henley-deposition-summary.docx

1022-00005 · Hargrove, Deluca & Stein LLP · Depositions

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PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT This memorandum is protected by the attorney work product doctrine and the attorney-client privilege. It reflects the mental impressions, conclusions, opinions, and legal theories of counsel. It is not to be disclosed to any person or entity outside Calderwood & Harkness LLP and its authorized agents without the prior written consent of the undersigned.

CALDERWOOD & HARKNESS LLP 425 Park Avenue, 33rd Floor New York, NY 10022

MEMORANDUM

To: Linda Osei, Responsible Partner

From: Yuki Nakamura, Working Associate

Date: December 9, 2024

Re: Deposition Summary — Marcus Henley (Meridian Infrastructure Partners LLC, Vice President of Field Operations, Northeast Division), December 3–4, 2024

Matter: Northgate Fiber Americas Inc. — Defense of Meridian Infrastructure Partners LLC Construction Dispute

Matter No.: 1022-00005

Court: Supreme Court of the State of New York, New York County, Commercial Division, Index No. 654321/2024 (Hon. Eleanor M. Ricci, Part 49)

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I. Executive Summary

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

Henley served as the day-to-day operational supervisor of all Meridian field crews deployed on the Northgate fiber build-out program across the seven-state northeastern footprint encompassing New York, New Jersey, Connecticut, Massachusetts, Pennsylvania, Maryland, and Virginia. In that capacity, he had direct personal knowledge of crew staffing, subcontractor management, schedule performance, quality control, and many of the operative events underlying both Meridian's claims and Northgate's counterclaims in this litigation.

Henley's testimony over the two-day deposition yielded several significant admissions that are highly favorable to Northgate's defense, as well as to Northgate's affirmative counterclaims. The most consequential admissions relate to the following four subject areas:

(a) Crew shortages were attributable to Meridian's internal staffing failures, not external force majeure events. Henley admitted that Meridian diverted experienced workers to other projects, lost foremen to competitors because of uncompetitive wages, and reduced crew levels on the Northgate project at the direction of Ridgepoint Capital Group LP ("Ridgepoint"), Meridian's private equity sponsor, in order to meet EBITDA margin targets. He conceded that by mid-2022, the labor market had substantially recovered from COVID-19 disruptions and that Meridian's ongoing staffing challenges were internally driven.

(b) Root causes of non-conformance reports ("NCRs") traced back to inadequate training and supervision of subcontractor crews. Henley testified that the "majority" of the 43 critical NCRs issued during the project were caused by Meridian's failure to adequately train subcontractor crews on Northgate's technical specifications and by insufficient field supervision resulting from the crew reductions described above.

(c) Henley's personal awareness of schedule slippage well before the cure notices. Henley conceded that by the time Milestone 6 was completed, he personally believed Meridian would not be able to complete Milestone 8 on schedule without significant additional resources that Meridian had not committed.

(d) Meridian's failure to implement meaningful corrective action even after internal recognition of quality failures. Henley's requests for additional quality control personnel and replacement splicing equipment were repeatedly denied or deferred due to budget constraints imposed by Ridgepoint's cost-reduction directives.

There are certain areas where Henley's testimony may be viewed as potentially favorable to Meridian, though these are of limited force. In particular, Henley maintained that Northgate's permitting delays contributed to Phase 2 schedule slippage, identifying delays in three Connecticut municipalities and two Massachusetts municipalities where he claimed NFA was late in securing right-of-way agreements. However, Henley could not provide specifics to support these claims, and his own internal permit tracker — when placed before him — revealed that a substantial number of permit application delays were attributable to Meridian's own submission of incomplete or erroneous applications. Additionally, Henley testified that at least some of the 14 alleged scope changes were directed verbally by Sean Calloway, NFA's Director of Construction Management, without written Change Orders. While this testimony could support Meridian's constructive change order theory, Henley conceded that Meridian never submitted formal written Change Order requests as required by MCA § 16.1 for any of the 14 claimed changes, significantly undermining Meridian's ability to rely on this defense.

This memorandum provides a detailed summary of Henley's testimony organized by topic, identifies key admissions and areas of concern, and sets forth recommendations for follow-up action.

II. Witness Background and Role

A. Professional Background

Marcus Henley testified that he has been employed by Meridian Infrastructure Partners LLC since 2015, initially in a senior project manager role overseeing fiber construction projects in the Mid-Atlantic region. He was promoted to Vice President of Field Operations for the Northeast Division in January 2020, shortly before the Master Construction Agreement ("MCA") between Northgate and Meridian was executed on March 15, 2020. In his current role, Henley oversees all field operations for Meridian's Northeast Division, which encompasses fiber construction projects across approximately a dozen states along the eastern seaboard.

Prior to joining Meridian, Henley worked for two other fiber construction firms over a combined period of approximately twelve years. His career has been focused on outside plant ("OSP") construction, including aerial and underground fiber optic cable installation, conduit construction, splice work, and related civil infrastructure. He described his background as rooted in construction management and field supervision, noting that he has extensive hands-on experience managing large-scale fiber build-out programs for major telecommunications carriers and internet service providers.

Henley testified that he does not hold a professional engineering license and has never been a licensed professional engineer in any jurisdiction. He holds a bachelor's degree in construction management and has completed various industry certifications related to fiber optic installation and safety compliance, though he did not identify these certifications by name during the deposition.

B. Role on the Northgate Project

Henley testified that he directly supervised all Meridian field crews and subcontractors working on the Northgate fiber build-out program from the date of the Notice to Proceed in April 2020 through the date of Northgate's termination of the MCA on April 1, 2024. This represented the full duration of Meridian's performance under the contract. In that capacity, Henley was responsible for a broad range of operational functions, including crew deployment and scheduling, subcontractor management and oversight, day-to-day schedule tracking, and quality control at the field level. He described his role as "the person ultimately responsible for making sure the work got done in the field."

Within Meridian's organizational structure, Henley reported directly to Bridget Yeung, Meridian's Chief Operating Officer, and had a dotted-line reporting relationship to Victor Sandoval, Meridian's Chief Executive Officer. Henley testified that he communicated with Yeung on a near-daily basis regarding the Northgate project and participated in weekly status calls with both Yeung and Sandoval. He also attended periodic meetings with Meridian's board of directors and representatives of Ridgepoint Capital Group LP, Meridian's majority equity holder, though he characterized his participation in those meetings as limited to presenting operational updates.

On the Northgate side, Henley served as Meridian's primary operational point of contact with Sean Calloway, NFA's Director of Construction Management, for all day-to-day field issues. Henley described his relationship with Calloway as "professional" and testified that the two communicated frequently — often multiple times per day during active construction periods — by phone, email, and text message regarding crew deployment, construction progress, field conditions, and emerging issues. Henley also interacted with other NFA personnel, including Renata Voss (NFA's Vice President of US Network Infrastructure), though he described those interactions as less frequent and typically limited to higher-level schedule and performance discussions.

When questioned about his familiarity with the contractual terms governing the project, Henley acknowledged that he was familiar with the MCA's milestone schedule set forth in Section 8.2 of the agreement, which established 14 defined milestones across three construction phases. He confirmed he understood the milestone dates and the associated liquidated damages provisions applicable to milestone delays. He further acknowledged familiarity with the quality standards set forth in MCA § 12.4 and in Northgate's Technical Specification NS-FIBER-2020, which governed fiber splice performance, conduit installation, route alignment, and other technical requirements. Henley stated that he considered these documents to be his "operational roadmap" and that he distributed relevant excerpts to his crew foremen and subcontractor supervisors, though, as discussed below, his testimony regarding the adequacy of that distribution and accompanying training revealed significant gaps.

III. Day 1 Testimony (December 3, 2024) — Phase 1 and Phase 2 Performance

A. Phase 1 (New York Metro & Northern New Jersey — Milestones 1–4)

1. General Performance

Henley's testimony on Day 1 began with an overview of Phase 1 of the fiber build-out program, which encompassed the New York metropolitan area and northern New Jersey. Henley confirmed that Phase 1 covered approximately 3,200 route miles of fiber optic cable installation and related civil infrastructure, with a total milestone value of approximately $208 million under the MCA. Phase 1 was divided into four milestones (Milestones 1 through 4), each tied to the completion of defined geographic segments and construction activities within the Phase 1 footprint.

Henley testified that Milestones 1 and 2 were completed substantially on schedule, with only minor delays that did not trigger liquidated damages. However, he acknowledged that Milestone 3 was completed 47 days late — with actual completion on October 14, 2021, versus a target completion date of August 28, 2021. This delay was significant both in absolute terms and because it set a pattern of escalating schedule slippage that would accelerate through Phases 2 and 3.

When asked about the causes of the Milestone 3 delay, Henley attributed it primarily to two factors: crew productivity shortfalls and difficulty obtaining municipal permits in certain New York City boroughs. With respect to crew productivity, Henley acknowledged that Meridian's field crews were not achieving the daily route-mile production rates assumed in the project schedule, though he did not provide a detailed quantitative breakdown. With respect to permitting, Henley testified in general terms that certain New York City agencies were slow to process permit applications, but when pressed for specifics, he was unable to identify which particular permit applications were Northgate's responsibility under MCA § 5.3 (which allocates certain governmental permitting obligations to the Owner) as opposed to Meridian's responsibility. This inability to distinguish between Owner-responsible and Contractor-responsible permits significantly undermines any claim that the Milestone 3 delay was attributable to Northgate's permitting failures.

Milestone 4 was completed with a relatively minor delay that did not result in a separate liquidated damages assessment, and Henley did not provide extensive testimony about Milestone 4 performance.

2. Admission: Crew Shortages in Phase 1

One of the most significant admissions from Henley's Day 1 testimony concerned the root causes of crew shortages during Phase 1. When questioned by Mr. Park about why Meridian was unable to achieve planned production rates during the Milestone 3 period, Henley testified as follows:

Key Admission: Henley admitted that Meridian was unable to fully staff its Phase 1 crews as planned because the company had simultaneously taken on two other large fiber construction projects — one in the Southeast and one in the Midwest — and had diverted experienced workers away from the Northgate project to staff those competing engagements. This admission is of critical importance because it establishes that Meridian's crew shortages during Phase 1 were the product of Meridian's own resource allocation decisions, not external events beyond its control.

Henley further acknowledged that he raised staffing concerns with both Bridget Yeung (COO) and Victor Sandoval (CEO) as early as the third quarter of 2020 — within the first six months of the project — alerting them that the diversion of experienced workers to the Southeast and Midwest projects was creating staffing gaps on the Northgate project. However, Henley testified that Meridian did not take meaningful action to reallocate resources back to the Northgate project until the first quarter of 2021, a delay of approximately two calendar quarters during which understaffing persisted.

This testimony directly undermines Meridian's position in this litigation that Phase 1 delays were attributable to Northgate's permitting failures or to force majeure events. Instead, it establishes that Meridian's own business decision to overextend its workforce across multiple projects was a primary driver of Phase 1 schedule slippage.

3. Liquidated Damages for Milestone 3

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

When asked whether he disputed the calculation at the time, Henley testified that he did not. He further acknowledged that Meridian did not formally challenge the liquidated damages assessment through the dispute resolution procedures set forth in the MCA. Meridian's failure to timely challenge the Milestone 3 liquidated damages assessment may have implications for any argument Meridian might raise at trial contesting the enforceability or calculation of the Phase 1 liquidated damages.

B. Phase 2 (Connecticut, Western Massachusetts, Southern Pennsylvania — Milestones 5–8)

1. Escalating Schedule Delays

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

Henley testified that the delays compounded over time because Meridian was unable to recover schedule once it fell behind on Milestone 5. He explained that the Phase 2 milestones were sequentially dependent, such that a delay in one milestone cascaded into subsequent milestones, and that Meridian did not have sufficient reserve capacity in its schedule or crew deployment plan to absorb the initial delay and get back on track.

Key Admission: When pressed about his contemporaneous understanding of the schedule trajectory, Henley conceded that by the time Milestone 6 was completed — already 68 days behind schedule — he personally believed that Meridian would not be able to complete Milestone 8 on schedule. He testified that achieving the Milestone 8 target date would have required significant additional resources, including additional field crews and subcontractors, that Meridian had not committed and had no realistic plan to obtain. This admission is highly probative of Meridian's knowledge of its own inability to perform, and it predates the cure notices by a substantial period, suggesting that Meridian's eventual failure to cure was not attributable to any act or omission by Northgate but rather to Meridian's own longstanding and internally recognized resource deficiencies.

2. Root Causes of Crew Shortages (Phase 2)

Henley's testimony regarding the root causes of Phase 2 crew shortages was among the most consequential portions of the two-day deposition. Henley attributed Phase 2 crew shortages to three interrelated factors:

(a) General labor market tightness in the fiber construction industry post-COVID-19. Henley testified that the fiber construction industry experienced acute labor shortages in 2021 and into 2022 as the broader economy recovered from pandemic-related disruptions and demand for fiber infrastructure surged, driven in part by federal broadband stimulus programs.

(b) Loss of experienced crew foremen to competitors. Henley acknowledged that Meridian lost several experienced crew foremen — individuals who served as the on-the-ground leaders of Meridian's field crews — to competitors who offered higher wages. He testified that the loss of these experienced personnel had a disproportionate impact on crew productivity and quality because the replacement workers lacked the same level of experience and familiarity with the Northgate project's technical specifications.

(c) Ridgepoint Capital Group LP's cost-reduction directives. Henley testified that Ridgepoint, Meridian's private equity sponsor, imposed cost-reduction directives beginning in approximately the second quarter of 2022 that constrained Meridian's ability to offer competitive wages, hire replacement foremen, and engage additional subcontractors to supplement its workforce on the Northgate project.

Key Admission: When Mr. Park asked Henley directly whether COVID-19 force majeure was the primary cause of crew shortages in 2022 and 2023, Henley conceded that it was not. He testified that by mid-2022, the general labor market had substantially recovered from pandemic-related disruptions and that Meridian's ongoing staffing challenges were "more attributable to compensation competitiveness and internal budget constraints imposed by Ridgepoint than to pandemic-related disruption." This admission is of paramount importance to the case because it significantly weakens Meridian's force majeure defense, which is premised on the claim that COVID-19 aftereffects excused Meridian's delays throughout the Phase 2 and Phase 3 periods extending well into 2023 and 2024. Henley's own testimony places the end of meaningful pandemic-related labor disruption at mid-2022, leaving the vast majority of the Phase 2 delay period unexplained by force majeure.

3. Ridgepoint's Cost-Reduction Pressure

Building on his testimony regarding crew shortages, Henley provided detailed and damaging testimony about the specific ways in which Ridgepoint Capital Group LP's cost-reduction pressure affected Meridian's ability to perform on the Northgate project. Henley testified that beginning in approximately the second quarter of 2022, Graham Latimer, the Managing Partner of Ridgepoint, communicated through Victor Sandoval (CEO) and Bridget Yeung (COO) that Meridian needed to reduce overhead and field costs to meet certain EBITDA margin targets. Henley provided context for these targets, testifying that Meridian's fiscal year 2023 EBITDA was $58.9 million on total revenue of $620 million, representing an EBITDA margin of approximately 9.5%. He understood Ridgepoint's expectation was for higher margins, and that achieving these targets required cuts to operating expenses, including field labor costs.

Henley testified that these Ridgepoint-driven cost-reduction directives led Meridian to take the following specific actions that directly impacted performance on the Northgate project:

(a) Crew reductions. Meridian reduced the number of active field crews deployed on the Northgate project from a peak of 38 crews in the first quarter of 2022 to approximately 24 crews by the fourth quarter of 2022 — a reduction of approximately 37%. Henley testified that this reduction occurred at a time when the project was already behind schedule and needed more, not fewer, crews to recover.

(b) Deferred hiring of replacement foremen. Rather than replacing the experienced crew foremen who had departed for competitors, Meridian deferred those hires, leaving crews under the supervision of less-experienced personnel.

(c) Increased reliance on less-experienced subcontractor crews. To maintain some level of production capacity despite the crew reductions, Meridian relied more heavily on subcontractor crews that were less experienced with Northgate's technical specifications and quality requirements. As discussed in Section III.C below, this increased reliance on less-experienced subcontractors was a direct contributor to the surge in non-conformance reports during Phase 2.

Henley acknowledged that he protested these reductions in a series of emails to Bridget Yeung, warning that the crew reductions would cause further schedule delays and quality problems on the Northgate project. These emails were identified during the deposition and are contained in the document production at Bates numbers MIP-00234871 through MIP-00234879. Henley testified that he was "very clear" in these communications that reducing crews would have predictable and serious adverse consequences for project performance, but that his warnings were overridden by Yeung and Sandoval at Ridgepoint's direction.

4. Liquidated Damages Assessment (Phase 2)

Henley confirmed his awareness that Northgate assessed liquidated damages for each of the Phase 2 milestones. The Phase 2 liquidated damages assessments are as follows:

With respect to Milestone 8, Henley confirmed that the contractual liquidated damages cap of 10% of the milestone value applied, resulting in a capped assessment of $9,100,000 (10% of the $91 million Milestone 8 value) rather than the uncapped calculated amount of $23,450,000. Henley did not dispute the day-count calculations for any of the Phase 2 milestones and did not testify that the daily rate or cap provisions were incorrectly applied.

C. Non-Conformance Reports (NCRs) — Root Causes

1. Volume and Severity of NCRs

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

Henley testified that the 43 critical NCRs encompassed three principal categories of defects:

• Splice loss exceeding specification: Fiber optic splices that failed to meet the loss thresholds established by Northgate Technical Specification NS-FIBER-2020 and the applicable ANSI/TIA-568 industry standards. Splice loss exceedances were the most common category of critical NCR.

• Improper conduit burial depth: Conduit installed at burial depths less than the minimums required by NS-FIBER-2020 and applicable local building codes. These violations created compliance risks and potential physical damage exposure.

• Unauthorized route deviations: Construction of fiber routes that departed from the approved design alignment without prior written approval from Northgate, as required under the MCA.

The 244 non-critical NCRs encompassed range lesser deficiencies, including documentation deficiencies (such as incomplete daily construction logs or missing inspection records), minor route alignment variances that did not affect overall network topology, and incomplete or inaccurate as-built records. While individually less serious than the critical NCRs, the volume of non-critical NCRs further reflects the systemic quality control failures that pervaded Meridian's work on the project.

2. Admission: NCRs Caused by Inadequate Training and Supervision

Key Admission: When asked to identify the root causes of the 43 critical NCRs, Henley testified that the "majority" of these critical defects were attributable to two related factors: (a) inadequate training of subcontractor crews on Northgate's Technical Specification NS-FIBER-2020, and (b) insufficient field supervision resulting from the crew reductions and staffing constraints discussed above. This admission is highly significant because it places the cause of the critical NCRs squarely within Meridian's control and responsibility, negating any argument that the quality failures were caused by Northgate's actions, specifications, or external conditions.

Henley elaborated on this admission by testifying that Meridian's quality control program was severely understaffed during the Phase 2 period. Specifically, he acknowledged that Meridian had only three full-time quality control inspectors covering the entire Phase 2 geographic footprint — Connecticut, western Massachusetts, and southern Pennsylvania. When asked whether this level of QC staffing was adequate, Henley described it as "inadequate" and testified that the ratio of QC inspectors to active field crews was insufficient to provide the level of inspection and oversight contemplated by the MCA and by NS-FIBER-2020.

Henley further testified that he requested additional QC personnel from Bridget Yeung on multiple occasions during 2022 and 2023. He referenced a series of emails to Yeung contained in the document production at Bates numbers MIP-00301445 through MIP-00301452, in which he set forth his concerns about QC understaffing and the consequences for project quality. According to Henley, these requests were either denied outright or deferred indefinitely due to budget constraints — the same Ridgepoint-driven cost-reduction pressures that led to the crew reductions described above. This testimony establishes that Meridian's leadership was aware of the QC understaffing problem, was specifically warned about its consequences by the person closest to field operations, and made a deliberate decision not to address it.

3. Splice Loss Failures

Henley testified in considerable detail about the splice loss NCRs, which he confirmed were the most common category of critical NCR on the project. Splice loss is a critical quality metric in fiber optic construction, as excessive splice loss degrades signal quality and can render fiber segments non-functional for their intended purpose. Northgate's Technical Specification NS-FIBER-2020 established maximum acceptable splice loss thresholds consistent with ANSI/TIA-568 standards, and any splice exceeding those thresholds required remediation, typically in the form of re-splicing or, in severe cases, replacement of the affected fiber segment.

Henley admitted that at least 18 of the splice loss NCRs — a substantial proportion of the total — resulted from Meridian's field crews using outdated fusion splicing equipment that had not been replaced or upgraded. Henley testified that the outdated equipment was less reliable, more prone to producing high-loss splices, and required more skilled operators to achieve acceptable results. When asked why the equipment had not been replaced, Henley attributed the failure to capital expenditure limitations — another manifestation of the cost constraints that Ridgepoint had imposed on Meridian's operations.

Henley also acknowledged that Sean Calloway, NFA's Director of Construction Management, had raised splice loss concerns with him as early as March 2022, putting Meridian on notice of the problem well before the critical NCRs accumulated to the levels that ultimately contributed to the termination decision. When asked to characterize Meridian's response to Calloway's concerns, Henley testified that the response was "slower than it should have been," an acknowledgment that Meridian failed to take timely corrective action even after being put on notice by the Owner.

4. Conduit Depth Violations

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

Henley testified that the conduit depth violations occurred primarily in Connecticut and were discovered during Northgate's independent quality assurance inspections — not through Meridian's own QC program — further underscoring the inadequacy of Meridian's quality control operations during Phase 2.

Key Admission: Henley acknowledged that Meridian itself terminated its directional boring subcontractor on the affected Connecticut segments in the third quarter of 2023 for poor workmanship. This action by Meridian effectively constitutes a concession that the conduit depth violations were caused by the subcontractor's deficient work, a deficiency for which Meridian bears contractual responsibility as the prime contractor under the MCA. Henley's testimony on this point eliminates any argument that the conduit depth violations were caused by NFA's design specifications, site conditions, or other factors outside Meridian's control.

5. Unauthorized Route Deviations

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

When asked about the circumstances of these deviations, Henley offered partial justifications, claiming that some deviations were necessitated by field conditions encountered during construction, such as encountering unmarked underground utilities that made it impractical to follow the approved route alignment. However, Henley admitted that the proper procedure under MCA § 16.1 in such circumstances was to submit a Change Order request to Northgate before deviating from the approved design, and that Meridian did not follow this procedure in most cases. Instead, according to Henley, field crews made on-the-spot decisions to deviate from the approved route and notified Northgate after the fact, if at all. This failure to follow the contractual change management process is consistent with the broader pattern of disregard for MCA procedural requirements discussed in Section IV.C below in connection with the alleged scope changes.

6. Remediation Status

Henley's testimony regarding the remediation status of the critical NCRs as of the date of termination provides powerful support for Northgate's Counterclaim III for remediation costs. Henley acknowledged that as of the April 1, 2024 termination date, the majority of the 43 critical NCRs remained unresolved. He estimated that Meridian had fully remediated only approximately 12 of the 43 critical NCRs. The remaining 31 critical NCRs were either partially addressed (i.e., some remediation work had been initiated but not completed) or had not yet been started at all.

This testimony is significant for multiple reasons. First, it demonstrates that Meridian failed to remediate known quality defects over a period of many months, even as additional NCRs continued to accumulate. Second, it supports Northgate's position that the termination for cause was justified because Meridian had not only failed to meet schedule milestones but had also failed to deliver work of acceptable quality. Third, and most directly, it provides factual support for Northgate's Counterclaim III, which seeks $18.3 million in remediation costs. That counterclaim quantifies remediation costs based on 43 critical NCRs at an average remediation cost of approximately $275,000 per NCR (totaling approximately $11.825 million) plus 244 non-critical NCRs at an average remediation cost of approximately $26,500 per NCR (totaling approximately $6.466 million), for a combined total of approximately $18.3 million. Henley's admission that 31 of 43 critical NCRs remained unremediated is directly consistent with the factual predicates of this counterclaim.

IV. Day 2 Testimony (December 4, 2024) — Phase 3, Cure Notices, Scope Changes, and Permitting

A. Phase 3 (Maryland, Virginia, Eastern Pennsylvania — Milestones 9–14)

1. Mobilization Failures

Day 2 of the deposition began with Henley's testimony regarding Phase 3 of the fiber build-out program, which encompassed the remaining geographic footprint in Maryland, Virginia, and eastern Pennsylvania and was divided into Milestones 9 through 14. Henley confirmed that Phase 3 was the largest phase of the project by a substantial margin, planned to cover approximately 9,700 route miles of fiber construction with a total milestone value of $629 million.

Henley testified that Meridian mobilized initial crews in Maryland in July 2023 and commenced limited construction activity in the Phase 3 footprint. However, the progress achieved was minimal. Henley acknowledged that as of the April 1, 2024 termination, Meridian had completed only approximately 340 route miles of the planned 9,700 route miles — a completion rate of approximately 3.5%. This negligible progress over a nine-month mobilization period starkly illustrates Meridian's inability to perform the Phase 3 scope.

Key Admission: Henley acknowledged that Phase 3 mobilization was hampered by the same crew shortages that continued to affect Phase 2 performance during this period. He admitted that Meridian did not have a realistic plan to adequately staff Phase 3 while Phase 2 milestones remained incomplete and Phase 2 crews were already insufficient to meet the Phase 2 schedule. In effect, Henley conceded that Meridian could not simultaneously execute both phases and that commencing Phase 3 without resolving Phase 2 resource deficiencies was unrealistic. This admission undermines any argument by Meridian that Phase 3 delays were attributable to external factors rather than to Meridian's own inability to marshal adequate resources.

2. Phase 3 Payment Disputes

Henley testified that he was aware of payment disputes between Meridian and Northgate relating to Phase 3 work. He confirmed that Meridian submitted Phase 3 payment applications totaling $48.2 million and that Northgate approved and paid $31.7 million of that amount but disputed $16.5 million.

Henley testified that he believed some of the disputed amounts corresponded to legitimate work performed by Meridian's crews and subcontractors in the Phase 3 footprint. However, under questioning by Mr. Park, Henley conceded that certain payment applications submitted by Meridian included unit counts — the quantities of completed construction units (e.g., feet of conduit installed, splice closures completed) upon which payment was calculated — that he could not personally verify. Henley explained that he had not been physically present on-site for all of the work segments for which Meridian claimed payment and therefore could not confirm from personal knowledge that the claimed quantities were accurate. This concession raises questions about the reliability of Meridian's Phase 3 payment applications and may be relevant to Northgate's defense against Meridian's payment claims.

B. Cure Notices and Corrective Action Plan

1. Cure Notice No. 1 (January 18, 2024)

Henley confirmed that he was copied on Cure Notice No. 1, dated January 18, 2024, which was sent by Renata Voss, NFA's Vice President of US Network Infrastructure, to Meridian's senior leadership. The Cure Notice cited three categories of material breach under the MCA: (a) Meridian's failure to achieve Milestone 8, which was substantially behind schedule at that point; (b) Meridian's inadequate Phase 3 mobilization, which had yielded only negligible progress despite months of activity; and (c) the 43 critical NCRs, which reflected systemic quality failures that Meridian had failed to remediate.

Henley testified that upon receiving Cure Notice No. 1, he understood that Northgate was invoking the termination-for-cause provisions of MCA § 14.1, which required Northgate to provide Meridian with written notice of material breach and afford Meridian a 30-calendar-day cure period before proceeding to termination. Henley stated that he understood the significance of the Cure Notice and recognized that if Meridian failed to cure, Northgate would have the contractual right to terminate the MCA.

2. Meridian's Response (February 2, 2024)

Henley confirmed that he contributed to the drafting of Meridian's response to Cure Notice No. 1, which was submitted on February 2, 2024 — within the 30-day cure period. Meridian's response attributed its performance failures to three categories of claimed justification:

(a) Northgate's alleged failure to timely obtain municipal permits. Meridian's response asserted that NFA had failed to timely fulfill its permitting obligations under MCA § 5.3, causing delays that cascaded through the project schedule.

(b) Fourteen Owner-directed scope changes. Meridian claimed that NFA personnel — primarily Sean Calloway — had directed 14 scope changes during the course of the project that were never formalized as written Change Orders under MCA § 16.1, and that these uncompensated scope changes added work and delayed Meridian's schedule.

(c) Force majeure (COVID-19 aftereffects). Meridian asserted that the lingering effects of the COVID-19 pandemic, including labor shortages and supply chain disruptions, constituted force majeure events that excused its schedule delays.

When questioned about the specifics of the permitting delay claim, Henley's testimony was conspicuously vague. He could identify only three specific instances in Connecticut where he believed NFA had delayed in providing right-of-way access to Meridian's crews. He could not produce any supporting documentation for these claims during the deposition and was uncertain whether the permits in question fell under NFA's responsibility pursuant to MCA § 5.3 or under a different contractual provision. As discussed further in Section IV.D below, Henley's own internal permit tracker, when placed before him, substantially undermined the broader permitting delay claim.

3. Cure Notice No. 2 (February 19, 2024) and Corrective Action Plan (March 5, 2024)

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

Henley testified that he assisted in preparing the Corrective Action Plan that Meridian submitted on March 5, 2024, in response to Cure Notice No. 2. The Corrective Action Plan proposed several measures intended to address the identified performance failures, including an accelerated construction schedule, the deployment of additional field crews and subcontractor resources, and the implementation of enhanced quality control procedures. The plan also requested a nine-month extension of the project schedule and $87 million in additional compensation from Northgate to fund the acceleration and remediation efforts.

Key Admission: When questioned about the Corrective Action Plan's proposed deployment of additional crews, Henley made a damaging concession. He testified that as of the date the Corrective Action Plan was submitted to Northgate on March 5, 2024, Meridian had not yet secured firm commitments from the additional subcontractor crews identified in the plan. Henley described the crew commitments contained in the plan as "aspirational" rather than "firm," meaning that Meridian had identified potential subcontractors but had not executed contracts, obtained capacity commitments, or confirmed availability. This admission is devastating to Meridian's position because it demonstrates that the Corrective Action Plan — Meridian's primary response to the cure notices — was not a credible plan backed by actual commitments but rather a speculative proposal based on resources Meridian hoped, but could not ensure, it would be able to obtain.

Compounding the credibility problems with the Corrective Action Plan, Henley acknowledged that during the cure period itself — between the issuance of Cure Notice No. 1 on January 18, 2024, and the submission of the Corrective Action Plan on March 5, 2024 — Northgate issued 12 additional critical NCRs for newly identified quality defects. These additional NCRs, issued while Meridian was purportedly developing a plan to cure its existing failures, further undermined the credibility of Meridian's cure efforts and demonstrated that quality failures were continuing unabated even as Meridian promised corrective action.

4. Notice of Termination (April 1, 2024)

Henley testified that he learned of Northgate's termination of the MCA on April 1, 2024. He stated that he personally believed the termination was "premature," expressing the view that Meridian should have been given additional time and opportunity to implement the Corrective Action Plan. However, Henley acknowledged that he was not involved in the legal analysis of whether material breach had occurred under MCA § 14.1 and that his characterization of the termination as "premature" was based on his perspective as an operations manager rather than on any legal assessment.

This characterization is a lay opinion that lacks legal foundation, and while Meridian's counsel may attempt to introduce it at trial, it is of limited probative value given Henley's admission that he was not involved in the legal analysis and given the overwhelming evidence of Meridian's performance failures that Henley himself confirmed during the deposition.

C. Alleged Owner-Directed Scope Changes

1. Henley's Account of the 14 Claimed Scope Changes

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

Henley was asked to identify and describe each of the 14 claimed scope changes. He was able to specifically describe only 9 of the 14 changes. For the remaining 5, Henley deferred to Bridget Yeung (COO) and Victor Sandoval (CEO) as having more direct knowledge, testifying that he was either not personally involved in the relevant communications or did not have sufficient recollection to describe those changes with specificity.

Of the 9 scope changes Henley could describe, he characterized them as follows:

• Route realignments to serve additional customer locations: Four instances where NFA personnel (primarily Sean Calloway) allegedly directed Meridian to modify the fiber route alignment to reach customer premises that were not included in the original design. Henley described these as additions to the scope of work that required Meridian to construct additional route miles.

• Changes to conduit specifications: Two instances where NFA allegedly directed changes to the type or size of conduit to be installed in certain segments, requiring Meridian to modify its procurement and installation approach.

• Additional handholes and splice points: Two instances where NFA allegedly directed the installation of additional handholes and splice points beyond those shown in the approved design.

• Acceleration directive for Phase 2 Milestone 6: One instance where Henley claimed Sean Calloway verbally directed Meridian to accelerate work on Milestone 6 to recover schedule, requiring the deployment of additional crews and overtime work that Meridian contends should be compensated as a scope change.

2. Admission: No Written Change Order Requests Submitted by Meridian

Key Admission: When questioned about the process by which these scope changes were communicated and documented, Henley made a critical concession. He admitted that for all 14 of the alleged scope changes — including the 9 he could describe and the 5 he could not — Meridian did not submit a formal written Change Order request as required by MCA § 16.1. Henley testified that Meridian "relied on verbal approvals" from Sean Calloway and expected that the changes would be formalized "after the fact" through a retroactive Change Order process. No such retroactive formalization ever occurred.

Henley further acknowledged that he was aware of the requirements of MCA § 16.1, which mandates that all changes to the scope of work be documented through written Change Orders signed by authorized representatives of both parties. He conceded that he understood this provision at the time the alleged scope changes occurred and that he did not take steps to ensure Meridian's compliance with the contractual Change Order procedure.

This admission is of critical importance to Northgate's defense for several reasons. First, it establishes that Meridian's own failure to follow the contractually required Change Order process is the reason these alleged scope changes were never formalized, not any act or omission by Northgate. Second, it supports Northgate's position that Meridian cannot rely on informal, undocumented verbal directions as a basis for claiming additional compensation or excusing its performance failures. Third, it provides a strong basis for arguing that Meridian's failure to follow the MCA § 16.1 procedure bars its equitable defenses, including any constructive change order theory, as a matter of contract law.

3. Impact on Schedule

Henley estimated that the 9 scope changes he could identify added approximately 180 to 240 route miles and 45 to 60 days of additional work to the Phase 2 schedule. He testified that this estimate was based on his "field judgment" and general familiarity with the type and magnitude of the work involved in each change.

However, under cross-examination, Henley made several significant concessions regarding this estimate. First, he acknowledged that he had not performed a formal schedule impact analysis for any of the 9 scope changes. He did not conduct a critical path analysis, did not evaluate whether the alleged scope changes fell on the project's critical path, and did not quantify the impact of each change on specific milestones. His estimate was, by his own description, a rough approximation based on general field experience rather than the product of rigorous scheduling analysis.

Second, and critically, Henley conceded that even if one were to credit his highest estimate of 60 days of schedule impact attributable to the scope changes, this would not come close to accounting for the cumulative 315+ days of delay that Meridian experienced across Milestones 5 through 8 of Phase 2. The gap between the claimed scope change impact (60 days at most) and the actual delay experienced (over 315 days) is enormous and demonstrates that the alleged scope changes, even if proven, cannot serve as the primary explanation for Meridian's Phase 2 schedule failures.

D. Permitting Responsibility Under MCA § 5.3

1. Henley's Understanding of Permitting Allocation

Henley testified about the allocation of permitting responsibilities between NFA and Meridian under MCA § 5.3. He stated that his understanding was that MCA § 5.3 made NFA responsible for "major" governmental permits and rights-of-way, such as franchise agreements and state-level authorizations, while Meridian was responsible for obtaining routine construction permits, including street opening permits, traffic control permits, and similar local construction authorizations.

Under questioning, however, Henley admitted that he had not closely read MCA § 5.3 and that his understanding of the permitting allocation was based on summaries provided to him by Meridian's contract administration team rather than on his own review of the contract language. This admission weakens Henley's credibility as a witness on permitting issues and suggests that his testimony about which permits were NFA's responsibility versus Meridian's responsibility may not be based on an accurate understanding of the contractual provisions.

2. Specific Permitting Delays Identified

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

However, under cross-examination, Henley's permitting delay claims were significantly undermined. He conceded the following:

(a) He did not personally communicate with the municipalities in question about permit status and therefore had no firsthand knowledge of the timeline for permit processing.

(b) He did not know whether NFA had submitted permit applications on time or whether the alleged delays were caused by NFA's late submission or by the municipalities' processing timelines.

(c) Meridian's own permit tracking logs — contained in the document production at Bates numbers MIP-00412003 through MIP-00412087 — reflected that many routine construction permits (which were Meridian's responsibility, not NFA's) were delayed because Meridian submitted incomplete or erroneous applications.

Key Admission: When shown Meridian's own internal permit tracker during the deposition, Henley acknowledged that of 847 permit applications tracked in Phase 2, 213 — approximately 25% — were returned by municipalities for incompleteness or errors in Meridian's applications. The average delay caused by the need to correct and resubmit these deficient applications was 34 days. Henley conceded that these delays were attributable to Meridian, not to NFA. This admission is profoundly damaging to Meridian's permitting delay defense because it demonstrates that a substantial proportion of permit-related delays in Phase 2 were self-inflicted, caused by Meridian's own failure to submit complete and accurate permit applications.

E. Force Majeure

1. COVID-19 and Supply Chain

Henley's Day 2 testimony also addressed the force majeure defense in connection with COVID-19's impact on labor availability and fiber cable supply chains. Henley testified that COVID-19 aftereffects did affect labor availability and supply chains through approximately mid-2022, consistent with his Day 1 testimony on this topic.

Key Admission (reiterated from Day 1): When asked to address the force majeure defense directly, Henley reiterated his Day 1 concession that by mid-2022, labor market conditions in the fiber construction sector had substantially normalized. He testified that Meridian's ongoing staffing challenges after that point were primarily due to compensation competitiveness and Ridgepoint-driven budget constraints rather than pandemic-related disruption. This admission effectively confines Meridian's force majeure defense to a relatively limited window — from approximately mid-2020 through mid-2022 — and leaves the majority of Meridian's Phase 2 delays (which extended through early 2024) and all of its Phase 3 delays unexplained by force majeure.

With respect to supply chain disruptions, Henley testified that Meridian experienced delays of approximately 4 to 8 weeks in receiving fiber cable from its primary supplier during the period from the second quarter of 2021 through the first quarter of 2022. He attributed these delays to pandemic-related supply chain constraints affecting the telecommunications materials sector. However, he acknowledged that these supply chain delays had resolved by mid-2022 and that fiber cable availability was no longer a significant constraint on Phase 2 work, which commenced in October 2021. Accordingly, while the supply chain disruptions may have contributed to some early Phase 2 delays, they do not explain the escalating delays that characterized Milestones 6, 7, and 8, which occurred after the supply chain issues had been resolved.

V. Key Admissions Summary (Favorable to Northgate)

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

1. Crew shortages were primarily internal, not force majeure. Henley admitted that Meridian's crew shortages resulted from (a) diversion of experienced workers to other Meridian projects in the Southeast and Midwest, (b) loss of experienced crew foremen to competitors due to uncompetitive wages, and (c) Ridgepoint Capital Group LP's cost-reduction directives that constrained hiring and subcontractor engagement. Henley conceded that COVID-19 aftereffects, which form the basis of Meridian's force majeure defense, had substantially resolved by mid-2022, leaving the majority of Phase 2 and all of Phase 3 delay periods unexplained by force majeure.

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

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

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

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

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

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

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

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

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

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

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

VI. Testimony Potentially Favorable to Meridian (Areas of Concern)

While Henley's deposition was overwhelmingly favorable to Northgate's position, the following aspects of his testimony should be flagged as areas of concern that may require attention in subsequent depositions, expert work, and trial preparation:

1. Permitting delays (limited). Henley identified three Connecticut municipalities and two Massachusetts municipalities where he claimed NFA was late in securing right-of-way agreements needed for Meridian's construction activities. While he could not provide detailed supporting information and his own internal permit tracker substantially undermined the broader permitting delay claim, Meridian's counsel will likely attempt to develop this testimony through other witnesses — particularly Bridget Yeung — and through documentary evidence. We should be prepared to rebut any permitting delay claims with NFA's own permit submission records and the Meridian internal tracker showing 213 returned applications. The specificity of Henley's claim regarding five municipalities, while limited, gives Meridian's counsel a concrete starting point for further development.

2. Scope changes directed verbally by Sean Calloway. Henley consistently testified that Sean Calloway verbally directed scope changes on at least 9 occasions, including route realignments, conduit specification changes, additional handholes, and one acceleration directive. If this testimony is corroborated by other witnesses or contemporaneous documents (such as emails or text messages between Calloway and Henley), it could support Meridian's constructive change order theory. The absence of written Change Order requests under MCA § 16.1 significantly limits the legal viability of this theory, but the factual testimony about verbal directions, if corroborated, could be presented to the factfinder as evidence that NFA contributed to Meridian's workload in ways not reflected in the formal contract documents. We should review Calloway's communications carefully and prepare him for his own deposition (if Meridian seeks to depose him) or for trial testimony.

3. Characterization of termination as "premature." Henley's statement that he personally believed the termination was "premature" is a lay opinion without legal foundation, and Henley conceded that he was not involved in the legal analysis of material breach. Nonetheless, Meridian's counsel may attempt to introduce this characterization at trial to create an impression that even Meridian's own field operations leader believed the termination was unwarranted. We should be prepared to exclude this testimony under relevance and foundation objections, or, if it is admitted, to neutralize it through cross-examination highlig

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT This memorandum is protected by the attorney work product doctrine and the attorney-client privilege. It reflects the mental impressions, conclusions, opinions, and legal theories of counsel. It is not to be disclosed to any person or entity outside Calderwood & Harkness LLP and its authorized agents without the prior written consent of the undersigned.
CALDERWOOD & HARKNESS LLP 425 Park Avenue, 33rd Floor New York, NY 10022
MEMORANDUM
To: Linda Osei, Responsible Partner
From: Yuki Nakamura, Working Associate
Date: December 9, 2024
Re: Deposition Summary — Marcus Henley (Meridian Infrastructure Partners LLC, Vice President of Field Operations, Northeast Division), December 3–4, 2024
Matter: Northgate Fiber Americas Inc. — Defense of Meridian Infrastructure Partners LLC Construction Dispute
Matter No.: 1022-00005
Court: Supreme Court of the State of New York, New York County, Commercial Division, Index No. 654321/2024 (Hon. Eleanor M. Ricci, Part 49)
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I. Executive Summary
Marcus Henley, Meridian Infrastructure Partners LLC's ("Meridian") Vice President of Field Operations for the Northeast Division, was deposed over two days on December 3 and 4, 2024, at the offices of Calderwood & Harkness LLP. The deposition was taken by Jeffrey Park, Lead Associate, on behalf of our client Northgate Fiber Americas Inc. ("NFA" or "Northgate"). Mr. Henley was represented at the deposition by Thomas Deluca and Miriam Vasquez of Hargrove, Deluca & Stein LLP, counsel for Meridian.
Henley served as the day-to-day operational supervisor of all Meridian field crews deployed on the Northgate fiber build-out program across the seven-state northeastern footprint encompassing New York, New Jersey, Connecticut, Massachusetts, Pennsylvania, Maryland, and Virginia. In that capacity, he had direct personal knowledge of crew staffing, subcontractor management, schedule performance, quality control, and many of the operative events underlying both Meridian's claims and Northgate's counterclaims in this litigation.
Henley's testimony over the two-day deposition yielded several significant admissions that are highly favorable to Northgate's defense, as well as to Northgate's affirmative counterclaims. The most consequential admissions relate to the following four subject areas:
(a) Crew shortages were attributable to Meridian's internal staffing failures, not external force majeure events. Henley admitted that Meridian diverted experienced workers to other projects, lost foremen to competitors because of uncompetitive wages, and reduced crew levels on the Northgate project at the direction of Ridgepoint Capital Group LP ("Ridgepoint"), Meridian's private equity sponsor, in order to meet EBITDA margin targets. He conceded that by mid-2022, the labor market had substantially recovered from COVID-19 disruptions and that Meridian's ongoing staffing challenges were internally driven.
(b) Root causes of non-conformance reports ("NCRs") traced back to inadequate training and supervision of subcontractor crews. Henley testified that the "majority" of the 43 critical NCRs issued during the project were caused by Meridian's failure to adequately train subcontractor crews on Northgate's technical specifications and by insufficient field supervision resulting from the crew reductions described above.
(c) Henley's personal awareness of schedule slippage well before the cure notices. Henley conceded that by the time Milestone 6 was completed, he personally believed Meridian would not be able to complete Milestone 8 on schedule without significant additional resources that Meridian had not committed.
(d) Meridian's failure to implement meaningful corrective action even after internal recognition of quality failures. Henley's requests for additional quality control personnel and replacement splicing equipment were repeatedly denied or deferred due to budget constraints imposed by Ridgepoint's cost-reduction directives.
There are certain areas where Henley's testimony may be viewed as potentially favorable to Meridian, though these are of limited force. In particular, Henley maintained that Northgate's permitting delays contributed to Phase 2 schedule slippage, identifying delays in three Connecticut municipalities and two Massachusetts municipalities where he claimed NFA was late in securing right-of-way agreements. However, Henley could not provide specifics to support these claims, and his own internal permit tracker — when placed before him — revealed that a substantial number of permit application delays were attributable to Meridian's own submission of incomplete or erroneous applications. Additionally, Henley testified that at least some of the 14 alleged scope changes were directed verbally by Sean Calloway, NFA's Director of Construction Management, without written Change Orders. While this testimony could support Meridian's constructive change order theory, Henley conceded that Meridian never submitted formal written Change Order requests as required by MCA § 16.1 for any of the 14 claimed changes, significantly undermining Meridian's ability to rely on this defense.
This memorandum provides a detailed summary of Henley's testimony organized by topic, identifies key admissions and areas of concern, and sets forth recommendations for follow-up action.
II. Witness Background and Role
A. Professional Background
Marcus Henley testified that he has been employed by Meridian Infrastructure Partners LLC since 2015, initially in a senior project manager role overseeing fiber construction projects in the Mid-Atlantic region. He was promoted to Vice President of Field Operations for the Northeast Division in January 2020, shortly before the Master Construction Agreement ("MCA") between Northgate and Meridian was executed on March 15, 2020. In his current role, Henley oversees all field operations for Meridian's Northeast Division, which encompasses fiber construction projects across approximately a dozen states along the eastern seaboard.
Prior to joining Meridian, Henley worked for two other fiber construction firms over a combined period of approximately twelve years. His career has been focused on outside plant ("OSP") construction, including aerial and underground fiber optic cable installation, conduit construction, splice work, and related civil infrastructure. He described his background as rooted in construction management and field supervision, noting that he has extensive hands-on experience managing large-scale fiber build-out programs for major telecommunications carriers and internet service providers.
Henley testified that he does not hold a professional engineering license and has never been a licensed professional engineer in any jurisdiction. He holds a bachelor's degree in construction management and has completed various industry certifications related to fiber optic installation and safety compliance, though he did not identify these certifications by name during the deposition.
B. Role on the Northgate Project
Henley testified that he directly supervised all Meridian field crews and subcontractors working on the Northgate fiber build-out program from the date of the Notice to Proceed in April 2020 through the date of Northgate's termination of the MCA on April 1, 2024. This represented the full duration of Meridian's performance under the contract. In that capacity, Henley was responsible for a broad range of operational functions, including crew deployment and scheduling, subcontractor management and oversight, day-to-day schedule tracking, and quality control at the field level. He described his role as "the person ultimately responsible for making sure the work got done in the field."
Within Meridian's organizational structure, Henley reported directly to Bridget Yeung, Meridian's Chief Operating Officer, and had a dotted-line reporting relationship to Victor Sandoval, Meridian's Chief Executive Officer. Henley testified that he communicated with Yeung on a near-daily basis regarding the Northgate project and participated in weekly status calls with both Yeung and Sandoval. He also attended periodic meetings with Meridian's board of directors and representatives of Ridgepoint Capital Group LP, Meridian's majority equity holder, though he characterized his participation in those meetings as limited to presenting operational updates.
On the Northgate side, Henley served as Meridian's primary operational point of contact with Sean Calloway, NFA's Director of Construction Management, for all day-to-day field issues. Henley described his relationship with Calloway as "professional" and testified that the two communicated frequently — often multiple times per day during active construction periods — by phone, email, and text message regarding crew deployment, construction progress, field conditions, and emerging issues. Henley also interacted with other NFA personnel, including Renata Voss (NFA's Vice President of US Network Infrastructure), though he described those interactions as less frequent and typically limited to higher-level schedule and performance discussions.
When questioned about his familiarity with the contractual terms governing the project, Henley acknowledged that he was familiar with the MCA's milestone schedule set forth in Section 8.2 of the agreement, which established 14 defined milestones across three construction phases. He confirmed he understood the milestone dates and the associated liquidated damages provisions applicable to milestone delays. He further acknowledged familiarity with the quality standards set forth in MCA § 12.4 and in Northgate's Technical Specification NS-FIBER-2020, which governed fiber splice performance, conduit installation, route alignment, and other technical requirements. Henley stated that he considered these documents to be his "operational roadmap" and that he distributed relevant excerpts to his crew foremen and subcontractor supervisors, though, as discussed below, his testimony regarding the adequacy of that distribution and accompanying training revealed significant gaps.
III. Day 1 Testimony (December 3, 2024) — Phase 1 and Phase 2 Performance
A. Phase 1 (New York Metro & Northern New Jersey — Milestones 1–4)
1. General Performance
Henley's testimony on Day 1 began with an overview of Phase 1 of the fiber build-out program, which encompassed the New York metropolitan area and northern New Jersey. Henley confirmed that Phase 1 covered approximately 3,200 route miles of fiber optic cable installation and related civil infrastructure, with a total milestone value of approximately $208 million under the MCA. Phase 1 was divided into four milestones (Milestones 1 through 4), each tied to the completion of defined geographic segments and construction activities within the Phase 1 footprint.
Henley testified that Milestones 1 and 2 were completed substantially on schedule, with only minor delays that did not trigger liquidated damages. However, he acknowledged that Milestone 3 was completed 47 days late — with actual completion on October 14, 2021, versus a target completion date of August 28, 2021. This delay was significant both in absolute terms and because it set a pattern of escalating schedule slippage that would accelerate through Phases 2 and 3.
When asked about the causes of the Milestone 3 delay, Henley attributed it primarily to two factors: crew productivity shortfalls and difficulty obtaining municipal permits in certain New York City boroughs. With respect to crew productivity, Henley acknowledged that Meridian's field crews were not achieving the daily route-mile production rates assumed in the project schedule, though he did not provide a detailed quantitative breakdown. With respect to permitting, Henley testified in general terms that certain New York City agencies were slow to process permit applications, but when pressed for specifics, he was unable to identify which particular permit applications were Northgate's responsibility under MCA § 5.3 (which allocates certain governmental permitting obligations to the Owner) as opposed to Meridian's responsibility. This inability to distinguish between Owner-responsible and Contractor-responsible permits significantly undermines any claim that the Milestone 3 delay was attributable to Northgate's permitting failures.
Milestone 4 was completed with a relatively minor delay that did not result in a separate liquidated damages assessment, and Henley did not provide extensive testimony about Milestone 4 performance.
2. Admission: Crew Shortages in Phase 1
One of the most significant admissions from Henley's Day 1 testimony concerned the root causes of crew shortages during Phase 1. When questioned by Mr. Park about why Meridian was unable to achieve planned production rates during the Milestone 3 period, Henley testified as follows:
Key Admission: Henley admitted that Meridian was unable to fully staff its Phase 1 crews as planned because the company had simultaneously taken on two other large fiber construction projects — one in the Southeast and one in the Midwest — and had diverted experienced workers away from the Northgate project to staff those competing engagements. This admission is of critical importance because it establishes that Meridian's crew shortages during Phase 1 were the product of Meridian's own resource allocation decisions, not external events beyond its control.
Henley further acknowledged that he raised staffing concerns with both Bridget Yeung (COO) and Victor Sandoval (CEO) as early as the third quarter of 2020 — within the first six months of the project — alerting them that the diversion of experienced workers to the Southeast and Midwest projects was creating staffing gaps on the Northgate project. However, Henley testified that Meridian did not take meaningful action to reallocate resources back to the Northgate project until the first quarter of 2021, a delay of approximately two calendar quarters during which understaffing persisted.
This testimony directly undermines Meridian's position in this litigation that Phase 1 delays were attributable to Northgate's permitting failures or to force majeure events. Instead, it establishes that Meridian's own business decision to overextend its workforce across multiple projects was a primary driver of Phase 1 schedule slippage.
3. Liquidated Damages for Milestone 3
Henley testified that he was aware that Northgate assessed liquidated damages of $8,225,000 for the 47-day Milestone 3 delay, calculated at the contractual rate of $175,000 per day. This assessment was communicated to Meridian via letter dated November 5, 2021, from Renata Voss on behalf of NFA.
When asked whether he disputed the calculation at the time, Henley testified that he did not. He further acknowledged that Meridian did not formally challenge the liquidated damages assessment through the dispute resolution procedures set forth in the MCA. Meridian's failure to timely challenge the Milestone 3 liquidated damages assessment may have implications for any argument Meridian might raise at trial contesting the enforceability or calculation of the Phase 1 liquidated damages.
B. Phase 2 (Connecticut, Western Massachusetts, Southern Pennsylvania — Milestones 5–8)
1. Escalating Schedule Delays
Henley's testimony regarding Phase 2 revealed a pattern of dramatically escalating schedule delays that accelerated with each successive milestone. Phase 2 covered the construction footprint in Connecticut, western Massachusetts, and southern Pennsylvania, and was divided into Milestones 5 through 8. Henley confirmed the following delays for each Phase 2 milestone:
Henley testified that the delays compounded over time because Meridian was unable to recover schedule once it fell behind on Milestone 5. He explained that the Phase 2 milestones were sequentially dependent, such that a delay in one milestone cascaded into subsequent milestones, and that Meridian did not have sufficient reserve capacity in its schedule or crew deployment plan to absorb the initial delay and get back on track.
Key Admission: When pressed about his contemporaneous understanding of the schedule trajectory, Henley conceded that by the time Milestone 6 was completed — already 68 days behind schedule — he personally believed that Meridian would not be able to complete Milestone 8 on schedule. He testified that achieving the Milestone 8 target date would have required significant additional resources, including additional field crews and subcontractors, that Meridian had not committed and had no realistic plan to obtain. This admission is highly probative of Meridian's knowledge of its own inability to perform, and it predates the cure notices by a substantial period, suggesting that Meridian's eventual failure to cure was not attributable to any act or omission by Northgate but rather to Meridian's own longstanding and internally recognized resource deficiencies.
2. Root Causes of Crew Shortages (Phase 2)
Henley's testimony regarding the root causes of Phase 2 crew shortages was among the most consequential portions of the two-day deposition. Henley attributed Phase 2 crew shortages to three interrelated factors:
(a) General labor market tightness in the fiber construction industry post-COVID-19. Henley testified that the fiber construction industry experienced acute labor shortages in 2021 and into 2022 as the broader economy recovered from pandemic-related disruptions and demand for fiber infrastructure surged, driven in part by federal broadband stimulus programs.
(b) Loss of experienced crew foremen to competitors. Henley acknowledged that Meridian lost several experienced crew foremen — individuals who served as the on-the-ground leaders of Meridian's field crews — to competitors who offered higher wages. He testified that the loss of these experienced personnel had a disproportionate impact on crew productivity and quality because the replacement workers lacked the same level of experience and familiarity with the Northgate project's technical specifications.
(c) Ridgepoint Capital Group LP's cost-reduction directives. Henley testified that Ridgepoint, Meridian's private equity sponsor, imposed cost-reduction directives beginning in approximately the second quarter of 2022 that constrained Meridian's ability to offer competitive wages, hire replacement foremen, and engage additional subcontractors to supplement its workforce on the Northgate project.
Key Admission: When Mr. Park asked Henley directly whether COVID-19 force majeure was the primary cause of crew shortages in 2022 and 2023, Henley conceded that it was not. He testified that by mid-2022, the general labor market had substantially recovered from pandemic-related disruptions and that Meridian's ongoing staffing challenges were "more attributable to compensation competitiveness and internal budget constraints imposed by Ridgepoint than to pandemic-related disruption." This admission is of paramount importance to the case because it significantly weakens Meridian's force majeure defense, which is premised on the claim that COVID-19 aftereffects excused Meridian's delays throughout the Phase 2 and Phase 3 periods extending well into 2023 and 2024. Henley's own testimony places the end of meaningful pandemic-related labor disruption at mid-2022, leaving the vast majority of the Phase 2 delay period unexplained by force majeure.
3. Ridgepoint's Cost-Reduction Pressure
Building on his testimony regarding crew shortages, Henley provided detailed and damaging testimony about the specific ways in which Ridgepoint Capital Group LP's cost-reduction pressure affected Meridian's ability to perform on the Northgate project. Henley testified that beginning in approximately the second quarter of 2022, Graham Latimer, the Managing Partner of Ridgepoint, communicated through Victor Sandoval (CEO) and Bridget Yeung (COO) that Meridian needed to reduce overhead and field costs to meet certain EBITDA margin targets. Henley provided context for these targets, testifying that Meridian's fiscal year 2023 EBITDA was $58.9 million on total revenue of $620 million, representing an EBITDA margin of approximately 9.5%. He understood Ridgepoint's expectation was for higher margins, and that achieving these targets required cuts to operating expenses, including field labor costs.
Henley testified that these Ridgepoint-driven cost-reduction directives led Meridian to take the following specific actions that directly impacted performance on the Northgate project:
(a) Crew reductions. Meridian reduced the number of active field crews deployed on the Northgate project from a peak of 38 crews in the first quarter of 2022 to approximately 24 crews by the fourth quarter of 2022 — a reduction of approximately 37%. Henley testified that this reduction occurred at a time when the project was already behind schedule and needed more, not fewer, crews to recover.
(b) Deferred hiring of replacement foremen. Rather than replacing the experienced crew foremen who had departed for competitors, Meridian deferred those hires, leaving crews under the supervision of less-experienced personnel.
(c) Increased reliance on less-experienced subcontractor crews. To maintain some level of production capacity despite the crew reductions, Meridian relied more heavily on subcontractor crews that were less experienced with Northgate's technical specifications and quality requirements. As discussed in Section III.C below, this increased reliance on less-experienced subcontractors was a direct contributor to the surge in non-conformance reports during Phase 2.
Henley acknowledged that he protested these reductions in a series of emails to Bridget Yeung, warning that the crew reductions would cause further schedule delays and quality problems on the Northgate project. These emails were identified during the deposition and are contained in the document production at Bates numbers MIP-00234871 through MIP-00234879. Henley testified that he was "very clear" in these communications that reducing crews would have predictable and serious adverse consequences for project performance, but that his warnings were overridden by Yeung and Sandoval at Ridgepoint's direction.
4. Liquidated Damages Assessment (Phase 2)
Henley confirmed his awareness that Northgate assessed liquidated damages for each of the Phase 2 milestones. The Phase 2 liquidated damages assessments are as follows:
With respect to Milestone 8, Henley confirmed that the contractual liquidated damages cap of 10% of the milestone value applied, resulting in a capped assessment of $9,100,000 (10% of the $91 million Milestone 8 value) rather than the uncapped calculated amount of $23,450,000. Henley did not dispute the day-count calculations for any of the Phase 2 milestones and did not testify that the daily rate or cap provisions were incorrectly applied.
C. Non-Conformance Reports (NCRs) — Root Causes
1. Volume and Severity of NCRs
Henley confirmed that he was aware of all 287 non-conformance reports issued during the course of the Northgate project. Of these, 43 were classified as "critical" NCRs, reflecting defects or deviations of sufficient severity to require mandatory remediation before the affected segments could be accepted by Northgate. The remaining 244 NCRs were classified as non-critical.
Henley testified that the 43 critical NCRs encompassed three principal categories of defects:
•  Splice loss exceeding specification: Fiber optic splices that failed to meet the loss thresholds established by Northgate Technical Specification NS-FIBER-2020 and the applicable ANSI/TIA-568 industry standards. Splice loss exceedances were the most common category of critical NCR.
•  Improper conduit burial depth: Conduit installed at burial depths less than the minimums required by NS-FIBER-2020 and applicable local building codes. These violations created compliance risks and potential physical damage exposure.
•  Unauthorized route deviations: Construction of fiber routes that departed from the approved design alignment without prior written approval from Northgate, as required under the MCA.
The 244 non-critical NCRs encompassed range lesser deficiencies, including documentation deficiencies (such as incomplete daily construction logs or missing inspection records), minor route alignment variances that did not affect overall network topology, and incomplete or inaccurate as-built records. While individually less serious than the critical NCRs, the volume of non-critical NCRs further reflects the systemic quality control failures that pervaded Meridian's work on the project.
2. Admission: NCRs Caused by Inadequate Training and Supervision
Key Admission: When asked to identify the root causes of the 43 critical NCRs, Henley testified that the "majority" of these critical defects were attributable to two related factors: (a) inadequate training of subcontractor crews on Northgate's Technical Specification NS-FIBER-2020, and (b) insufficient field supervision resulting from the crew reductions and staffing constraints discussed above. This admission is highly significant because it places the cause of the critical NCRs squarely within Meridian's control and responsibility, negating any argument that the quality failures were caused by Northgate's actions, specifications, or external conditions.
Henley elaborated on this admission by testifying that Meridian's quality control program was severely understaffed during the Phase 2 period. Specifically, he acknowledged that Meridian had only three full-time quality control inspectors covering the entire Phase 2 geographic footprint — Connecticut, western Massachusetts, and southern Pennsylvania. When asked whether this level of QC staffing was adequate, Henley described it as "inadequate" and testified that the ratio of QC inspectors to active field crews was insufficient to provide the level of inspection and oversight contemplated by the MCA and by NS-FIBER-2020.
Henley further testified that he requested additional QC personnel from Bridget Yeung on multiple occasions during 2022 and 2023. He referenced a series of emails to Yeung contained in the document production at Bates numbers MIP-00301445 through MIP-00301452, in which he set forth his concerns about QC understaffing and the consequences for project quality. According to Henley, these requests were either denied outright or deferred indefinitely due to budget constraints — the same Ridgepoint-driven cost-reduction pressures that led to the crew reductions described above. This testimony establishes that Meridian's leadership was aware of the QC understaffing problem, was specifically warned about its consequences by the person closest to field operations, and made a deliberate decision not to address it.
3. Splice Loss Failures
Henley testified in considerable detail about the splice loss NCRs, which he confirmed were the most common category of critical NCR on the project. Splice loss is a critical quality metric in fiber optic construction, as excessive splice loss degrades signal quality and can render fiber segments non-functional for their intended purpose. Northgate's Technical Specification NS-FIBER-2020 established maximum acceptable splice loss thresholds consistent with ANSI/TIA-568 standards, and any splice exceeding those thresholds required remediation, typically in the form of re-splicing or, in severe cases, replacement of the affected fiber segment.
Henley admitted that at least 18 of the splice loss NCRs — a substantial proportion of the total — resulted from Meridian's field crews using outdated fusion splicing equipment that had not been replaced or upgraded. Henley testified that the outdated equipment was less reliable, more prone to producing high-loss splices, and required more skilled operators to achieve acceptable results. When asked why the equipment had not been replaced, Henley attributed the failure to capital expenditure limitations — another manifestation of the cost constraints that Ridgepoint had imposed on Meridian's operations.
Henley also acknowledged that Sean Calloway, NFA's Director of Construction Management, had raised splice loss concerns with him as early as March 2022, putting Meridian on notice of the problem well before the critical NCRs accumulated to the levels that ultimately contributed to the termination decision. When asked to characterize Meridian's response to Calloway's concerns, Henley testified that the response was "slower than it should have been," an acknowledgment that Meridian failed to take timely corrective action even after being put on notice by the Owner.
4. Conduit Depth Violations
Henley confirmed that 11 of the 43 critical NCRs involved conduit burial depths that failed to meet the minimum requirements established by NS-FIBER-2020 and applicable local building codes. Conduit burial depth is a critical compliance parameter because insufficiently buried conduit is vulnerable to damage from surface activities, third-party excavation, and environmental factors, and may violate local utility construction regulations.
Henley testified that the conduit depth violations occurred primarily in Connecticut and were discovered during Northgate's independent quality assurance inspections — not through Meridian's own QC program — further underscoring the inadequacy of Meridian's quality control operations during Phase 2.
Key Admission: Henley acknowledged that Meridian itself terminated its directional boring subcontractor on the affected Connecticut segments in the third quarter of 2023 for poor workmanship. This action by Meridian effectively constitutes a concession that the conduit depth violations were caused by the subcontractor's deficient work, a deficiency for which Meridian bears contractual responsibility as the prime contractor under the MCA. Henley's testimony on this point eliminates any argument that the conduit depth violations were caused by NFA's design specifications, site conditions, or other factors outside Meridian's control.
5. Unauthorized Route Deviations
Henley testified that approximately 8 of the 43 critical NCRs involved instances where Meridian's crews deviated from the approved route design without obtaining prior written approval from Northgate. These unauthorized route deviations had the potential to affect network topology, property rights and easements, and regulatory compliance, and triggered remediation obligations under the MCA.
When asked about the circumstances of these deviations, Henley offered partial justifications, claiming that some deviations were necessitated by field conditions encountered during construction, such as encountering unmarked underground utilities that made it impractical to follow the approved route alignment. However, Henley admitted that the proper procedure under MCA § 16.1 in such circumstances was to submit a Change Order request to Northgate before deviating from the approved design, and that Meridian did not follow this procedure in most cases. Instead, according to Henley, field crews made on-the-spot decisions to deviate from the approved route and notified Northgate after the fact, if at all. This failure to follow the contractual change management process is consistent with the broader pattern of disregard for MCA procedural requirements discussed in Section IV.C below in connection with the alleged scope changes.
6. Remediation Status
Henley's testimony regarding the remediation status of the critical NCRs as of the date of termination provides powerful support for Northgate's Counterclaim III for remediation costs. Henley acknowledged that as of the April 1, 2024 termination date, the majority of the 43 critical NCRs remained unresolved. He estimated that Meridian had fully remediated only approximately 12 of the 43 critical NCRs. The remaining 31 critical NCRs were either partially addressed (i.e., some remediation work had been initiated but not completed) or had not yet been started at all.
This testimony is significant for multiple reasons. First, it demonstrates that Meridian failed to remediate known quality defects over a period of many months, even as additional NCRs continued to accumulate. Second, it supports Northgate's position that the termination for cause was justified because Meridian had not only failed to meet schedule milestones but had also failed to deliver work of acceptable quality. Third, and most directly, it provides factual support for Northgate's Counterclaim III, which seeks $18.3 million in remediation costs. That counterclaim quantifies remediation costs based on 43 critical NCRs at an average remediation cost of approximately $275,000 per NCR (totaling approximately $11.825 million) plus 244 non-critical NCRs at an average remediation cost of approximately $26,500 per NCR (totaling approximately $6.466 million), for a combined total of approximately $18.3 million. Henley's admission that 31 of 43 critical NCRs remained unremediated is directly consistent with the factual predicates of this counterclaim.
IV. Day 2 Testimony (December 4, 2024) — Phase 3, Cure Notices, Scope Changes, and Permitting
A. Phase 3 (Maryland, Virginia, Eastern Pennsylvania — Milestones 9–14)
1. Mobilization Failures
Day 2 of the deposition began with Henley's testimony regarding Phase 3 of the fiber build-out program, which encompassed the remaining geographic footprint in Maryland, Virginia, and eastern Pennsylvania and was divided into Milestones 9 through 14. Henley confirmed that Phase 3 was the largest phase of the project by a substantial margin, planned to cover approximately 9,700 route miles of fiber construction with a total milestone value of $629 million.
Henley testified that Meridian mobilized initial crews in Maryland in July 2023 and commenced limited construction activity in the Phase 3 footprint. However, the progress achieved was minimal. Henley acknowledged that as of the April 1, 2024 termination, Meridian had completed only approximately 340 route miles of the planned 9,700 route miles — a completion rate of approximately 3.5%. This negligible progress over a nine-month mobilization period starkly illustrates Meridian's inability to perform the Phase 3 scope.
Key Admission: Henley acknowledged that Phase 3 mobilization was hampered by the same crew shortages that continued to affect Phase 2 performance during this period. He admitted that Meridian did not have a realistic plan to adequately staff Phase 3 while Phase 2 milestones remained incomplete and Phase 2 crews were already insufficient to meet the Phase 2 schedule. In effect, Henley conceded that Meridian could not simultaneously execute both phases and that commencing Phase 3 without resolving Phase 2 resource deficiencies was unrealistic. This admission undermines any argument by Meridian that Phase 3 delays were attributable to external factors rather than to Meridian's own inability to marshal adequate resources.
2. Phase 3 Payment Disputes
Henley testified that he was aware of payment disputes between Meridian and Northgate relating to Phase 3 work. He confirmed that Meridian submitted Phase 3 payment applications totaling $48.2 million and that Northgate approved and paid $31.7 million of that amount but disputed $16.5 million.
Henley testified that he believed some of the disputed amounts corresponded to legitimate work performed by Meridian's crews and subcontractors in the Phase 3 footprint. However, under questioning by Mr. Park, Henley conceded that certain payment applications submitted by Meridian included unit counts — the quantities of completed construction units (e.g., feet of conduit installed, splice closures completed) upon which payment was calculated — that he could not personally verify. Henley explained that he had not been physically present on-site for all of the work segments for which Meridian claimed payment and therefore could not confirm from personal knowledge that the claimed quantities were accurate. This concession raises questions about the reliability of Meridian's Phase 3 payment applications and may be relevant to Northgate's defense against Meridian's payment claims.
B. Cure Notices and Corrective Action Plan
1. Cure Notice No. 1 (January 18, 2024)
Henley confirmed that he was copied on Cure Notice No. 1, dated January 18, 2024, which was sent by Renata Voss, NFA's Vice President of US Network Infrastructure, to Meridian's senior leadership. The Cure Notice cited three categories of material breach under the MCA: (a) Meridian's failure to achieve Milestone 8, which was substantially behind schedule at that point; (b) Meridian's inadequate Phase 3 mobilization, which had yielded only negligible progress despite months of activity; and (c) the 43 critical NCRs, which reflected systemic quality failures that Meridian had failed to remediate.
Henley testified that upon receiving Cure Notice No. 1, he understood that Northgate was invoking the termination-for-cause provisions of MCA § 14.1, which required Northgate to provide Meridian with written notice of material breach and afford Meridian a 30-calendar-day cure period before proceeding to termination. Henley stated that he understood the significance of the Cure Notice and recognized that if Meridian failed to cure, Northgate would have the contractual right to terminate the MCA.
2. Meridian's Response (February 2, 2024)
Henley confirmed that he contributed to the drafting of Meridian's response to Cure Notice No. 1, which was submitted on February 2, 2024 — within the 30-day cure period. Meridian's response attributed its performance failures to three categories of claimed justification:
(a) Northgate's alleged failure to timely obtain municipal permits. Meridian's response asserted that NFA had failed to timely fulfill its permitting obligations under MCA § 5.3, causing delays that cascaded through the project schedule.
(b) Fourteen Owner-directed scope changes. Meridian claimed that NFA personnel — primarily Sean Calloway — had directed 14 scope changes during the course of the project that were never formalized as written Change Orders under MCA § 16.1, and that these uncompensated scope changes added work and delayed Meridian's schedule.
(c) Force majeure (COVID-19 aftereffects). Meridian asserted that the lingering effects of the COVID-19 pandemic, including labor shortages and supply chain disruptions, constituted force majeure events that excused its schedule delays.
When questioned about the specifics of the permitting delay claim, Henley's testimony was conspicuously vague. He could identify only three specific instances in Connecticut where he believed NFA had delayed in providing right-of-way access to Meridian's crews. He could not produce any supporting documentation for these claims during the deposition and was uncertain whether the permits in question fell under NFA's responsibility pursuant to MCA § 5.3 or under a different contractual provision. As discussed further in Section IV.D below, Henley's own internal permit tracker, when placed before him, substantially undermined the broader permitting delay claim.
3. Cure Notice No. 2 (February 19, 2024) and Corrective Action Plan (March 5, 2024)
Henley confirmed that Northgate issued a second Cure Notice on February 19, 2024, reiterating the grounds for material breach and noting that Meridian's February 2, 2024 response did not constitute cure of the identified deficiencies. Cure Notice No. 2 provided Meridian with an additional opportunity to present a concrete corrective action plan.
Henley testified that he assisted in preparing the Corrective Action Plan that Meridian submitted on March 5, 2024, in response to Cure Notice No. 2. The Corrective Action Plan proposed several measures intended to address the identified performance failures, including an accelerated construction schedule, the deployment of additional field crews and subcontractor resources, and the implementation of enhanced quality control procedures. The plan also requested a nine-month extension of the project schedule and $87 million in additional compensation from Northgate to fund the acceleration and remediation efforts.
Key Admission: When questioned about the Corrective Action Plan's proposed deployment of additional crews, Henley made a damaging concession. He testified that as of the date the Corrective Action Plan was submitted to Northgate on March 5, 2024, Meridian had not yet secured firm commitments from the additional subcontractor crews identified in the plan. Henley described the crew commitments contained in the plan as "aspirational" rather than "firm," meaning that Meridian had identified potential subcontractors but had not executed contracts, obtained capacity commitments, or confirmed availability. This admission is devastating to Meridian's position because it demonstrates that the Corrective Action Plan — Meridian's primary response to the cure notices — was not a credible plan backed by actual commitments but rather a speculative proposal based on resources Meridian hoped, but could not ensure, it would be able to obtain.
Compounding the credibility problems with the Corrective Action Plan, Henley acknowledged that during the cure period itself — between the issuance of Cure Notice No. 1 on January 18, 2024, and the submission of the Corrective Action Plan on March 5, 2024 — Northgate issued 12 additional critical NCRs for newly identified quality defects. These additional NCRs, issued while Meridian was purportedly developing a plan to cure its existing failures, further undermined the credibility of Meridian's cure efforts and demonstrated that quality failures were continuing unabated even as Meridian promised corrective action.
4. Notice of Termination (April 1, 2024)
Henley testified that he learned of Northgate's termination of the MCA on April 1, 2024. He stated that he personally believed the termination was "premature," expressing the view that Meridian should have been given additional time and opportunity to implement the Corrective Action Plan. However, Henley acknowledged that he was not involved in the legal analysis of whether material breach had occurred under MCA § 14.1 and that his characterization of the termination as "premature" was based on his perspective as an operations manager rather than on any legal assessment.
This characterization is a lay opinion that lacks legal foundation, and while Meridian's counsel may attempt to introduce it at trial, it is of limited probative value given Henley's admission that he was not involved in the legal analysis and given the overwhelming evidence of Meridian's performance failures that Henley himself confirmed during the deposition.
C. Alleged Owner-Directed Scope Changes
1. Henley's Account of the 14 Claimed Scope Changes
A substantial portion of Day 2 was devoted to Henley's testimony regarding Meridian's claim that NFA personnel directed 14 scope changes during the project that were never formalized as written Change Orders under MCA § 16.1. This claim is a central component of Meridian's defense, as Meridian contends that the uncompensated scope changes added significant work and delay to the project schedule.
Henley was asked to identify and describe each of the 14 claimed scope changes. He was able to specifically describe only 9 of the 14 changes. For the remaining 5, Henley deferred to Bridget Yeung (COO) and Victor Sandoval (CEO) as having more direct knowledge, testifying that he was either not personally involved in the relevant communications or did not have sufficient recollection to describe those changes with specificity.
Of the 9 scope changes Henley could describe, he characterized them as follows:
•  Route realignments to serve additional customer locations: Four instances where NFA personnel (primarily Sean Calloway) allegedly directed Meridian to modify the fiber route alignment to reach customer premises that were not included in the original design. Henley described these as additions to the scope of work that required Meridian to construct additional route miles.
•  Changes to conduit specifications: Two instances where NFA allegedly directed changes to the type or size of conduit to be installed in certain segments, requiring Meridian to modify its procurement and installation approach.
•  Additional handholes and splice points: Two instances where NFA allegedly directed the installation of additional handholes and splice points beyond those shown in the approved design.
•  Acceleration directive for Phase 2 Milestone 6: One instance where Henley claimed Sean Calloway verbally directed Meridian to accelerate work on Milestone 6 to recover schedule, requiring the deployment of additional crews and overtime work that Meridian contends should be compensated as a scope change.
2. Admission: No Written Change Order Requests Submitted by Meridian
Key Admission: When questioned about the process by which these scope changes were communicated and documented, Henley made a critical concession. He admitted that for all 14 of the alleged scope changes — including the 9 he could describe and the 5 he could not — Meridian did not submit a formal written Change Order request as required by MCA § 16.1. Henley testified that Meridian "relied on verbal approvals" from Sean Calloway and expected that the changes would be formalized "after the fact" through a retroactive Change Order process. No such retroactive formalization ever occurred.
Henley further acknowledged that he was aware of the requirements of MCA § 16.1, which mandates that all changes to the scope of work be documented through written Change Orders signed by authorized representatives of both parties. He conceded that he understood this provision at the time the alleged scope changes occurred and that he did not take steps to ensure Meridian's compliance with the contractual Change Order procedure.
This admission is of critical importance to Northgate's defense for several reasons. First, it establishes that Meridian's own failure to follow the contractually required Change Order process is the reason these alleged scope changes were never formalized, not any act or omission by Northgate. Second, it supports Northgate's position that Meridian cannot rely on informal, undocumented verbal directions as a basis for claiming additional compensation or excusing its performance failures. Third, it provides a strong basis for arguing that Meridian's failure to follow the MCA § 16.1 procedure bars its equitable defenses, including any constructive change order theory, as a matter of contract law.
3. Impact on Schedule
Henley estimated that the 9 scope changes he could identify added approximately 180 to 240 route miles and 45 to 60 days of additional work to the Phase 2 schedule. He testified that this estimate was based on his "field judgment" and general familiarity with the type and magnitude of the work involved in each change.
However, under cross-examination, Henley made several significant concessions regarding this estimate. First, he acknowledged that he had not performed a formal schedule impact analysis for any of the 9 scope changes. He did not conduct a critical path analysis, did not evaluate whether the alleged scope changes fell on the project's critical path, and did not quantify the impact of each change on specific milestones. His estimate was, by his own description, a rough approximation based on general field experience rather than the product of rigorous scheduling analysis.
Second, and critically, Henley conceded that even if one were to credit his highest estimate of 60 days of schedule impact attributable to the scope changes, this would not come close to accounting for the cumulative 315+ days of delay that Meridian experienced across Milestones 5 through 8 of Phase 2. The gap between the claimed scope change impact (60 days at most) and the actual delay experienced (over 315 days) is enormous and demonstrates that the alleged scope changes, even if proven, cannot serve as the primary explanation for Meridian's Phase 2 schedule failures.
D. Permitting Responsibility Under MCA § 5.3
1. Henley's Understanding of Permitting Allocation
Henley testified about the allocation of permitting responsibilities between NFA and Meridian under MCA § 5.3. He stated that his understanding was that MCA § 5.3 made NFA responsible for "major" governmental permits and rights-of-way, such as franchise agreements and state-level authorizations, while Meridian was responsible for obtaining routine construction permits, including street opening permits, traffic control permits, and similar local construction authorizations.
Under questioning, however, Henley admitted that he had not closely read MCA § 5.3 and that his understanding of the permitting allocation was based on summaries provided to him by Meridian's contract administration team rather than on his own review of the contract language. This admission weakens Henley's credibility as a witness on permitting issues and suggests that his testimony about which permits were NFA's responsibility versus Meridian's responsibility may not be based on an accurate understanding of the contractual provisions.
2. Specific Permitting Delays Identified
Henley identified permitting delays in five municipalities — three in Connecticut and two in Massachusetts — where he claimed NFA was late in securing right-of-way agreements that Meridian needed to commence or continue construction. He testified that these delays affected Meridian's ability to deploy crews in the affected areas and contributed to Phase 2 schedule slippage.
However, under cross-examination, Henley's permitting delay claims were significantly undermined. He conceded the following:
(a) He did not personally communicate with the municipalities in question about permit status and therefore had no firsthand knowledge of the timeline for permit processing.
(b) He did not know whether NFA had submitted permit applications on time or whether the alleged delays were caused by NFA's late submission or by the municipalities' processing timelines.
(c) Meridian's own permit tracking logs — contained in the document production at Bates numbers MIP-00412003 through MIP-00412087 — reflected that many routine construction permits (which were Meridian's responsibility, not NFA's) were delayed because Meridian submitted incomplete or erroneous applications.
Key Admission: When shown Meridian's own internal permit tracker during the deposition, Henley acknowledged that of 847 permit applications tracked in Phase 2, 213 — approximately 25% — were returned by municipalities for incompleteness or errors in Meridian's applications. The average delay caused by the need to correct and resubmit these deficient applications was 34 days. Henley conceded that these delays were attributable to Meridian, not to NFA. This admission is profoundly damaging to Meridian's permitting delay defense because it demonstrates that a substantial proportion of permit-related delays in Phase 2 were self-inflicted, caused by Meridian's own failure to submit complete and accurate permit applications.
E. Force Majeure
1. COVID-19 and Supply Chain
Henley's Day 2 testimony also addressed the force majeure defense in connection with COVID-19's impact on labor availability and fiber cable supply chains. Henley testified that COVID-19 aftereffects did affect labor availability and supply chains through approximately mid-2022, consistent with his Day 1 testimony on this topic.
Key Admission (reiterated from Day 1): When asked to address the force majeure defense directly, Henley reiterated his Day 1 concession that by mid-2022, labor market conditions in the fiber construction sector had substantially normalized. He testified that Meridian's ongoing staffing challenges after that point were primarily due to compensation competitiveness and Ridgepoint-driven budget constraints rather than pandemic-related disruption. This admission effectively confines Meridian's force majeure defense to a relatively limited window — from approximately mid-2020 through mid-2022 — and leaves the majority of Meridian's Phase 2 delays (which extended through early 2024) and all of its Phase 3 delays unexplained by force majeure.
With respect to supply chain disruptions, Henley testified that Meridian experienced delays of approximately 4 to 8 weeks in receiving fiber cable from its primary supplier during the period from the second quarter of 2021 through the first quarter of 2022. He attributed these delays to pandemic-related supply chain constraints affecting the telecommunications materials sector. However, he acknowledged that these supply chain delays had resolved by mid-2022 and that fiber cable availability was no longer a significant constraint on Phase 2 work, which commenced in October 2021. Accordingly, while the supply chain disruptions may have contributed to some early Phase 2 delays, they do not explain the escalating delays that characterized Milestones 6, 7, and 8, which occurred after the supply chain issues had been resolved.
V. Key Admissions Summary (Favorable to Northgate)
The following is a consolidated summary of Henley's most significant admissions from the two-day deposition, organized for quick reference. Each of these admissions supports Northgate's defense against Meridian's claims and/or Northgate's affirmative counterclaims:
1.  Crew shortages were primarily internal, not force majeure. Henley admitted that Meridian's crew shortages resulted from (a) diversion of experienced workers to other Meridian projects in the Southeast and Midwest, (b) loss of experienced crew foremen to competitors due to uncompetitive wages, and (c) Ridgepoint Capital Group LP's cost-reduction directives that constrained hiring and subcontractor engagement. Henley conceded that COVID-19 aftereffects, which form the basis of Meridian's force majeure defense, had substantially resolved by mid-2022, leaving the majority of Phase 2 and all of Phase 3 delay periods unexplained by force majeure.
2.  NCRs caused by Meridian's own failures. Henley testified that the "majority" of the 43 critical NCRs were caused by inadequate training of subcontractor crews on Northgate's Technical Specification NS-FIBER-2020 and by insufficient field supervision resulting from Meridian's crew reductions — problems squarely within Meridian's control.
3.  QC program was understaffed. Meridian deployed only 3 full-time QC inspectors to cover the entire Phase 2 footprint across three states, a level Henley himself described as "inadequate." His requests for additional QC personnel were denied due to budget constraints.
4.  Splice loss failures tied to outdated equipment. At least 18 critical splice loss NCRs resulted from Meridian's failure to replace outdated fusion splicing equipment, a failure attributable to Ridgepoint-driven capital expenditure limitations.
5.  Defective subcontractor terminated by Meridian. Meridian itself terminated its directional boring subcontractor in the third quarter of 2023 for poor workmanship, effectively conceding that the 11 conduit depth violation NCRs were Contractor-caused.
6.  Most critical NCRs unremediated at termination. Approximately 31 of 43 critical NCRs remained unresolved as of the April 1, 2024 termination date. Only approximately 12 had been fully remediated.
7.  No written Change Order requests submitted. Meridian did not submit formal written Change Order requests as required by MCA § 16.1 for any of the 14 alleged scope changes, relying instead on purported "verbal approvals" from Sean Calloway.
8.  Corrective Action Plan crew commitments were "aspirational." As of the March 5, 2024 submission date, Meridian had not secured firm commitments from the additional subcontractor crews identified in the Corrective Action Plan. Henley characterized the commitments as "aspirational" rather than "firm."
9.  Permit delays partly Meridian's fault. Of 847 Phase 2 permit applications tracked in Meridian's own internal permit tracker, 213 were returned by municipalities for incompleteness or errors, causing an average 34-day resubmission delay — delays attributable to Meridian, not NFA.
10.  Henley personally believed Meridian could not meet the MS8 schedule. By the time Milestone 6 was completed, Henley personally believed that Milestone 8 was unachievable without significant additional resources that Meridian had not committed and had no realistic plan to obtain.
11.  Scope change impact insufficient to explain delays. Even crediting Henley's highest estimate of 60 days of schedule impact from the alleged scope changes, this would not account for the cumulative 315+ days of delay across Phase 2 Milestones 5 through 8.
12.  Phase 3 mobilization undermined by the same crew shortages. Meridian completed only 340 of 9,700 planned Phase 3 route miles (3.5%) and lacked a realistic staffing plan for Phase 3 while Phase 2 milestones remained incomplete.
VI. Testimony Potentially Favorable to Meridian (Areas of Concern)
While Henley's deposition was overwhelmingly favorable to Northgate's position, the following aspects of his testimony should be flagged as areas of concern that may require attention in subsequent depositions, expert work, and trial preparation:
1.  Permitting delays (limited). Henley identified three Connecticut municipalities and two Massachusetts municipalities where he claimed NFA was late in securing right-of-way agreements needed for Meridian's construction activities. While he could not provide detailed supporting information and his own internal permit tracker substantially undermined the broader permitting delay claim, Meridian's counsel will likely attempt to develop this testimony through other witnesses — particularly Bridget Yeung — and through documentary evidence. We should be prepared to rebut any permitting delay claims with NFA's own permit submission records and the Meridian internal tracker showing 213 returned applications. The specificity of Henley's claim regarding five municipalities, while limited, gives Meridian's counsel a concrete starting point for further development.
2.  Scope changes directed verbally by Sean Calloway. Henley consistently testified that Sean Calloway verbally directed scope changes on at least 9 occasions, including route realignments, conduit specification changes, additional handholes, and one acceleration directive. If this testimony is corroborated by other witnesses or contemporaneous documents (such as emails or text messages between Calloway and Henley), it could support Meridian's constructive change order theory. The absence of written Change Order requests under MCA § 16.1 significantly limits the legal viability of this theory, but the factual testimony about verbal directions, if corroborated, could be presented to the factfinder as evidence that NFA contributed to Meridian's workload in ways not reflected in the formal contract documents. We should review Calloway's communications carefully and prepare him for his own deposition (if Meridian seeks to depose him) or for trial testimony.
3.  Characterization of termination as "premature." Henley's statement that he personally believed the termination was "premature" is a lay opinion without legal foundation, and Henley conceded that he was not involved in the legal analysis of material breach. Nonetheless, Meridian's counsel may attempt to introduce this characterization at trial to create an impression that even Meridian's own field operations leader believed the termination was unwarranted. We should be prepared to exclude this testimony under relevance and foundation objections, or, if it is admitted, to neutralize it through cross-examination highlig

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