Contract analysis

I. Executive Summary The purpose of this memorandum is to provide Cascade Retail Holdings Inc. ("CRH" or the "Company") and its General Counsel with a candid and comprehensive assessment of CRH's litigation strengths and vulnerabilities in connection with the anticipated filing of a Verified Complaint and a Motion for Temporary Restraining Order and Preliminary Injunction in the Delaware Court of Chancery against Pri

1. Breach of Restrictive Covenant (against all eight individual defendants);

2. Breach of Confidentiality Obligations (against all eight individual defendants);

3. Misappropriation of Trade Secrets under the Delaware Uniform Trade Secrets Act, 6 Del. C. § 2001 et seq. ("DUTSA") (against all eight individual defendants and Verdana);

4. Tortious Interference with Contractual Relations (against Verdana); and

5. Civil Conspiracy (against all defendants and Verdana). Based on our thorough review of the underlying employment agreements, the preliminary forensic findings of Pinnacle Forensics Group LLC ("Pinnacle Forensics"), the initial investigative report of Aurelian Investigations LLC ("Aurelian Investigations"), and all other materials made available to Calderwood & Harkness as of the date of this memorandum, it is our

II. Factual Background Summary (As Relevant to Assessment) The following summary sets forth the key factual predicates relevant to this assessment. This section is intended to provide context for the strengths and weaknesses analysis that follows and is not exhaustive of all relevant facts. A more detailed factual chronology is being prepared separately for use in the Verified Complaint and supporting declarations. A

III. Strengths of CRH's Position This section sets forth the principal strengths of CRH's litigation position. These strengths support the filing of a Verified Complaint and TRO/preliminary injunction motion and, taken together, provide CRH with substantial leverage for either contested litigation or negotiated resolution. A. Clear and Well-Drafted Restrictive Covenant Language CRH's eight employment agreements conta

IV. Weaknesses and Vulnerabilities This section sets forth the principal weaknesses and vulnerabilities of CRH's litigation position. Understanding and preparing for these issues is essential to effective litigation strategy, both for the TRO/preliminary injunction proceedings and for any subsequent merits litigation or settlement negotiations. Each weakness is accompanied by our assessment of its risk level and reco

V. Assessment of Specific Claims This section provides an individualized assessment of each count to be asserted in the Verified Complaint, including the strength of the claim, the key risks, and the estimated likelihood of success at the preliminary injunction stage. A. Count 1: Breach of Restrictive Covenant (All Eight Individual Defendants) Strength: Strong. The elements of this claim are straightforward: each ind