Contract analysis

I. Purpose This memorandum formally closes Calderwood & Harkness LLP Matter No. 1038-00007 and provides a comprehensive summary of the matter outcome, litigation history, settlement terms, total fees and costs incurred, insurance recoveries, and net economic impact to the client, Cascade Retail Holdings Inc. ("Cascade" or "CRH"). This memorandum is intended to serve as the definitive file-closing record for the matte

II. Client and Engagement Summary A. Client Information The firm's client in this matter is Cascade Retail Holdings Inc. ("Cascade" or "CRH"), a Delaware corporation publicly traded on the Nasdaq Stock Market under the ticker symbol CRHI. Cascade maintains its principal corporate headquarters at 2200 Elliott Avenue West, Suite 1400, Seattle, Washington 98119. For fiscal year 2021, Cascade reported annual revenue of a

III. Case Summary A. Claims Alleged On September 7, 2021, Vantor Holdings Corp. filed a complaint against Cascade Retail Holdings Inc. in the Superior Court of California, County of Los Angeles, Case No. 21STCV-34872. The complaint asserted three causes of action arising from Cascade's entry into supply agreements with three suppliers that had previously maintained exclusive supply agreements with Vantor. The three c

1. Hemsworth Consumer Products LLC. Hemsworth Consumer Products LLC ("Hemsworth") is an Oregon limited liability company with its principal place of business at 4720 NW Yeon Avenue, Portland, Oregon 97210. Hemsworth's Chief Executive Officer is Janet Kohler. Hemsworth specializes in the manufacturing and distribution of home goods and kitchen accessories, including cookware, storage solutions, and kitchen utensils. H

2. Tridale Manufacturing Inc. Tridale Manufacturing Inc. ("Tridale") is a Nevada corporation with its principal office at 6300 South Pecos Road, Suite 210, Las Vegas, Nevada 89120. Tridale's President is Gregory Fontaine. Tridale manufactures and distributes consumer electronics accessories, including cables, chargers, and protective cases for smartphones, tablets, and other consumer electronics devices. Tridale had

3. Orion Lifestyle Brands Corp. Orion Lifestyle Brands Corp. ("Orion") is a California corporation with its principal office at 1900 Avenue of the Stars, Suite 1050, Los Angeles, California 90067. Orion's Chief Executive Officer is Simone Alvarez. Orion manufactures and distributes personal care and wellness products, including skincare, haircare, bath products, and wellness supplements. Orion had an exclusive supply

1. Absence of Actual Knowledge. Cascade did not have actual knowledge of the specific exclusivity provisions contained in Vantor's supply agreements with Hemsworth, Tridale, or Orion at the time the new supply agreements were negotiated and executed. While Cascade's sourcing team, through Project Atlas, was aware that each supplier had existing business relationships with other retailers (including Vantor), the evide

2. Independent Supplier Decision-Making. Each of the three suppliers—Hemsworth, Tridale, and Orion—independently chose to enter into supply agreements with Cascade based on the superior commercial terms offered by Cascade, including significantly higher annual purchase commitments, longer contract terms, and enhanced distribution reach through Cascade's national retail network. No evidence of inducement, coercion, or

3. Termination-for-Convenience Clauses. Each of the Vantor exclusive supply agreements contained a termination-for-convenience provision (90 days for Hemsworth, 60 days for Tridale, and 120 days for Orion) that permitted either party to terminate the agreement without cause upon the specified notice period. Each supplier exercised its termination-for-convenience right prior to commencing deliveries under its new agre

4. Failure to Mitigate and Absence of Cognizable Damages. Vantor suffered no cognizable damages—or, at a minimum, substantially less than the claimed $87.4 million—because the exclusive supply agreements were terminable at will, Vantor failed to take reasonable steps to identify and secure alternative suppliers following the termination of each relationship, and Vantor's damages projections were based on speculative

5. Preemption of § 17200 Claim. The unfair business practices claim under California Business and Professions Code Section 17200 was preempted by and duplicative of the tortious interference claims. The alleged "unfair" and "unlawful" conduct underlying the Section 17200 claim was identical to the conduct forming the basis of the common-law tortious interference causes of action, and the Section 17200 claim did not a

IV. Procedural History and Key Litigation Events A. Pre-Litigation and Pleadings Phase (September–November 2021) The pre-litigation and pleadings phase of this matter proceeded as follows: • September 7, 2021: Vantor Holdings Corp. filed its complaint against Cascade Retail Holdings Inc. in the Superior Court of California, County of Los Angeles, Case No. 21STCV-34872, asserting three causes of action: (1) tortious i

V. Settlement Terms Summary The Settlement Agreement and Mutual Release executed on June 12, 2023 contains the following material terms: • Settlement Payment: Cascade Retail Holdings Inc. shall pay to Vantor Holdings Corp. the sum of $14,750,000.00 in full and final settlement of all claims asserted in the action. • Insurance Contribution Toward Settlement: Pinnacle National Insurance Co. shall contribute $6,250,000.

VI. Final Fee and Cost Summary A. Calderwood & Harkness LLP Professional Fees The following table sets forth the total professional fees billed by Calderwood & Harkness LLP for Matter No. 1038-00007, broken down by timekeeper: Reconciliation: $358,800 + $511,350 + $1,334,000 + $1,503,625 + $679,725 = $4,387,500. The "Other timekeepers / staff" category includes contributions from paralegals, research attorneys, litig

VII. Total Economic Impact to Cascade The total economic impact of this matter to Cascade Retail Holdings Inc. is set forth in the following table: Reconciliation: The total economic impact of $18,492,400 comprises the gross settlement payment of $14,750,000 plus net defense costs of $3,742,400, less total insurance recoveries of $8,400,000 (consisting of $6,250,000 in settlement contribution and $2,150,000 in defens

VIII. Insurance Recovery Summary The following table summarizes the total insurance recovery obtained from Pinnacle National Insurance Co. in connection with this matter: All amounts are recoverable under CGL Policy No. PNG-CGL-2021-04487, issued by Pinnacle National Insurance Co. Coverage was tendered on September 20, 2021, and Pinnacle accepted coverage subject to a reservation of rights. The settlement contributio

IX. Assessment of Outcome The resolution of this matter represents a favorable outcome for Cascade Retail Holdings Inc., evaluated against the following benchmarks and considerations: Comparison to Damages Demand. Vantor's initial damages demand, as set forth in the complaint and supported by the expert report of Dr. Harold Pryce, was $87.4 million. The settlement was achieved at $14.75 million, which represents appr

X. Document Retention and File Disposition All matter files, including client correspondence, pleadings, discovery materials, expert reports, internal memoranda, work product, privilege logs, settlement documents, billing records, and related materials, are to be retained in accordance with Calderwood & Harkness LLP's standard document retention policy for closed litigation matters. The firm's standard policy require

XI. Outstanding Items and Final Actions The following items remain outstanding as of the date of this memorandum and require follow-up action by the identified responsible parties:

1. Confirm Receipt of Insurance Payments. Confirm receipt of Pinnacle National Insurance Co.'s payment of $6,250,000 (settlement contribution) and $2,150,000 (defense cost reimbursement), totaling $8,400,000. The post-settlement insurance recovery letter was submitted on June 15, 2023. If payment is not received within 30 days of the date of this memorandum (i.e., by July 30, 2023), Francesca Morano shall follow up d

2. Final Invoice to Cascade. Prepare and submit a final invoice to Cascade Retail Holdings Inc. for any remaining unbilled time and costs through the date of matter closure. The final invoice should be reviewed by Francesca Morano prior to submission and should be accompanied by a closing letter to David Pruitt confirming the closure of the engagement.

3. Close Billing Records. Close all billing records for Matter No. 1038-00007 in the firm's accounting system. No further time or cost entries should be posted to this matter number after the date of this memorandum, except for administrative time associated with the file closure process.

4. Notify Local Counsel of Matter Closure. Notify Diana Prescott of Wortham & Adair LLP of the closure of this matter and confirm that all outstanding invoices from Wortham & Adair have been received and paid.

5. Notify Defense Expert of Matter Closure. Notify Dr. Vivian Ostrowski of Archer & Colvin Consulting Group of the closure of this matter and confirm that the final invoice from Archer & Colvin has been received and paid in full.

6. Reconcile E-discovery Vendor Final Invoice. Confirm final invoice reconciliation with Samuel Byrd at Krane Investigations LLC, including verification that all project costs have been accurately invoiced and that no additional charges are outstanding.

7. Update Firm Conflicts Database. Update the firm's conflicts database to reflect the closure of Matter No. 1038-00007 and to include the final and complete party/entity list for the matter, including all parties, witnesses, experts, vendors, and other entities identified during the course of the engagement.

8. Issue Litigation Hold Release. As described in Section X above, coordinate with David Pruitt to issue the formal hold-release memorandum to all Cascade custodians.

XII. Conclusion The defense of Cascade Retail Holdings Inc. in Vantor Holdings Corp. v. Cascade Retail Holdings Inc., Case No. 21STCV-34872, Superior Court of California, County of Los Angeles, has been resolved on terms favorable to the client. The settlement of $14.75 million represents a significant reduction from Vantor's initial damages demand of $87.4 million—a reduction of approximately 83.1%—and the settlemen