Contract analysis

I. Purpose and Background This letter is submitted on behalf of our client, Cascade Retail Holdings Inc. ("Cascade" or the "Insured"), and constitutes a formal request for payment of insurance proceeds under Commercial General Liability Policy No. PNG-CGL-2021-04487 (the "Policy") issued by Pinnacle National Insurance Co. ("Pinnacle National") in connection with the settlement of Vantor Holdings Corp. v. Cascade Reta

II. Summary of the Litigation and Claims A. The Parties Vantor Holdings Corp. ("Vantor"), a California corporation headquartered at 18500 Von Karman Avenue, Suite 600, Irvine, California 92612, filed the complaint initiating the Action on September 7, 2021, naming Cascade Retail Holdings Inc. as the sole defendant. Cascade is a Delaware corporation whose common stock is listed on the Nasdaq Global Select Market under

1. Tortious Interference with Contractual Relations. Vantor alleged that Cascade knowingly and intentionally induced three of Vantor's exclusive suppliers to breach their existing supply agreements with Vantor by entering into competing supply arrangements directly with Cascade, thereby causing Vantor to lose access to critical supply channels and suffer significant economic harm.

2. Tortious Interference with Prospective Economic Advantage. Vantor further alleged that Cascade engaged in independently wrongful conduct designed to disrupt Vantor's prospective business relationships with additional suppliers, distributors, and retail partners, thereby injuring Vantor's ability to compete effectively in the consumer products marketplace.

3. Unfair Business Practices Under California Business and Professions Code § 17200. Vantor asserted that Cascade's alleged conduct constituted unfair, unlawful, and fraudulent business practices within the meaning of the California Unfair Competition Law, entitling Vantor to restitution and injunctive relief. C. Factual Basis of the Claims The claims arose from Cascade's entry into new supply agreements with three s

III. Summary of Litigation Outcome A. Cascade's Defense Cascade filed its Answer and Affirmative Defenses on October 18, 2021, denying all material allegations and asserting, among other defenses, that the suppliers at issue had voluntarily terminated their relationships with Vantor for cause; that Cascade did not have knowledge of any enforceable exclusivity provisions; that the purported exclusive supply agreements

IV. Request for Insurance Contribution to Settlement Amount Pursuant to the indemnity provisions of the Policy, we hereby request that Pinnacle National Insurance Co. contribute $6,250,000 toward the $14,750,000 settlement payment made by Cascade to Vantor. After application of Pinnacle National's contribution, Cascade's remaining share of the settlement amount is $8,500,000 (i.e., $14,750,000 minus $6,250,000). We n

V. Request for Reimbursement of Covered Defense Costs In addition to the settlement contribution requested above, we also request reimbursement of a portion of the defense costs incurred by Cascade in the defense of the Action. The total defense costs incurred in this matter amount to $5,892,400. A detailed breakdown is set forth below. A. Calderwood & Harkness LLP Legal Fees Calderwood & Harkness LLP's total legal f

VI. Total Insurance Recovery Requested The following table summarizes the total insurance recovery requested from Pinnacle National Insurance Co. in connection with the settlement and defense of the Action: For informational purposes, the total economic impact to Cascade arising from the Litigation, inclusive of both the settlement payment and net defense costs borne by Cascade after application of the requested insu

VII. Enclosures The following documents are enclosed with this letter in support of the insurance recovery request:

1. Executed Settlement Agreement and Mutual Release, dated June 12, 2023, between Vantor Holdings Corp. and Cascade Retail Holdings Inc.

2. Summary of Defense Costs Incurred, itemized by category, vendor, and timekeeper, with supporting invoices.

3. Conformed copy of the Joint Stipulation of Dismissal with Prejudice, filed June 23, 2023, in the Superior Court of California, County of Los Angeles, Case No. 21STCV-34872.

4. Copy of the initial coverage notification letter from Douglas Carmichael to Leonard Furman, dated September 20, 2021, placing Pinnacle National Insurance Co. on notice of the claim. Should Pinnacle National require any additional documentation, including but not limited to copies of specific billing entries, vendor invoices, expert reports, court filings, or correspondence, we are prepared to provide such material

VIII. Payment Instructions and Contact Information We respectfully request that Pinnacle National remit payment of the total insurance recovery amount of $8,400,000 within thirty (30) days of the date of this letter, or such other period as may be provided under Policy No. PNG-CGL-2021-04487 for the payment of indemnity and defense cost reimbursement obligations following settlement of a covered claim. Payment should