Contract analysis

I. PARTIES A. The State of Washington The State of Washington ("the State"), acting through the Office of the Attorney General, Consumer Protection Division, with offices located at 800 Fifth Avenue, Suite 2000, Seattle, Washington 98104, is a party to this Assurance of Voluntary Compliance. The State is represented in this matter by Meredith Calloway-Voss, Lead Assistant Attorney General, and Jordan A. Kittridge, In

II. RECITALS The State and Cascade (collectively, "the Parties") recite as follows: A. Background of the Investigation On March 26, 2024, the State, acting through the Office of the Attorney General, Consumer Protection Division, issued a Civil Investigative Demand ("CID") to Cascade pursuant to RCW 19.86.110. The CID sought the production of documents, data, and information concerning Cascade's use of "compare-at,"

III. NO ADMISSION OF LIABILITY Cascade neither admits nor denies any violation of the Washington Consumer Protection Act, RCW 19.86 et seq., or any other federal, state, or local law, regulation, or ordinance, in connection with the conduct described in the Recitals set forth above or otherwise. This Assurance shall not be construed as evidence or an admission of any wrongdoing, liability, or violation of law by Casc

IV. DEFINITIONS As used throughout this Assurance, the following terms shall have the meanings set forth below: "Affected Period" means the period from October 15, 2023, through and including March 15, 2024. "Assurance" means this Assurance of Voluntary Compliance, including all terms, conditions, and provisions set forth herein, together with any amendments hereto made in accordance with Section XIV.D. "Bona Fide Of

V. INJUNCTIVE AND PROSPECTIVE RELIEF — PRICING STANDARDS A. Reference-Price Substantiation Requirement From and after the Effective Date, Cascade shall ensure that all Reference Prices displayed in connection with the offer, advertisement, or sale of any merchandise through any Covered Channel reflect the actual, Bona Fide Offering Price at which the item was offered for sale in the ordinary course of Cascade's busin

1. Display a Reference Price that has never been the actual offering price for the item at any Covered Channel;

2. Display a Reference Price derived solely from a manufacturer's suggested retail price ("MSRP") or a competitor's price unless the Reference Price is clearly and conspicuously identified as such (e.g., "MSRP: $XX.XX") and is not presented in a manner that suggests it was Cascade's own prior offering price;

3. Inflate, fabricate, or artificially generate Reference Prices for the purpose of creating a false impression of consumer savings; or

4. Use algorithmic or automated pricing tools, including but not limited to the pricing model developed by Praxton Analytics LLC or any successor or replacement pricing model, to generate Reference Prices unless the outputs of such tools are validated against actual historical transaction and offering data within the one hundred twenty (120)-day Lookback Window prior to display to consumers. In the event that Cascade

1. The SKU or other product identifier for the merchandise to which the Reference Price relates;

2. The Reference Price displayed;

3. The dates on which the Reference Price was first and last displayed to consumers, and the Covered Channel(s) on which it was displayed;

4. The historical offering-price data used to substantiate the Reference Price, including the dates and Covered Channel(s) at which the merchandise was offered at the Reference Price and documentation of the actual offering;

5. Any algorithmic or model outputs, including outputs from the Praxton Analytics LLC pricing model or any successor or replacement model, used in generating or recommending the Reference Price; and

6. Documentation of the validation process applied to any algorithmically generated Reference Price, including the identity of the person or automated system that performed the validation and the date on which validation was completed. Cascade shall organize and maintain these records in a manner that permits efficient retrieval and review by the Monitor and by the State upon reasonable request. D. Training and Inter

1. The requirements of this Assurance, including the Reference-Price substantiation requirements, the Lookback Window, the prohibition on artificially inflated Reference Prices, and the documentation and record-keeping obligations;

2. The applicable provisions of the Washington Consumer Protection Act, RCW 19.86, as they relate to reference-price advertising and deceptive pricing practices;

3. Cascade's internal policies and procedures for generating, validating, displaying, and documenting Reference Prices; and

4. The roles and responsibilities of employees involved in the pricing process, including the process for escalating questions or concerns regarding Reference Price compliance. The training program shall be provided to all relevant employees within sixty (60) days of the Effective Date and shall be provided to all new employees in relevant roles within thirty (30) days of their commencement of employment. Cascade sha

VI. INDEPENDENT COMPLIANCE REVIEW A. Appointment of Monitor Within thirty (30) days of the Effective Date (i.e., by September 19, 2024), Cascade shall formally engage Ridgepoint Compliance Solutions Inc. ("Ridgepoint"), located at 700 Stewart Street, Suite 1500, Seattle, Washington 98101, as the independent compliance reviewer (the "Monitor") to audit Cascade's pricing practices during the Compliance Period. The enga

1. Whether each Reference Price in the sample reflects a Bona Fide Offering Price within the one hundred twenty (120)-day Lookback Window;

2. Whether the merchandise was offered at the Reference Price for a reasonably substantial period within the Lookback Window, as defined in Section V.A;

3. Whether Cascade has maintained adequate records to substantiate each Reference Price, as required by Section V.C;

4. Whether any algorithmically generated Reference Prices, including outputs from Praxton Analytics LLC's pricing model or any successor or replacement model, have been validated against actual historical offering-price data within the Lookback Window prior to display; and

5. Whether Cascade's internal compliance controls, including training and internal audits, are functioning effectively. C. Monitor Reports The Monitor shall prepare a detailed written report following each quarterly audit and shall submit such report to both Cascade and the State within thirty (30) days of the completion of each audit. Each report shall include, at a minimum:

1. A description of the methodology used, including the sample size, selection criteria, and statistical parameters;

2. A summary of findings of compliance and non-compliance, including the number and percentage of SKUs in the sample that were found to be in compliance and non-compliance with the requirements of Section V;

3. A detailed description of any instances of non-compliance identified, including the SKU(s) at issue, the nature and extent of the non-compliance, and the Covered Channel(s) affected;

4. An assessment of whether any identified non-compliance is isolated or systemic in nature;

5. Recommendations for corrective action, if applicable; and

6. An assessment of Cascade's implementation of any corrective actions recommended in prior reports. The Monitor's reports shall be treated as confidential between the Parties and the Monitor, except to the extent disclosure is required by applicable law or is necessary in connection with any enforcement proceeding related to this Assurance. D. Access and Cooperation Cascade shall provide the Monitor with full, timel

VII. CONSUMER RESTITUTION A. Establishment of Restitution Fund Within forty-five (45) days of the Effective Date (i.e., by October 4, 2024), Cascade shall establish a consumer-restitution fund in the amount of Two Million Eight Hundred Fifty Thousand Dollars ($2,850,000) (the "Restitution Fund"). The Restitution Fund shall be deposited into a separate, interest-bearing account at a federally insured financial institu

1. Allow consumers to submit claims online through a dedicated page on cascaderetail.com, by mail, or by telephone;

2. Require consumers to provide reasonable verification of their purchases, which may include order confirmation numbers, receipts, credit card statements, or other documentation, provided that Cascade shall not impose unreasonable documentation requirements that would deter eligible consumers from submitting claims;

3. Provide for a claims period of no fewer than one hundred eighty (180) days from the date on which notice is first provided to consumers; and

4. Include a process for Cascade to evaluate claims and issue restitution payments within a reasonable timeframe following the submission of a complete claim. Notice of the Restitution Fund and the claims process shall be provided to potentially affected consumers through the following channels:

1. Email Notice: Cascade shall send email notice to all consumers for whom Cascade has email addresses on file from transaction records during the Affected Period. Such email notice shall be sent within thirty (30) days of the State's approval of the claims process;

2. Website Notice: Cascade shall display a clear and prominent notice regarding the Restitution Fund and the claims process on the homepage of cascaderetail.com for a minimum period of ninety (90) consecutive days following the State's approval of the claims process; and

3. In-Store Signage: Cascade shall post clear and prominent signage regarding the Restitution Fund and the claims process in a location visible to consumers at or near the point of sale in all one hundred eighty-seven (187) retail locations for a minimum period of ninety (90) consecutive days following the State's approval of the claims process. The form and content of all notices shall be subject to the State's prio

VIII. CIVIL PENALTY Cascade shall pay a civil penalty of Seven Hundred Fifty Thousand Dollars ($750,000) to the State of Washington Consumer Protection Account. Payment shall be made within thirty (30) days of the Effective Date (i.e., by September 19, 2024). Payment shall be made by electronic wire transfer or certified check, payable to the "State of Washington Consumer Protection Account," and delivered or transmi

IX. REIMBURSEMENT OF INVESTIGATIVE COSTS Cascade shall reimburse the State in the amount of One Hundred Eighty-Five Thousand Dollars ($185,000) for the State's reasonable investigative costs and attorneys' fees incurred in connection with this matter, including costs associated with the issuance and enforcement of the Civil Investigative Demand, the review and analysis of documents produced by Cascade, the statistica

X. TOTAL FINANCIAL COMMITMENT The total financial commitment of Cascade under this Assurance is Three Million Seven Hundred Eighty-Five Thousand Dollars ($3,785,000), consisting of the following components: The foregoing amounts do not include costs and expenses that Cascade will incur in connection with the engagement of the Monitor (Section VI), the implementation of training and internal compliance controls (Secti

XI. COMPLIANCE REPORTING A. Semi-Annual Reports Cascade shall submit semi-annual compliance reports to the State's Consumer Protection Division during the twenty-four (24)-month Compliance Period. Each semi-annual report shall describe Cascade's compliance with each provision of this Assurance in reasonable detail, and shall include, at a minimum, the following:

1. The status of the Restitution Fund, including the total amount deposited, the total amount distributed to date, the number of claims received and processed, the number of claims paid and denied, and the balance remaining in the Fund;

2. A description of any changes to Cascade's reference-pricing practices, pricing systems, or algorithmic pricing models since the prior report;

3. A summary of training conducted pursuant to Section V.D, including the number of employees trained, the dates of training sessions, and any updates to training materials;

4. The results of internal audits of Reference Price accuracy conducted pursuant to Section V.D, including the number of SKUs audited, the compliance rate, and any corrective actions taken;

5. A summary of any consumer complaints received by Cascade regarding reference pricing during the reporting period, including the number of complaints, the nature of the complaints, and the disposition of each complaint; and

6. A certification by a senior officer of Cascade that, to the best of such officer's knowledge and belief, Cascade is in compliance with all provisions of this Assurance. B. Schedule. Semi-annual compliance reports shall be due on the following dates:

1. First Report: February 20, 2025 (six months after the Effective Date);

2. Second Report: August 20, 2025 (twelve months after the Effective Date);

3. Third Report: February 20, 2026 (eighteen months after the Effective Date); and

4. Fourth and Final Report: August 20, 2026 (twenty-four months after the Effective Date, coinciding with the end of the Compliance Period). Reports shall be submitted in writing to the State at the address specified in Section XIV.G, with a copy transmitted via electronic mail to an email address designated by the State. C. Monitor Reports Incorporated The quarterly reports of the Monitor prepared pursuant to Sectio

XII. STIPULATED PENALTIES FOR BREACH A. Amount. In the event of a material breach of any term or provision of this Assurance by Cascade, Cascade shall pay stipulated penalties of Ten Thousand Dollars ($10,000) per day for each day that such material breach continues, subject to the notice and cure provisions set forth in Section XII.B below. For purposes of this Section, a "material breach" shall mean a failure to co

XIII. RELEASE AND SCOPE OF ASSURANCE A. Release. Upon Cascade's full and timely compliance with all terms and provisions of this Assurance, the State hereby releases and forever discharges Cascade, its officers, directors, employees, agents, subsidiaries, and affiliates from any and all civil claims, causes of action, or demands arising under the Washington Consumer Protection Act, RCW 19.86 et seq., based on the spe

XIV. GENERAL PROVISIONS A. Governing Law This Assurance shall be governed by, and construed and interpreted in accordance with, the laws of the State of Washington, without regard to its conflict of laws principles. B. Jurisdiction and Venue Any action to enforce this Assurance, or any dispute arising out of or relating to this Assurance, may be brought in the Superior Court of the State of Washington for King County

I. Effective Date This Assurance shall be effective as of the date of the last signature affixed below (the "Effective Date"), which the Parties acknowledge and agree is August 20, 2024.

XV. SIGNATURES IN WITNESS WHEREOF, the Parties have executed this Assurance of Voluntary Compliance as of the date set forth below. FOR THE STATE OF WASHINGTON: OFFICE OF THE ATTORNEY GENERAL STATE OF WASHINGTON By: ________ Name: Meredith Calloway-Voss Title: Lead Assistant Attorney General Consumer Protection Division Office of the Attorney General of the State of Washington Date: August 20, 2024 FOR CASCADE RETAIL