Contract analysis

From: Christy Bauer <cbauer@calderwoodharkness.com> To: Douglas Fenn <dfenn@whitfieldgraves.com> Cc: Simone Alvarez <salvarez@whitfieldgraves.com> Date: Fri, 26 May 2023 03:47:00 -0000 Subject: Northgate Americas / Cedarpoint MSA — Open Issues for June 1 Session

I hope this finds you well. I wanted to reach out ahead of our in-person negotiation session on June 1 at our New York office (600 Lexington Avenue, 30th Floor) to lay the groundwork for a productive meeting. I have reviewed Cedarpoint's May 19 counter-redline thoroughly with the Northgate team, and I think we have made meaningful progress since our second draft went out on May 5. That said, a handful of substantive

On our side, the following individuals will attend: Colette Whitman (Calderwood & Harkness), myself, Deirdre Kwan (VP of Procurement, Northgate Americas), and Katrina Bosch (VP of Network Operations, Northgate Americas). Could you confirm the attendee list from the Cedarpoint/WGM side? We anticipate Nadia Okafor and Philip Hargreaves from Cedarpoint in addition to WGM counsel, but please let us know if that has chang

Set forth below are the open items as we see them, organized for discussion:

**1. Most Favored Nation Pricing — Audit Cost Allocation**

The parties have reached agreement on the substantive MFN framework, including the comparable volume threshold of ≥200 managed nodes, the trailing 12-month benchmark period, and the >3% pricing differential trigger for retroactive credits (within 45 days) and prospective adjustment (within 30 days). The remaining open point is cost allocation for the annual MFN audit. Northgate's position is that the audit should be

**2. Indemnification — Aggregate Cap Percentage**

We are aligned on the structure of mutual indemnification obligations and the categories of covered claims (IP infringement, data breach, bodily injury/property damage, and regulatory penalties on Cedarpoint's side; misuse and content claims on Northgate's side). We have also agreed on the carve-outs from the aggregate cap — IP infringement, willful misconduct, data breach, and confidentiality breach will remain unca

**3. Change of Control — Board-Turnover Prong**

We have reached agreement on three of the four prongs of the change of control definition: (i) acquisition of >50% of voting equity, (ii) non-surviving merger, consolidation, or reorganization, and (iii) sale of all or substantially all assets. The open issue is prong (iv) — a change in a majority of Cedarpoint's board of directors within any 12-month period, other than changes approved by the then-existing board. Ce

The remaining mechanics around change of control are agreed: 90-day advance written notice from Cedarpoint, a 60-day election period for Northgate (to consent to the assignment or elect to terminate on 180 days' notice), transition assistance at no additional cost, pro-rata refund of prepaid fees, and escrow release. The anti-assignment provision (any assignment without prior written consent is void) is also agreed.

We are in agreement on the tiered credit structure: a 5% credit at 99.90%–99.94% monthly uptime ($62,500/month), 10% at 99.50%–99.89% ($125,000/month), 20% below 99.50% ($250,000/month), and the material breach trigger after three consecutive months below 99.50%. The open point is the annual aggregate SLA credit cap. Northgate's position is that the cap should be set at 30% of annual managed network services fees ($1

We have agreed on the wind-down escrow structure: a $750,000 annual deposit (5% of the $15,000,000 ACV) to Dravello National Bank (account FNB-ESC-2023-07742), with an aggregate cap of $3,750,000 over the 5-year initial term. The remaining open point is the conditions and timing for release of escrowed funds. Northgate's position is that the escrow should be released to Northgate upon (a) termination due to a change

We are aligned that the migration from Greystone Network Solutions' legacy MPLS infrastructure will occur in three phases over 18 months. The open issue is the scope of transition assistance Cedarpoint must provide upon termination of the MSA, whether for change of control or other cause. Northgate's position is that Cedarpoint must provide comprehensive transition assistance — including cooperation with a successor

For planning purposes, I would propose a 10:00 AM ET start time for the June 1 session, and we will arrange a conference room and working lunch here at the office. I am happy to circulate a formal agenda in advance of the meeting once we have confirmed attendees and any preliminary calls.

If you or Simone would like to schedule a brief call early next week to narrow any of these items before the session, I am available and would welcome the opportunity. Otherwise, I look forward to seeing everyone on June 1.

Thank you, Douglas, and enjoy the long weekend.

Christy Bauer Associate, intellectual Property Group Calderwood & Harkness LLP 600 Lexington Avenue, 30th Floor New York, NY 10022 T: (212) 554-7183 E: cbauer@calderwoodharkness.com

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