1022-00008 · Northgate Telecommunications PLC · Negotiation & Drafting

negotiation-session-agenda-jun1.docx DOCUMENT M&A / Corporate

24 / 38 ← → ✕

NEGOTIATION SESSION AGENDA — CONFIDENTIAL

In-Person Negotiation Session Northgate Americas, Inc. / Cedarpoint Systems Integration, Inc. Master Services Agreement

Date: June 1, 2023 Time: 10:00 a.m. – 4:00 p.m. (Eastern Time) Location: Calderwood & Harkness LLP 600 Lexington Avenue, 30th Floor New York, NY 10022

Prepared by: Christy Bauer, Lead Associate, Calderwood & Harkness LLP Matter Number: 1022-00008 Designation: Attorney-Client Privileged / Work Product

This agenda and all accompanying materials are protected by the attorney-client privilege and the work product doctrine. This document is prepared in anticipation of litigation and in connection with the provision of legal advice to Northgate Americas, Inc. Distribution is restricted to the individuals listed herein and should not be forwarded, copied, or disclosed to any person or entity without the prior written consent of Calderwood & Harkness LLP.

I. ATTENDEES

The following individuals are expected to attend the negotiation session in person at Calderwood & Harkness LLP's offices, unless otherwise noted. All attendees should plan to arrive no later than 9:45 a.m. to allow time for building security and visitor badge processing.

A. Northgate Americas, Inc. / Customer Side

B. Cedarpoint Systems Integration, Inc. / Service Provider Side

C. Dialing In (If Needed)

Dial-in credentials will be provided separately by Christy Bauer. Both remote participants should ensure they are reachable by mobile phone throughout the day in the event they are needed on short notice.

II. BACKGROUND AND PURPOSE

A. Transaction Overview

This negotiation session is intended to resolve all remaining open issues in the Master Services Agreement (the "MSA") between Northgate Americas, Inc. ("Northgate" or the "Customer/Licensee") and Cedarpoint Systems Integration, Inc. ("Cedarpoint" or the "Service Provider/Licensor") for managed network services. The MSA contemplates a total contract value of approximately $75,000,000 over a five-year initial term, with an annual contract value ("ACV") of $15,000,000. Under the MSA, Cedarpoint will provide managed SD-WAN network services across Northgate's enterprise infrastructure, utilizing Cedarpoint's proprietary ArcMesh platform (version 4.2), encompassing 340 managed nodes distributed across 28 U.S. states and 3 Canadian provinces.

B. Negotiation History

The parties have engaged in several rounds of drafting and negotiation over the past two months, as summarized below:

• April 3, 2023 — Calderwood & Harkness LLP, on behalf of Northgate, circulated the first draft of the MSA to Whitfield Graves & Morrow LLP ("WGM") and Cedarpoint.

• April 21, 2023 — WGM, on behalf of Cedarpoint, returned a comprehensive redline of the first draft MSA, together with a cover letter identifying Cedarpoint's principal commercial and legal concerns.

• May 5, 2023 — Calderwood & Harkness LLP circulated the second draft of the MSA, incorporating certain of Cedarpoint's comments and rejecting others, accompanied by a detailed response memorandum.

• May 19, 2023 — WGM circulated Cedarpoint's counter-redline to the second draft MSA, reflecting Cedarpoint's remaining positions on the open issues described in this agenda.

Since the circulation of the counter-redline, informal discussions between counsel and between the business principals have narrowed the universe of open items. However, several significant issues remain unresolved, and this in-person session is designed to bring the parties to final agreement on all outstanding points.

C. Objective

The objective of this session is to resolve all open points to permit the finalization and execution of the MSA, with a target signing and closing date of June 9, 2023. It is the expectation of both parties that this session will serve as the final substantive negotiation before the MSA is circulated in execution form. To the extent any issue cannot be resolved in this session, the parties should identify the specific decision-maker whose approval is required and agree on a timeline for obtaining that approval prior to June 9.

D. Reference Documents

The following documents should be reviewed in advance of the session and brought (in hard copy or electronic form) by all attendees:

1. Second draft MSA (dated May 5, 2023)

2. Cedarpoint counter-redline to the second draft MSA (dated May 19, 2023)

3. Negotiation issues tracker (current as of May 30, 2023)

4. Key commercial terms summary / term sheet

A complete list of reference materials appears in Section IV of this agenda.

III. AGENDA ITEMS

Agenda Item 1: Most Favored Nation Pricing Terms

Scheduled Time: 10:00 a.m. – 10:45 a.m. Lead Discussants: Deirdre Kwan (commercial terms), Christy Bauer (legal drafting) MSA Reference: Article VII, Section 7.04 (MFN Pricing)

This agenda item addresses five open issues relating to the most favored nation pricing provisions in the MSA. The MFN clause is a core commercial protection for Northgate and is intended to ensure that Cedarpoint does not offer materially more favorable pricing to similarly situated customers during the term of the MSA.

Open Issue 1A: MFN Benchmark Definition

Northgate Position: The MFN provision defines "comparable customer" as any Cedarpoint customer procuring managed network services for a network comprising 200 or more managed nodes (the "Comparable Customer Volume Threshold"). Northgate's own network comprises 340 managed nodes distributed across 28 U.S. states and 3 Canadian provinces, well above the proposed threshold. The 200-node threshold is designed to capture a meaningful universe of comparable engagements while excluding smaller deployments that may not be genuinely analogous in scope, complexity, or cost structure.

Cedarpoint Position: In the May 19 counter-redline, Cedarpoint proposed raising the Comparable Customer Volume Threshold from 200 managed nodes to 300 or more managed nodes. Cedarpoint's cover letter indicated this revision was driven by a concern that a lower threshold would capture a disproportionate number of Cedarpoint's mid-market clients and create undue pricing transparency obligations.

Northgate's Response and Recommended Approach: Northgate's position is that the 200-node threshold is market-standard for managed network services agreements of this nature and must be retained. Raising the threshold to 300 nodes would significantly narrow the universe of comparable customers and undermine the practical utility of the MFN protection. Christy Bauer's MFN clause analysis memorandum (see reference materials) confirms that a threshold of 200 nodes is consistent with comparable provisions in three recent peer transactions surveyed by Calderwood & Harkness.

Open Issue 1B: Pricing Differential Trigger

Northgate Position: The MFN clause is triggered when Cedarpoint offers or provides pricing to a comparable customer that results in a pricing differential greater than 3% below the effective pricing charged to Northgate for substantially similar services, on a per-node, per-month basis. Upon such a triggering event, Northgate is entitled to both a retroactive credit and a prospective pricing adjustment.

Cedarpoint Position: Cedarpoint's counter-redline proposed increasing the pricing differential trigger from greater than 3% to greater than 5%, arguing that minor pricing variations may result from differences in service configurations, geographic deployment costs, or promotional pricing programs and do not reflect genuine price discrimination.

Northgate's Response and Recommended Approach: Northgate's position is that the 3% threshold must be retained. A 5% threshold would allow Cedarpoint to offer discounts of nearly $750,000 on an annual basis (based on Northgate's ACV of $15,000,000) to a comparable customer before triggering the MFN protection, which would render the clause commercially meaningless. The 3% threshold already provides Cedarpoint with a reasonable buffer for minor pricing variations.

Open Issue 1C: Retroactive Credit and Prospective Adjustment Timelines

Northgate Position: Upon determination that the MFN pricing differential trigger has been met, (i) Cedarpoint must issue a retroactive credit within 45 days of the date of determination covering the difference between the pricing charged to Northgate and the lower pricing offered to the comparable customer for the period during which the violation existed, and (ii) Cedarpoint must implement a prospective pricing adjustment within 30 days such that Northgate's go-forward pricing is no less favorable than that offered to the comparable customer.

Status: These timelines were reflected in the second draft MSA (May 5, 2023) and did not appear to be the subject of objection in Cedarpoint's counter-redline. However, the parties should confirm at the session that there is no remaining disagreement on these points, and the language should be verified as settled.

Open Issue 1D: MFN Audit Rights and Cost Allocation

Northgate Position: Northgate has the right to conduct one MFN compliance audit per calendar year, covering the trailing 12-month period, to verify Cedarpoint's compliance with the MFN pricing obligations. The audit may be conducted by Northgate's internal audit team or by a third-party auditor selected by Northgate and reasonably acceptable to Cedarpoint. Cedarpoint is obligated to cooperate with the audit and provide access to relevant pricing records, customer contracts (on a redacted basis to protect third-party confidentiality), and financial data.

Cedarpoint Position: Cedarpoint's counter-redline did not object to the annual audit right or the trailing 12-month benchmark comparison period. However, Cedarpoint objected to the cost allocation provision, which in the second draft MSA provided that Cedarpoint would bear all costs of the audit in all circumstances.

Northgate's Response and Recommended Approach: Northgate is prepared to accept a modified cost allocation mechanism: audit costs shall be borne by Cedarpoint if the audit reveals a violation of the MFN pricing obligations; audit costs shall be borne by Northgate if the audit reveals no violation. This is a fair and balanced approach that incentivizes Cedarpoint's compliance while discouraging frivolous or burdensome audit requests by Northgate. This position should be proposed as a reasonable compromise.

Open Issue 1E: Cedarpoint's Mutual MFN Proposal

Cedarpoint Position: In the counter-redline, Cedarpoint introduced a new provision proposing a mutual most favored nation obligation — that is, Northgate would guarantee to Cedarpoint that Northgate does not procure substantially similar managed network services from any third-party provider at pricing more than 3% below the pricing paid to Cedarpoint, and that if Northgate does so, Cedarpoint would be entitled to a corresponding pricing reduction.

Northgate's Response and Recommended Approach: Northgate's position is to reject the mutual MFN proposal in its entirety. A mutual MFN provision is not market-standard in customer-side managed services agreements. The MFN protection runs in favor of the customer as a check against the service provider's pricing practices across its customer base. A reverse MFN imposed on the customer would improperly constrain Northgate's procurement flexibility and competitive bidding processes and is inconsistent with the commercial structure of this transaction.

Agenda Item 2: Indemnification Cap and Carve-Outs

Scheduled Time: 10:45 a.m. – 11:45 a.m. Lead Discussants: Christy Bauer (legal), Colette Whitman (risk assessment) MSA Reference: Article XII, Sections 12.01–12.06 (Indemnification)

This agenda item addresses six open issues relating to the indemnification provisions of the MSA. The indemnification framework is among the most critical risk-allocation provisions in the agreement, and Northgate's positions on the aggregate cap, uncapped carve-outs, and scope of indemnification obligations must be preserved.

Open Issue 2A: Cedarpoint's Aggregate Indemnification Cap

Northgate Position: Cedarpoint's aggregate indemnification liability under the MSA (exclusive of uncapped carve-outs, discussed below) shall be capped at 200% of the aggregate fees paid by Northgate during the 12-month period immediately preceding the event giving rise to the claim. Based on the annual contract value of $15,000,000, the Year 1 cap would be $30,000,000 (i.e., 2 × $15,000,000). This cap is appropriate given the scope of services, the critical infrastructure nature of the managed network, the number of nodes under management, and the potential magnitude of business interruption losses to Northgate in the event of a material service failure.

Cedarpoint Position: Cedarpoint's counter-redline proposed reducing the aggregate indemnification cap to 150% of trailing 12-month fees, which would result in a Year 1 cap of $22,500,000. Cedarpoint's cover letter cited industry benchmarks and its concern about disproportionate liability exposure relative to contract value.

Northgate's Response and Recommended Approach: Northgate's position is that the 200% cap must be retained. A 150% cap would provide insufficient protection given the following considerations:

(a) Northgate's managed network supports mission-critical telecommunications operations across 28 states and 3 provinces;

(b) A material network outage could result in downstream losses to Northgate's own customers that substantially exceed the annual contract value;

(c) Cedarpoint is a well-capitalized company with FY2022 revenues of $420,000,000 and approximately 1,800 employees, and a 200% cap relative to a $15,000,000 ACV does not present a disproportionate financial risk to Cedarpoint; and

(d) The 200% multiplier is consistent with the range observed in comparable managed services transactions reviewed by Calderwood & Harkness in Christy Bauer's indemnification analysis memorandum.

Open Issue 2B: Northgate's Aggregate Indemnification Cap

Northgate Position: Northgate's aggregate indemnification liability under the MSA shall be capped at 100% of the aggregate fees paid by Northgate during the 12-month period immediately preceding the event giving rise to the claim, resulting in a cap of $15,000,000 in any given year.

Status: This cap was proposed by Northgate in the first draft MSA and was not the subject of objection in either of Cedarpoint's redlines. The parties should confirm at the session that this provision is settled and does not require further discussion.

Open Issue 2C: Uncapped Carve-Outs

Northgate Position: The following categories of indemnification obligations shall be carved out from Cedarpoint's aggregate indemnification cap and shall be uncapped (i.e., Cedarpoint's liability for these categories shall not be subject to any monetary ceiling):

(i) intellectual property infringement — claims arising from third-party allegations that Cedarpoint's ArcMesh platform or any component thereof infringes or misappropriates the intellectual property rights of a third party;

(ii) Willful misconduct — claims arising from Cedarpoint's intentional or deliberately reckless acts or omissions in the performance of services;

(iii) Data breach — claims arising from any unauthorized access to, disclosure of, or loss of Northgate data in Cedarpoint's possession, custody, or control, to the extent caused by Cedarpoint's negligence, willful misconduct, or failure to comply with the data security obligations set forth in the MSA; and

(iv) Confidentiality breach — claims arising from Cedarpoint's unauthorized disclosure or use of Northgate's confidential information in violation of the confidentiality provisions of the MSA.

Cedarpoint Position: Cedarpoint's counter-redline accepted the uncapped treatment of IP infringement, willful misconduct, and confidentiality breach. However, Cedarpoint proposed capping data breach indemnification at 300% of trailing 12-month fees (i.e., $45,000,000 in Year 1), arguing that data breach liability is inherently unpredictable and that an uncapped obligation creates unacceptable risk.

Northgate's Response and Recommended Approach: Northgate's position is that all four carve-outs must remain uncapped. Data breach liability is precisely the type of risk that should not be subject to a cap, because the potential harm to Northgate — including regulatory penalties, customer notification costs, litigation exposure, and reputational damage — could far exceed any predetermined cap. Moreover, the data security obligations in the MSA are designed to minimize the likelihood of a breach, and Cedarpoint's compliance with those obligations is the appropriate mechanism for limiting Cedarpoint's exposure — not an arbitrary dollar cap. Cedarpoint's insurance coverage (discussed under Open Issue 2F) provides an additional backstop.

Open Issue 2D: Cedarpoint's Indemnification Obligations — Scope

Northgate Position: Cedarpoint's indemnification obligations under the MSA shall cover the following four categories:

(a) Third-Party IP Infringement Claims — Cedarpoint shall indemnify, defend, and hold harmless Northgate from and against any losses, damages, costs, and expenses (including reasonable attorneys' fees) arising from any third-party claim alleging that the ArcMesh platform, or any component thereof, infringes or misappropriates the intellectual property rights of such third party;

(b) Data Breaches — Cedarpoint shall indemnify Northgate from and against any losses arising from any unauthorized access to, disclosure of, or loss of Northgate data in Cedarpoint's possession, custody, or control, to the extent caused by Cedarpoint's negligence or willful misconduct;

(c) Bodily Injury or Property Damage — Cedarpoint shall indemnify Northgate from and against any losses arising from bodily injury or property damage to Northgate employees, facilities, or assets caused by the acts or omissions of Cedarpoint personnel while present on Northgate premises; and

(d) Regulatory Penalties — Cedarpoint shall indemnify Northgate from and against any fines, penalties, or sanctions imposed by any federal, state, provincial, or local governmental authority arising from Cedarpoint's failure to comply with applicable telecommunications laws and regulations in the performance of services under the MSA.

Status: The scope of Cedarpoint's indemnification obligations was substantially agreed in the second draft MSA. The parties should review and confirm the precise language at the session.

Open Issue 2E: Northgate's Indemnification Obligations — Scope

Northgate Position: Northgate's indemnification obligations under the MSA shall cover the following two categories:

(a) Misuse of ArcMesh — Northgate shall indemnify Cedarpoint from and against any losses arising from Northgate's use of the ArcMesh platform outside the scope of the license granted under the MSA; and

(b) Northgate-Provided Data or Content — Northgate shall indemnify Cedarpoint from and against any third-party claims arising from data or content provided by Northgate and transmitted over the managed network, to the extent such claims arise from the nature or content of such data rather than from Cedarpoint's acts or omissions.

Status: The scope of Northgate's indemnification obligations was substantially agreed in the second draft MSA. The parties should confirm at the session that this provision is settled.

Open Issue 2F: Insurance Coverage Requirements

Northgate Position: The MSA shall require Cedarpoint to maintain the following insurance coverage throughout the term:

Cedarpoint's current carrier is Braeburn Mutual Insurance Company. Cedarpoint is required to provide certificates of insurance to Northgate naming Northgate Americas, Inc. as an additional insured under each policy. Certificates must be delivered at closing and renewed annually within 30 days of each policy renewal date.

Status: These insurance requirements were set forth in the second draft MSA and were not objected to in Cedarpoint's counter-redline. The parties should confirm at the session that this provision is fully settled and that no remaining issues exist regarding policy forms, endorsements, or additional insured status.

Agenda Item 3: Change of Control Definition and Consent Mechanics

Scheduled Time: 11:45 a.m. – 12:30 p.m. Lead Discussants: Christy Bauer (legal), Colette Whitman (strategic considerations) MSA Reference: Article XV, Section 15.03 (Change of Control); Article XVIII (Anti-Assignment)

This agenda item addresses five open issues relating to the definition of "change of control" and the consent and termination mechanics triggered by a change of control event. These provisions are of particular strategic importance to Northgate given Ridgeline Capital Partners' majority ownership stake in Cedarpoint and the attendant risk of a sponsor-driven exit during the MSA term.

Open Issue 3A: Four-Prong Definition of "Change of Control"

Northgate Position: The MSA defines "Change of Control" as the occurrence of any of the following events with respect to Cedarpoint:

(i) Equity Acquisition — the acquisition, directly or indirectly, by any person, entity, or group (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934) of more than 50% of the outstanding voting equity securities of Cedarpoint;

(ii) Merger or Consolidation — any merger, consolidation, or reorganization involving Cedarpoint in which Cedarpoint is not the surviving entity, or following which the holders of Cedarpoint's voting equity securities immediately prior to such transaction hold less than 50% of the voting equity securities of the surviving entity;

(iii) Asset Sale — the sale, transfer, or other disposition of all or substantially all of Cedarpoint's assets, whether in a single transaction or a series of related transactions; or

(iv) Board Turnover — a change in a majority of the members of Cedarpoint's board of directors (or equivalent governing body) within any 12-month period, other than changes in board membership that are approved or recommended by a majority of the directors then in office who were directors at the beginning of such 12-month period.

Status: Prongs (i), (ii), and (iii) are substantially agreed. Prong (iv) remains disputed, as discussed below.

Open Issue 3B: Board-Turnover Prong (Prong (iv))

Cedarpoint Position: Cedarpoint's counter-redline proposed deleting prong (iv) (the board-turnover prong) from the definition of Change of Control. WGM's cover letter argued that the board-turnover prong is overly broad and could be triggered by routine governance changes, including the appointment of new independent directors, the rotation of board members in connection with Cedarpoint's annual meeting, or changes in board composition resulting from the retirement or resignation of existing directors.

Northgate's Response and Recommended Approach: Northgate's position is that prong (iv) is essential and must be retained. The board-turnover prong is specifically designed to address the risk that a change in effective control of Cedarpoint could be accomplished through reconstitution of the board without a direct equity transfer. This risk is particularly acute in the present context, given the following considerations:

(a) Ridgeline Capital Partners' Majority Stake — Ridgeline Capital Partners, LP currently holds 62% of Cedarpoint's outstanding voting equity. As a private equity sponsor, Ridgeline may seek to exit its investment through range mechanisms during the MSA term, some of which — including secondary sales, recapitalizations, or negotiated board reconstitutions — may not technically constitute an equity acquisition, merger, or asset sale under prongs (i)–(iii) but could nonetheless result in a fundamental change in Cedarpoint's strategic direction, management philosophy, and service delivery priorities.

(b) Board Control as a Proxy for Operational Control — In a sponsor-backed company such as Cedarpoint, the board of directors exercises significant influence over capital allocation, personnel decisions, strategic direction, and operational priorities. A wholesale reconstitution of the board could materially alter the nature of the entity with which Northgate contracted, even if the equity ownership structure remains nominally unchanged.

(c) Carve-Out for Approved Changes — The proposed prong (iv) already includes a carve-out for board changes that are "approved or recommended by a majority of the directors then in office," which addresses Cedarpoint's concern about routine governance changes. Only board reconstitutions that are not approved by the incumbent board — i.e., those that reflect a genuine change in control — would trigger the provision.

Christy Bauer's change of control analysis memorandum provides additional detail on market precedents supporting the inclusion of a board-turnover prong in change of control definitions in technology services agreements with sponsor-backed counterparties.

Open Issue 3C: Current Ownership Disclosure

For reference and context, the current capitalization of Cedarpoint Systems Integration, Inc. is as follows:

The parties should discuss whether the MSA should include an ownership representation schedule (as an exhibit or schedule to the MSA) reflecting the current capitalization, together with a representation and warranty from Cedarpoint that the capitalization disclosed is accurate and complete as of the date of execution. Such a schedule would provide a baseline against which future changes in ownership or control could be measured.

Open Issue 3D: Notice and Election Mechanics

Northgate Position: The MSA shall require Cedarpoint to provide Northgate with written notice at least 90 days prior to the anticipated closing of any transaction that would constitute a Change of Control. Upon receipt of such notice, Northgate shall have 60 days to elect one of the following:

(a) Consent to Assignment — Northgate may consent to the assignment of the MSA to the successor entity, provided that such consent shall not be unreasonably withheld, conditioned, or delayed; or

(b) Termination — Northgate may elect to terminate the MSA upon 180 days' written notice, with termination consequences as described in Open Issue 3E below.

Cedarpoint Position: Cedarpoint's counter-redline proposed reducing the advance notice period from 90 days to 60 days, arguing that a 90-day notice requirement is impractical in the context of competitive M&A processes and may create confidentiality risks for Cedarpoint in connection with potential transactions.

Northgate's Response and Recommended Approach: Northgate's position is that the 90-day notice period must be retained. A 60-day notice period would not provide Northgate with adequate time to evaluate the proposed transaction, assess the capabilities and financial condition of the successor entity, and make an informed election. Northgate's network is critical infrastructure, and a change in the identity of the service provider requires thorough due diligence. To the extent Cedarpoint has concerns about confidentiality during the notice period, those concerns are adequately addressed by the confidentiality provisions of the MSA and the mutual NDA.

Open Issue 3E: Termination Consequences on Change of Control

Northgate Position: If Northgate elects to terminate the MSA following a Change of Control, the following consequences shall apply:

(a) Transition Assistance — Cedarpoint shall provide transition assistance services to Northgate for a period of up to 12 months following the effective date of termination, at no additional cost to Northgate, to facilitate the migration of Northgate's managed network to a successor service provider or an in-house solution;

(b) Pro-Rata Refund — Northgate shall receive a pro-rata refund of any prepaid fees for services not yet rendered as of the effective date of termination;

(c) Wind-Down Escrow Release — The escrowed funds held pursuant to Article XIII of the MSA shall be released to Northgate upon the effective date of termination; and

(d) Anti-Assignment — Any purported assignment of the MSA by Cedarpoint without Northgate's prior written consent shall be void and of no force or effect.

Status: These termination consequences were set forth in the second draft MSA and are believed to be substantially agreed. The parties should confirm at the session.

Working Lunch

Scheduled Time: 12:30 p.m. – 1:15 p.m.

Lunch will be provided at Calderwood & Harkness LLP's offices (Conference Room A, 30th Floor). This is an informal break with no scheduled agenda items. Attendees are encouraged to use this time for informal discussion, relationship-building, or resolution of minor drafting points. No formal negotiations or binding commitments should be made during this period without all principals present.

Agenda Item 4: Service Level Agreement and Credit Structure

Scheduled Time: 1:15 p.m. – 2:00 p.m. Lead Discussants: Katrina Bosch (technical/operational), Christy Bauer (legal) MSA Reference: Exhibit B (Service Level Agreement); Article IX, Section 9.02 (Service Credits)

This agenda item addresses five open issues relating to the service level commitments, the tiered service credit structure, and the measurement methodology for network availability. The SLA provisions are central to Northgate's operational assurance framework and must reflect the critical nature of the managed network.

Open Issue 4A: Network Availability SLA

Northgate Position: Cedarpoint commits to a network availability service level of 99.95% monthly uptime, measured on a per-node basis across all 340 managed nodes. Monthly uptime is calculated as the total number of minutes in the applicable calendar month minus the total number of minutes of unplanned downtime, divided by the total number of minutes in the calendar month, expressed as a percentage.

Status: This service level commitment appeared in the second draft MSA and was not objected to in Cedarpoint's counter-redline. The parties should verify at the session that the 99.95% standard is fully settled.

Open Issue 4B: Tiered Service Credit Structure

Northgate Position: The MSA shall include a three-tiered service credit structure, calculated as a percentage of the monthly managed services fee. The monthly run-rate for managed services under the MSA is $1,250,000 (i.e., $15,000,000 ACV ÷ 12 months). The tiered credit structure is as follows:

Status: This tiered structure was set forth in the second draft MSA. The parties should confirm the credit percentages and dollar amounts at the session.

Open Issue 4C: Annual SLA Credit Cap

Northgate Position: The aggregate service credits payable by Cedarpoint in any contract year shall be capped at 30% of the annual managed services fees for that year. Based on the first-year annual fee of $10,500,000 (reflecting partial-year proration or, if fees are $15,000,000 on a full-year basis, $4,500,000; note: the parties should confirm the annual fee figure for purposes of this calculation, but based on available data, 30% of $10,500,000 = $3,150,000).

Cedarpoint Position: Cedarpoint's counter-redline proposed reducing the annual credit cap to 20% of annual managed services fees, which would result in a cap of approximately $2,100,000 (based on $10,500,000). Cedarpoint argued that a 30% cap creates excessive financial exposure and that service credits are intended to serve as a performance incentive, not a profit-sharing mechanism.

Northgate's Response and Recommended Approach: Northgate insists on the 30% annual cap as providing adequate protection given the critical nature of the managed network infrastructure. Service credits below this level would not meaningfully incentivize Cedarpoint's performance. Moreover, the annual credit cap functions as a ceiling — not a floor — and Cedarpoint's compliance with the 99.95% SLA would result in no credits being payable at all.

Open Issue 4D: Material Breach Trigger

Northgate Position: If Cedarpoint's monthly network availability falls below 99.50% uptime for three consecutive calendar months, such failure shall constitute a material breach of the MSA, entitling Northgate to terminate the MSA for cause in accordance with the termination provisions of Article XVI, Section 16.02.

Status: This material breach trigger was included in the second draft MSA and was not objected to in Cedarpoint's counter-redline. The parties should confirm at the session that this provision is fully settled.

Open Issue 4E: Measurement Methodology and Reporting

The parties should discuss and confirm the specifics of the uptime measurement methodology, including the following:

(a) Monitoring Tools — Identification of the monitoring tools and systems to be used by Cedarpoint to measure network availability, including whether Northgate will have independent access to monitoring data;

(b) Exclusions — Agreed exclusions from the uptime calculation, including (i) scheduled maintenance windows (to be defined in Exhibit B, with a maximum of 4 hours per month and 48 hours per calendar year, with at least 72 hours' advance written notice), (ii) downtime attributable to force majeure events as defined in Article XX, and (iii) downtime attributable to acts or omissions of Northgate or its third-party providers (other than Cedarpoint);

(c) Monthly Reporting — Cedarpoint shall provide Northgate with a written monthly availability report within 10 business days following the end of each calendar month, detailing (i) actual uptime by node and in aggregate, (ii) any downtime incidents, including root cause analysis, and (iii) any applicable service credits; and

(d) Dispute Resolution — The process for resolving disputes regarding uptime measurements or credit calculations.

Agenda Item 5: Escrow Deposit and Release Mechanics

Scheduled Time: 2:00 p.m. – 2:30 p.m. Lead Discussants: Christy Bauer (legal), Philip Hargreaves (financial, for Cedarpoint) MSA Reference: Article XIII, Sections 13.01–13.05 (Escrow)

This agenda item addresses four open issues relating to the establishment, funding, and release of an escrow account to secure certain of Cedarpoint's obligations under the MSA.

Open Issue 5A: Funding Schedule

Northgate Position: Cedarpoint shall make annual escrow deposits of $750,000 (representing 5% of the annual contract value of $15,000,000). Deposits shall be made on the first business day of each contract year, beginning on the effective date of the MSA. Over the five-year initial term, the aggregate escrowed amount shall be $3,750,000.

The escrow agent shall be Dravello National Bank, and the escrow account shall be established under reference number FNB-ESC-2023-07742.

Status: The funding schedule was set forth in the second draft MSA and is believed to be substantially agreed. The parties should confirm the deposit timing, amount, and escrow agent designation at the session.

Open Issue 5B: Escrow Release Conditions

Northgate Position: The escrowed funds shall be released as follows:

(a) Change of Control Termination — If Northgate terminates the MSA following a Change of Control event, the entire escrowed balance shall be released to Northgate;

(b) Material Breach Termination by Northgate — If Northgate terminates the MSA for cause due to Cedarpoint's material breach, the entire escrowed balance shall be released to Northgate; and

(c) Natural Expiration — If the MSA expires at the end of the initial term or any renewal term without renewal, and Cedarpoint has completed all transition obligations to Northgate's reasonable satisfaction, the escrowed balance shall be released to Cedarpoint.

Cedarpoint Position: Cedarpoint's counter-redline proposed that the escrowed funds be released to Cedarpoint upon any termination not caused by Cedarpoint's breach — i.e., including termination by Northgate for convenience, termination by Cedarpoint for Northgate's breach, and natural expiration.

Northgate's Response and Recommended Approach: Northgate's position is that the release conditions must favor Northgate in termination-for-cause and change-of-control scenarios. The escrow is designed to protect Northgate against the risk that Cedarpoint will fail to perform its transition obligations or that the MSA will be terminated under circumstances attributable to Cedarpoint. However, Northgate is willing to discuss the treatment of the escrow in a termination-for-convenience scenario as a potential area of compromise, provided that the Northgate-favorable release conditions in (a) and (b) above are preserved.

Open Issue 5C: Escrow Release Timeline

Northgate Position: Following the occurrence of a release-triggering event, the escrowed funds shall be released to the entitled party within 30 days of the triggering event (or, in the case of natural expiration, within 30 days of Cedarpoint's completion of all transition obligations).

Cedarpoint Position: Cedarpoint's counter-redline proposed a 60-day release timeline, arguing that 30 days does not provide adequate time for reconciliation and verification.

Recommended Approach: This is a potential area for compromise. The parties should discuss whether a 45-day release timeline would be acceptable to both sides, or whether a 30-day timeline with a specified reconciliation process could address Cedarpoint's concerns.

Open Issue 5D: Tri-Party Escrow Agreement

Northgate Position: The MSA shall require the execution of a separate tri-party escrow agreement among Northgate Americas, Inc., Cedarpoint Systems Integration, Inc., and Dravello National Bank, to be executed concurrently with the MSA at closing. The escrow agreement shall address the following matters:

(a) Establishment and maintenance of the escrow account;

(b) Investment of escrowed funds (to be invested in U.S. Treasury securities or money market funds, with interest accruing for the benefit of the party ultimately entitled to receive the escrowed funds);

(d) Release mechanics consistent with the conditions set forth in the MSA;

(e) Dispute resolution procedures in the event the escrow agent receives conflicting release instructions; and

(f) Governing law — the escrow agreement shall be governed by the laws of the State of New York, without regard to conflicts of law principles.

A draft form of the escrow agreement has been prepared by Calderwood & Harkness and will be available at the session for discussion.

Agenda Item 6: Transition Services — Migration from Greystone Network Solutions

Scheduled Time: 2:30 p.m. – 3:00 p.m. Lead Discussants: Katrina Bosch (operational), Christy Bauer (legal) MSA Reference: Article X (Transition Services); Transition Services Side Letter (to be executed concurrently)

This agenda item addresses four open issues relating to the transition of Northgate's managed network services from the incumbent service provider, Greystone Halcyon Software ("Greystone"), to Cedarpoint's SD-WAN/ArcMesh platform. The migration is a complex, multi-phase undertaking that will require close coordination among Northgate, Cedarpoint, and Greystone over an extended period.

Open Issue 6A: Migration Plan and Timeline

Northgate Position: The migration from Greystone's legacy MPLS infrastructure to Cedarpoint's SD-WAN/ArcMesh platform (version 4.2) shall be completed over an 18-month period following the effective date of the MSA, in three phases:

Phase 1 (Months 1–6): Planning and Pilot — Detailed site survey and network assessment; deployment of ArcMesh v4.2 at a pilot group of 30–40 nodes; parallel operation with Greystone MPLS at pilot sites; establishment of monitoring baselines and acceptance criteria.

Phase 2 (Months 7–12): Regional Rollout — Migration of approximately 150–160 nodes across designated regions; phased decommissioning of Greystone MPLS circuits at migrated sites; ongoing parallel-run at each site during the cutover period.

Phase 3 (Months 13–18): Full Migration and Decommissioning — Migration of remaining 140–150 nodes; complete decommissioning of Greystone MPLS infrastructure; final acceptance testing across all 340 nodes; transition to steady-state managed services.

The parties should discuss and confirm the specific milestones, deliverables, and acceptance criteria for each phase, as well as the consequences of delays attributable to each party.

Open Issue 6B: Cedarpoint Coordination with Greystone

Northgate Position: Cedarpoint shall be obligated to coordinate directly with Greystone during the migration period. This coordination obligation includes:

(a) Participating in joint planning meetings with Greystone and Northgate at least bi-weekly during each active migration phase;

(b) Sharing relevant technical specifications and integration requirements with Greystone (subject to appropriate confidentiality protections);

(c) Maintaining a parallel-run environment at each migrated site for a minimum of 30 days following cutover, during which both the Greystone MPLS circuit and the Cedarpoint ArcMesh connection are operational and traffic can be rerouted to the legacy system in the event of a failure; and

(d) Providing Northgate with written confirmation of successful migration at each site prior to decommissioning of the corresponding Greystone circuit.

Open Issue 6C: Rollback and Acceptance Testing

Northgate Position: If a migration phase fails acceptance testing (as defined in the transition services side letter), Cedarpoint shall implement rollback procedures to restore the affected nodes to their pre-migration state on the Greystone MPLS infrastructure within 48 hours of the failed test. Northgate shall have the right to delay any migration phase upon 30 days' written notice to Cedarpoint, for any reason, including concerns about network stability, operational readiness, or third-party dependencies. Any such delay shall extend the overall migration timeline by a corresponding period.

The acceptance testing criteria shall include, at a minimum, (i) successful connectivity and routing across all migrated nodes, (ii) performance within agreed latency and jitter thresholds, (iii) successful failover testing, and (iv) confirmation of security policy enforcement.

Open Issue 6D: Transition Services Side Letter

Northgate Position: The parties shall execute a separate transition services side letter concurrently with the MSA at closing. The side letter will supplement the MSA with detailed transition services terms, including:

(a) Detailed phase-by-phase migration schedule with milestones and deliverables;

(b) Acceptance testing criteria and procedures;

(d) Cedarpoint's coordination obligations with Greystone;

(e) Staffing and resource commitments by Cedarpoint during the migration period;

NEGOTIATION SESSION AGENDA — CONFIDENTIAL
In-Person Negotiation Session Northgate Americas, Inc. / Cedarpoint Systems Integration, Inc. Master Services Agreement
Date: June 1, 2023 Time: 10:00 a.m. – 4:00 p.m. (Eastern Time) Location: Calderwood & Harkness LLP 600 Lexington Avenue, 30th Floor New York, NY 10022
Prepared by: Christy Bauer, Lead Associate, Calderwood & Harkness LLP Matter Number: 1022-00008 Designation: Attorney-Client Privileged / Work Product
This agenda and all accompanying materials are protected by the attorney-client privilege and the work product doctrine. This document is prepared in anticipation of litigation and in connection with the provision of legal advice to Northgate Americas, Inc. Distribution is restricted to the individuals listed herein and should not be forwarded, copied, or disclosed to any person or entity without the prior written consent of Calderwood & Harkness LLP.
I. ATTENDEES
The following individuals are expected to attend the negotiation session in person at Calderwood & Harkness LLP's offices, unless otherwise noted. All attendees should plan to arrive no later than 9:45 a.m. to allow time for building security and visitor badge processing.
A. Northgate Americas, Inc. / Customer Side
B. Cedarpoint Systems Integration, Inc. / Service Provider Side
C. Dialing In (If Needed)
Dial-in credentials will be provided separately by Christy Bauer. Both remote participants should ensure they are reachable by mobile phone throughout the day in the event they are needed on short notice.
II. BACKGROUND AND PURPOSE
A. Transaction Overview
This negotiation session is intended to resolve all remaining open issues in the Master Services Agreement (the "MSA") between Northgate Americas, Inc. ("Northgate" or the "Customer/Licensee") and Cedarpoint Systems Integration, Inc. ("Cedarpoint" or the "Service Provider/Licensor") for managed network services. The MSA contemplates a total contract value of approximately $75,000,000 over a five-year initial term, with an annual contract value ("ACV") of $15,000,000. Under the MSA, Cedarpoint will provide managed SD-WAN network services across Northgate's enterprise infrastructure, utilizing Cedarpoint's proprietary ArcMesh platform (version 4.2), encompassing 340 managed nodes distributed across 28 U.S. states and 3 Canadian provinces.
B. Negotiation History
The parties have engaged in several rounds of drafting and negotiation over the past two months, as summarized below:
•  April 3, 2023 — Calderwood & Harkness LLP, on behalf of Northgate, circulated the first draft of the MSA to Whitfield Graves & Morrow LLP ("WGM") and Cedarpoint.
•  April 21, 2023 — WGM, on behalf of Cedarpoint, returned a comprehensive redline of the first draft MSA, together with a cover letter identifying Cedarpoint's principal commercial and legal concerns.
•  May 5, 2023 — Calderwood & Harkness LLP circulated the second draft of the MSA, incorporating certain of Cedarpoint's comments and rejecting others, accompanied by a detailed response memorandum.
•  May 19, 2023 — WGM circulated Cedarpoint's counter-redline to the second draft MSA, reflecting Cedarpoint's remaining positions on the open issues described in this agenda.
Since the circulation of the counter-redline, informal discussions between counsel and between the business principals have narrowed the universe of open items. However, several significant issues remain unresolved, and this in-person session is designed to bring the parties to final agreement on all outstanding points.
C. Objective
The objective of this session is to resolve all open points to permit the finalization and execution of the MSA, with a target signing and closing date of June 9, 2023. It is the expectation of both parties that this session will serve as the final substantive negotiation before the MSA is circulated in execution form. To the extent any issue cannot be resolved in this session, the parties should identify the specific decision-maker whose approval is required and agree on a timeline for obtaining that approval prior to June 9.
D. Reference Documents
The following documents should be reviewed in advance of the session and brought (in hard copy or electronic form) by all attendees:
1.  Second draft MSA (dated May 5, 2023)
2.  Cedarpoint counter-redline to the second draft MSA (dated May 19, 2023)
3.  Negotiation issues tracker (current as of May 30, 2023)
4.  Key commercial terms summary / term sheet
A complete list of reference materials appears in Section IV of this agenda.
III. AGENDA ITEMS
Agenda Item 1: Most Favored Nation Pricing Terms
Scheduled Time: 10:00 a.m. – 10:45 a.m. Lead Discussants: Deirdre Kwan (commercial terms), Christy Bauer (legal drafting) MSA Reference: Article VII, Section 7.04 (MFN Pricing)
This agenda item addresses five open issues relating to the most favored nation pricing provisions in the MSA. The MFN clause is a core commercial protection for Northgate and is intended to ensure that Cedarpoint does not offer materially more favorable pricing to similarly situated customers during the term of the MSA.
Open Issue 1A: MFN Benchmark Definition
Northgate Position: The MFN provision defines "comparable customer" as any Cedarpoint customer procuring managed network services for a network comprising 200 or more managed nodes (the "Comparable Customer Volume Threshold"). Northgate's own network comprises 340 managed nodes distributed across 28 U.S. states and 3 Canadian provinces, well above the proposed threshold. The 200-node threshold is designed to capture a meaningful universe of comparable engagements while excluding smaller deployments that may not be genuinely analogous in scope, complexity, or cost structure.
Cedarpoint Position: In the May 19 counter-redline, Cedarpoint proposed raising the Comparable Customer Volume Threshold from 200 managed nodes to 300 or more managed nodes. Cedarpoint's cover letter indicated this revision was driven by a concern that a lower threshold would capture a disproportionate number of Cedarpoint's mid-market clients and create undue pricing transparency obligations.
Northgate's Response and Recommended Approach: Northgate's position is that the 200-node threshold is market-standard for managed network services agreements of this nature and must be retained. Raising the threshold to 300 nodes would significantly narrow the universe of comparable customers and undermine the practical utility of the MFN protection. Christy Bauer's MFN clause analysis memorandum (see reference materials) confirms that a threshold of 200 nodes is consistent with comparable provisions in three recent peer transactions surveyed by Calderwood & Harkness.
Open Issue 1B: Pricing Differential Trigger
Northgate Position: The MFN clause is triggered when Cedarpoint offers or provides pricing to a comparable customer that results in a pricing differential greater than 3% below the effective pricing charged to Northgate for substantially similar services, on a per-node, per-month basis. Upon such a triggering event, Northgate is entitled to both a retroactive credit and a prospective pricing adjustment.
Cedarpoint Position: Cedarpoint's counter-redline proposed increasing the pricing differential trigger from greater than 3% to greater than 5%, arguing that minor pricing variations may result from differences in service configurations, geographic deployment costs, or promotional pricing programs and do not reflect genuine price discrimination.
Northgate's Response and Recommended Approach: Northgate's position is that the 3% threshold must be retained. A 5% threshold would allow Cedarpoint to offer discounts of nearly $750,000 on an annual basis (based on Northgate's ACV of $15,000,000) to a comparable customer before triggering the MFN protection, which would render the clause commercially meaningless. The 3% threshold already provides Cedarpoint with a reasonable buffer for minor pricing variations.
Open Issue 1C: Retroactive Credit and Prospective Adjustment Timelines
Northgate Position: Upon determination that the MFN pricing differential trigger has been met, (i) Cedarpoint must issue a retroactive credit within 45 days of the date of determination covering the difference between the pricing charged to Northgate and the lower pricing offered to the comparable customer for the period during which the violation existed, and (ii) Cedarpoint must implement a prospective pricing adjustment within 30 days such that Northgate's go-forward pricing is no less favorable than that offered to the comparable customer.
Status: These timelines were reflected in the second draft MSA (May 5, 2023) and did not appear to be the subject of objection in Cedarpoint's counter-redline. However, the parties should confirm at the session that there is no remaining disagreement on these points, and the language should be verified as settled.
Open Issue 1D: MFN Audit Rights and Cost Allocation
Northgate Position: Northgate has the right to conduct one MFN compliance audit per calendar year, covering the trailing 12-month period, to verify Cedarpoint's compliance with the MFN pricing obligations. The audit may be conducted by Northgate's internal audit team or by a third-party auditor selected by Northgate and reasonably acceptable to Cedarpoint. Cedarpoint is obligated to cooperate with the audit and provide access to relevant pricing records, customer contracts (on a redacted basis to protect third-party confidentiality), and financial data.
Cedarpoint Position: Cedarpoint's counter-redline did not object to the annual audit right or the trailing 12-month benchmark comparison period. However, Cedarpoint objected to the cost allocation provision, which in the second draft MSA provided that Cedarpoint would bear all costs of the audit in all circumstances.
Northgate's Response and Recommended Approach: Northgate is prepared to accept a modified cost allocation mechanism: audit costs shall be borne by Cedarpoint if the audit reveals a violation of the MFN pricing obligations; audit costs shall be borne by Northgate if the audit reveals no violation. This is a fair and balanced approach that incentivizes Cedarpoint's compliance while discouraging frivolous or burdensome audit requests by Northgate. This position should be proposed as a reasonable compromise.
Open Issue 1E: Cedarpoint's Mutual MFN Proposal
Cedarpoint Position: In the counter-redline, Cedarpoint introduced a new provision proposing a mutual most favored nation obligation — that is, Northgate would guarantee to Cedarpoint that Northgate does not procure substantially similar managed network services from any third-party provider at pricing more than 3% below the pricing paid to Cedarpoint, and that if Northgate does so, Cedarpoint would be entitled to a corresponding pricing reduction.
Northgate's Response and Recommended Approach: Northgate's position is to reject the mutual MFN proposal in its entirety. A mutual MFN provision is not market-standard in customer-side managed services agreements. The MFN protection runs in favor of the customer as a check against the service provider's pricing practices across its customer base. A reverse MFN imposed on the customer would improperly constrain Northgate's procurement flexibility and competitive bidding processes and is inconsistent with the commercial structure of this transaction.
Agenda Item 2: Indemnification Cap and Carve-Outs
Scheduled Time: 10:45 a.m. – 11:45 a.m. Lead Discussants: Christy Bauer (legal), Colette Whitman (risk assessment) MSA Reference: Article XII, Sections 12.01–12.06 (Indemnification)
This agenda item addresses six open issues relating to the indemnification provisions of the MSA. The indemnification framework is among the most critical risk-allocation provisions in the agreement, and Northgate's positions on the aggregate cap, uncapped carve-outs, and scope of indemnification obligations must be preserved.
Open Issue 2A: Cedarpoint's Aggregate Indemnification Cap
Northgate Position: Cedarpoint's aggregate indemnification liability under the MSA (exclusive of uncapped carve-outs, discussed below) shall be capped at 200% of the aggregate fees paid by Northgate during the 12-month period immediately preceding the event giving rise to the claim. Based on the annual contract value of $15,000,000, the Year 1 cap would be $30,000,000 (i.e., 2 × $15,000,000). This cap is appropriate given the scope of services, the critical infrastructure nature of the managed network, the number of nodes under management, and the potential magnitude of business interruption losses to Northgate in the event of a material service failure.
Cedarpoint Position: Cedarpoint's counter-redline proposed reducing the aggregate indemnification cap to 150% of trailing 12-month fees, which would result in a Year 1 cap of $22,500,000. Cedarpoint's cover letter cited industry benchmarks and its concern about disproportionate liability exposure relative to contract value.
Northgate's Response and Recommended Approach: Northgate's position is that the 200% cap must be retained. A 150% cap would provide insufficient protection given the following considerations:
(a) Northgate's managed network supports mission-critical telecommunications operations across 28 states and 3 provinces;
(b) A material network outage could result in downstream losses to Northgate's own customers that substantially exceed the annual contract value;
(c) Cedarpoint is a well-capitalized company with FY2022 revenues of $420,000,000 and approximately 1,800 employees, and a 200% cap relative to a $15,000,000 ACV does not present a disproportionate financial risk to Cedarpoint; and
(d) The 200% multiplier is consistent with the range observed in comparable managed services transactions reviewed by Calderwood & Harkness in Christy Bauer's indemnification analysis memorandum.
Open Issue 2B: Northgate's Aggregate Indemnification Cap
Northgate Position: Northgate's aggregate indemnification liability under the MSA shall be capped at 100% of the aggregate fees paid by Northgate during the 12-month period immediately preceding the event giving rise to the claim, resulting in a cap of $15,000,000 in any given year.
Status: This cap was proposed by Northgate in the first draft MSA and was not the subject of objection in either of Cedarpoint's redlines. The parties should confirm at the session that this provision is settled and does not require further discussion.
Open Issue 2C: Uncapped Carve-Outs
Northgate Position: The following categories of indemnification obligations shall be carved out from Cedarpoint's aggregate indemnification cap and shall be uncapped (i.e., Cedarpoint's liability for these categories shall not be subject to any monetary ceiling):
(i) intellectual property infringement — claims arising from third-party allegations that Cedarpoint's ArcMesh platform or any component thereof infringes or misappropriates the intellectual property rights of a third party;
(ii) Willful misconduct — claims arising from Cedarpoint's intentional or deliberately reckless acts or omissions in the performance of services;
(iii) Data breach — claims arising from any unauthorized access to, disclosure of, or loss of Northgate data in Cedarpoint's possession, custody, or control, to the extent caused by Cedarpoint's negligence, willful misconduct, or failure to comply with the data security obligations set forth in the MSA; and
(iv) Confidentiality breach — claims arising from Cedarpoint's unauthorized disclosure or use of Northgate's confidential information in violation of the confidentiality provisions of the MSA.
Cedarpoint Position: Cedarpoint's counter-redline accepted the uncapped treatment of IP infringement, willful misconduct, and confidentiality breach. However, Cedarpoint proposed capping data breach indemnification at 300% of trailing 12-month fees (i.e., $45,000,000 in Year 1), arguing that data breach liability is inherently unpredictable and that an uncapped obligation creates unacceptable risk.
Northgate's Response and Recommended Approach: Northgate's position is that all four carve-outs must remain uncapped. Data breach liability is precisely the type of risk that should not be subject to a cap, because the potential harm to Northgate — including regulatory penalties, customer notification costs, litigation exposure, and reputational damage — could far exceed any predetermined cap. Moreover, the data security obligations in the MSA are designed to minimize the likelihood of a breach, and Cedarpoint's compliance with those obligations is the appropriate mechanism for limiting Cedarpoint's exposure — not an arbitrary dollar cap. Cedarpoint's insurance coverage (discussed under Open Issue 2F) provides an additional backstop.
Open Issue 2D: Cedarpoint's Indemnification Obligations — Scope
Northgate Position: Cedarpoint's indemnification obligations under the MSA shall cover the following four categories:
(a) Third-Party IP Infringement Claims — Cedarpoint shall indemnify, defend, and hold harmless Northgate from and against any losses, damages, costs, and expenses (including reasonable attorneys' fees) arising from any third-party claim alleging that the ArcMesh platform, or any component thereof, infringes or misappropriates the intellectual property rights of such third party;
(b) Data Breaches — Cedarpoint shall indemnify Northgate from and against any losses arising from any unauthorized access to, disclosure of, or loss of Northgate data in Cedarpoint's possession, custody, or control, to the extent caused by Cedarpoint's negligence or willful misconduct;
(c) Bodily Injury or Property Damage — Cedarpoint shall indemnify Northgate from and against any losses arising from bodily injury or property damage to Northgate employees, facilities, or assets caused by the acts or omissions of Cedarpoint personnel while present on Northgate premises; and
(d) Regulatory Penalties — Cedarpoint shall indemnify Northgate from and against any fines, penalties, or sanctions imposed by any federal, state, provincial, or local governmental authority arising from Cedarpoint's failure to comply with applicable telecommunications laws and regulations in the performance of services under the MSA.
Status: The scope of Cedarpoint's indemnification obligations was substantially agreed in the second draft MSA. The parties should review and confirm the precise language at the session.
Open Issue 2E: Northgate's Indemnification Obligations — Scope
Northgate Position: Northgate's indemnification obligations under the MSA shall cover the following two categories:
(a) Misuse of ArcMesh — Northgate shall indemnify Cedarpoint from and against any losses arising from Northgate's use of the ArcMesh platform outside the scope of the license granted under the MSA; and
(b) Northgate-Provided Data or Content — Northgate shall indemnify Cedarpoint from and against any third-party claims arising from data or content provided by Northgate and transmitted over the managed network, to the extent such claims arise from the nature or content of such data rather than from Cedarpoint's acts or omissions.
Status: The scope of Northgate's indemnification obligations was substantially agreed in the second draft MSA. The parties should confirm at the session that this provision is settled.
Open Issue 2F: Insurance Coverage Requirements
Northgate Position: The MSA shall require Cedarpoint to maintain the following insurance coverage throughout the term:
Cedarpoint's current carrier is Braeburn Mutual Insurance Company. Cedarpoint is required to provide certificates of insurance to Northgate naming Northgate Americas, Inc. as an additional insured under each policy. Certificates must be delivered at closing and renewed annually within 30 days of each policy renewal date.
Status: These insurance requirements were set forth in the second draft MSA and were not objected to in Cedarpoint's counter-redline. The parties should confirm at the session that this provision is fully settled and that no remaining issues exist regarding policy forms, endorsements, or additional insured status.
Agenda Item 3: Change of Control Definition and Consent Mechanics
Scheduled Time: 11:45 a.m. – 12:30 p.m. Lead Discussants: Christy Bauer (legal), Colette Whitman (strategic considerations) MSA Reference: Article XV, Section 15.03 (Change of Control); Article XVIII (Anti-Assignment)
This agenda item addresses five open issues relating to the definition of "change of control" and the consent and termination mechanics triggered by a change of control event. These provisions are of particular strategic importance to Northgate given Ridgeline Capital Partners' majority ownership stake in Cedarpoint and the attendant risk of a sponsor-driven exit during the MSA term.
Open Issue 3A: Four-Prong Definition of "Change of Control"
Northgate Position: The MSA defines "Change of Control" as the occurrence of any of the following events with respect to Cedarpoint:
(i) Equity Acquisition — the acquisition, directly or indirectly, by any person, entity, or group (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934) of more than 50% of the outstanding voting equity securities of Cedarpoint;
(ii) Merger or Consolidation — any merger, consolidation, or reorganization involving Cedarpoint in which Cedarpoint is not the surviving entity, or following which the holders of Cedarpoint's voting equity securities immediately prior to such transaction hold less than 50% of the voting equity securities of the surviving entity;
(iii) Asset Sale — the sale, transfer, or other disposition of all or substantially all of Cedarpoint's assets, whether in a single transaction or a series of related transactions; or
(iv) Board Turnover — a change in a majority of the members of Cedarpoint's board of directors (or equivalent governing body) within any 12-month period, other than changes in board membership that are approved or recommended by a majority of the directors then in office who were directors at the beginning of such 12-month period.
Status: Prongs (i), (ii), and (iii) are substantially agreed. Prong (iv) remains disputed, as discussed below.
Open Issue 3B: Board-Turnover Prong (Prong (iv))
Cedarpoint Position: Cedarpoint's counter-redline proposed deleting prong (iv) (the board-turnover prong) from the definition of Change of Control. WGM's cover letter argued that the board-turnover prong is overly broad and could be triggered by routine governance changes, including the appointment of new independent directors, the rotation of board members in connection with Cedarpoint's annual meeting, or changes in board composition resulting from the retirement or resignation of existing directors.
Northgate's Response and Recommended Approach: Northgate's position is that prong (iv) is essential and must be retained. The board-turnover prong is specifically designed to address the risk that a change in effective control of Cedarpoint could be accomplished through reconstitution of the board without a direct equity transfer. This risk is particularly acute in the present context, given the following considerations:
(a) Ridgeline Capital Partners' Majority Stake — Ridgeline Capital Partners, LP currently holds 62% of Cedarpoint's outstanding voting equity. As a private equity sponsor, Ridgeline may seek to exit its investment through range mechanisms during the MSA term, some of which — including secondary sales, recapitalizations, or negotiated board reconstitutions — may not technically constitute an equity acquisition, merger, or asset sale under prongs (i)–(iii) but could nonetheless result in a fundamental change in Cedarpoint's strategic direction, management philosophy, and service delivery priorities.
(b) Board Control as a Proxy for Operational Control — In a sponsor-backed company such as Cedarpoint, the board of directors exercises significant influence over capital allocation, personnel decisions, strategic direction, and operational priorities. A wholesale reconstitution of the board could materially alter the nature of the entity with which Northgate contracted, even if the equity ownership structure remains nominally unchanged.
(c) Carve-Out for Approved Changes — The proposed prong (iv) already includes a carve-out for board changes that are "approved or recommended by a majority of the directors then in office," which addresses Cedarpoint's concern about routine governance changes. Only board reconstitutions that are not approved by the incumbent board — i.e., those that reflect a genuine change in control — would trigger the provision.
Christy Bauer's change of control analysis memorandum provides additional detail on market precedents supporting the inclusion of a board-turnover prong in change of control definitions in technology services agreements with sponsor-backed counterparties.
Open Issue 3C: Current Ownership Disclosure
For reference and context, the current capitalization of Cedarpoint Systems Integration, Inc. is as follows:
The parties should discuss whether the MSA should include an ownership representation schedule (as an exhibit or schedule to the MSA) reflecting the current capitalization, together with a representation and warranty from Cedarpoint that the capitalization disclosed is accurate and complete as of the date of execution. Such a schedule would provide a baseline against which future changes in ownership or control could be measured.
Open Issue 3D: Notice and Election Mechanics
Northgate Position: The MSA shall require Cedarpoint to provide Northgate with written notice at least 90 days prior to the anticipated closing of any transaction that would constitute a Change of Control. Upon receipt of such notice, Northgate shall have 60 days to elect one of the following:
(a) Consent to Assignment — Northgate may consent to the assignment of the MSA to the successor entity, provided that such consent shall not be unreasonably withheld, conditioned, or delayed; or
(b) Termination — Northgate may elect to terminate the MSA upon 180 days' written notice, with termination consequences as described in Open Issue 3E below.
Cedarpoint Position: Cedarpoint's counter-redline proposed reducing the advance notice period from 90 days to 60 days, arguing that a 90-day notice requirement is impractical in the context of competitive M&A processes and may create confidentiality risks for Cedarpoint in connection with potential transactions.
Northgate's Response and Recommended Approach: Northgate's position is that the 90-day notice period must be retained. A 60-day notice period would not provide Northgate with adequate time to evaluate the proposed transaction, assess the capabilities and financial condition of the successor entity, and make an informed election. Northgate's network is critical infrastructure, and a change in the identity of the service provider requires thorough due diligence. To the extent Cedarpoint has concerns about confidentiality during the notice period, those concerns are adequately addressed by the confidentiality provisions of the MSA and the mutual NDA.
Open Issue 3E: Termination Consequences on Change of Control
Northgate Position: If Northgate elects to terminate the MSA following a Change of Control, the following consequences shall apply:
(a) Transition Assistance — Cedarpoint shall provide transition assistance services to Northgate for a period of up to 12 months following the effective date of termination, at no additional cost to Northgate, to facilitate the migration of Northgate's managed network to a successor service provider or an in-house solution;
(b) Pro-Rata Refund — Northgate shall receive a pro-rata refund of any prepaid fees for services not yet rendered as of the effective date of termination;
(c) Wind-Down Escrow Release — The escrowed funds held pursuant to Article XIII of the MSA shall be released to Northgate upon the effective date of termination; and
(d) Anti-Assignment — Any purported assignment of the MSA by Cedarpoint without Northgate's prior written consent shall be void and of no force or effect.
Status: These termination consequences were set forth in the second draft MSA and are believed to be substantially agreed. The parties should confirm at the session.
Working Lunch
Scheduled Time: 12:30 p.m. – 1:15 p.m.
Lunch will be provided at Calderwood & Harkness LLP's offices (Conference Room A, 30th Floor). This is an informal break with no scheduled agenda items. Attendees are encouraged to use this time for informal discussion, relationship-building, or resolution of minor drafting points. No formal negotiations or binding commitments should be made during this period without all principals present.
Agenda Item 4: Service Level Agreement and Credit Structure
Scheduled Time: 1:15 p.m. – 2:00 p.m. Lead Discussants: Katrina Bosch (technical/operational), Christy Bauer (legal) MSA Reference: Exhibit B (Service Level Agreement); Article IX, Section 9.02 (Service Credits)
This agenda item addresses five open issues relating to the service level commitments, the tiered service credit structure, and the measurement methodology for network availability. The SLA provisions are central to Northgate's operational assurance framework and must reflect the critical nature of the managed network.
Open Issue 4A: Network Availability SLA
Northgate Position: Cedarpoint commits to a network availability service level of 99.95% monthly uptime, measured on a per-node basis across all 340 managed nodes. Monthly uptime is calculated as the total number of minutes in the applicable calendar month minus the total number of minutes of unplanned downtime, divided by the total number of minutes in the calendar month, expressed as a percentage.
Status: This service level commitment appeared in the second draft MSA and was not objected to in Cedarpoint's counter-redline. The parties should verify at the session that the 99.95% standard is fully settled.
Open Issue 4B: Tiered Service Credit Structure
Northgate Position: The MSA shall include a three-tiered service credit structure, calculated as a percentage of the monthly managed services fee. The monthly run-rate for managed services under the MSA is $1,250,000 (i.e., $15,000,000 ACV ÷ 12 months). The tiered credit structure is as follows:
Status: This tiered structure was set forth in the second draft MSA. The parties should confirm the credit percentages and dollar amounts at the session.
Open Issue 4C: Annual SLA Credit Cap
Northgate Position: The aggregate service credits payable by Cedarpoint in any contract year shall be capped at 30% of the annual managed services fees for that year. Based on the first-year annual fee of $10,500,000 (reflecting partial-year proration or, if fees are $15,000,000 on a full-year basis, $4,500,000; note: the parties should confirm the annual fee figure for purposes of this calculation, but based on available data, 30% of $10,500,000 = $3,150,000).
Cedarpoint Position: Cedarpoint's counter-redline proposed reducing the annual credit cap to 20% of annual managed services fees, which would result in a cap of approximately $2,100,000 (based on $10,500,000). Cedarpoint argued that a 30% cap creates excessive financial exposure and that service credits are intended to serve as a performance incentive, not a profit-sharing mechanism.
Northgate's Response and Recommended Approach: Northgate insists on the 30% annual cap as providing adequate protection given the critical nature of the managed network infrastructure. Service credits below this level would not meaningfully incentivize Cedarpoint's performance. Moreover, the annual credit cap functions as a ceiling — not a floor — and Cedarpoint's compliance with the 99.95% SLA would result in no credits being payable at all.
Open Issue 4D: Material Breach Trigger
Northgate Position: If Cedarpoint's monthly network availability falls below 99.50% uptime for three consecutive calendar months, such failure shall constitute a material breach of the MSA, entitling Northgate to terminate the MSA for cause in accordance with the termination provisions of Article XVI, Section 16.02.
Status: This material breach trigger was included in the second draft MSA and was not objected to in Cedarpoint's counter-redline. The parties should confirm at the session that this provision is fully settled.
Open Issue 4E: Measurement Methodology and Reporting
The parties should discuss and confirm the specifics of the uptime measurement methodology, including the following:
(a) Monitoring Tools — Identification of the monitoring tools and systems to be used by Cedarpoint to measure network availability, including whether Northgate will have independent access to monitoring data;
(b) Exclusions — Agreed exclusions from the uptime calculation, including (i) scheduled maintenance windows (to be defined in Exhibit B, with a maximum of 4 hours per month and 48 hours per calendar year, with at least 72 hours' advance written notice), (ii) downtime attributable to force majeure events as defined in Article XX, and (iii) downtime attributable to acts or omissions of Northgate or its third-party providers (other than Cedarpoint);
(c) Monthly Reporting — Cedarpoint shall provide Northgate with a written monthly availability report within 10 business days following the end of each calendar month, detailing (i) actual uptime by node and in aggregate, (ii) any downtime incidents, including root cause analysis, and (iii) any applicable service credits; and
(d) Dispute Resolution — The process for resolving disputes regarding uptime measurements or credit calculations.
Agenda Item 5: Escrow Deposit and Release Mechanics
Scheduled Time: 2:00 p.m. – 2:30 p.m. Lead Discussants: Christy Bauer (legal), Philip Hargreaves (financial, for Cedarpoint) MSA Reference: Article XIII, Sections 13.01–13.05 (Escrow)
This agenda item addresses four open issues relating to the establishment, funding, and release of an escrow account to secure certain of Cedarpoint's obligations under the MSA.
Open Issue 5A: Funding Schedule
Northgate Position: Cedarpoint shall make annual escrow deposits of $750,000 (representing 5% of the annual contract value of $15,000,000). Deposits shall be made on the first business day of each contract year, beginning on the effective date of the MSA. Over the five-year initial term, the aggregate escrowed amount shall be $3,750,000.
The escrow agent shall be Dravello National Bank, and the escrow account shall be established under reference number FNB-ESC-2023-07742.
Status: The funding schedule was set forth in the second draft MSA and is believed to be substantially agreed. The parties should confirm the deposit timing, amount, and escrow agent designation at the session.
Open Issue 5B: Escrow Release Conditions
Northgate Position: The escrowed funds shall be released as follows:
(a) Change of Control Termination — If Northgate terminates the MSA following a Change of Control event, the entire escrowed balance shall be released to Northgate;
(b) Material Breach Termination by Northgate — If Northgate terminates the MSA for cause due to Cedarpoint's material breach, the entire escrowed balance shall be released to Northgate; and
(c) Natural Expiration — If the MSA expires at the end of the initial term or any renewal term without renewal, and Cedarpoint has completed all transition obligations to Northgate's reasonable satisfaction, the escrowed balance shall be released to Cedarpoint.
Cedarpoint Position: Cedarpoint's counter-redline proposed that the escrowed funds be released to Cedarpoint upon any termination not caused by Cedarpoint's breach — i.e., including termination by Northgate for convenience, termination by Cedarpoint for Northgate's breach, and natural expiration.
Northgate's Response and Recommended Approach: Northgate's position is that the release conditions must favor Northgate in termination-for-cause and change-of-control scenarios. The escrow is designed to protect Northgate against the risk that Cedarpoint will fail to perform its transition obligations or that the MSA will be terminated under circumstances attributable to Cedarpoint. However, Northgate is willing to discuss the treatment of the escrow in a termination-for-convenience scenario as a potential area of compromise, provided that the Northgate-favorable release conditions in (a) and (b) above are preserved.
Open Issue 5C: Escrow Release Timeline
Northgate Position: Following the occurrence of a release-triggering event, the escrowed funds shall be released to the entitled party within 30 days of the triggering event (or, in the case of natural expiration, within 30 days of Cedarpoint's completion of all transition obligations).
Cedarpoint Position: Cedarpoint's counter-redline proposed a 60-day release timeline, arguing that 30 days does not provide adequate time for reconciliation and verification.
Recommended Approach: This is a potential area for compromise. The parties should discuss whether a 45-day release timeline would be acceptable to both sides, or whether a 30-day timeline with a specified reconciliation process could address Cedarpoint's concerns.
Open Issue 5D: Tri-Party Escrow Agreement
Northgate Position: The MSA shall require the execution of a separate tri-party escrow agreement among Northgate Americas, Inc., Cedarpoint Systems Integration, Inc., and Dravello National Bank, to be executed concurrently with the MSA at closing. The escrow agreement shall address the following matters:
(a) Establishment and maintenance of the escrow account;
(b) Investment of escrowed funds (to be invested in U.S. Treasury securities or money market funds, with interest accruing for the benefit of the party ultimately entitled to receive the escrowed funds);
(c) Escrow agent fees (to be split equally between Northgate and Cedarpoint);
(d) Release mechanics consistent with the conditions set forth in the MSA;
(e) Dispute resolution procedures in the event the escrow agent receives conflicting release instructions; and
(f) Governing law — the escrow agreement shall be governed by the laws of the State of New York, without regard to conflicts of law principles.
A draft form of the escrow agreement has been prepared by Calderwood & Harkness and will be available at the session for discussion.
Agenda Item 6: Transition Services — Migration from Greystone Network Solutions
Scheduled Time: 2:30 p.m. – 3:00 p.m. Lead Discussants: Katrina Bosch (operational), Christy Bauer (legal) MSA Reference: Article X (Transition Services); Transition Services Side Letter (to be executed concurrently)
This agenda item addresses four open issues relating to the transition of Northgate's managed network services from the incumbent service provider, Greystone Halcyon Software ("Greystone"), to Cedarpoint's SD-WAN/ArcMesh platform. The migration is a complex, multi-phase undertaking that will require close coordination among Northgate, Cedarpoint, and Greystone over an extended period.
Open Issue 6A: Migration Plan and Timeline
Northgate Position: The migration from Greystone's legacy MPLS infrastructure to Cedarpoint's SD-WAN/ArcMesh platform (version 4.2) shall be completed over an 18-month period following the effective date of the MSA, in three phases:
Phase 1 (Months 1–6): Planning and Pilot — Detailed site survey and network assessment; deployment of ArcMesh v4.2 at a pilot group of 30–40 nodes; parallel operation with Greystone MPLS at pilot sites; establishment of monitoring baselines and acceptance criteria.
Phase 2 (Months 7–12): Regional Rollout — Migration of approximately 150–160 nodes across designated regions; phased decommissioning of Greystone MPLS circuits at migrated sites; ongoing parallel-run at each site during the cutover period.
Phase 3 (Months 13–18): Full Migration and Decommissioning — Migration of remaining 140–150 nodes; complete decommissioning of Greystone MPLS infrastructure; final acceptance testing across all 340 nodes; transition to steady-state managed services.
The parties should discuss and confirm the specific milestones, deliverables, and acceptance criteria for each phase, as well as the consequences of delays attributable to each party.
Open Issue 6B: Cedarpoint Coordination with Greystone
Northgate Position: Cedarpoint shall be obligated to coordinate directly with Greystone during the migration period. This coordination obligation includes:
(a) Participating in joint planning meetings with Greystone and Northgate at least bi-weekly during each active migration phase;
(b) Sharing relevant technical specifications and integration requirements with Greystone (subject to appropriate confidentiality protections);
(c) Maintaining a parallel-run environment at each migrated site for a minimum of 30 days following cutover, during which both the Greystone MPLS circuit and the Cedarpoint ArcMesh connection are operational and traffic can be rerouted to the legacy system in the event of a failure; and
(d) Providing Northgate with written confirmation of successful migration at each site prior to decommissioning of the corresponding Greystone circuit.
Open Issue 6C: Rollback and Acceptance Testing
Northgate Position: If a migration phase fails acceptance testing (as defined in the transition services side letter), Cedarpoint shall implement rollback procedures to restore the affected nodes to their pre-migration state on the Greystone MPLS infrastructure within 48 hours of the failed test. Northgate shall have the right to delay any migration phase upon 30 days' written notice to Cedarpoint, for any reason, including concerns about network stability, operational readiness, or third-party dependencies. Any such delay shall extend the overall migration timeline by a corresponding period.
The acceptance testing criteria shall include, at a minimum, (i) successful connectivity and routing across all migrated nodes, (ii) performance within agreed latency and jitter thresholds, (iii) successful failover testing, and (iv) confirmation of security policy enforcement.
Open Issue 6D: Transition Services Side Letter
Northgate Position: The parties shall execute a separate transition services side letter concurrently with the MSA at closing. The side letter will supplement the MSA with detailed transition services terms, including:
(a) Detailed phase-by-phase migration schedule with milestones and deliverables;
(b) Acceptance testing criteria and procedures;
(c) Rollback procedures and remediation obligations;
(d) Cedarpoint's coordination obligations with Greystone;
(e) Staffing and resource commitments by Cedarpoint during the migration period;
(f) Pricing for transition services (if any) in excess of those included in the base managed services fees; and
(g) Escalation and dispute resolution procedures specific to the migration.
A draft of the transition services side letter is being prepared by Calderwood & Harkness and will be circulated to WGM promptly following this session.
Agenda Item 7: Remaining Open Items and Execution Timeline
Scheduled Time: 3:00 p.m. – 3:45 p.m. Lead Discussants: Christy Bauer (legal), Colette Whitman (strategic) MSA Reference: Various articles
This agenda item addresses six remaining open issues that must be resolved prior to finalization of the MSA, as well as the target execution timeline and closing deliverables.
Open Issue 7A: IP Ownership and Licensing
Northgate Position: The ArcMesh platform (version 4.2), including all software, documentation, algorithms, and associated intellectual property, is licensed (not sold) to Northgate under the MSA. Cedarpoint retains all right, title, and interest in and to the ArcMesh platform and all underlying intellectual property.
Northgate receives a non-exclusive, non-transferable, non-sublicensable license to use the ArcMesh platform solely in connection with the managed network services during the term of the MSA (including any renewal periods). The license terminates automatically upon expiration or termination of the MSA, subject to the transition assistance provisions.
Open Sub-Issue: Customizations and Derivative Works — The parties must discuss and agree upon the ownership allocation for any customizations, configurations, integrations, or derivative works developed by Cedarpoint specifically for Northgate in connection with the managed network services. Northgate's preferred position is that Northgate should own (or receive a perpetual, royalty-free license to) any Northgate-specific customizations, while Cedarpoint retains ownership of any enhancements to the core ArcMesh platform. The parties should discuss the appropriate demarcation between "Northgate-specific customizations" and "platform enhancements."
Open Issue 7B: Confidentiality
Northgate Position: The MSA shall include comprehensive confidentiality provisions that incorporate and supersede the existing Mutual Non-Disclosure Agreement between Northgate Americas, Inc. and Cedarpoint Systems Integration, Inc., dated February 22, 2023. The confidentiality provisions of the MSA shall govern the parties' obligations with respect to confidential information disclosed in connection with the MSA, and the mutual NDA shall be deemed terminated and replaced in its entirety upon execution of the MSA.
The parties should confirm that the confidentiality provisions in the current draft MSA are aligned with the protections afforded under the mutual NDA, including (i) the definition of "Confidential Information," (ii) the exceptions to confidentiality obligations, (iii) the permitted disclosure carve-outs (including disclosures required by law, regulation, or judicial order), and (iv) the survival period for confidentiality obligations following termination or expiration of the MSA.
Open Issue 7C: Term and Renewal
Northgate Position:
Initial Term: The MSA shall have an initial term commencing on June 9, 2023 and expiring on June 8, 2028 (five years).
Renewal: The MSA shall automatically renew for two successive 2-year renewal periods (i.e., June 9, 2028 – June 8, 2030, and June 9, 2030 – June 8, 2032), unless either party provides the other with 180 days' written notice of non-renewal prior to the expiration of the then-current term.
Status: These term and renewal provisions are believed to be substantially agreed. The parties should confirm at the session.
Open Issue 7D: Governing Law and Dispute Resolution
Northgate Position: The MSA shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of law principles.
Dispute Resolution: The parties must confirm the dispute resolution mechanism. Northgate's preferred approach is a tiered dispute resolution process:
Step 1: Negotiation — The parties shall first attempt to resolve any dispute through good-faith negotiation between designated senior executives (VP level or above) for a period of 30 days following written notice of the dispute.
Step 2: Mediation — If the dispute is not resolved through negotiation, the parties shall submit the dispute to non-binding mediation administered by a mutually agreed mediator for a period of 60 days.
Step 3: Litigation or Arbitration — If the dispute is not resolved through mediation, either party may pursue resolution through (a) litigation in the courts of the State of New York located in New York County, or the United States District Court for the Southern District of New York, or (b) binding arbitration — to be agreed. The parties should discuss and confirm at the session whether the final tier of dispute resolution will be litigation or arbitration.
Open Issue 7E: Closing Deliverables and Conditions
The following documents and deliverables must be prepared, executed, and delivered at or prior to closing:
(a) Officer's Certificates — Officer's certificates from both Northgate Americas, Inc. and Cedarpoint Systems Integration, Inc. confirming the accuracy of representations and warranties and the satisfaction of closing conditions;
(b) Secretary's Certificate (Cedarpoint) — Secretary's certificate from Cedarpoint certifying (i) board resolutions authorizing the execution and delivery of the MSA and related agreements, (ii) a true and correct copy of Cedarpoint's certificate of incorporation (as amended), (iii) a true and correct copy of Cedarpoint's bylaws (as amended), (iv) a certificate of good standing from the Secretary of State of Delaware (Cedarpoint's state of incorporation), and (v) incumbency certificates for Rajiv Sundaram (CEO), Philip Hargreaves (CFO), and Nadia Okafor (General Counsel);
(c) Legal Opinion — Legal opinion from Whitfield Graves & Morrow LLP opining on (i) Cedarpoint's due organization, valid existence, and good standing, (ii) Cedarpoint's due authorization and execution of the MSA, and (iii) the enforceability of the MSA against Cedarpoint in accordance with its terms;
(d) Certificates of Insurance — Certificates of insurance from Braeburn Mutual Insurance Company evidencing the required coverage and naming Northgate Americas, Inc. as additional insured;
(e) Executed Escrow Agreement — The tri-party escrow agreement among Northgate Americas, Inc., Cedarpoint Systems Integration, Inc., and Dravello National Bank, fully executed; and
(f) Transition Services Side Letter — The transition services side letter, fully executed, supplementing the MSA with detailed migration terms.
Open Issue 7F: Target Execution Timeline
The parties should confirm the following target execution timeline:
All parties should ensure that internal approvals, board resolutions, and other authorizations required for execution are obtained prior to the June 9 target date.
Agenda Item 8: Wrap-Up and Next Steps
Scheduled Time: 3:45 p.m. – 4:00 p.m. Lead Discussant: Christy Bauer
This final agenda item is reserved for summarizing the outcomes of the session and confirming next steps.
A. Summary of Resolutions
At the conclusion of the substantive discussions, Christy Bauer will provide a verbal summary of all resolutions reached during the session, identifying each open issue and its agreed disposition. Any resolutions that are tentative or subject to further confirmation should be clearly identified as such.
B. Items Requiring Further Principal-Level Approval
The parties should identify any items discussed during the session that require further approval from individuals not present, including:
•  Marcus Harcourt (Northgate Americas, Inc.) — for any commercial terms requiring Northgate executive-level sign-off;
•  Rajiv Sundaram (CEO, Cedarpoint Systems Integration, Inc.) — for any terms requiring Cedarpoint executive-level approval; and
•  Jonathan Kessler (Ridgeline Capital Partners, LP) — if the change of control provisions (particularly the board-turnover prong and the notice and election mechanics) require sponsor-level sign-off from Ridgeline.
For each such item, the parties should agree on a timeline for obtaining the required approval, with a target of no later than June 7, 2023, to permit finalization of the MSA by the June 9 signing date.
C. Action Items for Finalizing the Execution Version
The parties should confirm the assignment of action items for finalizing the execution version of the MSA and all exhibits and schedules, including:
•  Exhibits A through F — Confirm the content, format, and responsible drafter for each exhibit;
•  Schedules 1 through 3 — Confirm the content, format, and responsible drafter for each schedule;
•  Transition Services Side Letter — Confirm the timeline for circulation and negotiation of the side letter;
•  Escrow Agreement — Confirm the timeline for finalization and execution of the tri-party escrow agreement with Dravello National Bank; and
•  All other closing deliverables — As set forth in Open Issue 7E above.
D. Distribution List for Final Execution Version
The parties should confirm the distribution list for the final execution version of the MSA and related documents, ensuring that all necessary signatories and their respective counsel receive the final documents with adequate time for review prior to the June 9 signing date.
E. Post-Session Deliverables
Christy Bauer will circulate a written session summary and a revised draft MSA reflecting all agreed revisions to all parties by Saturday, June 3, 2023. The session summary will include:
(a) A description of each open issue discussed and its resolution (or, if unresolved, the agreed path to resolution);
(b) A list of all action items, responsible parties, and deadlines;
(c) An updated negotiation issues tracker reflecting the current status of all items; and
(d) A revised MSA in both clean and redline format, showing all changes from the May 19, 2023 counter-redline.
IV. REFERENCE MATERIALS TO BE BROUGHT TO SESSION
All attendees should ensure they have access to the following reference materials (in hard copy or electronic form) during the session:
1.  Second Draft MSA (dated May 5, 2023) — the most recent Northgate draft of the Master Services Agreement
2.  Cedarpoint Counter-Redline (dated May 19, 2023) — Cedarpoint's most recent markup of the second draft MSA
3.  Negotiation Issues Tracker — current version as of May 30, 2023, reflecting the status of all open issues
4.  Key Commercial Terms Summary / Term Sheet — one-page summary of the principal commercial terms of the MSA
5.  Christy Bauer's Memoranda:
(a) MFN Clause Analysis — survey of comparable provisions in peer transactions and recommended approach
(b) Indemnification Analysis — analysis of cap structure, carve-outs, and market benchmarks
(c) Change of Control Analysis — analysis of the four-prong definition, board-turnover prong, and market precedents in sponsor-backed technology transactions
6.  Garrett Simmons's Tax Structuring Memorandum — for reference on sales tax, withholding tax, and cross-border tax issues (U.S./Canada) if such issues are raised during the session
7.  Mutual Non-Disclosure Agreement (dated February 22, 2023) — the existing mutual NDA between Northgate Americas, Inc. and Cedarpoint Systems Integration, Inc., which will be superseded by the confidentiality provisions of the MSA
8.  Cedarpoint FY2022 Financial Statements — Cedarpoint's audited financial statements for fiscal year 2022 (revenue: $420,000,000; approximately 1,800 employees), for reference during discussions of indemnification exposure and financial capacity
9.  Node Locations Schedule — schedule of all 340 managed nodes, including location by state/province, for reference during SLA and migration discussions (28 U.S. states, 3 Canadian provinces)
10.  Draft Escrow Agreement Form — draft tri-party escrow agreement among Northgate Americas, Inc., Cedarpoint Systems Integration, Inc., and Dravello National Bank, prepared by Calderwood & Harkness LLP
V. LOGISTICS
Conference Room: Calderwood & Harkness LLP, 30th Floor, Conference Room A
Address:
Calderwood & Harkness LLP 600 Lexington Avenue, 30th Floor New York, NY 10022
Building Access: Building reception on the ground floor will have visitor badges pre-arranged for all external attendees (Cedarpoint and WGM representatives). Visitors should present government-issued photo identification at the reception desk and advise that they are attending a meeting at Calderwood & Harkness LLP, 30th Floor. A Calderwood & Harkness receptionist will meet guests in the 30th Floor elevator lobby.
Dial-In Line: A dedicated conference dial-in line will be available throughout the session for Garrett Simmons and Alistair Pemberton in the event their input is needed. Dial-in credentials will be distributed by Christy Bauer under separate cover. Please note that the dial-in line should be kept on mute unless the remote participant is actively engaged in the discussion.
Lunch: Lunch will be ordered for all in-person attendees and will be served in Conference Room A during the working lunch period (12:30 p.m. – 1:15 p.m.). Please advise Christy Bauer of any dietary restrictions or allergies in advance of the session.
Contact Information:
Christy Bauer, Lead Associate Calderwood & Harkness LLP 600 Lexington Avenue, 30th Floor New York, NY 10022 Direct Line: (212) 555-0147
Email: cbauer@calderwoodharkness.com
CONFIDENTIALITY NOTICE: This document and all attachments are confidential and are subject to the attorney-client privilege and the work product doctrine. This document is intended solely for the use of the individuals named herein. Any unauthorized review, use, disclosure, or distribution is prohibited. If you have received this document in error, please notify Christy Bauer immediately at the contact information above and destroy all copies.
Name | Title / Role | Affiliation
Colette Whitman | Responsible Partner | Calderwood & Harkness LLP
Christy Bauer | Lead Associate | Calderwood & Harkness LLP
Deirdre Kwan | Vice President of Procurement, North America | Northgate Americas, Inc.
Katrina Bosch | Vice President of Network Operations | Northgate Americas, Inc.
Name | Title / Role | Affiliation
Douglas Fenn | Lead Partner, Technology Transactions | Whitfield Graves & Morrow LLP
Simone Alvarez | Associate Counsel | Whitfield Graves & Morrow LLP
Nadia Okafor | General Counsel | Cedarpoint Systems Integration, Inc.
Philip Hargreaves | Chief Financial Officer | Cedarpoint Systems Integration, Inc.
Name | Title / Role | Affiliation | Availability
Garrett Simmons | Working Associate (Tax) | Calderwood & Harkness LLP | Available by phone for tax-related questions, including sales tax, withholding, and cross-border issues
Alistair Pemberton | Chief Technology Officer | Northgate Telecommunications PLC | Available by phone for technical questions regarding the ArcMesh v4.2 migration and network architecture
Coverage Type | Per Occurrence Limit | Aggregate Limit
Cyber Liability Insurance | $25,000,000 | $50,000,000
Technology Errors & Omissions | $20,000,000 | $40,000,000
Commercial General Liability | $5,000,000 | $10,000,000
Equityholder | Voting Equity Percentage
Ridgeline Capital Partners, LP | 62%
Rajiv Sundaram (CEO) | 18%
Teresa Cho (COO) | 12%
Other employees and early investors | 8%
Tier | Monthly Uptime Range | Credit Percentage | Credit Amount
Tier 1 | 99.90% – 99.94% | 5% of monthly fee | $62,500
Tier 2 | 99.50% – 99.89% | 10% of monthly fee | $125,000
Tier 3 | Below 99.50% | 20% of monthly fee | $250,000
Milestone | Target Date
Final MSA circulated for review | June 5, 2023
Target signing and closing date (simultaneous sign and close; services commencement) | June 9, 2023
Formal close-out with all closing deliverables confirmed | June 20, 2023

NEGOTIATION SESSION AGENDA — CONFIDENTIAL

I. ATTENDEES

II. BACKGROUND AND PURPOSE

III. AGENDA ITEMS

Record

Parties

Dates

Amounts