Contract analysis

I. Purpose and Scope of Memorandum This memorandum memorializes the full course of Calderwood & Harkness LLP's ("C&H" or the "Firm") representation of Cascade Retail Holdings Inc. ("CRH" or "Cascade") in connection with the consumer-protection inquiry initiated by the Washington State Attorney General's Office, Consumer Protection Division (the "AG" or the "AG's Office"), concerning CRH's pricing-disclosure practices

II. Background and Origin of the Inquiry A. The Client Cascade Retail Holdings Inc. is a Delaware corporation publicly traded on the Nasdaq Stock Market under the ticker symbol CRHI. The company is headquartered at 4500 Overlake Boulevard, Suite 800, Bellevue, Washington 98004. CRH operates a multi-channel retail business consisting of 187 brick-and-mortar retail stores across 14 western United States states and a na

III. Calderwood & Harkness Engagement A. Engagement Letter CRH formally retained Calderwood & Harkness LLP on April 9, 2024, to serve as outside counsel in connection with the AG consumer-protection inquiry. The engagement letter was executed on behalf of CRH by Diana Prescott-Levy, General Counsel, and on behalf of C&H by Alan Ngo, the designated Responsible Partner for the matter. The engagement letter defined the

IV. Chronological Summary of Key Milestones The following is a chronological summary of the key milestones, events, and developments that occurred during the course of C&H's representation of CRH in this matter, from the initial CID response through the execution of the AVC and closing of the matter. A. CID Response — Phase One (April 23, 2024) On April 23, 2024, C&H submitted CRH's initial rolling CID response to Le

I. AVC Execution (August 20, 2024) On August 20, 2024, the AVC was fully executed by Diana Prescott-Levy on behalf of Cascade Retail Holdings Inc. and by Meredith Calloway-Voss on behalf of the State of Washington, acting through the Consumer Protection Division of the Office of the Attorney General. On the same date, C&H transmitted a closing letter to the AG's Office confirming execution of the AVC, enclosing CRH's

V. Summary of AVC Terms The following is a summary of the material terms of the executed AVC. A fully executed copy of the AVC is maintained in the matter file under C&H Matter No. 1038-00004. A. No Admission of Liability The AVC expressly provides that CRH neither admits nor denies any violation of RCW 19.86 or any other provision of law in connection with the AG's inquiry. The no-admission clause was a critical ter

I. Stipulated Penalties for Breach The AVC provides for stipulated penalties of $10,000 per day for any material breach of the AVC's terms. Stipulated penalties are subject to a 30-day cure period: upon the AG's delivery of written notice of an alleged breach, CRH has 30 days to cure the identified non-compliance before stipulated penalties begin to accrue. This cure provision was a key element of CRH's counter-propo

VI. Billing Summary and Fee Reconciliation A. Calderwood & Harkness Fees and Costs The following is a summary of the professional fees and costs billed by C&H in connection with this matter through the date of matter closing: The total amount billed of $451,095 fell within the agreed estimated fee budget range of $350,000 to $475,000 established at the outset of the engagement. The slight exceedance above the midpoin

VII. Insurance Coverage Status A. Policy Details CRH maintains directors-and-officers and corporate-liability insurance coverage through Elkhorn Mutual Insurance Company. The relevant policy details are as follows: • Carrier: Elkhorn Mutual Insurance Company • Policy Number: ELK-DO-2024-08817 • Coverage Type: Directors & Officers and Corporate Liability • Policy Form: Claims-made basis • Per-Occurrence Limit: $25,000

VIII. Open / Residual Items Although the C&H matter has been closed and no further active work is presently anticipated, the following items remain open or require continued attention by CRH, its in-house legal team, and/or its other advisors. C&H has communicated these open items to Diana Prescott-Levy and Terence Ashford and has provided a detailed implementation roadmap in the C&H client advisory memorandum dated

IX. Document Retention and File Inventory All matter files associated with C&H's representation of CRH in this matter are maintained under C&H Matter No. 1038-00004. The file inventory includes the following categories of materials: (a) Privileged attorney work product, including internal memoranda, research files, strategic analyses, and draft documents; (b) CID response materials, including document-collection reco

X. Conclusion C&H's representation of CRH in connection with the Washington AG consumer-protection inquiry has concluded with the execution of the AVC on August 20, 2024. The resolution achieved on behalf of CRH compares favorably to the AG's initial demands across all material dimensions: The total financial commitment under the AVC of $3,785,000 represents a reduction of approximately $2,400,000, or 38.8%, from the