Contract analysis

ARTICLE I DEFINITIONS As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined in this Article I shall have the meanings ascribed to them elsewhere in this Agreement.

Section 1.1 "Action" means the civil action captioned Cascade Retail Holdings Inc. v. Rathore et al., C.A. No. 2025-0198-MTZ, filed in the Court of Chancery of the State of Delaware before Vice Chancellor Margaret T. Zhao.

Section 1.2 "Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person. For purposes of this definition, "control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Pe

Section 1.3 "Business Day" means any day other than a Saturday, Sunday, or any day on which banking institutions in the State of Delaware or the State of Washington are authorized or required by law, regulation, or executive order to close.

Section 1.4 "Compliance Monitor" means Aldwyn Compliance Solutions LLC, a Delaware limited liability company, with offices at 1700 Market Street, Suite 2800, Philadelphia, Pennsylvania 19103, or any successor compliance monitor appointed in accordance with Section 5.1.

Section 1.5 "Compliance Monitor Engagement Letter" means the engagement letter between the Compliance Monitor and the Parties, in substantially the form attached hereto as Exhibit D, setting forth the terms and conditions of the Compliance Monitor's engagement.

Section 1.6 "Compliance Monitoring Period" means the twelve (12)-month period commencing on the Execution Date and expiring on the first anniversary of the Execution Date.

Section 1.7 "Confidential Information" means "Confidential Information" as defined in each Individual Defendant's respective Employment Agreement, including without limitation all information, data, documents, materials, and intellectual property relating to (a) Project Ridgeline, including all analyses, reports, presentations, financial models, and strategic plans developed in connection therewith; (b) vendor negoti

Section 1.8 "Consent Order" means the consent order to be entered by the Court in substantially the form attached hereto as Schedule 1, incorporating the Modified Non-Compete Obligations, Modified Non-Solicitation Obligations, confidentiality obligations, data destruction obligations, and Compliance Monitor appointment set forth in this Agreement.

Section 1.9 "Cost Reimbursement" has the meaning set forth in Section 3.2.

Section 1.10 "Court" means the Court of Chancery of the State of Delaware.

Section 1.11 "CRH Equity Awards" means all restricted stock unit awards, stock option awards, performance share awards, and other equity-based compensation awards granted to any Individual Defendant under CRH's 2018 Omnibus Equity Incentive Plan, the CRH 2022 Long-Term Incentive Plan, or any other equity compensation plan of CRH, whether vested or unvested as of the Resignation Date.

Section 1.12 "Data Destruction Protocol" means the data return and destruction protocol attached hereto as Exhibit B, including the sworn certification form set forth in Annex 1 thereto.

Section 1.13 "DUTSA" means the Delaware Uniform Trade Secrets Act, 6 Del. C. § 2001 et seq.

Section 1.14 "Effective Date" means the date on which the Consent Order is entered by the Court following submission of the Stipulation of Settlement and Proposed Consent Order by the Parties.

Section 1.15 "Employment Agreements" means, collectively, the individual employment agreements between CRH and each Individual Defendant, as the same may have been amended, restated, or supplemented from time to time, including in the case of Rathore, the Amended and Restated Employment Agreement dated March 15, 2021.

Section 1.16 "Exfiltrated Data" means the fourteen thousand three hundred twenty-seven (14,327) files, comprising approximately 2.8 gigabytes (GB) of data, downloaded from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts between approximately January 10, 2025 and February 4, 2025, as identified in the forensic analysis conducted by Pinnacle Forensics LLC and documented in

Section 1.17 "Forensic Auditor" means Pinnacle Forensics LLC, a Maryland limited liability company, with offices at 8700 Georgia Avenue, Suite 300, Silver Spring, Maryland 20910.

Section 1.18 "Greystone" means Greystone Capital Partners, LP, a Delaware limited partnership, and Greystone Capital Fund VII, LP, a Delaware limited partnership, the majority equity holder of Verdana. Greystone is not a party to this Agreement but is referenced herein and is an intended third-party beneficiary solely as set forth in Section 8.3.

Section 1.19 "Modified Non-Compete Obligations" means the modified non-competition obligations applicable to the Individual Defendants as set forth in Article II and detailed in Exhibit A attached hereto.

Section 1.20 "Modified Non-Solicitation Obligations" means the modified non-solicitation of employees and non-solicitation of vendors obligations applicable to the Individual Defendants as set forth in Article II and detailed in Exhibit A attached hereto.

Section 1.21 "Modified Restrictive Covenants" means, collectively, the Modified Non-Compete Obligations and the Modified Non-Solicitation Obligations.

Section 1.22 "Person" means any individual, corporation, partnership, limited partnership, limited liability company, joint venture, trust, estate, association, governmental authority, or other entity.

Section 1.23 "Pinnacle Forensics" means Pinnacle Forensics LLC.

Section 1.24 "Project Ridgeline" means CRH's proprietary five-year strategic category expansion plan, completed in October 2024, including all analyses, financial models, strategic roadmaps, vendor strategies, product development plans, and related documentation developed in connection therewith.

Section 1.25 "Resignation Date" means February 7, 2025, the date on which each Individual Defendant submitted his or her resignation from CRH, effective immediately.

Section 1.26 "Restricted Categories" means (i) home goods, (ii) seasonal décor, and (iii) private-label apparel, as such categories are more specifically defined in Exhibit A.

Section 1.27 "Settlement Payment" has the meaning set forth in Section 3.1, and shall mean the sum of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000).

Section 1.28 "Top 50 Vendors" means the fifty (50) vendors identified on the list attached hereto as Exhibit C, representing CRH's top fifty vendors by aggregate spend for FY2024 in the Restricted Categories.

Section 1.29 "TRO" means the temporary restraining order entered by the Court on March 7, 2025, in the Action, restraining the Individual Defendants from commencing employment in merchandising roles at Verdana for a period of fourteen (14) days.

Section 1.30 "Verdana Forensic Audit" means the independent forensic audit of Verdana's information systems to be conducted by the Forensic Auditor as described in Section 4.3 of this Agreement.

ARTICLE II MODIFIED RESTRICTIVE COVENANTS

Section 2.1 Modified Non-Competition Obligations — Rathore. (a) Rathore acknowledges and agrees that she shall be subject to a modified non-competition obligation commencing on the Resignation Date (February 7, 2025) and expiring at 11:59 p.m. Eastern Time on February 6, 2026 (a period of twelve (12) months). The modified non-competition obligation set forth in this Section 2.1 replaces and supersedes in its entirety

Section 2.2 Modified Non-Competition Obligations — Other Individual Defendants. (a) Each of Linden, Kaczmarek, Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson acknowledges and agrees that he or she shall be subject to a modified non-competition obligation commencing on the Resignation Date (February 7, 2025) and expiring at 11:59 p.m. Eastern Time on November 6, 2025 (a period of nine (9) months). The modified n

Section 2.3 Modified Non-Solicitation of Employees. (a) Each of the eight (8) Individual Defendants acknowledges and agrees that he or she shall be subject to an eighteen (18)-month non-solicitation of employees obligation commencing on the Resignation Date (February 7, 2025) and expiring at 11:59 p.m. Eastern Time on August 6, 2026. (b) During the restricted period described in Section 2.3(a), no Individual Defendan

Section 2.4 Modified Non-Solicitation of Vendors. (a) Each of the eight (8) Individual Defendants acknowledges and agrees that he or she shall be subject to a twelve (12)-month non-solicitation of vendors obligation with respect to CRH's Top 50 Vendors (as identified in Exhibit C), commencing on the Resignation Date (February 7, 2025) and expiring at 11:59 p.m. Eastern Time on February 6, 2026. (b) During the restric

Section 2.5 Confidentiality Obligations. (a) Each Individual Defendant hereby reaffirms, acknowledges, and agrees that the perpetual confidentiality obligations contained in his or her respective Employment Agreement remain in full force and effect and are not modified by this Agreement, except to the extent expressly set forth herein. Each Individual Defendant shall continue to be bound by such confidentiality oblig

Section 2.6 Verdana Covenants. (a) Verdana covenants and agrees that during the applicable restricted periods set forth in Sections 2.1 through 2.4, it shall not knowingly assign, direct, instruct, or permit any Individual Defendant to engage in any activities that would constitute a violation of the Modified Non-Compete Obligations or the Modified Non-Solicitation Obligations. (b) Verdana shall implement and maintai

Section 2.7 Incorporation into Consent Order. The Modified Non-Compete Obligations, the Modified Non-Solicitation Obligations, the perpetual confidentiality obligations reaffirmed under Section 2.5, and the Verdana covenants set forth in Section 2.6 shall be incorporated into the Consent Order to be filed with and entered by the Court in substantially the form attached hereto as Schedule 1. The Court shall retain jur

Section 2.8 Detailed Terms. The comprehensive terms of the Modified Non-Compete Obligations and the Modified Non-Solicitation Obligations, including detailed definitions of the Restricted Categories, permitted activities, carve-outs, and transition provisions, are set forth in Exhibit A (Modified Restrictive Covenant Terms) attached hereto and incorporated herein by reference. In the event of any conflict between the

ARTICLE III SETTLEMENT PAYMENT AND MONETARY TERMS

Section 3.1 Settlement Payment. (a) Within thirty (30) calendar days following the Execution Date, Verdana shall pay to CRH, by wire transfer of immediately available funds in United States dollars to an account designated in writing by CRH, the sum of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000) (the "Settlement Payment"). (b) CRH shall provide wire transfer instructions (including the name of the

Section 3.2 Litigation Cost Reimbursement. (a) Within thirty (30) calendar days following the Execution Date, Verdana shall pay to CRH, by wire transfer of immediately available funds to the account designated by CRH pursuant to Section 3.1(b), the sum of Four Hundred Twenty-Five Thousand Dollars ($425,000) as partial reimbursement of CRH's litigation costs and expenses incurred in connection with the Action, includi

Section 3.3 Equity Forfeitures — Rathore. (a) Rathore acknowledges and agrees that she shall forfeit one hundred percent (100%) of her unvested CRH Equity Awards as of the Resignation Date. Rathore further acknowledges and agrees that, pursuant to the for-cause clawback provision contained in Section 7(d) of her Amended and Restated Employment Agreement dated March 15, 2021, which was triggered by her breach of restr

Section 3.4 Equity Forfeitures — Other Individual Defendants. (a) Each of Linden, Kaczmarek, Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson (collectively, the "Other Individual Defendants") acknowledges and agrees to forfeit his or her unvested CRH Equity Awards on a pro rata basis, as calculated in accordance with the individual equity forfeiture schedules set forth in the equity forfeiture schedule incorporat

Section 3.5 Total Economic Recovery Summary. The Parties acknowledge that the total economic recovery to CRH under this Agreement consists of the following: The Parties agree that the foregoing economic recovery, together with the non-monetary relief provided in this Agreement (including the Modified Restrictive Covenants, the Compliance Monitor arrangement, the data return and destruction obligations, and the Consen

Section 3.6 Tax Treatment. (a) Each Party shall be solely responsible for any tax obligations, liabilities, and consequences arising from or attributable to the payments, forfeitures, and other transactions contemplated by this Article III, including without limitation any federal, state, or local income, employment, excise, or other taxes. (b) Verdana shall issue appropriate tax reporting forms, including IRS Form 1

Section 3.7 No Other Monetary Obligations. Except as expressly provided in this Agreement, each Party shall bear its own attorneys' fees, costs, disbursements, and expenses incurred in connection with the Action, the mediation, the settlement negotiations, and the preparation, negotiation, and execution of this Agreement. No Party shall have any monetary obligation to any other Party arising from the matters that are

ARTICLE IV DATA RETURN AND DESTRUCTION

Section 4.1 Obligation to Return or Destroy. (a) Within ten (10) Business Days following the Execution Date, each Individual Defendant shall return to CRH, or certify the complete destruction of, all Exfiltrated Data and any other CRH Confidential Information in his or her possession, custody, or control, regardless of the medium on which such information is stored, including without limitation hard copies, electroni

Section 4.2 Certification of Destruction. (a) Upon completion of the data return or destruction process described in Section 4.1, each Individual Defendant shall execute and deliver to CRH a sworn certification in the form attached as Annex 1 to Exhibit B, confirming under penalty of perjury that (i) all CRH Confidential Information (including Exfiltrated Data) that was in his or her possession, custody, or control h

Section 4.3 Verdana Forensic Audit. (a) Verdana shall permit and cooperate with an independent forensic audit of its information systems by the Forensic Auditor (Pinnacle Forensics LLC) to verify compliance with the data return and destruction obligations set forth in this Article IV and to confirm that no CRH Confidential Information resides on Verdana's systems (the "Verdana Forensic Audit"). (b) The Verdana Forens

Section 4.4 Consequences of Non-Compliance. (a) In the event the Verdana Forensic Audit reveals the presence of any CRH Confidential Information on Verdana's information systems, Verdana shall immediately (and in no event later than five (5) Business Days following receipt of the Forensic Auditor's report) quarantine and destroy such information under the direct supervision of the Forensic Auditor, and shall provide

Section 4.5 Detailed Procedures. The step-by-step procedures for the return and destruction of CRH Confidential Information, the technical specifications for data destruction (including standards for secure deletion, overwriting, and physical destruction of storage media), and the forms of sworn certification are set forth in Exhibit B (Data Return and Destruction Protocol) attached hereto and incorporated herein by

Section 5.1 Appointment. (a) The Parties agree to the appointment of Aldwyn Compliance Solutions LLC, a Delaware limited liability company, located at 1700 Market Street, Suite 2800, Philadelphia, Pennsylvania 19103, as the independent compliance monitor (the "Compliance Monitor") for the purpose of monitoring and verifying compliance by the Individual Defendants and Verdana with the obligations set forth in this Agr

Section 5.2 Scope of Monitoring. (a) The Compliance Monitor shall conduct quarterly verification of compliance by the Individual Defendants and Verdana with the following obligations: (i) The Modified Non-Compete Obligations set forth in Sections 2.1 and 2.2 and Exhibit A; (ii) The Modified Non-Solicitation Obligations set forth in Sections 2.3 and 2.4 and Exhibit A; (iii) The data return and destruction obligations

Section 5.3 Access and Cooperation. (a) Each Individual Defendant and Verdana shall cooperate fully and in good faith with the Compliance Monitor in connection with the performance of the Compliance Monitor's duties, including by providing reasonable access to relevant records, documents, data, personnel, and information as the Compliance Monitor may reasonably request. Without limiting the generality of the foregoin

Section 5.4 Reporting. (a) The Compliance Monitor shall deliver quarterly written reports (each, a "Quarterly Report") to counsel for each Party: (i) Calderwood & Harkness LLP, Attention: Bernard Crawford, 1301 K Street NW, Suite 1200, Washington, DC 20005 (counsel for CRH); (ii) Whitfield, Nygaard & Doyle LLP, Attention: Catherine Nygaard, 1000 North Market Street, Suite 1500, Wilmington, DE 19801 (counsel for the I

Section 5.5 Cost Allocation. (a) The total estimated cost of the Compliance Monitor's engagement for the Compliance Monitoring Period is Three Hundred Sixty Thousand Dollars ($360,000), inclusive of professional fees, out-of-pocket expenses, and administrative costs. The actual cost may vary based on the scope and complexity of the monitoring activities, provided that neither Party's share of actual costs shall excee