals exchanged between or among the parties in connection with the settlement of the Litigation, shall be inadmissible in any judicial, administrative, arbitral, or other proceeding for any purpose, whether as evidence of liability, the invalidity of a claim or defense, the amount of damages, or for any other purpose, except solely for the purpose of enforcing the terms and conditions of the Settlement Agreement itself.

The parties acknowledge and agree that this provision is consistent with and is intended to invoke the protections of Federal Rule of Evidence 408 (Compromise Offers and Negotiations) and any analogous state evidentiary rules, including New York Civil Practice Law and Rules Section 4547, and any other applicable evidentiary privilege, protection, or exclusion.

SECTION 7: CONFIDENTIALITY

7.1 Confidentiality of Settlement Terms

All terms and conditions of the Settlement Agreement, including without limitation the Settlement Payment amount and the existence and substance of the settlement negotiations, shall be and remain strictly confidential. No party shall disclose, publish, disseminate, or otherwise communicate any term or condition of the Settlement Agreement to any person or entity other than as expressly permitted in Section 7.2, without the prior written consent of all other parties.

Internal Note: Confidentiality is a high priority for Ridgeline Capital Partners in connection with its broader portfolio considerations. Per the Settlement Authority Memorandum dated November 8, 2022, Ridgeline has identified reputational risk associated with the public disclosure of a settlement of material size, particularly given the potential read-across to other portfolio company litigation and the negative signaling implications for counterparties in future commercial negotiations. We should ensure that the confidentiality provisions in the definitive Settlement Agreement are robust and enforceable.

7.2 Permitted Disclosures

Notwithstanding the provisions of Section 7.1, each party shall be permitted to disclose the terms and conditions of the Settlement Agreement to the following persons and entities, in each case solely on a need-to-know basis and subject to the disclosing party's obligation to inform each such person or entity of the confidential nature of the Settlement Agreement and to use reasonable efforts to ensure compliance with the confidentiality obligations set forth herein:

(a) Each party's officers, directors, employees, attorneys, accountants, auditors, and financial advisors, including without limitation Clarendon Partners LLP, Stonefield's independent auditor (engagement partner: Robert Farraday), for financial reporting, audit disclosure, and internal accounting purposes;

(b) Federal, state, or local tax authorities, as required for tax reporting and compliance purposes;

(c) Any regulatory or governmental body (including the Securities and Exchange Commission), as required by applicable law, regulation, or legal process;

(d) Lakeshore National Bank, N.A., as administrative agent under Stonefield's senior secured credit facility (Reference No. LNB-SLG-2017-CA-4402), to the extent disclosure is required by the Credit Agreement, including without limitation the disclosure obligations set forth in Section 6.03(b) thereof;

(e) Ridgeline Capital Partners, LP, Ridgeline Fund III, LP, and their respective partners, officers, directors, employees, agents, and representatives, in their capacity as equity holders and board members of Stonefield;

(f) As required by court order or subpoena, provided that the disclosing party shall give the non-disclosing party reasonable advance written notice (not less than ten (10) business days, or such shorter period as may be required by the terms of the order or subpoena) and a reasonable opportunity to seek a protective order or other appropriate remedy to limit or prevent disclosure;

(g) In connection with the enforcement of the Settlement Agreement, including in any judicial or other proceeding brought to enforce the terms and conditions thereof.

7.3 Non-Disparagement. Each party agrees that it shall not, and shall cause its officers, directors, employees, agents, and representatives not to, make, publish, or cause to be made or published, any public statement, comment, or communication that disparages, defames, or casts in a negative light the other party or any of its officers, directors, employees, affiliates, or representatives in connection with the TSA, the termination of the TSA, the Litigation, or the settlement thereof.

This non-disparagement obligation shall not restrict or prohibit any party from making truthful statements in response to a lawfully issued subpoena, court order, or governmental or regulatory inquiry or investigation, or from providing truthful testimony in any judicial, arbitral, or administrative proceeding.

7.4 Press / Public Statements

In the event that any party is asked by any member of the press, media, or public about the Litigation or its resolution, the agreed-upon response shall be limited to the following statement, and no additional comment shall be provided:

"The matter has been resolved to the mutual satisfaction of the parties. The terms of the resolution are confidential."

No press release, public announcement, blog post, social media post, or other public communication shall be issued by any party regarding the settlement without the prior written consent of all other parties.

SECTION 8: REPRESENTATIONS AND WARRANTIES

8.1 Authority. Each party represents and warrants to the other party that it has full corporate, partnership, limited liability company, or other entity power and authority to enter into the Settlement Agreement, to perform its obligations thereunder, and to consummate the transactions contemplated thereby. The execution, delivery, and performance of the Settlement Agreement have been duly authorized by all necessary corporate, partnership, limited liability company, or other entity action on the part of each party.

Each individual executing the Settlement Agreement on behalf of a party represents and warrants that he or she is duly authorized to execute and deliver the Settlement Agreement on behalf of such party, and that the Settlement Agreement constitutes the legal, valid, and binding obligation of such party, enforceable against such party in accordance with its terms.

Vantor Holdings Corp. specifically represents and warrants that it is the sole member of Vantor Transport Services LLC and has full authority to bind VTS to the terms and conditions of the Settlement Agreement, including the releases, covenant not to sue, and all other obligations set forth herein.

8.2 No Assignment of Claims

Each party represents and warrants to the other party that it has not assigned, transferred, pledged, hypothecated, or otherwise conveyed or disposed of any of the claims, demands, causes of action, or rights released pursuant to Section 4 to any third party, and that no third party has any interest in or right to any of the released claims.

8.3 Voluntary Execution

Each party represents and warrants that it has read and fully understands the terms and conditions of the Settlement Agreement, that it has had the opportunity to consult with independent legal counsel of its own choosing regarding the meaning, effect, and consequences of the Settlement Agreement, and that it is executing the Settlement Agreement voluntarily, of its own free will, without duress, coercion, undue influence, or misrepresentation.

8.4 No Other Actions

Each party represents and warrants that, as of the Effective Date, it has not filed, commenced, or participated in any other action, suit, proceeding, arbitration, mediation, or other dispute resolution proceeding against the other party (or any released party) arising out of, relating to, or in any way connected with the released claims, other than the Litigation styled Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.).

SECTION 9: GENERAL PROVISIONS

9.1 Governing Law

The Settlement Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York, without giving effect to any choice or conflict of laws provision, principle, or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York. This governing law provision is consistent with, and is intended to be coextensive with, the governing law provision set forth in the TSA.

9.2 Forum. Any dispute, controversy, or claim arising out of, relating to, or in connection with the Settlement Agreement, or the breach, termination, or validity thereof, shall be resolved exclusively in the United States District Court for the Southern District of New York, and each party hereby irrevocably submits to the exclusive jurisdiction of such court for such purposes and waives any objection to venue or any claim of forum non conveniens with respect to any proceeding brought in such court. This forum selection provision is consistent with the forum selection clause in the TSA and with the court in which the Litigation is currently pending.

9.3 Entire Agreement

The Settlement Agreement constitutes the entire agreement between and among the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, representations, understandings, communications, discussions, and agreements, whether written or oral, between or among the parties relating to the subject matter hereof.

The parties acknowledge and agree that the TSA (Contract Reference No. SLG-VTS-2019-0315), which was terminated by Stonefield's termination letter dated March 4, 2022, is terminated and of no further force or effect as between the parties. For the avoidance of doubt, no obligations or rights under the TSA survive the Effective Date of the Settlement Agreement except as expressly set forth in the Settlement Agreement. This provision confirms that no residual or surviving obligations under the TSA (including without limitation any post-termination obligations, indemnification provisions, or intellectual property provisions) shall have any continuing force or effect following the Effective Date of the Settlement Agreement.

9.4 Amendments. No amendment, modification, supplement, or waiver of any provision of the Settlement Agreement shall be effective unless set forth in a written instrument duly executed by all parties to the Settlement Agreement. No oral amendment, modification, or waiver shall be given effect.

9.5 Severability. If any provision of the Settlement Agreement, or the application of any provision to any person, entity, or circumstance, is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of the Settlement Agreement or the application of such provision to other persons, entities, or circumstances, and the remaining provisions of the Settlement Agreement shall remain in full force and effect and shall be construed and enforced as if the invalid, illegal, or unenforceable provision had not been included herein.

9.6 Counterparts. The Settlement Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Execution and delivery of the Settlement Agreement by electronic signature (including signatures transmitted by PDF, facsimile, or Brightwater Software or similar electronic signature platform) shall be deemed to be, and shall have the same force and effect as, execution and delivery of an original signed counterpart.

9.7 Notices. All notices, requests, demands, consents, and other communications required or permitted to be given under the Settlement Agreement shall be in writing and shall be deemed to have been duly given when (i) delivered personally; (ii) sent by nationally recognized overnight courier service (with tracking and confirmation of delivery); or (iii) sent by certified mail, return receipt requested, postage prepaid, addressed as follows:

If to Stonefield Logistics Group Inc.:

Tobias Wren, General Counsel Stonefield Logistics Group Inc. 4200 Commerce Parkway, Suite 800 Fort Worth, Texas 76102

With a copy (which shall not constitute notice) to:

Samuel Eklund, Esq. Calderwood & Harkness LLP 200 Park Avenue, 38th Floor New York, New York 10166

If to Vantor Holdings Corp. or Vantor Transport Services LLC:

[Counsel to be determined — or, if unrepresented:]

Nikolai Vantorovich, Chief Executive Officer Vantor Holdings Corp. 580 Eighth Avenue, 14th Floor New York, New York 10018

With a copy (which shall not constitute notice) to:

[Counsel name and address to be determined]

Any party may change its address for purposes of this Section by giving written notice of such change to the other party in accordance with this Section 9.7.

9.8 Attorneys' Fees and Costs

Each party shall bear its own attorneys' fees, costs, expenses, and disbursements incurred in connection with the Litigation and the negotiation, drafting, and execution of the Settlement Agreement. Neither party shall seek to recover any attorneys' fees, costs, or expenses from the other party, whether by motion, claim, or otherwise, except as expressly provided in Section 4.4 (indemnification for breach of covenant not to sue).

Internal Note: Stonefield's total legal spend through approximately October 2023 is estimated at $4.42 million ($3.8 million in Calderwood & Harkness fees plus approximately $620,000 in costs and disbursements, including expert fees for Dr. Rosser and Kensington Analytics Group, court reporter fees, document review platform costs, and travel). Vantor's estimated legal spend through the same period is approximately $2.1 million, with approximately $870,000 in unpaid invoices to Caldwell Royce & Shapiro LLP (per CRS's anticipated withdrawal motion, which cites a fee dispute as one of the grounds for withdrawal). The fee dispute between Vantor and CRS is a significant factor in the anticipated settlement dynamics.

9.9 No Third-Party Beneficiaries

The Settlement Agreement is intended solely for the benefit of the parties and their respective successors, heirs, executors, administrators, and permitted assigns. Nothing in the Settlement Agreement, express or implied, is intended to or shall confer upon any third party (other than the Released Parties and Releasing Parties, as applicable, who are intended beneficiaries of the releases set forth in Section 4) any right, benefit, remedy, or cause of action of any kind under or by reason of the Settlement Agreement.

9.10 Waiver. The failure of any party to enforce any provision of the Settlement Agreement, or to exercise any right or remedy provided hereunder, shall not constitute a waiver of such provision, right, or remedy, or of any other provision, right, or remedy. No waiver shall be effective unless made in writing and signed by the waiving party. A waiver of any particular breach or default shall not constitute a waiver of any subsequent breach or default.

9.11 Construction. The Settlement Agreement shall be construed neutrally, as a whole, and in accordance with the fair meaning of its terms, without any presumption or rule of construction against the party responsible for drafting any particular provision. The parties acknowledge that each party has had the opportunity to participate in the drafting and negotiation of the Settlement Agreement and that no ambiguity shall be construed against any party on the basis that such party drafted or proposed any particular provision.

SECTION 10: EFFECTIVE DATE

The Settlement Agreement shall become effective upon the date of execution by all parties (the "Effective Date"). In the event the Settlement Agreement is executed in counterparts on different dates, the Effective Date shall be the date on which the last party executes the Settlement Agreement.

The Settlement Payment shall be due and payable within thirty (30) business days following the Effective Date, as more fully set forth in Section 3.2.

The Joint Stipulation of Dismissal shall be executed and filed with the Clerk of Court within five (5) business days following confirmed receipt of the Settlement Payment in full, as more fully set forth in Section 5.1.

SECTION 11: SIGNATURE BLOCKS

IN WITNESS WHEREOF, the undersigned parties have executed this Settlement Agreement as of the Effective Date set forth below.

11.1 Stonefield Logistics Group Inc.

STONEFIELD LOGISTICS GROUP INC.

By: ________

Name: Marcus Denton

Title: Chief Executive Officer

Date: ________

PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT DRAFT — NOT FOR DISTRIBUTION
September 1, 2023
DRAFT — SETTLEMENT TERM SHEET
FOR INTERNAL DISCUSSION ONLY
Prepared By: Patrick Gallagher, Lead Associate, Litigation (General), Calderwood & Harkness LLP Matter No.: 1012-00005 Case Reference: Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.) Distribution: Internal only — Samuel Eklund, Linda Osei (Calderwood & Harkness LLP); for review and discussion with client (Tobias Wren, Marcus Denton — Stonefield Logistics Group Inc.) and PE sponsor (Alison Trang — Ridgeline Capital Partners, LP) upon partner approval. Not to be transmitted to opposing party or any third party.
INTRODUCTORY NOTE — INTERNAL COVER MEMORANDUM
September 1, 2023
TO: Samuel Eklund, Partner, Litigation (General)
FROM: Patrick Gallagher, Lead Associate, Litigation (General)
RE: Draft Settlement Term Sheet — Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.) — Matter No. 1012-00005
Sam —
Please find attached a preliminary internal draft settlement term sheet prepared for discussion purposes only. This draft reflects the settlement authority range previously approved by the client and its private equity sponsor — specifically, the range of $0 to $4.5 million authorized pursuant to the Settlement Authority Memorandum dated November 8, 2022, which was subsequently reconfirmed by Ridgeline Capital Partners, LP (Douglas Whitmore and Alison Trang) via email dated November 15, 2022.
This term sheet has not been shared with Vantor Holdings Corp. or its counsel, Caldwell Royce & Shapiro LLP (Harrison Caldwell, lead partner), and should not be transmitted to opposing counsel or any other party outside the firm without your express approval. The document is intended solely as a working framework for internal discussion and, upon your review, for presentation to the client (Tobias Wren, General Counsel, and Marcus Denton, CEO, of Stonefield Logistics Group Inc.) and the PE sponsor (Alison Trang of Ridgeline Capital Partners, LP) to align on settlement posture and parameters should a settlement window open.
As you are aware, opposing counsel at Caldwell Royce & Shapiro LLP signaled openness to resolution discussions during informal exchanges at the most recent status conference. We anticipate a more formal settlement overture from CRS in the near term, particularly given the intelligence we have received suggesting that CRS may be preparing to withdraw from the representation due to a fee dispute and "irreconcilable differences" with Vantorovich and the Vantor board. Such a withdrawal, if it occurs, could materially alter the settlement dynamics in our favor.
Our view is that Stonefield's litigation posture has strengthened considerably following discovery. Several key developments support this assessment:
•  The Sandra Milescu email dated September 22, 2021 (Bates No. VTS-00017842), which constitutes a "smoking gun" internal admission by Vantor's own Director of Operations that VTS's fleet compliance rates had fallen below the contractual thresholds for three consecutive quarters and that Vantor leadership was aware of these failures well before Stonefield issued its Cure Notice;
•  The deposition admissions of Derek Pruitt (Vantor's VP of Fleet Management), who conceded under examination that VTS failed to achieve the minimum on-time delivery rates specified in Schedule B to the TSA for the periods Q3 2021 and Q4 2021, and that no remediation plan was implemented during the 30-day cure period;
•  The fleet redeployment records (Bates Nos. VTS-00023100 through VTS-00023487) demonstrating that Vantor redirected a substantial portion of its dedicated fleet capacity away from the Stonefield account to service a competing contract with Meridian Freight Corp. beginning in August 2021, directly contributing to the service level failures that gave rise to Stonefield's Cure Notice and termination;
•  Dr. Evelyn Rosser's rebuttal expert report, served August 25, 2023, which persuasively caps Vantor's maximum damages exposure at $8.2 million under an alternative lost-profits theory — and that figure assumes, arguendo, that the termination was wrongful, which we strongly dispute. Dr. Rosser's analysis adjusts for Vantor's own contributory breaches, its failure to mitigate damages, and applies a market-based calculation methodology that substantially undermines the $95.4 million damages figure advanced by Vantor's expert, Dr. Philip Trask.
The specific settlement amount has been left as $[___] in this draft, pending input from the client and Ridgeline on the precise dollar figure within the authorized range. Our recommendation, which we can discuss further, is that any initial offer should be at or near zero, emphasizing the strength of the Cause defense and Vantor's own first-to-breach conduct, with the understanding that final resolution should not exceed $4.5 million absent further authorization.
As a final note, Ridgeline Capital Partners, LP (which holds approximately 72% of Stonefield's equity through Ridgeline Fund III, LP) continues to prefer an aggressive defense posture. However, Ridgeline has authorized settlement at nuisance and litigation-cost-avoidance levels, recognizing that the total cost of continued defense through summary judgment and potential trial is projected at $5.5 million to $7.2 million, exclusive of the costs already incurred (approximately $4.42 million through projected October 2023 figures). A settlement at $4.5 million or below therefore represents a rational economic outcome relative to continued defense, even under a favorable outcome scenario.
I am available to discuss at your convenience.
— Patrick
DRAFT — SETTLEMENT TERM SHEET
Vantor Holdings Corp. v. Stonefield Logistics Group Inc. Case No. 22-cv-07841 (S.D.N.Y.)
FOR INTERNAL DISCUSSION ONLY — NOT FOR EXTERNAL DISTRIBUTION
SECTION 1: IDENTIFICATION OF PARTIES
1.1 Releasing Parties (Plaintiff Side)
The following individuals and entities shall constitute the "Releasing Parties" for purposes of this Settlement Term Sheet and the definitive Settlement Agreement to be executed by the parties (the "Settlement Agreement"):
(a) Vantor Holdings Corp. ("Vantor"), a corporation organized and existing under the laws of the State of New York, with its principal offices located at 580 Eighth Avenue, 14th Floor, New York, New York 10018;
(b) Vantor Transport Services LLC ("VTS"), a limited liability company organized and existing under the laws of the State of New York, with its sole member being Vantor Holdings Corp., and with its principal offices located at 580 Eighth Avenue, 14th Floor, New York, New York 10018;
(c) Nikolai Vantorovich, individually and in his capacity as Chief Executive Officer and Founder of Vantor Holdings Corp.;
Note to file: Vantorovich is included individually given his approximately 58% personal ownership stake in Vantor Holdings Corp. Including him in his individual capacity ensures a comprehensive release and eliminates the risk of derivative or individual claims being asserted by Vantorovich personally following execution of the Settlement Agreement.
(d) Gregory Fielding, Sandra Milescu, Derek Pruitt, and all other officers, directors, employees, agents, representatives, successors, and assigns of Vantor Holdings Corp. and Vantor Transport Services LLC, whether current or former, in their individual and representative capacities.
1.2 Released Parties (Defendant Side)
The following individuals and entities shall constitute the "Released Parties" for purposes of this Settlement Term Sheet and the Settlement Agreement:
(a) Stonefield Logistics Group Inc. ("Stonefield" or "SLG"), a corporation organized and existing under the laws of the State of Delaware, with its principal offices located at 4200 Commerce Parkway, Suite 800, Fort Worth, Texas 76102, and its registered agent being Capitol Registered Agents LLC, 1209 Orange Street, Wilmington, Delaware 19801;
(b) All current and former officers, directors, employees, agents, and representatives of Stonefield Logistics Group Inc., including without limitation:
(i) Marcus Denton, Chief Executive Officer;
(ii) Priya Ramachandran, Chief Financial Officer;
(iii) Tobias Wren, General Counsel;
(iv) Carlos Medina, Senior Vice President, Operations;
(v) Janet Kirkwood, Vice President, Carrier Relations;
(vi) Raymond Hess, Director, Contract Compliance;
(c) Ridgeline Capital Partners, LP, a limited partnership organized and existing under the laws of the State of Delaware, and Ridgeline Fund III, LP, a limited partnership organized and existing under the laws of the State of Delaware, in their capacities as equity holders of Stonefield Logistics Group Inc., together with their respective general partners, limited partners, officers, directors, employees, agents, and representatives, including without limitation Douglas Whitmore, Alison Trang, and Brendan Carey;
(d) All successors, assigns, parent entities, subsidiaries, and affiliates of each of the foregoing Released Parties.
SECTION 2: RECITALS
2.1 The Underlying Agreement
WHEREAS, Stonefield Logistics Group Inc. and Vantor Transport Services LLC entered into that certain Transportation Services Agreement dated March 15, 2019 (TSA Contract Reference No. SLG-VTS-2019-0315) (the "TSA"), pursuant to which VTS agreed to provide certain dedicated and on-demand transportation and logistics services to Stonefield in exchange for specified service fees and volume commitments;
WHEREAS, the TSA provided for a five-year term commencing on April 1, 2019 and expiring on March 31, 2024, subject to earlier termination as provided therein;
WHEREAS, the TSA was originally drafted by Ashford Meridian LLP on behalf of Stonefield and is governed by the laws of the State of New York, with a forum selection clause designating the United States District Court for the Southern District of New York or the Supreme Court of the State of New York, New York County, as the exclusive forums for resolution of disputes arising under or in connection with the TSA;
WHEREAS, the TSA provided for an annual committed volume ("ACV") of approximately $43.2 million, yielding a total five-year minimum commitment of approximately $216 million, and further imposed Service Level Obligations on VTS as set forth in Schedule B to the TSA, including minimum on-time delivery rates, fleet availability thresholds, and reporting requirements;
2.2 The Termination
WHEREAS, on January 18, 2022, Stonefield issued a Cure Notice to VTS identifying material breaches by VTS of the Service Level Obligations set forth in Schedule B to the TSA during the fourth quarter of 2021 (Q4 2021), including but not limited to sustained failures to achieve minimum on-time delivery rates and fleet availability thresholds, and the failure to provide timely and accurate performance reporting as required under Section 7.3 of the TSA;
WHEREAS, the 30-day cure period specified in Section 13.1(a) of the TSA expired on February 17, 2022, and VTS failed to cure the identified breaches within the cure period or to present a commercially reasonable remediation plan acceptable to Stonefield;
WHEREAS, on March 4, 2022, Stonefield issued a termination letter to VTS, terminating the TSA effective immediately pursuant to Section 13.1(a) of the TSA (Termination for Cause), on the basis of VTS's material, sustained, and uncured breaches of Service Level Obligations;
WHEREAS, at the time of termination, the remaining term of the TSA was approximately two (2) years and twenty-seven (27) days (through March 31, 2024);
2.3 The Litigation
WHEREAS, on August 12, 2022, Vantor Holdings Corp. filed a Complaint against Stonefield Logistics Group Inc. in the United States District Court for the Southern District of New York, which action was assigned Case No. 22-cv-07841 and was assigned to the Honorable Margaret T. Calloway, United States District Judge;
WHEREAS, on December 2, 2022, Vantor filed an Amended Complaint (the "Amended Complaint"), alleging breach of contract and asserting claims for total damages of approximately $95.4 million, comprising the following categories:
(i) Liquidated damages under Section 13.4 of the TSA in the amount of approximately $67.23 million;
(ii) Lost profits in the amount of approximately $18.7 million;
(iii) Stranded assets (equipment, leasehold improvements, and dedicated fleet investments) in the amount of approximately $5.2 million;
(iv) Workforce reduction costs (severance, benefits continuation, and retraining) in the amount of approximately $2.87 million; and
(v) Mitigation costs (costs incurred in seeking replacement business) in the amount of approximately $1.4 million;
WHEREAS, on January 13, 2023, Stonefield filed its Answer to the Amended Complaint, asserting affirmative defenses including but not limited to Vantor's/VTS's own material breach of the TSA, failure to mitigate damages, unclean hands, unenforceability of the liquidated damages clause as a penalty, and the contractual waiver of consequential damages under Section 15.1 of the TSA, together with a Counterclaim for declaratory judgment seeking a declaration that Stonefield's termination of the TSA was valid for Cause under Section 13.1(a);
WHEREAS, the parties have engaged in extensive fact and expert discovery in the Litigation, including the production of documents (Stonefield: 42,387 documents; Vantor: 28,914 documents plus 4,218 supplemental documents produced in response to Stonefield's motion to compel), and the depositions of Derek Pruitt (Vantor VP, Fleet Management), Janet Kirkwood (Stonefield VP, Carrier Relations), Raymond Hess (Stonefield Director, Contract Compliance), Sandra Milescu (Vantor Director, Operations), and Nikolai Vantorovich (CEO, Vantor — deposition partially completed, to be continued);
WHEREAS, Vantor's damages expert, Dr. Philip Trask of Trask Greystone & Associates, served an expert report dated May 15, 2023, opining on Vantor's alleged damages in connection with the termination of the TSA; and Stonefield's rebuttal expert, Dr. Evelyn Rosser of Kensington Analytics Group LLC, served a rebuttal expert report dated August 25, 2023, opining that Vantor's maximum recoverable damages range from $0 (if the termination is determined to have been valid for Cause) to $8.2 million (under an alternative lost-profits theory, assuming arguendo that the termination was wrongful, after adjusting for Vantor's own contributory breaches, failure to mitigate, and applying a market-based damages calculation);
2.4 Denial of Liability
WHEREAS, Stonefield denies all of Vantor's claims and maintains that its termination of the TSA on March 4, 2022 was valid for Cause under Section 13.1(a) of the TSA, based on VTS's sustained, material, and uncured breaches of Service Level Obligations, and that Stonefield has no liability whatsoever to Vantor or VTS in connection with the termination;
WHEREAS, Vantor denies Stonefield's counterclaim, denies that its performance under the TSA constituted a material breach, and denies the validity of Stonefield's affirmative defenses;
WHEREAS, each party desires to resolve the Litigation and all disputes between and among them arising out of or relating to the TSA, the termination thereof, and the Litigation, solely to avoid the burden, expense, distraction, and uncertainty of continued litigation, and not as an admission of liability, wrongdoing, or fault by any party;
NOW, THEREFORE, in consideration of the mutual promises, covenants, and releases set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree to the following terms and conditions:
SECTION 3: SETTLEMENT PAYMENT
3.1 Settlement Amount
Stonefield Logistics Group Inc. shall pay to Vantor Holdings Corp. the aggregate sum of $[___] (the "Settlement Payment"), in full and complete settlement and satisfaction of all claims, counterclaims, demands, causes of action, and disputes between and among the parties arising out of or relating to the TSA, the termination thereof, and the Litigation.
Internal Note to File: The Settlement Payment amount is intentionally left blank pending input from the client (Tobias Wren, Marcus Denton) and Ridgeline Capital Partners (Alison Trang, Douglas Whitmore) on the specific dollar figure within the approved authority range of $0 to $4.5 million. The $4.5 million figure represents the upper end of the nuisance/litigation-cost-avoidance range and was established with reference to the following considerations:
•  Total legal spend to date: Stonefield's total Calderwood & Harkness fees incurred through approximately October 2023 are estimated at $3.8 million, plus approximately $620,000 in costs and disbursements (expert fees, court reporter fees, travel, document hosting and review platform costs), for a total of approximately $4.42 million.
•  Projected cost of continued litigation: If the case proceeds through summary judgment and potential trial, total legal spend is projected at $5.5 million to $7.2 million (inclusive of costs already incurred), with the range dependent on the scope of any summary judgment briefing, Daubert challenges, trial preparation, and trial duration.
•  Cost-avoidance analysis: Settlement at $4.5 million or below represents a rational cost savings relative to the projected cost of continued defense, even assuming a favorable outcome on the merits (i.e., a defense verdict or complete dismissal), because a favorable outcome would still require the expenditure of an additional $1.1 million to $2.8 million in defense costs.
•  Maximum exposure: Dr. Rosser's $8.2 million maximum exposure figure represents the worst-case scenario under an alternative lost-profits theory and assumes arguendo that the termination was wrongful. Stonefield's position has strengthened materially through discovery (Milescu email, Pruitt admissions, fleet redeployment records), and actual risk may be meaningfully lower than $8.2 million.
3.2 Payment Terms
The Settlement Payment shall be made by wire transfer of immediately available funds to a bank account designated in writing by Vantor's counsel of record (or by Vantor directly, if Vantor is unrepresented at the time of settlement) within thirty (30) business days following the Effective Date of the Settlement Agreement (the "Payment Deadline").
The Settlement Payment shall be made as a single lump-sum payment. No installment payments, deferred payments, or structured settlement arrangements are contemplated.
In the event that Stonefield fails to make the Settlement Payment within the 30-business-day period specified above, interest shall accrue on the unpaid balance at a rate equal to the federal funds rate as published by the Board of Governors of the Federal Reserve System on the Payment Deadline, plus two percent (2%) per annum, calculated on the basis of a 365-day year and the actual number of days elapsed, commencing on the day immediately following the Payment Deadline and continuing until the Settlement Payment is received in full.
3.3 Tax Treatment
Each party shall be solely responsible for its own tax obligations, if any, arising from or in connection with the Settlement Payment, including but not limited to any federal, state, or local income taxes, payroll taxes, or other taxes or assessments.
Vantor shall provide a completed and duly executed IRS Form W-9 (Request for Taxpayer Identification Number and Certification) to Stonefield or its counsel prior to the disbursement of the Settlement Payment. In the event that Vantor fails to provide a completed Form W-9, or in the event that Stonefield receives any notice from the Internal Revenue Service requiring withholding, Stonefield shall be entitled to withhold from the Settlement Payment such amounts as may be required by applicable law or IRS guidance.
Neither party makes any representation or warranty to the other regarding the tax treatment or tax consequences of the Settlement Payment. Each party agrees to indemnify and hold harmless the other party from any taxes, penalties, or interest assessed against the indemnifying party with respect to its own tax obligations relating to the Settlement Payment.
3.4 Source of Funds
Internal Note to File: The Settlement Payment is expected to be funded from Stonefield's operating funds. No insurance coverage is available for this matter:
•  D&O Coverage: Graymark Insurance Company declined coverage under Directors & Officers Liability Policy No. GLG-DO-1025-00008 by coverage denial letter dated October 3, 2022, on the basis that the underlying claims arise from a commercial contract dispute and do not constitute a "Claim" against an "Insured Person" within the meaning of the policy.
•  CGL Coverage: Brindoval Mutual Insurance Co. Commercial General Liability Policy No. CGL-SLG-2022-11902 does not provide coverage for breach of contract claims and contains a standard contractual liability exclusion.
Lender Notification Consideration: Counsel and the client should evaluate whether notification to Lakeshore National Bank, N.A. (administrative agent under Stonefield's $425 million senior secured credit facility, Reference No. LNB-SLG-2017-CA-4402) is required in connection with any settlement payment. Under Section 6.03(b) of the Credit Agreement, the notification threshold for litigation matters is $25 million. A settlement within the contemplated $0 to $4.5 million range falls well below this threshold and likely does not trigger additional notification obligations beyond Stonefield's existing quarterly litigation updates. However, Tobias Wren and Priya Ramachandran should confirm this analysis with Lakeshore's relationship manager and, if appropriate, with Stonefield's credit facility counsel at Ashford Meridian LLP.
SECTION 4: MUTUAL GENERAL RELEASE
4.1 Release by Vantor / VTS (Plaintiff Release)
Effective upon the Effective Date, Vantor Holdings Corp., Vantor Transport Services LLC, Nikolai Vantorovich (individually and in his capacity as CEO and Founder of Vantor), and all Releasing Parties as defined in Section 1.1, for themselves and their respective heirs, executors, administrators, successors, and assigns, do hereby fully, finally, unconditionally, and irrevocably release, acquit, and forever discharge Stonefield Logistics Group Inc., all Released Parties as defined in Section 1.2, and their respective successors and assigns, from any and all claims, demands, rights, actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, judgments, extents, executions, obligations, liabilities, damages, losses, costs, and expenses, of whatever kind or nature, whether at law or in equity, whether known or unknown, suspected or unsuspected, contingent or matured, liquidated or unliquidated, direct or derivative, which have existed, do exist, or may hereafter exist, arising out of, relating to, or in any way connected with any of the following:
(a) The Transportation Services Agreement dated March 15, 2019 (TSA Contract Reference No. SLG-VTS-2019-0315), including all schedules, exhibits, amendments, and addenda thereto;
(b) The termination of the TSA by Stonefield's letter dated March 4, 2022, and all events, acts, omissions, and circumstances relating to or leading up to such termination, including without limitation the Cure Notice dated January 18, 2022 and the cure period;
(c) The Litigation styled Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.), including all claims and counterclaims asserted or that could have been asserted therein;
(d) Any and all acts, omissions, transactions, events, circumstances, or occurrences from the inception of the relationship between Stonefield and Vantor/VTS through the Effective Date of the Settlement Agreement, whether or not related to the TSA or the Litigation.
The foregoing release specifically includes, without limitation, all claims asserted or that could have been asserted in the Amended Complaint filed on December 2, 2022, including but not limited to claims for breach of contract, wrongful termination of the TSA, liquidated damages, lost profits, stranded assets, workforce reduction costs, mitigation costs, and any other direct, consequential, incidental, special, exemplary, or punitive damages of any kind.
The foregoing release extends to all claims arising under federal, state, or local statutory, regulatory, or common law, whether at law or in equity, and whether arising under the laws of the State of New York, the State of Delaware, the State of Texas, or any other jurisdiction.
4.2 Release by Stonefield (Defendant Release)
Effective upon the Effective Date, Stonefield Logistics Group Inc. and all Released Parties as defined in Section 1.2, for themselves and their respective successors and assigns, do hereby fully, finally, unconditionally, and irrevocably release, acquit, and forever discharge Vantor Holdings Corp., Vantor Transport Services LLC, Nikolai Vantorovich, and all Releasing Parties as defined in Section 1.1, and their respective heirs, executors, administrators, successors, and assigns, from any and all claims, demands, rights, actions, causes of action, suits, debts, obligations, liabilities, damages, losses, costs, and expenses, of whatever kind or nature, whether at law or in equity, whether known or unknown, suspected or unsuspected, contingent or matured, liquidated or unliquidated, arising out of, relating to, or in any way connected with the same subject matter as identified in Section 4.1 above.
The foregoing release specifically includes, without limitation, the Counterclaim for declaratory judgment asserted by Stonefield in the Answer filed on January 13, 2023, and any and all claims, defenses, or causes of action related to VTS's performance or non-performance under the TSA, including but not limited to any claims for damages arising from VTS's alleged breaches of Service Level Obligations, the alleged diversion of fleet capacity, or any other conduct by Vantor, VTS, or their officers, directors, employees, or agents during the term of the TSA.
4.3 Unknown Claims Waiver
Each party, on behalf of itself and all Releasing Parties or Released Parties (as applicable), expressly waives and relinquishes, to the fullest extent permitted by applicable law, any and all rights and benefits conferred by any statute, rule, regulation, or principle of law of any jurisdiction that provides that a general release does not extend to claims that the releasing party does not know or suspect to exist in his, her, or its favor at the time of executing the release, which, if known or suspected, would have materially affected the releasing party's settlement with the released party.
Each party acknowledges that it may discover facts different from, or in addition to, those that it now knows or believes to be true with respect to the subject matter of the releases contained herein, and each party agrees that the releases set forth in this Section 4 shall remain effective in all respects notwithstanding the discovery of any such different or additional facts.
Carve-Out: Notwithstanding the foregoing, the releases set forth in this Section 4 shall not extend to any rights or obligations arising under the Settlement Agreement itself, including but not limited to the obligation to make the Settlement Payment, the confidentiality obligations set forth in Section 7, and the covenant not to sue set forth in Section 4.4.
4.4 Covenant Not to Sue
Each party, on behalf of itself and all Releasing Parties or Released Parties (as applicable), covenants and agrees that it will not file, commence, prosecute, or participate in (whether individually, as a class member, or otherwise) any action, suit, arbitration, or other proceeding of any kind, in any court, tribunal, or forum, against any released party with respect to any released claim, demand, or cause of action encompassed within the releases set forth in Sections 4.1 and 4.2 above.
In the event that any Releasing Party or Released Party (as applicable) breaches the foregoing covenant not to sue, the breaching party shall indemnify, defend, and hold harmless the non-breaching released party or releasing party (as applicable) from and against any and all costs, fees, expenses, damages, and liabilities (including reasonable attorneys' fees and court costs) incurred by the non-breaching party in connection with the defense or dismissal of any such action, suit, or proceeding, and the non-breaching party shall be entitled to recover such costs and fees from the breaching party in any court of competent jurisdiction.
SECTION 5: DISMISSAL OF LITIGATION
5.1 Stipulation of Dismissal
Within five (5) business days following the confirmed receipt by Vantor (or Vantor's counsel) of the Settlement Payment in full, the parties shall execute and file with the Clerk of Court for the United States District Court for the Southern District of New York a Joint Stipulation of Dismissal (the "Stipulation") dismissing all claims and counterclaims in Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.), with prejudice, with each party bearing its own costs and attorneys' fees.
The Stipulation shall be submitted for approval by the Honorable Margaret T. Calloway, United States District Judge, and the parties shall cooperate in taking all steps necessary or appropriate to effectuate the dismissal, including the execution of any additional documents or filings that may be required by the Court.
5.2 Form of Stipulation
A draft of the Joint Stipulation of Dismissal shall be agreed upon by counsel for both parties (or by Vantor directly, if Vantor is unrepresented at the time of settlement) prior to, or simultaneously with, the execution of the Settlement Agreement. The Stipulation shall provide, in substance, as follows:
"IT IS HEREBY STIPULATED AND AGREED by and between the undersigned parties, through their respective counsel of record, that all claims and counterclaims in the above-captioned action are hereby dismissed with prejudice, without costs or attorneys' fees to any party, pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii)."
The precise form and content of the Stipulation shall be subject to negotiation and mutual agreement, but shall in all events provide for dismissal with prejudice and without costs or fees to any party.
Internal Note: If Vantor remains without counsel at the time of settlement — Caldwell Royce & Shapiro LLP is anticipated to withdraw from the representation, potentially as early as October 2023, based on intelligence regarding a fee dispute and irreconcilable differences between CRS and Vantorovich — the corporate entity Vantor Holdings Corp. will need to retain substitute counsel to execute the Stipulation of Dismissal in federal court. Under settled law in the Second Circuit, a corporation cannot appear pro se in federal court. See Rowland v. Cal. Men's Colony, 506 U.S. 194, 201–02 (1993); Lattanzio v. COMTA, 481 F.3d 137, 140 (2d Cir. 2007). If Vantor fails to retain counsel, the Court may dismiss Vantor's claims for failure to prosecute under Federal Rule of Civil Procedure 41(b), which could eliminate the need for settlement entirely. We should monitor this development closely.
5.3 Court Jurisdiction Retained
The Settlement Agreement shall provide that the United States District Court for the Southern District of New York shall retain jurisdiction over the parties and the subject matter of the Litigation solely for purposes of enforcing the terms of the Settlement Agreement, including without limitation the Settlement Payment, the mutual releases set forth in Section 4, the confidentiality provisions set forth in Section 7, and any other obligations of the parties arising under the Settlement Agreement.
SECTION 6: NO ADMISSION OF LIABILITY
6.1 Express Denial
The Settlement Agreement, the Settlement Payment, and all negotiations, discussions, drafts, term sheets, and communications relating thereto shall not constitute, and shall not be construed or deemed to constitute, an admission of liability, wrongdoing, fault, or the validity or invalidity of any claim, defense, or position by any party.
Stonefield Logistics Group Inc. expressly denies that its termination of the TSA on March 4, 2022 was wrongful or constituted a breach of the TSA, and Stonefield maintains that the termination was valid for Cause under Section 13.1(a) of the TSA based on VTS's material, sustained, and uncured breaches of Service Level Obligations as set forth in Stonefield's Cure Notice dated January 18, 2022, the termination letter dated March 4, 2022, and Stonefield's Answer and Affirmative Defenses filed January 13, 2023. Nothing in the Settlement Agreement shall be construed to alter, modify, or undermine Stonefield's position with respect to the validity of the termination.
Vantor Holdings Corp. expressly denies that VTS's performance under the TSA constituted a material breach of the TSA, denies that Stonefield's termination was valid for Cause, and denies the validity of Stonefield's affirmative defenses and counterclaim. Nothing in the Settlement Agreement shall be construed to alter, modify, or undermine Vantor's position with respect to its claims in the Litigation.
6.2 Inadmissibility.  The Settlement Agreement, together with all related negotiations, drafts, term sheets, communications, proposals, and counterproposals exchanged between or among the parties in connection with the settlement of the Litigation, shall be inadmissible in any judicial, administrative, arbitral, or other proceeding for any purpose, whether as evidence of liability, the invalidity of a claim or defense, the amount of damages, or for any other purpose, except solely for the purpose of enforcing the terms and conditions of the Settlement Agreement itself.
The parties acknowledge and agree that this provision is consistent with and is intended to invoke the protections of Federal Rule of Evidence 408 (Compromise Offers and Negotiations) and any analogous state evidentiary rules, including New York Civil Practice Law and Rules Section 4547, and any other applicable evidentiary privilege, protection, or exclusion.
SECTION 7: CONFIDENTIALITY
7.1 Confidentiality of Settlement Terms
All terms and conditions of the Settlement Agreement, including without limitation the Settlement Payment amount and the existence and substance of the settlement negotiations, shall be and remain strictly confidential. No party shall disclose, publish, disseminate, or otherwise communicate any term or condition of the Settlement Agreement to any person or entity other than as expressly permitted in Section 7.2, without the prior written consent of all other parties.
Internal Note: Confidentiality is a high priority for Ridgeline Capital Partners in connection with its broader portfolio considerations. Per the Settlement Authority Memorandum dated November 8, 2022, Ridgeline has identified reputational risk associated with the public disclosure of a settlement of material size, particularly given the potential read-across to other portfolio company litigation and the negative signaling implications for counterparties in future commercial negotiations. We should ensure that the confidentiality provisions in the definitive Settlement Agreement are robust and enforceable.
7.2 Permitted Disclosures
Notwithstanding the provisions of Section 7.1, each party shall be permitted to disclose the terms and conditions of the Settlement Agreement to the following persons and entities, in each case solely on a need-to-know basis and subject to the disclosing party's obligation to inform each such person or entity of the confidential nature of the Settlement Agreement and to use reasonable efforts to ensure compliance with the confidentiality obligations set forth herein:
(a) Each party's officers, directors, employees, attorneys, accountants, auditors, and financial advisors, including without limitation Clarendon Partners LLP, Stonefield's independent auditor (engagement partner: Robert Farraday), for financial reporting, audit disclosure, and internal accounting purposes;
(b) Federal, state, or local tax authorities, as required for tax reporting and compliance purposes;
(c) Any regulatory or governmental body (including the Securities and Exchange Commission), as required by applicable law, regulation, or legal process;
(d) Lakeshore National Bank, N.A., as administrative agent under Stonefield's senior secured credit facility (Reference No. LNB-SLG-2017-CA-4402), to the extent disclosure is required by the Credit Agreement, including without limitation the disclosure obligations set forth in Section 6.03(b) thereof;
(e) Ridgeline Capital Partners, LP, Ridgeline Fund III, LP, and their respective partners, officers, directors, employees, agents, and representatives, in their capacity as equity holders and board members of Stonefield;
(f) As required by court order or subpoena, provided that the disclosing party shall give the non-disclosing party reasonable advance written notice (not less than ten (10) business days, or such shorter period as may be required by the terms of the order or subpoena) and a reasonable opportunity to seek a protective order or other appropriate remedy to limit or prevent disclosure;
(g) In connection with the enforcement of the Settlement Agreement, including in any judicial or other proceeding brought to enforce the terms and conditions thereof.
7.3 Non-Disparagement.  Each party agrees that it shall not, and shall cause its officers, directors, employees, agents, and representatives not to, make, publish, or cause to be made or published, any public statement, comment, or communication that disparages, defames, or casts in a negative light the other party or any of its officers, directors, employees, affiliates, or representatives in connection with the TSA, the termination of the TSA, the Litigation, or the settlement thereof.
This non-disparagement obligation shall not restrict or prohibit any party from making truthful statements in response to a lawfully issued subpoena, court order, or governmental or regulatory inquiry or investigation, or from providing truthful testimony in any judicial, arbitral, or administrative proceeding.
7.4 Press / Public Statements
In the event that any party is asked by any member of the press, media, or public about the Litigation or its resolution, the agreed-upon response shall be limited to the following statement, and no additional comment shall be provided:
"The matter has been resolved to the mutual satisfaction of the parties. The terms of the resolution are confidential."
No press release, public announcement, blog post, social media post, or other public communication shall be issued by any party regarding the settlement without the prior written consent of all other parties.
SECTION 8: REPRESENTATIONS AND WARRANTIES
8.1 Authority.  Each party represents and warrants to the other party that it has full corporate, partnership, limited liability company, or other entity power and authority to enter into the Settlement Agreement, to perform its obligations thereunder, and to consummate the transactions contemplated thereby. The execution, delivery, and performance of the Settlement Agreement have been duly authorized by all necessary corporate, partnership, limited liability company, or other entity action on the part of each party.
Each individual executing the Settlement Agreement on behalf of a party represents and warrants that he or she is duly authorized to execute and deliver the Settlement Agreement on behalf of such party, and that the Settlement Agreement constitutes the legal, valid, and binding obligation of such party, enforceable against such party in accordance with its terms.
Vantor Holdings Corp. specifically represents and warrants that it is the sole member of Vantor Transport Services LLC and has full authority to bind VTS to the terms and conditions of the Settlement Agreement, including the releases, covenant not to sue, and all other obligations set forth herein.
8.2 No Assignment of Claims
Each party represents and warrants to the other party that it has not assigned, transferred, pledged, hypothecated, or otherwise conveyed or disposed of any of the claims, demands, causes of action, or rights released pursuant to Section 4 to any third party, and that no third party has any interest in or right to any of the released claims.
8.3 Voluntary Execution
Each party represents and warrants that it has read and fully understands the terms and conditions of the Settlement Agreement, that it has had the opportunity to consult with independent legal counsel of its own choosing regarding the meaning, effect, and consequences of the Settlement Agreement, and that it is executing the Settlement Agreement voluntarily, of its own free will, without duress, coercion, undue influence, or misrepresentation.
8.4 No Other Actions
Each party represents and warrants that, as of the Effective Date, it has not filed, commenced, or participated in any other action, suit, proceeding, arbitration, mediation, or other dispute resolution proceeding against the other party (or any released party) arising out of, relating to, or in any way connected with the released claims, other than the Litigation styled Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.).
SECTION 9: GENERAL PROVISIONS
9.1 Governing Law
The Settlement Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York, without giving effect to any choice or conflict of laws provision, principle, or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York. This governing law provision is consistent with, and is intended to be coextensive with, the governing law provision set forth in the TSA.
9.2 Forum.  Any dispute, controversy, or claim arising out of, relating to, or in connection with the Settlement Agreement, or the breach, termination, or validity thereof, shall be resolved exclusively in the United States District Court for the Southern District of New York, and each party hereby irrevocably submits to the exclusive jurisdiction of such court for such purposes and waives any objection to venue or any claim of forum non conveniens with respect to any proceeding brought in such court. This forum selection provision is consistent with the forum selection clause in the TSA and with the court in which the Litigation is currently pending.
9.3 Entire Agreement
The Settlement Agreement constitutes the entire agreement between and among the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, representations, understandings, communications, discussions, and agreements, whether written or oral, between or among the parties relating to the subject matter hereof.
The parties acknowledge and agree that the TSA (Contract Reference No. SLG-VTS-2019-0315), which was terminated by Stonefield's termination letter dated March 4, 2022, is terminated and of no further force or effect as between the parties. For the avoidance of doubt, no obligations or rights under the TSA survive the Effective Date of the Settlement Agreement except as expressly set forth in the Settlement Agreement. This provision confirms that no residual or surviving obligations under the TSA (including without limitation any post-termination obligations, indemnification provisions, or intellectual property provisions) shall have any continuing force or effect following the Effective Date of the Settlement Agreement.
9.4 Amendments.  No amendment, modification, supplement, or waiver of any provision of the Settlement Agreement shall be effective unless set forth in a written instrument duly executed by all parties to the Settlement Agreement. No oral amendment, modification, or waiver shall be given effect.
9.5 Severability.  If any provision of the Settlement Agreement, or the application of any provision to any person, entity, or circumstance, is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of the Settlement Agreement or the application of such provision to other persons, entities, or circumstances, and the remaining provisions of the Settlement Agreement shall remain in full force and effect and shall be construed and enforced as if the invalid, illegal, or unenforceable provision had not been included herein.
9.6 Counterparts.  The Settlement Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Execution and delivery of the Settlement Agreement by electronic signature (including signatures transmitted by PDF, facsimile, or Brightwater Software or similar electronic signature platform) shall be deemed to be, and shall have the same force and effect as, execution and delivery of an original signed counterpart.
9.7 Notices.  All notices, requests, demands, consents, and other communications required or permitted to be given under the Settlement Agreement shall be in writing and shall be deemed to have been duly given when (i) delivered personally; (ii) sent by nationally recognized overnight courier service (with tracking and confirmation of delivery); or (iii) sent by certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Stonefield Logistics Group Inc.:
Tobias Wren, General Counsel Stonefield Logistics Group Inc. 4200 Commerce Parkway, Suite 800 Fort Worth, Texas 76102
With a copy (which shall not constitute notice) to:
Samuel Eklund, Esq. Calderwood & Harkness LLP 200 Park Avenue, 38th Floor New York, New York 10166
If to Vantor Holdings Corp. or Vantor Transport Services LLC:
[Counsel to be determined — or, if unrepresented:]
Nikolai Vantorovich, Chief Executive Officer Vantor Holdings Corp. 580 Eighth Avenue, 14th Floor New York, New York 10018
With a copy (which shall not constitute notice) to:
[Counsel name and address to be determined]
Any party may change its address for purposes of this Section by giving written notice of such change to the other party in accordance with this Section 9.7.
9.8 Attorneys' Fees and Costs
Each party shall bear its own attorneys' fees, costs, expenses, and disbursements incurred in connection with the Litigation and the negotiation, drafting, and execution of the Settlement Agreement. Neither party shall seek to recover any attorneys' fees, costs, or expenses from the other party, whether by motion, claim, or otherwise, except as expressly provided in Section 4.4 (indemnification for breach of covenant not to sue).
Internal Note: Stonefield's total legal spend through approximately October 2023 is estimated at $4.42 million ($3.8 million in Calderwood & Harkness fees plus approximately $620,000 in costs and disbursements, including expert fees for Dr. Rosser and Kensington Analytics Group, court reporter fees, document review platform costs, and travel). Vantor's estimated legal spend through the same period is approximately $2.1 million, with approximately $870,000 in unpaid invoices to Caldwell Royce & Shapiro LLP (per CRS's anticipated withdrawal motion, which cites a fee dispute as one of the grounds for withdrawal). The fee dispute between Vantor and CRS is a significant factor in the anticipated settlement dynamics.
9.9 No Third-Party Beneficiaries
The Settlement Agreement is intended solely for the benefit of the parties and their respective successors, heirs, executors, administrators, and permitted assigns. Nothing in the Settlement Agreement, express or implied, is intended to or shall confer upon any third party (other than the Released Parties and Releasing Parties, as applicable, who are intended beneficiaries of the releases set forth in Section 4) any right, benefit, remedy, or cause of action of any kind under or by reason of the Settlement Agreement.
9.10 Waiver.  The failure of any party to enforce any provision of the Settlement Agreement, or to exercise any right or remedy provided hereunder, shall not constitute a waiver of such provision, right, or remedy, or of any other provision, right, or remedy. No waiver shall be effective unless made in writing and signed by the waiving party. A waiver of any particular breach or default shall not constitute a waiver of any subsequent breach or default.
9.11 Construction.  The Settlement Agreement shall be construed neutrally, as a whole, and in accordance with the fair meaning of its terms, without any presumption or rule of construction against the party responsible for drafting any particular provision. The parties acknowledge that each party has had the opportunity to participate in the drafting and negotiation of the Settlement Agreement and that no ambiguity shall be construed against any party on the basis that such party drafted or proposed any particular provision.
SECTION 10: EFFECTIVE DATE
The Settlement Agreement shall become effective upon the date of execution by all parties (the "Effective Date"). In the event the Settlement Agreement is executed in counterparts on different dates, the Effective Date shall be the date on which the last party executes the Settlement Agreement.
The Settlement Payment shall be due and payable within thirty (30) business days following the Effective Date, as more fully set forth in Section 3.2.
The Joint Stipulation of Dismissal shall be executed and filed with the Clerk of Court within five (5) business days following confirmed receipt of the Settlement Payment in full, as more fully set forth in Section 5.1.
SECTION 11: SIGNATURE BLOCKS
IN WITNESS WHEREOF, the undersigned parties have executed this Settlement Agreement as of the Effective Date set forth below.
11.1 Stonefield Logistics Group Inc.
STONEFIELD LOGISTICS GROUP INC.
By: ________
Name: Marcus Denton
Title: Chief Executive Officer
Date: ________
or
STONEFIELD LOGISTICS GROUP INC.
By: ________
Name: Tobias Wren
Title: General Counsel
Date: ________
11.2 Vantor Holdings Corp.
VANTOR HOLDINGS CORP.
By: ________
Name: Nikolai Vantorovich
Title: Chief Executive Officer
Date: ________
11.3 Vantor Transport Services LLC
VANTOR TRANSPORT SERVICES LLC By Vantor Holdings Corp., its Sole Member
By: ________
Name: Nikolai Vantorovich
Title: Chief Executive Officer, Vantor Holdings Corp.,
in its capacity as Sole Member of Vantor Transport Services LLC
Date: ________
APPENDIX — INTERNAL NOTES NOT PART OF SETTLEMENT AGREEMENT PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
Note A: Settlement Authority and Negotiation Parameters
Approved Settlement Authority: $0 to $4.5 million, as established by the Settlement Authority Memorandum dated November 8, 2022, prepared by Samuel Eklund and Patrick Gallagher, approved by the client (Tobias Wren and Marcus Denton), and confirmed by Ridgeline Capital Partners, LP (Douglas Whitmore and Alison Trang) via email dated November 15, 2022.
Maximum Defensible Exposure: $8.2 million, as determined by Dr. Evelyn Rosser of Kensington Analytics Group LLC in her rebuttal expert report dated August 25, 2023. This figure represents the maximum exposure under an alternative lost-profits theory, assuming arguendo that the termination was wrongful, and after adjusting for:
•  Vantor's own contributory breaches of the TSA (fleet redeployment, failure to maintain service levels, misrepresentation of remediation efforts);
•  Vantor's failure to mitigate damages (failure to seek replacement contracts on a timely basis, rejection of at least two commercially reasonable replacement opportunities);
•  Application of a market-based calculation methodology (rather than the speculative and inflated projections used by Vantor's expert, Dr. Trask).
Analysis of Vantor's Claimed Damages ($95.4 million): Stonefield considers this figure grossly inflated and legally unsupportable, for the following reasons:
•  Liquidated damages ($67.23 million): The liquidated damages clause in Section 13.4 of the TSA, which purports to require the terminating party to pay the full remaining ACV for the unexpired term, likely constitutes an unenforceable penalty under New York law. See Truck Rent-A-Ctr., Inc. v. Purdy Corp., 41 N.Y.2d 354 (1977); Kestrel Corporation, 4 N.Y.3d 373 (2005). The clause bears no reasonable relationship to the anticipated or actual harm suffered by Vantor and would result in a windfall far exceeding any conceivable loss.
•  Consequential damages ($9.47 million — stranded assets, workforce reduction, mitigation costs): These categories of damages are barred by the mutual waiver of consequential damages in Section 15.1 of the TSA, which provides that "in no event shall either party be liable to the other party for any indirect, incidental, consequential, special, exemplary, or punitive damages arising out of or in connection with this Agreement." The waiver is enforceable under New York law and was a negotiated, arms-length provision in the TSA.
•  Lost profits ($18.7 million): Dr. Trask's lost-profits calculation is duplicative of the liquidated damages claim (which itself purports to compensate for the same lost revenue stream), relies on unreliable margin assumptions (applying historical peak margins without adjustment for declining industry trends and Vantor's own operational deterioration), and fails to account for Vantor's failure to mitigate.
Negotiation Approach: If and when settlement discussions open, our initial offer should be at or near zero, emphasizing the strength of Stonefield's Cause defense and the significant evidence that Vantor was the first to breach the TSA. The initial negotiating position should stress the following points:
1.  The Milescu email is a devastating admission that Vantor leadership knew about the service level failures and consciously decided not to prioritize remediation;
2.  The Pruitt deposition admissions eliminate any genuine dispute about whether VTS failed to meet the contractual service level thresholds;
3.  The fleet redeployment records demonstrate that Vantor affirmatively diverted resources away from the Stonefield account to service a competing contract, which constitutes a material breach independent of the service level failures;
4.  Dr. Rosser's rebuttal report exposes the fundamental flaws in Dr. Trask's damages analysis and establishes a credible maximum exposure ceiling of $8.2 million — a fraction of the $95.4 million claimed.
Final authority must not exceed $4.5 million without further authorization from the client and Ridgeline. Any settlement figure above the authorized range will require a supplemental authorization memorandum and approval from Ridgeline (Douglas Whitmore, as lead partner on the Stonefield investment at Ridgeline Fund III).
Note B: Practical Considerations
As of the date of this draft (September 1, 2023), Vantor Holdings Corp. is still represented by Caldwell Royce & Shapiro LLP (Harrison Caldwell, lead partner; Andrea Shapiro, co-counsel). However, we have received intelligence — both through informal communications with other practitioners familiar with CRS and through observations at recent court proceedings — that CRS is preparing to withdraw from the representation. The anticipated withdrawal is reportedly driven by a significant fee dispute (with approximately $870,000 in unpaid CRS invoices) and "irreconcilable differences" between CRS and Vantorovich regarding litigation strategy.
The withdrawal of CRS, if and when it occurs, could materially alter the settlement dynamics in the following ways:
Scenario 1 — Pressure to Settle Quickly: Vantor may face significant pressure to resolve the case before losing counsel, particularly if Vantorovich recognizes that retaining substitute counsel will require a substantial new retainer payment and that any new counsel will require significant time to get up to speed on a complex case with extensive discovery. This scenario favors an aggressive negotiating posture on our part.
Scenario 2 — Vantor Becomes Unreachable/Unresponsive: If CRS withdraws and Vantor fails to promptly retain new counsel, Vantor may become unreachable or unresponsive, and settlement discussions may stall. In this scenario, we should be prepared to pivot to a motion practice strategy, including a potential motion to dismiss for failure to prosecute under FRCP 41(b).
Scenario 3 — Involuntary Dismissal: Under settled Second Circuit precedent, a corporation cannot appear pro se in federal court. If Vantor fails to retain substitute counsel within a reasonable time after CRS's withdrawal, the Court may issue an order directing Vantor to retain counsel by a date certain, and failure to comply could result in dismissal of Vantor's claims for failure to prosecute. This outcome would eliminate the need for settlement entirely and would be the optimal result for Stonefield.
This draft term sheet is being preserved for potential use if and when settlement discussions become appropriate. The term sheet will need to be updated to include the specific settlement dollar figure and to reflect any changes to the parties' circumstances (including Vantor's counsel status) before any external transmission.
Note C: Lender/Audit Disclosure Implications
Lakeshore National Bank — Credit Facility Disclosure:
Any settlement payment should be evaluated for potential disclosure obligations under Stonefield's $425 million senior secured credit facility with Lakeshore National Bank, N.A. (administrative agent), Reference No. LNB-SLG-2017-CA-4402. Under Section 6.03(b) of the Credit Agreement, Stonefield is required to provide notice to the administrative agent of any litigation matter in which the amount in controversy or the reasonably anticipated liability exceeds $25 million. A settlement within the contemplated $0 to $4.5 million range falls well below this threshold and, in our assessment, likely does not trigger additional notification obligations beyond Stonefield's existing quarterly litigation updates.
The most recent quarterly litigation update was submitted to Lakeshore on July 10, 2023, and characterized the Vantor claims as lacking merit and the risk of material adverse outcome as remote. In the event of a settlement, this characterization should be updated in the next quarterly report to reflect the resolution of the matter, with appropriate language confirming that the settlement was entered into solely for litigation-cost-avoidance purposes and does not constitute an admission of liability. Tobias Wren and Priya Ramachandran should confirm the disclosure analysis with Lakeshore's relationship manager and, if appropriate, with Stonefield's credit facility counsel at Ashford Meridian LLP.
Clarendon Partners LLP — Financial Reporting and Audit Disclosure:
For financial reporting purposes, Stonefield's independent auditor, Clarendon Partners LLP (engagement partner: Robert Farraday), should be notified of any settlement at the appropriate time. A settlement at the contemplated level ($0 to $4.5 million) would not constitute a material liability requiring revision to prior financial statements. Stonefield's current financial statement disclosure characterizes the Vantor Holdings litigation as a contingent liability with a "remote" probability of a material adverse outcome, consistent with ASC 450-20 (Contingencies — Loss Contingencies)