Contract analysis

I. Executive Summary Calderwood & Harkness LLP ("C&H" or the "Firm") was formally engaged on February 18, 2025 to represent Cascade Retail Holdings Inc. ("CRH" or the "Company") in connection with the coordinated departure of eight senior merchandising employees led by Priya Rathore, CRH's former Senior Vice President of Merchandising. Ms. Rathore and the seven other departing employees (collectively, the "Rathore Gr

II. Engagement and Staffing A. Formal Engagement The engagement letter between CRH and C&H was executed on February 18, 2025. The matter has been assigned internal matter number 1038-00006. The scope of the engagement encompasses the enforcement of restrictive covenant provisions — including non-competition, non-solicitation of employees, non-solicitation of vendors, and confidentiality covenants — as well as claims

III. Background and Factual Summary A. The Departing Employees On February 7, 2025, at 4:47 PM PST, CRH received simultaneous resignation emails from eight senior employees within its merchandising division. All eight resignations were effective immediately, and all were submitted within seconds of each other, strongly indicating a high degree of coordination. The departing employees comprise the core leadership of C

IV. Restrictive Covenant Review A. Summary of Review Process Pursuant to our initial work plan, James Underwood and Devon Archer conducted a comprehensive review of all eight employment agreements during the period of February 19–22, 2025. The review encompassed the original employment agreements, all amendments and restatements, offer letters, promotion letters, RSU agreements with restrictive covenant tie-in provis

V. Vendor Engagements A. Pinnacle Forensics LLC C&H engaged Pinnacle Forensics LLC ("Pinnacle") on February 20, 2025 to provide forensic investigation services in connection with this matter. The engagement letter was executed on that date. The engagement is led by Dr. Rajiv Anand, a recognized expert in digital forensics with extensive experience in trade secret misappropriation cases. Pinnacle's offices are located

VI. Pre-Litigation Correspondence A. Cease-and-Desist Letters On February 25, 2025, C&H prepared and sent cease-and-desist letters to the following recipients. All letters were sent by both overnight delivery (via Severin Partners LLC Priority Overnight) and by email to the recipients and/or their known counsel.

1. Priya Rathore. A detailed cease-and-desist letter was sent to Ms. Rathore at her last known address and by email, demanding: (i) immediate cessation of employment at Verdana Commerce Group, Inc. in any capacity involving merchandising, strategy, vendor relations, product development, or any other function that would draw upon or risk disclosure of CRH's confidential information and trade secrets; (ii) the immediat

2. Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson. Cease-and-desist letters were sent to each of the seven remaining departing employees individually. These letters followed a standardized form but included individual annexes specifying each employee's specific covenant terms, including the applicable non-competition period, non-solicitation periods,

3. Verdana Commerce Group, Inc. A separate cease-and-desist letter was addressed to Helen Tsoi, General Counsel of Verdana Commerce Group, Inc., at Verdana's Wilmington headquarters. The letter demanded that Verdana immediately cease employing the members of the Rathore Group in any capacity that would cause or contribute to a breach of their restrictive covenant obligations to CRH. The letter further warned Verdana

4. Greystone Capital Partners, LP. A cease-and-desist letter was addressed to Elliot Westbrook, Managing Partner of Greystone Capital Partners, LP, at Greystone's New York offices at 680 Park Avenue, 22nd Floor, New York, New York 10065. The letter notified Greystone of CRH's claims and demanded that Greystone, as the majority owner of Verdana through Greystone Capital Fund VII, LP, take immediate steps to ensure tha

VII. Litigation Hold C&H prepared a comprehensive litigation hold notice on February 19, 2025, the day following formal engagement. The litigation hold notice was distributed to relevant CRH personnel, with distribution coordinated through CRH's General Counsel's office. The hold covers all documents, communications, and electronically stored information related to the following topics and individuals: • All eight me

VIII. Litigation Strategy and Next Steps A. Proposed Claims Based on our initial review of the facts, the employment agreements, and the applicable law, we recommend asserting the following causes of action in a Verified Complaint to be filed in the Delaware Court of Chancery:

1. Breach of Restrictive Covenant (Non-Competition) — Against All Eight Individual Defendants. Each member of the Rathore Group has accepted employment with Verdana Commerce Group, Inc., a direct competitor of CRH, in violation of the non-competition covenants contained in their respective employment agreements. The employment of the Rathore Group members at Verdana in merchandising and strategy roles that are substa

2. Breach of Confidentiality Obligations — Against All Eight Individual Defendants. The preliminary forensic evidence indicates that members of the Rathore Group downloaded approximately 14,327 files containing CRH's proprietary and confidential information — including Project Ridgeline materials, vendor negotiation term sheets, private-label cost models, and customer segmentation data — to personal cloud storage acc

3. Misappropriation of Trade Secrets Under the Delaware Uniform Trade Secrets Act (DUTSA) — Against All Eight Individual Defendants and Verdana Commerce Group, Inc. The information exfiltrated by the Rathore Group qualifies as trade secrets under DUTSA, as it derives independent economic value from not being generally known or readily ascertainable and was subject to reasonable measures by CRH to maintain its secrecy

4. Tortious Interference with Contractual Relations — Against Verdana Commerce Group, Inc. Verdana had actual or constructive knowledge of the restrictive covenant obligations binding each member of the Rathore Group, and it nonetheless deliberately recruited, hired, and compensated the entire group with substantial sign-on bonuses totaling $6.2 million, thereby inducing and facilitating breaches of those contractual

5. Civil Conspiracy — Against All Individual Defendants and Verdana Commerce Group, Inc. The coordinated nature of the simultaneous resignations, the pre-departure data exfiltration, the simultaneous hiring by a single competitor, and the alignment between Verdana's announced growth strategy and CRH's confidential strategic plans collectively demonstrate a conspiracy among the Rathore Group members and Verdana (and p

1. Complete forensic imaging of remaining three CRH devices. Pinnacle Forensics will complete imaging of the three devices received later, enabling a comprehensive forensic analysis across all eight departing employees' CRH-issued equipment.

2. Analyze WND response to cease-and-desist letters upon receipt. Upon receipt of the substantive response from Whitfield, Nygaard & Doyle LLP, we will analyze the arguments raised and incorporate our analysis into the Verified Complaint and motion papers.

3. Begin drafting the Verified Complaint and TRO/PI motion papers. We will commence drafting the Verified Complaint, memorandum of law in support of the TRO and preliminary injunction, proposed order, and all ancillary filings.

4. Prepare supporting declarations. We will begin coordinating with CRH personnel on the preparation of the supporting declarations from Ms. Yun-Park and Mr. Ashby, and with Dr. Anand at Pinnacle Forensics on the expert forensic declaration.

5. Finalize engagement of damages expert. A formal recommendation for a specific economic damages expert will be provided, and we will seek CRH's approval to proceed with the engagement.

6. Continue Aurelian Investigations' inquiry. Aurelian will continue its investigation into the pre-resignation recruitment timeline and the involvement of Verdana and Greystone personnel, with a focus on developing admissible evidence of the conspiracy to recruit the Rathore Group as a coordinated unit.

7. Prepare analysis of Verdana's February 14 press release. We will prepare a memorandum analyzing the evidentiary implications of Verdana's public press release announcing the hiring of the Rathore Group, including its potential use as evidence of Verdana's knowledge of the competitive implications and its intent to leverage the departing employees' knowledge of CRH's proprietary operations.

IX. Budget and Fee Status As noted in Section II above, a staffing and budget memorandum was circulated to Billing Partner Renata Vasquez on February 18, 2025, the date of the engagement. That memorandum included a preliminary estimate of total fees through resolution of the matter, based on the anticipated scope of the litigation and the staffing plan. Fees incurred through February 28, 2025 will be reported in the

X. Corporate Governance and Disclosure Considerations The commencement of significant litigation raises several corporate governance and regulatory disclosure considerations for CRH as a publicly traded company. We flag the following items for your attention and recommend that they be addressed in coordination with CRH's in-house legal team: Board Notification. We recommend that CRH notify Dr. Lorraine Stahl, the Ind

XI. CRH Internal Contacts The following CRH personnel have been identified as the primary points of contact for this matter: Primary Contact: Theresa Yun-Park, General Counsel. All communications from C&H regarding this matter will be directed to Ms. Yun-Park unless otherwise instructed. Key Internal Stakeholders Briefed: The following CRH executives have been briefed on the general status and trajectory of this matt

XII. Conclusion and Recommendation This matter is progressing on an emergency timeline consistent with the critical need for injunctive relief to prevent ongoing and irreparable harm to CRH's competitive position. The coordinated departure of eight senior merchandising employees to a direct competitor, the preliminary forensic evidence of significant pre-departure data exfiltration, and the close alignment between Ve