Contract analysis

I. Executive Summary The purpose of this memorandum is to present for the Board's review and approval the material terms of the Standstill and Settlement Agreement (the "Agreement") that has been negotiated among Cascade Retail Holdings Inc. ("CRH" or the "Company"), the eight former merchandising employees led by Priya Rathore (collectively, the "Rathore Group"), and Verdana Commerce Group, Inc. ("Verdana"), in reso

II. Background A. The Company and Its Merchandising Division Cascade Retail Holdings Inc. is a Delaware corporation, publicly traded on the Nasdaq Stock Market under the ticker symbol "CRHL," with its principal executive offices located at 2200 Elliott Avenue West, Suite 3400, Seattle, Washington 98119. CRH operates as an omnichannel retail and ecommerce company, maintaining a network of 387 brick-and-mortar retail l

1. Priya Rathore — Former Senior Vice President, Merchandising. Ms. Rathore was employed by CRH from June 3, 2019 through her resignation on February 7, 2025, a tenure of approximately five years and eight months. Ms. Rathore was the most senior merchandising executive at CRH and had overall responsibility for the division's strategy, execution, and personnel. She had direct oversight of Project Ridgeline and was one

2. Derek Linden — Former Vice President, Hardlines Merchandising. Mr. Linden had been employed by CRH for approximately seven years and was responsible for all merchandising activities across the Company's hardlines product categories, including home improvement, tools, outdoor equipment, and related seasonal goods.

3. Sonia Kaczmarek — Former Vice President, Softlines Merchandising. Ms. Kaczmarek had been employed by CRH for approximately five years and oversaw merchandising for the Company's softlines categories, including apparel, footwear, and accessories, encompassing both national brands and CRH's private-label offerings.

4. Amara Osei — Former Director, Private Label Strategy. Ms. Osei had been employed by CRH for approximately four years and led the Company's private-label brand development and sourcing function, with detailed knowledge of cost structures, factory-level pricing, and margin targets for CRH's owned brand portfolio.

5. Brent Halvorsen — Former Director, Seasonal Planning & Analytics. Mr. Halvorsen had been employed by CRH for approximately six years and managed CRH's proprietary seasonal demand modeling and inventory allocation algorithms, including the predictive analytics components of Project Ridgeline.

6. Lucia Fernandez-Gill — Former Director, Vendor Relations (Domestic). Ms. Fernandez-Gill had been employed by CRH for approximately five years and maintained direct relationships with many of CRH's top domestic vendors, with extensive knowledge of negotiated pricing terms, volume rebate structures, and exclusivity arrangements.

7. Nathan Tsao — Former Senior Manager, eCommerce Merchandising. Mr. Tsao had been employed by CRH for approximately three years and was responsible for digital merchandising strategy, including online assortment planning, dynamic pricing, and ecommerce-specific promotional strategies.

8. Kira Johansson — Former Senior Manager, Category Analytics. Ms. Johansson had been employed by CRH for approximately four years and served as a key analyst supporting data-driven category management decisions, with access to CRH's proprietary customer segmentation and purchasing behavior datasets. All eight departing employees had executed employment agreements with CRH containing restrictive covenant provisions,

III. Procedural History A. Engagement of Counsel and Advisors CRH retained Calderwood & Harkness LLP on February 18, 2025, under Matter No. 1038-00006, to represent the Company in connection with the investigation of and litigation arising from the coordinated departure of the Rathore Group. The C&H engagement team is led by Bernard Crawford, Responsible Partner (Washington, DC office), and Renata Vasquez, Billing Pa

1. Count I — Breach of Restrictive Covenant (against all eight individual defendants), alleging that each defendant's acceptance of employment with Verdana in merchandising-related roles violated the non-competition provisions of their respective employment agreements with CRH;

2. Count II — Breach of Confidentiality Obligations (against all eight individual defendants), alleging that the defendants' exfiltration of 14,327 files of confidential CRH information to personal cloud storage accounts, and the anticipated disclosure or use of that information at Verdana, constituted a material breach of the confidentiality provisions of their employment agreements;

3. Count III — Misappropriation of Trade Secrets (against all eight individual defendants and Verdana Commerce Group, Inc.), brought under the Delaware Uniform Trade Secrets Act, 6 Del. C. §§ 2001–2009 ("DUTSA"), alleging that the exfiltration and anticipated use of CRH's proprietary trade secret materials, including Project Ridgeline, constituted misappropriation within the meaning of the statute;

4. Count IV — Tortious Interference with Contractual Relations (against Verdana Commerce Group, Inc.), alleging that Verdana knowingly and intentionally induced the Rathore Group to breach their contractual obligations to CRH, including their non-competition, non-solicitation, and confidentiality covenants; and

5. Count V — Civil Conspiracy (against all individual defendants and Verdana Commerce Group, Inc.), alleging that the defendants and Verdana engaged in a concerted scheme to deprive CRH of the benefit of its contractual protections and to misappropriate its trade secrets for Verdana's competitive gain. On March 7, 2025, the Court granted CRH's application for an ex parte Temporary Restraining Order, restraining all e

IV. Summary of Settlement Terms Set forth below is a comprehensive summary of the material terms of the Standstill and Settlement Agreement, as reflected in the near-final fourth draft dated April 8, 2025. A. Modified Non-Competition Obligations The Agreement provides for modified non-competition obligations that are narrower in both duration and scope than the original contractual terms, but that target the specific

I. Dissolution of TRO and Release of Injunction Bond Upon entry of the Consent Order by Vice Chancellor Zhao, the existing Temporary Restraining Order issued on March 7, 2025 will be dissolved, as the protections afforded by the Consent Order will supersede the TRO. CRH will then request the discharge of the $2,500,000 injunction bond posted through Broadview Surety Corp. (Bond No. BSC-2025-TRO-04419), which will rel

V. Assessment of Settlement A. Strengths of CRH's Litigation Position CRH entered the settlement negotiations from a position of meaningful strength across several dimensions: Contractual Clarity. All eight departing employees had executed employment agreements containing clearly drafted restrictive covenant provisions governed by Delaware law. The provisions were specific as to duration, scope of restricted activity

VI. Financial Impact Summary Inflows to CRH The settlement generates the following inflows to the Company: Costs Borne by CRH CRH's costs in connection with the investigation, litigation, and settlement are as follows: Calderwood & Harkness LLP Legal Fees and Expenses. Estimated total C&H legal fees and expenses through the closing of the settlement are approximately $1,850,000, broken down as follows: The expenses f

VII. SEC Disclosure Considerations A separate memorandum dated April 9, 2025, prepared by C&H in consultation with CRH's General Counsel, Theresa Yun-Park, analyzes in detail whether the settlement of the Action requires or warrants disclosure under the federal securities laws. The key considerations are summarized here for the Board's reference. Quantitative Analysis. Measured against CRH's FY2024 consolidated reven

VIII. Closing Mechanics and Timeline Target Execution Date The target execution date for the Agreement is April 14, 2025. The Agreement requires the signatures of 10 parties: CRH (through an authorized officer), each of the eight individual defendants, and Verdana Commerce Group, Inc. Filings Upon Execution Promptly following execution of the Agreement, the following filings and submissions will be made: • Stipulatio

IX. Recommendation Based on the foregoing analysis, and having carefully considered the strengths of CRH's litigation position, the risks and uncertainties inherent in continued litigation, the total economic recovery achieved, and the non-monetary protections secured through the Agreement, Calderwood & Harkness LLP recommends that the Board of Directors authorize the officers of Cascade Retail Holdings Inc. to execu

X. Enclosures / Attachments Referenced The following documents are enclosed with or accompany this memorandum for the Board's review:

1. Standstill and Settlement Agreement — Fourth Draft (Near-Final), dated April 8, 2025

2. Exhibit A: Modified Restrictive Covenant Terms (setting forth the modified non-competition, non-solicitation, and confidentiality obligations applicable to each of the eight individual defendants, with individual equity forfeiture calculations)

3. Exhibit B: Data Return and Destruction Protocol (setting forth the procedures for return, destruction, and certification of all CRH confidential information, and the scope and methodology of the independent forensic audit)

4. Exhibit C: List of Top 50 CRH Vendors by Annual Spend (Redacted) (identifying the vendors subject to the 12-month non-solicitation obligation, to be filed under seal)

5. Exhibit D: Form of Compliance Monitor Engagement Letter — Aldwyn Compliance Solutions LLC (setting forth the terms of the compliance monitor's engagement, including scope, reporting obligations, and fee schedule)

6. Exhibit E: Mutual Non-Disparagement Provisions (setting forth the non-disparagement obligations applicable to CRH, the Rathore Group, and Verdana)

7. Proposed Consent Order (to be filed with the Delaware Court of Chancery upon execution of the Agreement)

8. Draft Board Resolution — Ratification of Equity Forfeiture and Settlement Terms (dated April 14, 2025)

9. Memorandum re: SEC Disclosure Considerations, dated April 9, 2025

10. Draft 8-K Current Report Language, dated April 11, 2025 We apprec