EXHIBIT B
SERVICE LEVEL AGREEMENT
to the Master Services Agreement dated June 9, 2023
between
NORTHGATE AMERICAS, INC. ("Customer")
and
CEDARPOINT SYSTEMS INTEGRATION, INC. ("Service Provider")
CONFIDENTIAL TREATMENT REQUESTED — This document constitutes a confidential exhibit to the Master Services Agreement and is subject to the confidentiality provisions contained therein.
This Exhibit B — Service Level Agreement (this "SLA" or "Exhibit B") is incorporated into and forms an integral part of the Master Services Agreement dated June 9, 2023 (the "Agreement"), by and between Northgate Americas, Inc., a Delaware corporation with its principal place of business at 1700 Market Street, Suite 2400, Philadelphia, PA 19103 ("Customer" or "Northgate"), and Cedarpoint Systems Integration, Inc., a Virginia corporation with its principal place of business at 11400 Commerce Park Drive, Suite 600, Reston, VA 20191 ("Service Provider" or "Cedarpoint"). All capitalized terms used but not otherwise defined in this Exhibit B shall have the meanings ascribed to such terms in the Agreement.
Effective Date: June 9, 2023
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Section 1: Definitions
For purposes of this Exhibit B, the following terms shall have the meanings set forth below:
"Availability" or "Uptime" means the percentage of time during a calendar month that a Managed Node is operational and accessible to Customer and its authorized end users for the transmission and receipt of network traffic in accordance with the service specifications set forth in Exhibit A (Statement of Work). Availability is measured on a per-node basis as described in Section 3 of this Exhibit B.
"ArcMesh Platform" means Service Provider's proprietary network orchestration platform, version 4.2, as licensed to Customer under the Agreement, including all associated software modules, dashboards, application programming interfaces, monitoring tools, and reporting components delivered or made available to Customer in connection with the managed network services.
"Downtime" means any period during which a Managed Node is not operational or is not accessible to Customer for the transmission and receipt of network traffic, as measured in accordance with Section 3 of this Exhibit B. Downtime shall exclude any period attributable to Scheduled Maintenance performed in accordance with Section 6 and any Excused Downtime event described in Section 9.
"Excused Downtime" means any Downtime event that is excluded from the calculation of Availability pursuant to Section 9.1 of this Exhibit B.
"Managed Node" means each of the three hundred forty (340) network nodes identified in Schedule 1 to the Agreement, located across twenty-eight (28) states within the United States of America and three (3) provinces within Canada, as further described in the network topology diagrams and site inventory annexed to Exhibit A (Statement of Work).
"Measurement Period" means each calendar month during the Term of the Agreement. For purposes of the initial month of the Term (commencing June 9, 2023), the Measurement Period shall be the period from June 9, 2023 through June 30, 2023, and each subsequent Measurement Period shall be a full calendar month. The initial Term runs from June 9, 2023 through June 8, 2028.
"Monthly Managed Services Fee" means the monthly portion of the annual managed network services fee payable by Customer under the Agreement, equal to One Million Two Hundred Fifty Thousand Dollars ($1,250,000) per month, derived from the annual contract value for managed network services of Fifteen Million Dollars ($15,000,000) divided by twelve (12) months. For the avoidance of doubt, the Monthly Managed Services Fee is a component of the total annual fees under the Agreement.
"NOC" means Service Provider's Network Operations Center(s), consisting of (a) the primary NOC facility located at 11400 Commerce Park Drive, Suite 600, Reston, Virginia 20191, United States, and (b) the secondary NOC facility located at 200 Portage Avenue, Suite 1500, Winnipeg, Manitoba R3C 3X2, Canada. Both NOC facilities are operated by Service Provider and are staffed on a twenty-four (24) hours per day, seven (7) days per week basis.
"Scheduled Maintenance" means pre-approved maintenance activities performed by Service Provider on the Managed Nodes or the ArcMesh Platform during maintenance windows that comply with the notice and scheduling requirements set forth in Section 6 of this Exhibit B.
"Service Credit" means the monetary credit to which Customer is entitled in the event Service Provider fails to meet the Service Level commitments set forth in Section 2, calculated and applied in accordance with Section 4 of this Exhibit B.
"Service Level" or "SLA" means the performance standards and commitments set forth in Section 2 of this Exhibit B, including the monthly Uptime percentage commitment applicable to each Managed Node.
Section 2: Service Level Commitment
2.1 Network Availability Standard. Service Provider commits to maintain a monthly Uptime of not less than ninety-nine and ninety-five hundredths percent (99.95%) for each Managed Node during each Measurement Period throughout the Term. This availability commitment reflects Service Provider's obligation to ensure that each Managed Node is operational and accessible to Customer and its authorized end users for the transmission and receipt of network traffic for at least 99.95% of the total minutes in each calendar month, calculated on a per-node basis in accordance with Section 3.
2.2 Measurement Basis. Availability is measured on a per-node basis. Each of the three hundred forty (340) Managed Nodes is independently measured against the 99.95% Uptime target for each Measurement Period. A failure to meet the SLA at one Managed Node shall not, by itself, be deemed a failure at any other Managed Node; however, a single root cause affecting multiple nodes may give rise to multiple concurrent SLA failures, and Service Credits shall be calculated accordingly under Section 4.5.
2.3 24×7 Monitoring. Service Provider shall provide continuous monitoring of all Managed Nodes twenty-four (24) hours per day, seven (7) days per week, three hundred sixty-five (365) days per year (including weekends and holidays), from its NOC facilities in Reston, Virginia and Winnipeg, Manitoba. Service Provider shall ensure that its monitoring infrastructure provides redundant coverage such that a failure or disruption at one NOC facility does not result in a gap in monitoring capabilities.
2.4 SD-WAN and ArcMesh Platform Performance. The SLA set forth in this Exhibit B applies to the managed wide area network ("WAN") services delivered to Customer via the ArcMesh Platform (version 4.2), including, without limitation, software-defined wide area network ("SD-WAN") connectivity, intelligent traffic routing, dynamic path selection, application-aware quality of service, and automated failover functionality. Service Provider is responsible for the end-to-end performance of the managed network services as delivered through the ArcMesh Platform, from the ingress point at each Managed Node to the egress point at each destination Managed Node, subject to the exclusions set forth in Section 9.
2.5 Applicability During Migration. The Agreement contemplates a three-phase, eighteen (18)-month migration of Customer's network infrastructure from the legacy multiprotocol label switching ("MPLS") infrastructure previously provided by Greystone Halcyon Software to Service Provider's SD-WAN architecture and ArcMesh Platform. During this migration period, the SLA set forth in this Exhibit B shall apply to each Managed Node from the date on which such Managed Node has been successfully migrated to the ArcMesh Platform and formally accepted by Customer in writing under Phase 1, Phase 2, or Phase 3, as described in Exhibit A (Statement of Work). Prior to the date of Customer acceptance of a given Managed Node, Service Provider shall use commercially reasonable efforts to meet the SLA targets for such node, but Service Credits shall not accrue with respect to such node until the node's acceptance date.
Section 3: Uptime Calculation Methodology
3.1 Formula. Monthly Uptime Percentage for each Managed Node shall be calculated using the following formula:
Monthly Uptime Percentage = ((Total Minutes in Month – Downtime Minutes) ÷ Total Minutes in Month) × 100
Where "Total Minutes in Month" equals the total number of minutes in the applicable calendar month (e.g., 43,200 minutes for a 30-day month or 44,640 minutes for a 31-day month), and "Downtime Minutes" equals the aggregate number of minutes of Downtime experienced by the applicable Managed Node during that calendar month, excluding any periods of Scheduled Maintenance and Excused Downtime.
3.2 Downtime Measurement. Downtime commences at the earlier of (a) the time at which Service Provider's NOC monitoring systems first detect a loss of connectivity, service degradation constituting a Severity 1 or Severity 2 incident, or other failure rendering a Managed Node non-operational or inaccessible, or (b) the time at which Customer reports an outage or inaccessibility event to Service Provider's NOC (via telephone, email, or the ArcMesh Platform incident reporting portal). Downtime ends at the time at which connectivity and normal operations are restored and confirmed by Service Provider's NOC through automated monitoring verification and, where applicable, manual validation. Service Provider shall record and maintain accurate timestamps for the commencement and conclusion of each Downtime event.
3.3 Monitoring Tools. Uptime and Downtime shall be measured using Service Provider's ArcMesh Platform monitoring and reporting tools, which shall include automated ping, SNMP polling, flow analysis, synthetic transaction monitoring, and such other monitoring mechanisms as Service Provider employs in the ordinary course to detect and measure service availability. Customer shall have continuous read-only access to Service Provider's real-time and historical monitoring dashboards through the ArcMesh Platform portal, including the ability to view node status, historical uptime data, incident logs, and performance metrics at the individual node, regional, and aggregate network levels.
3.4 Rounding. Uptime percentages shall be calculated to two (2) decimal places (e.g., 99.95% or 99.41%). Fractional percentages shall be rounded to the nearest hundredth of a percent using standard mathematical rounding (i.e., values of 0.005 or greater are rounded up).
3.5 Disputed Measurements. If Customer disputes a Downtime calculation or any element of the monthly SLA report, Customer shall notify Service Provider in writing within fifteen (15) business days of receipt of the applicable monthly SLA report. Upon receipt of such notice, the parties shall promptly review the relevant monitoring logs, incident tickets, timestamp records, and any other relevant data, and shall work together in good faith to resolve the dispute within ten (10) business days of the date of Customer's dispute notice. If the parties are unable to resolve the dispute within such ten (10) business day period, the dispute shall be escalated to the designated representatives identified in Section 12.1, and if still unresolved after an additional ten (10) business days, shall be subject to the dispute resolution provisions of the Agreement.
Section 4: Service Credits
4.1 Tiered Service Credit Structure. If Service Provider fails to meet the 99.95% monthly Uptime commitment for any Managed Node in a Measurement Period, Customer shall be entitled to Service Credits in accordance with the following tiered structure:
For the avoidance of doubt, only one tier applies to a given Managed Node in a given Measurement Period, based on the actual monthly Uptime percentage achieved for that node. The Service Credit tiers are not cumulative within a single Measurement Period for a single node.
4.2 Calculation Basis. Service Credits are calculated as a percentage of the Monthly Managed Services Fee of One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00) per month, which is derived from the annual managed network services contract value of Fifteen Million Dollars ($15,000,000.00) divided by twelve (12) months. The dollar amounts set forth in the table in Section 4.1 are provided for illustrative convenience and are based on the Monthly Managed Services Fee in effect as of the Effective Date. In the event the Monthly Managed Services Fee is adjusted during the Term (including as a result of fee adjustments upon renewal), Service Credit dollar amounts shall be recalculated based on the then-current Monthly Managed Services Fee.
4.3 Application of Credits. Service Credits shall be applied as a credit against the next invoice following the determination and mutual confirmation of the SLA shortfall. If the Service Credit amount exceeds the amount of the next invoice, the excess credit shall be carried forward and applied to subsequent invoices until fully applied. Service Credits are not redeemable for cash, are non-transferable, and shall not bear interest. In the event of termination or expiration of the Agreement, any accrued but unapplied Service Credits shall be applied against any outstanding invoiced amounts or, if no outstanding invoiced amounts exist, shall be refunded to Customer within thirty (30) days of the effective date of termination or expiration.
4.4 Request for Credits. Customer must request Service Credits in writing (which may include email to Service Provider's designated SLA contact) within thirty (30) calendar days of the end of the Measurement Period in which the SLA shortfall occurred. Customer's request shall identify the affected Managed Node(s), the Measurement Period, and the Uptime percentage as reflected in Service Provider's monthly SLA report or as disputed by Customer pursuant to Section 3.5. Failure by Customer to submit a request within the thirty (30) calendar day period shall constitute a waiver of Customer's right to Service Credits solely for the affected Measurement Period; provided, however, that such failure shall not constitute a waiver of Customer's right to request Service Credits for any subsequent Measurement Period or to assert other rights or remedies under the Agreement.
4.5 Aggregation Across Nodes. Where multiple Managed Nodes fail to meet the 99.95% Uptime target in a single Measurement Period, Service Credits shall be calculated on a per-node weighted basis relative to the aggregate Monthly Managed Services Fee. Specifically, the per-node weighting factor shall be calculated by dividing One (1) by the total number of Managed Nodes (340), yielding a per-node weighting factor of approximately 0.294%. The Service Credit for each affected node shall equal the applicable Service Credit percentage (5%, 10%, or 20%) multiplied by the Monthly Managed Services Fee, multiplied by the per-node weighting factor. The aggregate Service Credits for a given Measurement Period shall be the sum of the per-node Service Credits for all affected nodes in that Measurement Period, subject to the annual cap set forth in Section 5. Illustrative examples of the aggregation methodology are set forth in the Appendix to this Exhibit B.
Section 5: Annual Service Credit Cap
5.1 Maximum Annual Service Credits. Aggregate Service Credits in any twelve (12)-month period (measured on a rolling basis from the Effective Date anniversary) shall not exceed thirty percent (30%) of the annual managed network services fees payable by Customer under the Agreement.
5.2 Dollar Amount. As of the Effective Date, the annual Service Credit cap equals Three Million One Hundred Fifty Thousand Dollars ($3,150,000.00), calculated as thirty percent (30%) multiplied by the annual managed network services fee component of Ten Million Five Hundred Thousand Dollars ($10,500,000.00) per year. In the event the annual managed network services fees are adjusted during the Term, the annual Service Credit cap shall be recalculated based on the then-current annual managed network services fees.
5.3 Clarification. The annual Service Credit cap applies solely to the managed network services fee component of the total annual fees under the Agreement. Specifically, the total annual contract value of Fifteen Million Dollars ($15,000,000.00) is comprised of the following components:
(a) Managed network services fees: $10,500,000 per year;
(b) ArcMesh Platform license and maintenance fees: $3,000,000 per year; and
(c) Professional services fees (including migration, integration, and ongoing optimization services): $1,500,000 per year.
The annual Service Credit cap of $3,150,000 is calculated by reference to the managed network services fees in clause (a) above only, and does not include or apply to the ArcMesh Platform license and maintenance fees in clause (b) or the professional services fees in clause (c).
5.4 Credits Not a Limitation on Other Remedies. The Service Credit cap set forth in this Section 5 constitutes a limitation solely on the aggregate monetary value of Service Credits available to Customer under this Exhibit B. The Service Credit cap does not limit, restrict, or affect:
(a) Customer's right to terminate the Agreement for material breach under Section 7 of this Exhibit B or the applicable termination provisions of the Agreement;
(b) Customer's right to pursue indemnification claims under the Agreement, including claims subject to the aggregate indemnification cap and claims within the uncapped carve-out categories;
(c) Customer's right to seek equitable relief, including injunctive relief and specific performance; or
(d) Any other remedies expressly provided under the Agreement or at law or in equity.
Section 6: Scheduled Maintenance and Excused Downtime
6.1 Scheduled Maintenance Windows. Service Provider may perform scheduled maintenance on the Managed Nodes, the ArcMesh Platform, and associated network infrastructure during pre-approved maintenance windows. Service Provider shall provide Customer's designated SLA contact (currently Katrina Bosch, VP of Network Operations) with at least five (5) business days' prior written notice of any scheduled maintenance activity. Such notice shall specify (i) the date and time of the maintenance window, (ii) the expected duration, (iii) the specific Managed Node(s) affected, (iv) a description of the maintenance activities to be performed, and (v) the anticipated impact on network connectivity and services.
6.2 Preferred Maintenance Times. Scheduled maintenance shall, to the extent practicable and consistent with the nature of the maintenance required, be performed during off-peak hours, defined as between 12:00 AM (midnight) and 6:00 AM local time at the location of the affected Managed Node. Service Provider acknowledges that Customer operates business-critical applications across multiple time zones in the United States and Canada, and Service Provider shall exercise reasonable judgment in scheduling maintenance to minimize disruption to Customer's operations.
6.3 Maximum Scheduled Maintenance. Scheduled maintenance shall not exceed a cumulative total of four (4) hours per Managed Node per calendar month. If Service Provider determines that maintenance in excess of four (4) hours per node per month is necessary, Service Provider shall obtain Customer's prior written consent, and any maintenance in excess of the four (4)-hour threshold shall be treated as Downtime unless Customer expressly agrees otherwise in writing.
6.4 Exclusion from Downtime. Downtime attributable to Scheduled Maintenance that has been properly noticed and performed in accordance with the requirements of this Section 6 shall not count toward Downtime for purposes of calculating the monthly Uptime Percentage under Section 3. Service Provider shall maintain accurate records of all Scheduled Maintenance activities, including start and end times, to support the exclusion of such periods from Downtime calculations.
6.5 Emergency Maintenance. In the event Service Provider determines that emergency maintenance is required to address an imminent threat to network security, stability, or integrity, Service Provider may perform such maintenance with less than five (5) business days' notice, provided that Service Provider shall (i) notify Customer as soon as reasonably practicable (and in no event later than one (1) hour prior to commencement of the emergency maintenance, except where immediate action is required to prevent harm), (ii) use commercially reasonable efforts to minimize the duration and scope of the emergency maintenance, and (iii) provide a written post-maintenance report to Customer within two (2) business days. Emergency maintenance performed in accordance with this Section 6.5 shall be treated as Scheduled Maintenance for purposes of the Downtime exclusion in Section 6.4, provided that the total Scheduled Maintenance and emergency maintenance combined shall not exceed six (6) hours per Managed Node per calendar month.
Section 7: Material Breach — Chronic SLA Failure
7.1 Material Breach Trigger. If the monthly Uptime for any Managed Node falls below ninety-nine and fifty hundredths percent (99.50%) for three (3) consecutive Measurement Periods, such failure shall constitute a material breach of the Agreement by Service Provider. The parties acknowledge that chronic underperformance at the level described in this Section 7.1 represents a fundamental failure of Service Provider's obligations under the Agreement and is not remediable solely through the application of Service Credits.
7.2 Customer's Termination Right. Upon the occurrence of a material breach under Section 7.1, Customer may, at its sole election, terminate the Agreement for cause in accordance with the termination provisions of the Agreement. Upon such termination, Customer shall be entitled to:
(a) Transition assistance services from Service Provider at no additional cost to Customer, in accordance with the transition provisions set forth in the Agreement and Exhibit A (Statement of Work), for a period of not less than one hundred eighty (180) days;
(b) A pro-rata refund of any prepaid fees corresponding to the unexpired portion of the then-current Term;
(c) The release and return to Customer of all amounts held in the escrow account established at Dravello National Bank (escrow account reference number FNB-ESC-2023-07742) in accordance with the escrow provisions of the Agreement;
(d) Return or destruction of all Customer Data in Service Provider's possession or control, in accordance with the data handling provisions of the Agreement and Exhibit E (Data Security and Privacy Requirements); and
(e) All accrued but unapplied Service Credits, which shall be refunded to Customer within thirty (30) days of the effective date of termination.
7.3 Cure Period. Service Provider shall have thirty (30) days from receipt of written notice of material breach under Section 7.1 to present a written remediation plan to Customer. Such remediation plan shall identify the root cause(s) of the chronic SLA failure, the specific corrective actions to be taken, the timeline for implementation, and the metrics by which improvement will be measured. Notwithstanding the foregoing, the material breach shall be deemed to have occurred upon the conclusion of the third consecutive Measurement Period in which the affected Managed Node falls below 99.50% Uptime, and the thirty (30)-day cure period shall not toll or delay Customer's right to terminate the Agreement if the remediation plan is not accepted by Customer in its reasonable discretion. Customer's acceptance or rejection of a remediation plan shall be communicated in writing within ten (10) business days of receipt.
7.4 Escalation. Prior to exercising termination rights under this Section 7, Customer's VP of Network Operations (currently Katrina Bosch, or her successor or designee) and Service Provider's dedicated service delivery manager assigned to the Northgate account shall convene a senior management review meeting (which may be conducted in person or by videoconference) to assess the root cause of the chronic SLA failure, evaluate the feasibility of remediation, and discuss alternative resolutions. This escalation meeting shall occur within ten (10) business days of Customer's written notice of material breach. The requirement to convene a senior management review shall not be construed as a condition precedent to Customer's exercise of its termination rights, but rather as a good-faith effort to explore resolution prior to termination.
Section 8: Reporting Requirements
8.1 Monthly SLA Reports. Service Provider shall prepare and deliver to Customer a comprehensive monthly SLA performance report within ten (10) business days following the end of each Measurement Period. Reports shall be delivered electronically via the ArcMesh Platform reporting portal and, upon Customer's request, in PDF format to Customer's designated SLA contact.
8.2 Report Contents. Each monthly SLA performance report shall include, at a minimum, the following information:
(a) Per-node Uptime percentage for each of the three hundred forty (340) Managed Nodes, organized by geographic region and site classification (hub node or spoke node);
(b) Total Downtime minutes per Managed Node, with root-cause categorization for each Downtime event (e.g., hardware failure, software defect, circuit failure, configuration error, external dependency failure, or other category);
(c) Identification and highlight of any Managed Nodes falling below 99.95% Uptime during the Measurement Period, including the applicable Service Credit tier;
(d) Calculation of any Service Credits due to Customer for the Measurement Period, identifying the affected Managed Node(s), the applicable tier, and the aggregate Service Credit amount;
(e) A running total of Service Credits applied year-to-date, measured against the annual Service Credit cap of Three Million One Hundred Fifty Thousand Dollars ($3,150,000.00), expressed in both dollar amount and percentage of the cap;
(f) A Scheduled Maintenance log for the Measurement Period, listing all maintenance activities performed, including dates, start and end times, durations, Managed Nodes affected, and a brief description of the maintenance performed;
(g) A summary of all incidents occurring during the Measurement Period, including total ticket counts by severity level, mean time to detection ("MTTD"), mean time to acknowledgment ("MTTA"), mean time to resolution ("MTTR"), and a narrative summary of all Severity 1 and Severity 2 incidents; and
(h) Any additional information reasonably requested by Customer in connection with the governance of this SLA.
8.3 Quarterly Performance Reviews. In addition to the monthly SLA reports, Service Provider shall participate in quarterly network performance reviews with Customer, as described in Exhibit A (Statement of Work). Each quarterly review shall assess performance trends, optimization opportunities, compliance with SLA targets, the status of any open remediation plans, and forward-looking projections for network capacity and performance. Service Provider shall prepare and distribute a written quarterly performance review summary to Customer's designated SLA contact and such other Customer personnel as Customer may designate.
8.4 Ad Hoc Reporting. Customer may request ad hoc performance reports at any time upon reasonable written notice to Service Provider. Service Provider shall deliver such ad hoc reports within five (5) business days of receipt of the request. Ad hoc reports may include, without limitation, detailed node-level performance data, incident drill-down reports, traffic analysis summaries, and custom dashboard views.
8.5 Access to Monitoring Systems. Customer shall have continuous, uninterrupted, read-only access to Service Provider's ArcMesh Platform monitoring dashboard for real-time visibility into Managed Node status, network performance metrics, incident tracking, and historical performance data. Service Provider shall provide Customer with login credentials for up to twenty (20) authorized Customer users and shall not restrict or limit Customer's access to the monitoring dashboard during the Term, except as reasonably necessary to perform system maintenance on the dashboard itself (which shall be performed during Scheduled Maintenance windows to the extent practicable).
Section 9: Exclusions from SLA
9.1 Excused Downtime Events. The following events and circumstances shall be excluded from the calculation of Downtime for purposes of determining the monthly Uptime Percentage and shall not give rise to Service Credits under this Exhibit B:
(a) Scheduled Maintenance. Downtime attributable to Scheduled Maintenance performed in accordance with the notice, scheduling, and duration requirements set forth in Section 6 of this Exhibit B, including emergency maintenance performed in accordance with Section 6.5;
(b) Force Majeure. Downtime attributable to force majeure events as defined in the Agreement, including, without limitation, natural disasters (earthquake, flood, hurricane, tornado, wildfire), acts of government or regulatory authorities, war, armed conflict, terrorism, civil unrest, pandemics, epidemics, widespread power grid failures affecting the geographic area of the affected Managed Node, and acts of God;
(c) Customer Acts or Omissions. Downtime caused by Customer's acts or omissions, including, without limitation, misconfiguration of Customer-owned or Customer-controlled equipment, unauthorized changes to network settings or configurations, Customer's failure to implement Service Provider-recommended patches or updates within the timeframes specified in Exhibit A, or Customer's failure to provide Service Provider with required physical or logical access to premises or equipment;
(d) Customer-Provided Infrastructure. Downtime attributable to the failure of Customer-provided circuits, equipment, software, or third-party services that are not under Service Provider's management, control, or contractual responsibility, including last-mile connectivity provided by local exchange carriers or internet service providers not subcontracted by Service Provider;
(e) Acceptable Use Policy Violations. Downtime resulting from Customer's violation of the Acceptable Use Policy set forth in Exhibit D to the Agreement, including, without limitation, use of the managed network for purposes that cause service degradation or interference with other network components;
(f) Migration Cut-Over Windows. Downtime occurring during agreed-upon migration cut-over windows under the Transition Services Side Letter dated June 9, 2023 (governing the migration from Greystone Halcyon Software legacy MPLS infrastructure to the ArcMesh Platform), provided that such cut-over windows have been mutually scheduled in advance in writing by the parties and that the duration of Downtime during any cut-over window does not exceed the agreed-upon duration by more than thirty (30) minutes.
9.2 Burden of Proof. Service Provider bears the burden of demonstrating that a claimed exclusion under Section 9.1 applies to a given Downtime event. Service Provider shall provide Customer with supporting documentation, including monitoring logs, incident reports, third-party communications, and such other evidence as may be reasonably necessary to substantiate the claimed exclusion, within five (5) business days of asserting any exclusion. If Service Provider fails to provide adequate supporting documentation within such period, the applicable Downtime shall be included in the calculation of the monthly Uptime Percentage.
9.3 Partial Exclusion. If a Downtime event is attributable in part to an excluded event described in Section 9.1 and in part to Service Provider's systems, actions, or omissions, the parties shall apportion the Downtime reasonably based on available evidence, monitoring data, and incident analysis. If the parties cannot agree on the apportionment, the matter shall be referred to the designated representatives identified in Section 12.1 for resolution in accordance with the dispute escalation procedures of the Agreement.
Section 10: Incident Response and Escalation Procedures
10.1 Severity Classification. All incidents affecting the managed network services shall be classified by Service Provider's NOC in accordance with the following severity levels:
Severity 1 (Critical): Complete loss of connectivity at a hub node, or loss of connectivity affecting more than ten (10) Managed Nodes simultaneously, or any incident rendering a material portion of Customer's network inoperable.
• Target Response Time: Fifteen (15) minutes from detection or Customer report
• Target Resolution Time: Four (4) hours from detection or Customer report
Severity 2 (Major): Loss of connectivity at a single spoke node, or degraded network performance constituting greater than fifty percent (50%) packet loss at any Managed Node, or any incident materially impairing the performance of a Managed Node without constituting a Severity 1 incident.
• Target Response Time: Thirty (30) minutes from detection or Customer report
• Target Resolution Time: Eight (8) hours from detection or Customer report
Severity 3 (Minor): Performance degradation at a Managed Node that does not constitute a Severity 1 or Severity 2 incident, including intermittent connectivity issues, elevated latency, jitter exceeding service specifications, or packet loss of fifty percent (50%) or less.
• Target Response Time: Two (2) hours from detection or Customer report
• Target Resolution Time: Twenty-four (24) hours from detection or Customer report
Severity 4 (Informational): Cosmetic issues, reporting discrepancies, documentation errors, non-urgent configuration requests, or other issues that do not affect network connectivity or performance.
• Target Response Time: One (1) business day from detection or Customer report
• Target Resolution Time: Five (5) business days from detection or Customer report
Service Provider shall assign severity classifications in good faith based on the actual impact of the incident. Customer may request reclassification of an incident to a higher severity level by contacting the NOC, and Service Provider shall reassess the classification promptly.
10.2 24×7 NOC Coverage. Service Provider's NOC facilities in Reston, Virginia and Winnipeg, Manitoba shall maintain twenty-four (24) hours per day, seven (7) days per week staffing for the detection of and response to Severity 1 and Severity 2 incidents. Each NOC facility shall be staffed by qualified network engineers with the training and expertise necessary to diagnose and remediate incidents affecting the ArcMesh Platform and the managed network infrastructure. Service Provider shall maintain redundant monitoring capabilities across its two NOC facilities such that a disruption at one facility does not impair Service Provider's ability to detect and respond to incidents.
10.3 Escalation Matrix. Service Provider shall maintain and provide to Customer a current escalation matrix identifying named contacts (including name, title, telephone number, and email address) for each severity level. The escalation matrix shall include escalation paths to Service Provider's senior management for unresolved Severity 1 incidents that exceed two (2) hours without resolution. Service Provider shall update the escalation matrix promptly upon any change in personnel and shall provide the updated matrix to Customer's designated SLA contact within two (2) business days of any change.
10.4 Root Cause Analysis. For any Severity 1 or Severity 2 incident, Service Provider shall deliver a written root cause analysis ("RCA") report to Customer within five (5) business days of incident resolution. Each RCA report shall include, at a minimum, (i) a detailed description of the incident, including timeline and impact, (ii) identification of the root cause, (iii) corrective actions taken to resolve the incident, (iv) preventive measures implemented or recommended to prevent recurrence, and (v) an assessment of any SLA impact and applicable Service Credits. Customer may request an RCA meeting to discuss the findings, and Service Provider shall make appropriate personnel available for such meeting within ten (10) business days of delivery of the RCA report.
Section 11: Cybersecurity Incident SLA
11.1 Integration with Data Security Requirements. Service Provider's cybersecurity monitoring, threat detection, vulnerability management, and incident response obligations under Exhibit E (Data Security and Privacy Requirements) to the Agreement are subject to the response time targets set forth in this Section 11. In the event of any conflict between the response time requirements in this Section 11 and those set forth in Exhibit E, the more stringent requirement shall apply.
11.2 Security Incident Notification. Service Provider shall notify Customer of any confirmed or suspected security incident affecting the managed network, including, without limitation, unauthorized access, data exfiltration, malware infection, denial-of-service attack, or other cybersecurity event, within one (1) hour of detection by Service Provider's security monitoring systems or personnel. Notification shall be provided to Customer's designated SLA contact and Customer's Chief Information Security Officer (or designee) via telephone and followed by written notification via email within two (2) hours of detection. The initial notification shall include all information then known regarding the nature, scope, and potential impact of the incident.
11.3 Containment. Service Provider shall initiate containment measures for security incidents within two (2) hours of detection. Containment measures may include, as appropriate, network isolation, blocking of malicious traffic, disabling of compromised accounts, deployment of patches or configuration changes, and such other measures as are reasonably necessary to limit the scope and impact of the security incident. Service Provider shall keep Customer informed of containment progress on a continuous basis until the incident is fully contained and remediated.
11.4 Relationship to Indemnification. Security incidents resulting from Service Provider's negligence, gross negligence, or willful misconduct are subject to the indemnification provisions of the Agreement. For the avoidance of doubt, data breach events fall within the uncapped carve-out to Service Provider's aggregate indemnification cap under the Agreement, as more fully described in Section 13.2(b) of this Exhibit B. Service Provider's obligation to provide prompt notification and containment of security incidents under this Section 11 is in addition to, and does not limit, any notification or cooperation obligations under applicable data breach notification laws or regulations.
Section 12: Service Level Governance
12.1 Designated Representatives. The following individuals are the designated SLA contacts for each party:
Customer's Designated SLA Contact: Katrina Bosch, Vice President of Network Operations Northgate Americas, Inc. 1700 Market Street, Suite 2400 Philadelphia, PA 19103
Email: k.bosch@northgateamericas.com
Telephone: (215) 555-0147
Service Provider's Designated SLA Contact: Dedicated Service Delivery Manager assigned to the Northgate Americas account (as identified in writing by Service Provider) Cedarpoint Systems Integration, Inc. 11400 Commerce Park Drive, Suite 600 Reston, VA 20191
Each party may change its designated SLA contact by providing written notice to the other party in accordance with the notice provisions of the Agreement. Any successor or designee of Katrina Bosch serving in the role of VP of Network Operations (or equivalent) shall automatically become Customer's designated SLA contact.
12.2 Monthly SLA Review Calls. The designated representatives identified in Section 12.1 shall conduct monthly calls within fifteen (15) business days of the end of each Measurement Period to review SLA performance for the preceding month, discuss open incidents and their status, review any pending Service Credit requests or disputes, and address any other SLA-related matters. Service Provider shall prepare and circulate an agenda and supporting materials for each monthly call at least two (2) business days in advance.
12.3 Annual SLA Review. The parties shall conduct an annual comprehensive review of the SLA terms set forth in this Exhibit B, to be held within sixty (60) days following each anniversary of the Effective Date. The annual review shall include, without limitation, benchmarking of SLA targets against then-current industry standards for managed network services, assessment of the appropriateness of the Service Credit tiers and caps, evaluation of incident response and resolution performance, and identification of opportunities to enhance the SLA framework. Any proposed modifications to SLA targets, Service Credit structures, or other terms of this Exhibit B resulting from the annual review shall be mutually agreed upon in writing and executed as a formal amendment to this Exhibit B in accordance with Section 14.2.
12.4 Continuous Improvement. Service Provider shall use commercially reasonable efforts throughout the Term to identify and implement improvements to network performance, reliability, and resilience, and to reduce incident frequency and resolution times. Service Provider shall proactively recommend technology upgrades, configuration optimizations, and architectural enhancements that may improve SLA performance and Customer's overall network experience. Service Provider shall present a continuous improvement plan to Customer at each quarterly performance review meeting.
Section 13: Remedies and Relationship to Agreement
13.1 Service Credits as Sole Financial Remedy for SLA Shortfalls. The Service Credits set forth in Section 4 of this Exhibit B constitute Customer's sole and exclusive financial remedy for Service Provider's failure to meet the SLA targets set forth in Section 2, subject to the annual cap on Service Credits set forth in Section 5. The parties acknowledge that Service Credits are intended to serve as liquidated damages for SLA shortfalls and are a reasonable estimate of the damages Customer would suffer as a result of such shortfalls, and are not intended as a penalty.
13.2 Preservation of Other Rights. Notwithstanding Section 13.1, nothing in this Exhibit B shall be construed to limit, restrict, waive, or otherwise affect:
(a) Customer's right to terminate the Agreement for material breach under Section 7 of this Exhibit B and the applicable termination provisions of the Agreement, including all rights and remedies available to Customer upon such termination;
(b) Customer's indemnification rights under the Agreement, including, without limitation, Cedarpoint's obligation to indemnify Customer subject to an aggregate indemnification cap of two hundred percent (200%) of trailing twelve (12)-month fees paid or payable by Customer under the Agreement, with uncapped carve-outs for claims arising from (i) intellectual property infringement, (ii) willful misconduct, (iii) data breach events, and (iv) breach of confidentiality obligations;
(c) Customer's right to seek equitable relief, including injunctive relief and specific performance, in any court of competent jurisdiction, without the requirement of posting bond or proving actual damages; or
(d) Any other remedies expressly provided to Customer under the Agreement, at law, or in equity.
13.3 Insurance. Service Provider's insurance obligations as set forth in Exhibit F (Insurance Requirements) to the Agreement shall remain in full force and effect throughout the Term and shall not be reduced, impaired, or otherwise affected by the application of any Service Credits under this Exhibit B. Without limiting the foregoing, Service Provider shall maintain the following insurance coverage with Braeburn Mutual Insurance Company (or such other insurer as may be approved by Customer in writing):
(a) Cyber liability insurance: Twenty-Five Million Dollars ($25,000,000) per occurrence / Fifty Million Dollars ($50,000,000) aggregate;
(b) Technology errors and omissions insurance: Twenty Million Dollars ($20,000,000) per occurrence / Forty Million Dollars ($40,000,000) aggregate; and
(c) Such other insurance coverage as specified in Exhibit F.
Service Provider shall provide Customer with certificates of insurance evidencing the foregoing coverage upon request and shall provide Customer with at least thirty (30) days' prior written notice of any cancellation, material modification, or non-renewal of any required insurance policy.
Section 14: Term and Amendments
14.1 Term. This Exhibit B shall be effective as of June 9, 2023 and shall remain in full force and effect for the duration of the Agreement, including the initial five (5)-year term commencing on June 9, 2023 and ending on June 8, 2028, and any renewal terms thereafter. The Agreement provides for two (2) automatic two (2)-year renewal terms (each a "Renewal Term"), unless either party provides written non-renewal notice to the other party at least one hundred eighty (180) days prior to the expiration of the then-current term.
14.2 Amendments. This Exhibit B may be amended, modified, or supplemented only by a written instrument signed by authorized representatives of both Customer and Service Provider. No oral agreement, course of dealing, or course of performance shall operate to amend or modify the terms of this Exhibit B.
14.3 Governing Law. This Exhibit B shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of laws principles, consistent with the governing law provision of the Agreement.
Section 15: General Provisions
15.1 Conflicts. In the event of any conflict or inconsistency between the terms of this Exhibit B and the body of the Agreement, the terms of the Agreement shall control and prevail, unless this Exhibit B expressly states that a particular provision of this Exhibit B is intended to supersede or take precedence over a conflicting provision of the Agreement.
15.2 Interpretation. References in this Exhibit B to sections or provisions of "the Agreement" refer to the Master Services Agreement dated June 9, 2023 between Northgate Americas, Inc. and Cedarpoint Systems Integration, Inc. References to other Exhibits (including Exhibit A, Exhibit D, Exhibit E, and Exhibit F) refer to the exhibits attached to and incorporated into the Agreement. Section headings in this Exhibit B are for convenience of reference only and shall not affect the interpretation of any provision.
15.3 Notices. All notices, requests, demands, and other communications required or permitted under this Exhibit B shall be in writing and shall be delivered in accordance with the notice provisions set forth in the Agreement. As of the Effective Date, notices shall be directed to the following addresses:
If to Customer:
Northgate Americas, Inc. 1700 Market Street, Suite 2400 Philadelphia, PA 19103
Attention: General Counsel
With a copy to: VP of Network Operations
If to Service Provider:
Cedarpoint Systems Integration, Inc. 11400 Commerce Park Drive, Suite 600 Reston, VA 20191
Attention: Chief Executive Officer
With a copy to: General Counsel
15.4 Severability. If any provision of this Exhibit B is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Exhibit B or the Agreement, and this Exhibit B shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.
15.5 Waiver. No waiver of any provision of this Exhibit B shall be effective unless set forth in a written instrument signed by the party waiving such provision. The failure of either party to enforce any provision of this Exhibit B at any time shall not be construed as a waiver of such provision or of the right to enforce such provision at a later time.
15.6 Entire Agreement. This Exhibit B, together with the Agreement and all other Exhibits and Schedules thereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, relating to such subject matter.
Signature block
This Exhibit B is executed and delivered as of June 9, 2023 as part of the Master Services Agreement between the parties. By signing below, each party's authorized representative acknowledges that this Exhibit B has been duly authorized and that such representative has the authority to bind the respective party.
NORTHGATE AMERICAS, INC.
By: ________
Name: Warren Liang
Title: President
Date: ________
CEDARPOINT SYSTEMS INTEGRATION, INC.
By: ________
Name: Rajiv Sundaram
Title: Chief Executive Officer
Date: ________
APPENDIX TO EXHIBIT B
Service Credit Calculation Examples
The following examples are provided for illustrative purposes only and are intended to demonstrate the application of the Service Credit methodology set forth in this Exhibit B. In the event of any conflict between these examples and the operative provisions of Sections 4 and 5, the operative provisions shall control.
Example 1: Single Node — Tier 1 Service Credit. Facts: In July 2024 (a 31-day month with 44,640 total minutes), a single Managed Node (Node ID: NGA-ATL-017, located in Atlanta, GA) experiences 26 minutes of Downtime (excluding Scheduled Maintenance). All other 339 Managed Nodes meet or exceed the 99.95% Uptime target.
Calculation:
Monthly Uptime Percentage = ((44,640 – 26) ÷ 44,640) × 100 = 99.9418% ≈ 99.94%
Applicable Tier: 99.90% – 99.94% → 5% Service Credit
Per-Node Weighting Factor: 1 ÷ 340 = 0.2941%
Service Credit = 5% × $1,250,000 × 0.2941% = approximately $183.82
Result: Customer is entitled to a Service Credit of approximately $183.82 for the affected node. However, under Section 4.1, if Service Credits are calculated on a whole-network basis rather than weighted per-node basis, the Service Credit would be $62,500. The applicable methodology is determined under Section 4.5 based on the per-node weighted basis.
Example 2: Single Node — Tier 2 Service Credit. Facts: In August 2024 (a 31-day month with 44,640 total minutes), a single Managed Node (Node ID: NGA-DFW-042, located in Dallas, TX) experiences 140 minutes of Downtime, resulting in Uptime of 99.69%.
Calculation:
Monthly Uptime Percentage = ((44,640 – 140) ÷ 44,640) × 100 = 99.6864% ≈ 99.69%
Applicable Tier: 99.50% – 99.89% → 10% Service Credit
Per-Node Weighting Factor: 1 ÷ 340 = 0.2941%
Service Credit = 10% × $1,250,000 × 0.2941% = approximately $367.65
Result: Customer is entitled to a Service Credit of approximately $367.65 for the affected node.
Example 3: Single Node — Tier 3 Service Credit. Facts: In September 2024 (a 30-day month with 43,200 total minutes), a single Managed Node (Node ID: NGA-YYZ-003, located in Toronto, ON, Canada) experiences 250 minutes of Downtime, resulting in Uptime of 99.42%.
Calculation:
Monthly Uptime Percentage = ((43,200 – 250) ÷ 43,200) × 100 = 99.4213% ≈ 99.42%
Applicable Tier: Below 99.50% → 20% Service Credit
Per-Node Weighting Factor: 1 ÷ 340 = 0.2941%
Service Credit = 20% × $1,250,000 × 0.2941% = approximately $735.29
Result: Customer is entitled to a Service Credit of approximately $735.29 for the affected node.
Example 4: Multiple Nodes Failing SLA in Same Month — Aggregation Methodology. Facts: In October 2024, the following Managed Nodes fail to meet the 99.95% Uptime target:
All other 336 Managed Nodes meet or exceed the 99.95% Uptime target.