Contract analysis

I. Purpose and Scope This memorandum summarizes the restrictive covenant provisions contained in the employment agreements of the eight former Cascade Retail Holdings Inc. ("CRH" or the "Company") merchandising employees who resigned simultaneously on February 7, 2025, at 4:47 PM PST. The departures were coordinated and executed without advance notice to CRH management. Each of the eight individuals submitted a subst

II. Overview of the Departing Employees The following table identifies each of the eight departing employees, together with key employment details drawn from their respective employment agreements and CRH human resources records: All eight employment agreements are governed by the laws of the State of Delaware, as discussed further in Section VII below. This is a material fact, as it establishes the legal framework u

III. Non-Competition Provisions Each of the eight departing employees is subject to a post-employment non-competition covenant. The specific terms of these provisions are summarized below on an employee-by-employee basis. A. Priya Rathore Duration: Eighteen (18) months following the date of termination of employment. Commencement: From the date of termination, i.e., February 7, 2025. The non-competition period runs t

I. Summary Table — Non-Competition The following table provides a consolidated summary of the non-competition provisions across all eight departing employees: As reflected in the table above, the non-competition provisions bifurcate into two tiers: (i) the three VP-level and above employees (Rathore, Linden, and Kaczmarek) are subject to eighteen-month non-competition periods, and (ii) the five Director- and Senior M

IV. Non-Solicitation of Employees Provisions A. Overview All eight employment agreements contain a non-solicitation of employees clause prohibiting the departing employee from, directly or indirectly, soliciting, recruiting, hiring, inducing, or encouraging any CRH employee to leave CRH's employment or to accept employment with another entity. The provisions are broadly drafted to capture not only direct solicitation

V. Non-Solicitation of Vendors / Business Relationships Provisions A. Overview All eight employment agreements contain prohibitions on soliciting, diverting, or interfering with CRH's vendor, supplier, and business partner relationships. These provisions are designed to protect CRH's established commercial relationships and to prevent departing employees from leveraging relationships developed during their CRH tenure

VI. Confidentiality and Non-Disclosure Obligations A. Scope All eight employment agreements contain broad confidentiality and non-disclosure provisions that impose obligations on the departing employees with respect to CRH's proprietary and confidential information. The confidentiality provisions are independent of, and supplementary to, the non-competition and non-solicitation covenants discussed in Sections III thr

VII. Governing Law, Forum Selection, and Remedial Provisions A. Governing Law All eight employment agreements are governed by the laws of the State of Delaware, without regard to principles of conflicts of law. This governing law provision was included in each agreement as executed and was acknowledged by each employee at the time of hire (or, in Rathore's case, at the time of execution of the Rathore A&R Agreement).

VIII. Enforceability Analysis — Preliminary Observations The following preliminary observations regarding the enforceability of the restrictive covenant provisions are offered to inform the litigation team's strategy. A more detailed enforceability analysis will be provided in a separate memorandum once we have completed our review of all relevant Delaware precedent and have the benefit of Pinnacle Forensics' full re

IX. Comparative Summary Chart The following table provides a comprehensive consolidated summary of the restrictive covenant terms across all eight departing employees: As reflected in the table above, the restrictive covenant framework is structured in two tiers. The three VP-level and above employees (Rathore, Linden, and Kaczmarek) are subject to longer non-competition, non-solicitation, and vendor non-solicitation

X. Recommendations and Next Steps Based on our review of the employment agreements and the facts currently available, we recommend the following next steps:

1. Cease-and-Desist Correspondence. We recommend proceeding with cease-and-desist letters to all eight departing employees, to be sent no later than February 25, 2025. Separate cease-and-desist letters should also be sent to Verdana Commerce Group, Inc. and Greystone Capital Partners, LP, putting all parties on notice of CRH's intent to enforce the restrictive covenant provisions and demanding immediate compliance wi

2. Pinnacle Forensics Report. We should await the completion of Pinnacle Forensics LLC's full forensic report, which is expected in early March 2025, to confirm the scope and extent of data exfiltration and to develop a complete evidentiary record for the trade secret misappropriation claims under DUTSA. Dr. Rajiv Anand has indicated that preliminary findings will be supplemented with metadata analysis, file-by-file

3. Investigative Work. We should coordinate with Aurelian Investigations Group Inc. (Sandra Fielding, who was engaged on February 21, 2025) to complete the investigation of the timeline of Verdana's recruitment activities and the Rathore Group's pre-departure planning. Of particular importance is the January 6, 2025 dinner meeting between Verdana CEO Warren Dietrich, Verdana COO Elliot Westbrook, and Priya Rathore at

4. Verified Complaint and Injunctive Relief Motion. We should prepare a Verified Complaint and Motion for Temporary Restraining Order and Preliminary Injunction for filing in the Delaware Court of Chancery. The restrictive covenant provisions, data exfiltration evidence, and the coordinated nature of the departure provide strong grounds for emergency relief. The Verified Complaint should assert claims for: (i) breach

5. Economic Damages Expert. We recommend engaging an economic damages expert to quantify the potential harm to CRH from breach of the restrictive covenants and misuse of trade secrets. We have subsequently engaged Veltrano Consulting Group LLC, led by Dr. Franklin Oberg, effective March 3, 2025. Dr. Oberg's team will develop a damages model addressing: (i) the competitive harm to CRH resulting from the Rathore Group'

6. Equity Forfeiture and Clawback Analysis. We should separately analyze the equity forfeiture and clawback provisions in the departing employees' equity award agreements. This analysis is particularly important with respect to Rathore's $725,000 RSU grant, which was subject to a four-year ratable annual vesting schedule commencing on March 15, 2021. As of the date of Rathore's resignation (February 7, 2025), approxi

XI. Appendices Referenced The following appendices are referenced in this memorandum: Appendix 1: Copies of all eight employment agreements, including the Amended and Restated Employment Agreement for Priya Rathore dated March 15, 2021, and the original employment agreements for Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson. These documents are maint