Contract analysis

I. Executive Summary On May 19, 2023, Whitfield Graves & Morrow LLP ("WGM") circulated Cedarpoint Systems Integration, Inc.'s ("Cedarpoint") counter-redline to our May 5, 2023 second draft of the Master Services Agreement (the "MSA") between Northgate Americas, Inc. ("Northgate" or the "Customer/Licensee") and Cedarpoint (the "Service Provider/Licensor"). This memorandum provides a detailed analysis of the counter-re

II. Background and Procedural Context Calderwood & Harkness LLP opened this engagement on March 14, 2023, pursuant to our outside counsel engagement letter dated March 10, 2023, to represent Northgate Americas, Inc. — the principal North American operating subsidiary of Northgate Telecommunications PLC (LSE: NTP) — in the negotiation and documentation of a five-year Master Services Agreement with Cedarpoint Systems I

III. Issue-by-Issue Analysis A. Most Favored Nation Pricing (MSA Section 7.4 / Schedule 3)

1. Cedarpoint's Position: Mutual MFN In our second draft, Section 7.4 of the MSA established a unilateral most-favored-nation pricing obligation running solely in Northgate's favor. Under this provision, Cedarpoint warranted that the fees charged to Northgate under the MSA would be no less favorable than the fees charged by Cedarpoint to any other customer for comparable managed network services of comparable scope a

2. Analysis and Recommendation A mutual MFN is commercially inappropriate and operationally unworkable for the customer side of this transaction. The MFN clause in a managed services MSA is a standard buyer protection mechanism that ensures the customer receives competitive pricing relative to the service provider's other customers. The purpose of the MFN is to prevent the service provider from using the customer's l

1. Cedarpoint's Position: Reduction from 200% to 150% of Trailing 12-Month Fees

Section 11 of the MSA establishes a mutual indemnification framework under which each party agrees to indemnify, defend, and hold harmless the other party from and against certain categories of third-party claims and losses. The indemnification obligations are subject to an aggregate cap expressed as a percentage of the trailing twelve-month fees paid by Northgate to Cedarpoint under the MSA. In our second draft, the

2. Analysis and Recommendation The 200% Cedarpoint Cap was a deliberately negotiated position in our second draft, reflecting the asymmetric risk profile inherent in this transaction. Cedarpoint is providing mission-critical managed network services across the entirety of Northgate's North American node infrastructure — 340 enterprise nodes spanning 28 U.S. states and 3 Canadian provinces. A systemic failure in Cedar

1. Cedarpoint's Position: Deletion of Board-Turnover Prong (Clause (iv))

Section 14 of the MSA addresses assignment, change of control, and related matters. The change of control provisions grant Northgate certain protective rights — including the right to consent to the change of control or to terminate the MSA — in the event of a qualifying change in Cedarpoint's ownership or governance structure. The definition of "change of control" is set forth in Schedule 2 and, as drafted in our se

2. Analysis and Recommendation The Board-Turnover Prong is a critical protection for Northgate given the current ownership structure of Cedarpoint. Based on publicly available information and representations made during the due diligence phase of this negotiation, Cedarpoint's voting equity is held as follows: • Ridgeline Capital Partners, LP: 62% of outstanding voting equity • Rajiv Sundaram (CEO and Co-Founder): 18

1. Cedarpoint's Position: Reduction from 30% to 15% of Annual Managed Services Fees

Section 6 of the MSA establishes the service level framework for the managed network services provided by Cedarpoint, with detailed SLA metrics and credit schedules set forth in Exhibit B. The SLA credit mechanism is a core operational protection for Northgate, providing financial incentives for Cedarpoint to meet its performance commitments and compensating Northgate for service degradation. Our second draft caps th

2. Analysis and Recommendation The practical impact of the SLA credit cap reduction can be assessed by modeling the rate at which credits accrue under various underperformance scenarios: Under the 15% cap ($1,575,000 per year): At the 10% credit tier (99.50%–99.89% uptime), monthly credits of $87,500 would exhaust the annual cap after approximately 18 months — meaning that the cap would not be reached within a single

Section 15 of the MSA establishes a transition and wind-down escrow designed to ensure that adequate funds are available to support an orderly transition of services in the event of a termination or expiration of the MSA. The escrow is a key element of Northgate's operational risk management framework, providing a dedicated funding source for the costs of migrating 340 managed nodes to an alternative service provider

2. Analysis and Recommendation Partial release upon first renewal. The concept of a partial escrow release upon renewal is not inherently unreasonable. Cedarpoint's argument — that the first renewal demonstrates a stable relationship and reduces wind-down risk — has some commercial logic. By the time the first renewal commences (June 9, 2028), the MSA will have been in effect for five years, the three-phase migration

IV. Issues Resolved in the Counter-Redline The following provisions were either accepted by Cedarpoint without further modification or were resolved in prior negotiation rounds and remain unchanged in the counter-redline. These items no longer require further negotiation and should be treated as settled for purposes of the June 1 session. Scope of Services (Section 3 / Exhibit A). Cedarpoint has accepted in full the

V. Recommended Negotiation Strategy for June 1 Session A. Priority Ranking of Open Issues Based on the analysis set forth in Section III, the five open issues should be ranked as follows for purposes of the June 1 negotiation:

1. Non-negotiable / Hold firm: (a) Reject mutual MFN (Section III.A). The mutual MFN is commercially inappropriate, operationally unworkable, and inconsistent with market practice. This is Northgate's strongest position and should be defended without concession. No fall-back should be offered. (b) Retain change of control Board-Turnover Prong (Section III.C). The Board-Turnover Prong addresses a specific and material

2. Resist but identify fall-back: (c) Indemnification cap at 200%, with 175% as compromise (Section III.B). The 200% cap is the preferred position, but the 175% fall-back ($26,250,000 in Year 1) is acceptable if paired with enhanced insurance requirements or loss payee status on the E&O policy.

3. Offer as concession: (d) SLA credit cap at 20% (Section III.D). Moving from 30% to 20% represents a meaningful concession to Cedarpoint while preserving adequate credit protection for Northgate. The 20% position should be offered as part of the package deal. (e) Modified escrow partial release at 25% per renewal (Section III.E). Agreeing to a graduated partial release (25% at first renewal, 25% at second renewal)

1. Client alignment call. Schedule a preparatory call with Deirdre Kwan and Katrina Bosch prior to the June 1 session, ideally during the week of May 22, to align on commercial fall-back positions. The call should focus in particular on: (a) Deirdre Kwan's views on the acceptable range for the indemnification cap compromise (200% vs. 175%); (b) Katrina Bosch's operational assessment of the SLA credit cap reduction (3

2. Issues tracker. Update the negotiation issues tracker (currently maintained as Document ID C&H-0058) to reflect the current positions on all five open issues and the recommended fall-back positions outlined in this memorandum. A revised version of the issues tracker should be circulated to WGM in advance of the June 1 session to frame the agenda and ensure that both sides come prepared to address the open items ef

3. Comparable transaction data. Prepare a summary of MFN provisions in comparable managed services MSAs (including the Ashgrove & Co./Thackeray Holdings, BT/Stonefield & Co., and Camberwell Enterprises/Sterling Reach Corporation transactions referenced in Section III.A) to support the position that mutual MFN obligations are not market practice on the customer side.

4. Ridgeline Capital Partners research. Prepare a brief summary of Ridgeline's portfolio, fund structure, and typical exit timelines to support the retention of the Board-Turnover Prong. This information may be useful if Cedarpoint challenges the relevance of the prong during the in-person session.

VI. Next Steps The following action items should be completed in advance of the June 1, 2023 negotiation session:

1. Circulate this memorandum to Colette Whitman for review and approval of the recommended positions and negotiation strategy outlined herein. Please advise if any of the recommended positions or fall-back parameters require modification based on partner-level review or input from Northgate's senior management.

2. Schedule preparatory call with Deirdre Kwan and Katrina Bosch (target: week of May 22, 2023). Christy Bauer will coordinate scheduling with Northgate's executive assistants and will prepare a brief agenda for the call.

3. Update the negotiation issues tracker (Document ID C&H-0058) to reflect the current positions on all five open issues, the recommended fall-back positions, and the package-deal framework described in Section V.B above. The updated tracker should be ready for internal review by May 25, 2023.

4. Send pre-session letter/email to Douglas Fenn (WGM) by approximately May 26, 2023, identifying the five open issues for the June 1 session and proposing an agenda. The letter should frame the discussion in terms of the parties' respective priorities and signal Northgate's willingness to engage constructively on the commercial terms while maintaining firm positions on structural protections.

5. Coordinate with Garrett Simmons (Working Associate, Tax) on any tax implications of the escrow release modifications. In particular, the partial release of escrowed funds upon renewal may have income recognition implications for Cedarpoint under Section 451 of the Internal Revenue Code, and the MSA's tax indemnity provisions (Section 18.3) should be reviewed to ensure that they appropriately allocate the tax conse

6. Target execution date remains June 9, 2023. If all open issues are resolved at the June 1 session, a final clean draft of the MSA should be circulated to WGM by June 5, 2023, with signature pages prepared simultaneously. Closing deliverables — including the escrow agreement with Dravello National Bank, certificates of insurance from Braeburn Mutual Insurance Company, and the officer's certificates required under S