AVAYA Deutschland GmbH Environmental, Health & Safety Review Report 6 November 2001

1. AVAYA Deutschland GmbH Environmental, Health & Safety Review Report 6 November 2001

2. Contents • 1. Executive Summary 2. Introduction and Scope of Work 2.1 Introduction 2.2 Scope of Work • Background Information on Avaya 4. Results 4.1 H&S Management 4.1.1 Responsibilities 4.1.2 Organisational Arrangements 4.1.3 Training and Awareness 4.1.4 Internal Communication 4.1.5 External Communication and Documentation of Accidents 4.1.6 Risk Assessment for Working Places 4.1.7 Test of the Electrical Equipment • 4. Results (cont.) 4.2 Equipment and Procedures in Munich 4.2.1 Working Place and Working Environment 4.2.2 Escape Routes and Emergency Exits 4.2.3 Fire Prevention 4.2.4 Inspections 4.2.5 First Aid 4.2.6 Work Stations with Screens 4.3 Environmental Management 5. Avaya’s EHS Worldwide Standards Annex 1: Photos

3. ArbSchG Arbeitsschutzgesetz, Federal law on measurements of occupational health and safety for the employees ArbStättV Arbeitstättenverordnung, Federal regulation on working place and working environment ASiG Arbeitssicherheitsgesetz, Federal law on medical officers, safety engineers and other experts for occupational health & safety ASR Arbeitsstättenrichtlinie. Guidance on Working place BAD Berufsgenossenschaft Arbeitsmedizinischer Dienst, Medical and safety service of the Employees Liability Insurance Association BayBAuO Bayerische Bauordnung, Bavarian construction order BG Employees Liability Insurance Association BGV Berufsgenossenschaftlichen Vorschriften, Regulations of the Employees Liability Insurance Association BildscharbV Bildschirmarbeitsverordnung, Federal regulation on work stations with screens EHS Environmental, Health & Safety H&S Health & Safety Glossary of abbreviations Abbreviations used regularly within this report HR Human Resources OWiG Ordnungswidrigkeitengesetz, Fedearal law on administrative offences SGB Sozialgesetzbuch, TPrüfVO Technische Prüfverordnung, Technical inspection regulation WEEE EU Waste Electrical and Electronic Equipment Directive Avaya Avaya Deutschland GmbH

4. 1. Executive Summary Introduction • KPMG carried out an environmental, health & safety (EHS) review of the AVAYA Deutschland GmbH in order to identify any material liabilities or potential EHS issues to impact on future legal compliance. • The review included interviews with selected AVAYA management representative, a CB Richard Ellis representative, a review of available documentation and a site visit at the AVAYA office in Munich, Germany. Potential Liabilities • The main potential liabilities identified concern organisational arrangements, particularly the allocation of responsibilities and accountabilities in the management structure. Responsibilities • The overall responsibility and accountability for EHS matters is with the managing director of Avaya Germany. • Avaya EMEA has recently appointed a corporate Regional Manager with competence onEHSissues. • H&S Management • The responsibility for EHS issues, particularly for H&S of people, in the management structure was not delegated. • Avaya has an external consultant for the medical officer and safety engineer. • Avaya did not allocate adequate resources within its organisation with the competencies required according to German legislation. Avaya should appoint several safety officers and first aiders. • The internal communication instruments like a H&S committee and an annual report of the safety engineer were not established. • Avaya could not demonstrate a systematic and effective external communication to the authorities on H&S issues. • The risk assessment of the working places with their working environment was not carried out. The results of the risk assessment must be documented. • From our understanding there is no regular full scope inspection or testing of the electrical equipment or safety and emergency installations. Equipment and Procedures in Munich • The reason for the missing responsibilities and accountabilities in the management structure could lead to most of the non compliances found during our site visit in Munich. • Non compliances were found in the area of escape routes, emergency exits, fire prevention and first aid. Environmental Management • There are no special legal requirements on environmental organisation applicable to Avaya‘s business activities, i.e. to appoint environmental officers or advisors. • There does not exit a German regulation concerning the take back of electrical or electronic end-of-life products for the manufacturers. • The legislative driver which is anticipated to have the most significant impact over the next ten years for all divisions of the Avaya Group is the EU Waste Electrical and Electronic Equipment (WEEE) Directive. The Directive will require manufacturers to recycle a certain percentage of their end-of-life products. Obligations are expected to commence from 2005. At present the costs of compliance are very uncertain. Management at Avaya asked KPMG Netherlands to carry out an impact assessment of the Directive.

5. 2. Introduction and Scope of Work 2.1 Introduction • KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprüfungsgesellschaft (hereinafter referred to as KPMG Germany) was commissioned by KPMG France to perform an EHS review at the site of AVAYA Deutschland GmbH in Munich, Germany, in the light of a compliance check to identify any material liabilities or potential for EHS issues to impact on future legal compliance. • This report has been prepared on the basis of work carried out on 16th October 2001, as outlined in the Scope of Work below. • The sources of information used are noted, wherever possible in our report. We have not sought to establish the reliability of these sources by reference to independent evidence. We have, however, reviewed the information provided and have satisfied ourselves as far as possible, that the information presented is consistent with other information obtained by us in the course of the work undertaken to prepare this report. • The quality of EHS management is important where there are material EHS issues for the company to manage. Corporate and divisional level management is important for major commercial issues such as new regulations affecting product specifications and product responsibilities such as product take back or organisational arrangements. • The importance of office level management is to ensure that issues such as compliance and EHS management arrangements are properly managed. Top down communication is necessary where office level management may not be aware of certain issues that affect their operations, or where their actions affect issues at corporate level. Bottom up communication is necessary where managers need assurance that office level issues that have material implications are effectively managed. Communication across functions and business units can assist in ensuring EHS issues are managed with maximum efficiency. • KPMG primary assessed the Avaya´s H&S management against the German H&S legal requirements. A complementary additional limited review was conducted in regards of Avaya’s EHS Worldwide Standards. • In Germany we have the public authorities and the Employees Liability Insurance Association (Berufsgenossenschaften, BG). Both supervise and inspect the compliance of the company´s performance regarding the H&S requirements. • The legal environmental requirements are supervised only by the public authorities. 2.2 Scope of Work The scope of work proposed by KPMG Germany was subdivided into the following two tasks: • Management interviews with Mr. Paul Wellens, Avaya Corporate EHS Regional Manager EMEA, Mrs. Dr. Iris Kindl, Avaya Manager Human Resources D/A/CH and Mrs. Anca Weyer, CB Richard Ellis Facility Manager, to discuss management processes, EHS liabilities and organisational requirements associated with legal regulations. This included a review of the contract with the external safety and medical service BAD – focussing on the issues detailed above. • The H&S issues were identified as important for Avaya Deutschland such that the company needs to have effective H&S management at most of the Avaya offices. Therefore the focus of the review was on H&S management and H&S equipment and facilities in Munich. The results are summarized in 4.1. • Site visit of the Avaya office in Munich to identify the current situation of the equipment and facilities. The findings are described in 4.2. • Environmental issues are described in 4.3.

6. 3. Background Information onAvaya Avaya Deutschland GmbH • Avaya is a leading provider of communications systems and software for enterprises, including businesses, government agencies and other organizations. They offer voice, converged voice and data, customer relationship management, messaging, multi-service networking and structured cabling products and services. • Avaya supports their customers with comprehensive global service offerings, including remote diagnostics testing of advanced systems, installation of their products, on-site repair and maintenance. • Avaya´s business is organized into three segments: communications solutions, services and connectivity solutions. • The Global Headquarter of Avaya is located in Basking Ridge, NJ, USA. Europe is part of the region Europe, Middle East and Africa (EMEA). Within Europe the German speaking area Germany (D), Austria (A) and Switzerland (CH) are an organisational unit. • Avaya Deutschland GmbH has seven offices in Germany, located in Munich, Berlin, Hamburg, Düsseldorf, Frankfurt/Main, Mannheim and Weiterstadt. The office in Munich is the headquarter for Germany. • The offices are not owned by Avaya Deutschland GmbH. There are lease agreements with different owners. • The following amount of employees are working in the different offices:Munich about 100, Frankfurt more than 30, Hamburg about 30, Düsseldorf and Weiterstadt each less than 30, Mannheim 8 and Berlin 4. • CB Richard Ellis is the external contractor of Avaya for the real estate management. CB Richard Ellis manages the Avaya offices in D/A/CH. • CB Richard Ellis also advises Avaya on EHS issues related to real estate aspects during official requests up to now.

7. 4. Results 4.1 H&S Management System 4.1.1 Responsibilities • The Managing Director, Uwe Witt, is the designated H&S manager for Avaya Deutschland. This is best practice and in line with the legal requirements. His legal responsibilities are the proper implementation and performance to the H&S requirements in all locations and spheres within the organisation. • Avaya EMEA has recently appointed a corporate Regional Manager with competence onEHSissues. Lease contract responsibilities • The H&S responsibilities of Avaya deduced from the office lease contracts for every facility could not be described and is important for the completeness of further implementation of H&S requirements. Authority management • CB Richard Ellis also advises Avaya on H&S issues related to real estate during official requests up to now. In the past CB Richard Ellis was also the point of contact for the authorities and the insurance association. Only an Avaya representative could be responsible for the authority management and contact because of the legal responsibility. Reference: ArbSchG 4.1.2 Organisational Arrangements Delegation of responsibility • At present, there is no integration of H&S management at corporate level, so the contact to relevant authorities were taken by the real estate contractor CB Richard Ellis. There was no delegation of the responsibilities to the line management, from most senior executive to first-line supervisory level according to legislation. The delegation shall be a written confirmation document signed by both parties. Reference: § 3 ArbSchG, § 9 OWiG, BGV A 1 in conjunction with § 15 SGB VII Medical officers (Betriebsärzte) and safety engineers (Sicherheitsingenieure) • Recently a contract was signed with the external safety and medical service BAD according to § 2 ASiG for medical officer (Bestellung von Betriebsärzten) and § 5 ASiG for safety engineer (Bestellung von Fachkräften für Arbeitssicherheit) to ensure the requirements of §§ 3 and 6 ASiG. This contract is in compliance with German legislation. • From our point of view the amount of working hours for the medical service BAD is to high. Reference: ASiG, BGV A 6 and A 7 BG Großhandels- und Lagerei Safety officers (Sicherheitsbeauftragte) • There were no appointed safety officers according to § 9 BGV A 1. According to annex 1 of the BGV A 1 one safety officer need to be appointed at facilities with more than 30 employees, 2 safety officers if there are more than 150 employees. Reference: § 9 BGV A 1 First aiders (Ersthelfer) • There were only a few of the required first aiders appointed. According to legal requirements organisations have to have at least one first aider for 20 employees (5 % rule). Reference: § 6 BGV A 5 (Erste Hilfe), § 10 ArbSchG

8. 4. Results 4.1.3 Training and Awareness The following paragraphs are references to legal requirements. Qualification of H&S personnel • The qualification of the H&S personnel mentioned above shall meet the legal requirements. • The training costs for first aiders will be accepted by the Employees Liability Insurance Association. • Reference: §§ 4, 7, ASiG, BGV A 1, BGV A 6 and A 7 BG Großhandels- und Lagerei Training of personnel • Avaya has to organise any necessary training, particularly for new employees before they start to work and at least for every employee once a year. • The training or instructions on H&S issues must be documented (content, participants, employee´s signature). • Reference: § 7 BGV A 1 4.1.4Internal Communication H&S committee • Up to now only in Hamburg a H&S committee is established. According to German legislation the management shall establish a H&S committee in organisations with more than 20 employees. The members of the H&S committee are the senior representative or an adequate substitute, the medical officer, the safety engineer and officers and two representatives of the employees. The H&S committee shall get together every three month at least. • Reference: § 11 ASiG Annual report • Because of the absence of a safety engineer in the past there was no annual report. The safety engineer, here the BAD, shall report to the responsible employer at least once a year about his activities and results. • Reference: § 5 of BGV A 6 and BGV A 7 BG Großhandels- und Lagerei • 4.1.5 External Communication and Documentation of Accidents External communication • The responsibility for the external communication was not defined. According to German legislation all accidents resulting in more than 3 days disability must be communicated to the Employees Liability Insurance Association. Accidents resulting in the death of an employee must be additionally communicated to the public inspectorate authorities (Gewerbeaufsichtsamt). Reference: § 6 ArbSchG, §193 SGB VII

9. 4. Results 4.1.5 External Communication and Documentation of Accidents (cont.) Documentation • Accidents at work which are leading to more than three days disability or the death of the employee have to be recorded by the employer. The organisational arrangements were not defined. Reference: § 6 ArbSchG 4.1.6 Risk Assessment for Working Places Risk assessment • A documented risk assessment of the working places could not be presented. The employer or the responsible managing director shall carry out a documented risk assessment of typical working places to make adequate arrangements. This should ensure that activities are carried out safely and in accordance with legal requirements. Reference:§§ 5, 6 ArbSchG, BildscharbV Expertise • In general the medical officer and the safety engineer shall consult the employer in the evaluation of the working place environment. Reference:§§ 3, 6 ASiG 4.1.7 Test of the Electrical Equipment • Based on the information given, up to now there is no regular inspection of the electrical equipment and installations. The electrical equipment and installations shall inspected regularly by an authorised expert and the inspection has to be recorded to demonstrate compliance. Reference: § 5 BGV A 2 (Elektrische Anlagen und Betriebsmittel) 4.2 Equipment and Procedures in Munich 4.2.1 Working Place and Working Environment • Incoming materials were stored in the hall and could hinder the employees on their escape route (photo 1). The same situation was to be found where copiers are placed in halls. The width of the halls must be at least 1m. Reference: §§ 18, 30 BGV A 1, §§ 17, 52 ArbStättV • In the case of a breakdown of the normal light the intensity of the safety light has to be 1 lux. Some halls fulfil this requirement some do not in our opinion. According to the Bavarian Building regulation a safety light in buildings is not necessary where the height of the highest floor is less than 22 meters. As – in our opinion – the Avaya building does not reach the height of 22 meters, there is no need to install safety illumination. • In general a safety light is not necessary for escape routes in working or resting areas which floor height is less than 22 m according to the Guidance on Working Place (ASR – Arbeitsstättenrichtlinie) 7/4. Reference: § 19 BGV A 1, § 7 ArbStättV 4.2.2 Escape Routes and Emergency Exits • In general the escape routes and emergency exits are clearly marked. Nevertheless we have found that • an empty box was blocking a fire door (photo 2), • a few bulbs in the exit signs were broken (photo 3), • some signs for the escape routes leading to emergency exits were missing (photo 4), • one door on an escape route could not be opened by everyone (photo 5) and • one door could be opened contrary to the escape direction (photo 6). Reference: § 30 BGV A 1, §§ 7, 10, 19 ArbStättV

10. 4. Results • 4.2.2 Escape Routes and Emergency Exits (cont.) Emergency doors • The doors from the Avaya area to the stairs meet the technical requirements. It is not necessary to fulfill additional requirements like fire protection or smoke prevention characteristics. Reference: Art. 36 BayBauO 4.3.3 Fire Prevention • The amount of fire extinguishers was sufficient and they were easy to reach. All fire extinguishers are clearly marked and were tested. The fire extinguishers must be tested by an authorised expert every two years. Reference: § 43 BGV A 1, § 13 ArbStättV • The emergency and evacuation plan was not up to date and emergency response procedures in a case of fire or emergency were not posted (photo 7). The emergency and evacuation plan should be completed by information about the reaction in a case of a fire or emergency (see also 4.3.5). This information should also be part of the employees training or instruction. Reference: § 43 BGV A 1, § 55 ArbStättV 4.2.4 Inspections • Equipment for safety and risk prevention i.e. safety lights, fire fighting installations, fume exhaust facilities, signals or emergency response installations must be tested by an authorised expert regularly. • The administration building in Munich is not part of the Technical Inspection Regulation (TPrüfVO – Technische Prüfverordnung). Because of the existing safety installations records about the inspections must be available. Reference: § 39 BGV A 1 4.2.5 First Aid • The first aid kit was at the reception desk, but not marked by a sign. The place where the first aid kit was kept was different from the description of the emergency plan. The first aid kit has to be checked regularly on completeness. • All injuries must be registered in the first aid book. • The first aid procedures together with current telephone numbers for the fire brigade, medical services such as doctors or hospitals and police station were not posted or available. The employer shall establish and provide any support so that procedures for an immediate first aid are in place. Reference: § 30 BGV A 1; §§ 2, 3 BGV A 5, § 39 ArbStättV 4.2.6 Work Stations with Screens • The screens shall be installed parallel to the windows or in a way that reflections from windows, lights or light-coloured areas are avoided. Few working places have screens faced to the window (photo 8). • The installation of the screens should be reviewed within the rsik assessment of the working places together with the medical officer and the safety engineer. • Up to now there is no systematic eye testing for the employees established. The employer shall offer to the employees a medical examination, particularly an eye test. Reference: § 30 BGV A 1; §§ 2, 3 BGV A 5, BildscharbV

11. 4. Results 4.4 Environmental Management Responsibilities • The overall responsibility and accountability for EHS matters is with the managing director of Avaya Germany. • Avaya EMEA has recently appointed a corporate Regional Manager with competence onEHSissues. Organisational arrangements • There are no special legal requirements on environmental organisation applicableto Avaya‘s business acitivities, i.e. to appoint environmental officers or advisors. Nevertheless the basic principles of environmental legislation have to be fulfilled (in particular regulations on waste disposal, water discharge, recycling obligations etc.). • The top management of Avaya Germany has the responsibility that the organisational performance complies with local and national environmental legislation and requirements. • An Avaya management system for administrative locations will be established and should be implemented in Germany. • The current situation in Germany on environmental matters seems to be adequate in relation to the material environmental issues as water and energy consumption and waste disposal. Legal compliance • Based on the information provided by the management, all offices appear to be in compliance with local environmental regulations. Waste disposal • At all offices the waste disposal is organised by the owner of the building in cooperation with CB Richard Ellis. • In Germany does not exist a regulation for the disposal of end-of-life IT equipment from households or Avaya office activities. The electronic or electrical waste could be disposed as bulky waste or electronic waste according to the local waste disposal system. Consumption of water and energy • The issue of consumption of water and energy is not of importance for Avaya. Hazardous materials • Based on the information provided hazardous materials or ozone-depleting substances were not an issue in the past. Packaging waste • According to the German packaging waste Ordinance Avaya is obligated to take back packaging waste in the context of products sold by them. The manufacturer or sales company could mandate external institutions as DSD (Duales System Deutschland) or Resy (recycling of transport packaging materials consist of paper) to fulfill this obligation. • No issues are known that Avaya does not comply with these regulations.

12. 4. Results 4.4 Environmental Management(cont.) Product responsibility: WEEE-Directive • The main legislative driver which could materially impact upon Avaya within the next ten years is the EU Waste Electrical and Electronic Equipment (WEEE) Directive. The Directive is to be implemented throughout Europe by 2005 and will require manufacturers to collect and recycle a certain percentage of their end-of-life products. At present the costs of compliance are very uncertain. Issues such as the means of collection and recycling, and the possibility of passing costs on to the consumer are currently being debated. • There does not exit a German regulation concerning the take back of electrical or electronic end-of-life products for the manufacturers. • The Avaya management and relevant industry associations indicate that costs are likely to be substantial to Avaya, based on the assumption that the current draft of the Directive will be implemented. • The impact of the EU Directive WEEE that will affect them is assessed on corporate level.Management at Avaya asked KPMG Netherlands to carry out an impact assessment of the Directive.

13. 5. Avaya EHS Wordwide Standards 5.1 Introduction • Avaya has established EHS Worldwide Standards that have to be implemented in its facilities wordwide. Olivier Corvez, of KPMG Audit France, had to conduct a limited review of the Munich office in compliance to these standards, if deemed applicable. • The bullets presented below indicate that some of existing procedures (EHS, E, OH and S) have been considered applicable for the concerned office building in Munich but have not, or partially, been implemented at the date our visit was conducted. 5.2 Findings EHSS01 : Reporting and Recordkeeping • Based on the information provided by the management, there are no responsibilities attributed regarding reporting to EMEA EHS Manager for EHS data. Issues (work related injuries and other data) are being reported to the UK Avaya GES staff, and no communication exist with the EMEA EHS Manager or with the local governmental agencies (visits by governmental agencies for instance should be declared). Avaya Corporate should analyse this situation and decide if additional local ressources is needed in Germany. EHSS04 : Contractor EHS Management • No indication was provided ensuring that contractor EHS management was implemented (written facility procedure to enforce Contractors to comply with laws and regulations, and Avaya‘s standards) E03 : Disposal of Waste and Contaminated Scrap • Some research are being conducted in the office building and may produce waste electrical/electronical equipment containing lead, cadmium or mercury. No assessment has been conducted in regards of proper sorting of waste, and if contractor has authorization. OH02 : Drinking water • According to the chapter OH 2.3.5, the site has to conduct annual testing for microorganisms and lead. SO3 : Control of Hazardous Energy • No document or controls are in place to ensure that potentially exposed employees and contractors are applying the lockout/tagout safety procedures SO5 : Fire and Life Safety • The facility does not possess a fire alarm system (chapter 5.3.4). • The exit signs are not placed appropriately across the building (not visible) • No fire evacuation drills have ever been conducted and training have not been provided for all new associates (chapter 5.3.3). • There are no Emergency Action Plan (chapter 5.3.5) or maintenance of such (chapter 5.3.6)