Contract analysis

I. EXECUTIVE SUMMARY This Insurance Due Diligence Memorandum has been prepared by Calderwood & Harkness LLP in connection with the proposed acquisition by Cascade Retail Holdings Inc. ("Cascade" or "CRH") of 100% of the outstanding capital stock of NovaMart Global Inc. ("NovaMart" or the "Company"), a Delaware corporation headquartered at 1100 Congress Avenue, Suite 800, Austin, TX 78701, for an aggregate purchase pr

II. METHODOLOGY AND SOURCES REVIEWED A. Documents Reviewed In conducting this insurance due diligence review, C&H reviewed the following documents and materials, all of which were produced by NovaMart in the VDR or provided directly by NovaMart's management in response to C&H's diligence requests:

1. Insurance program summary prepared by NovaMart management (VDR Folder 9.1, dated January 2025).

2. All current policy declarations pages and endorsements for each line of coverage, including but not limited to commercial general liability, property, umbrella/excess liability, directors' and officers' liability, errors and omissions/technology professional liability, cyber liability/data breach, workers' compensation and employers' liability, commercial auto, employment practices liability, fiduciary liability,

3. Certificates of insurance for all lines of coverage, including certificates issued to landlords, contractual counterparties, and other additional insureds (VDR Folder 9.3).

4. Loss run reports for each line of coverage for the three fiscal years ended December 31, 2022 through December 31, 2024 ("FY2022," "FY2023," and "FY2024," respectively) (VDR Folder 9.4).

5. Broker-of-record letters and correspondence between NovaMart and its insurance broker, Whitaker & Strand Insurance Brokers Inc. (VDR Folder 9.5).

6. Claims files for all open claims and recently closed claims (i.e., claims closed within the 24 months preceding the commencement of diligence), including adjuster reports, settlement agreements, and reserve summaries (VDR Folder 9.6).

7. Insurance-related sections of NovaMart's disclosure schedules to the Stock Purchase Agreement (drafts dated March 2025), including Schedule 4.15 (Insurance) and Schedule 4.11 (Litigation) (VDR Folder 2.4).

8. Material contracts reviewed for insurance requirements, including lease agreements for all 14 fulfillment centers and the Austin headquarters, the Logistics Partnership Agreement with Redline Freight Corp., the Master Services Agreement with Pinnacle Cloud Solutions Inc., and the Payment Processing Agreement with PayStream Financial Technologies Inc. (cross-reference to Material Contracts Due Diligence Memorandum

9. NovaMart's internal risk management policies and procedures documentation (VDR Folder 9.7).

10. Historical premium invoices and payment records for all lines of coverage for FY2022–FY2024 (VDR Folder 9.8). B. Interviews and Discussions In addition to reviewing the foregoing documents, C&H conducted the following interviews and discussions in connection with this insurance due diligence review:

1. Amanda Trevino, General Counsel, NovaMart Global Inc. — C&H conducted telephone interviews with Ms. Trevino on March 4, 2025 and March 19, 2025 regarding NovaMart's claims history, coverage decisions, known or anticipated claims, and the Company's general approach to risk management and insurance procurement. Ms. Trevino also provided written responses to C&H's supplemental insurance diligence questionnaire on Mar

2. Douglas "Doug" Whitfield, Chief Financial Officer, NovaMart Global Inc. — C&H participated in a joint call with Ms. Trevino and Mr. Whitfield on March 19, 2025, during which Mr. Whitfield addressed questions regarding insurance premium costs, total insured values, business interruption coverage adequacy, and the Company's historical insurance expenditures as a percentage of revenue.

3. Thomas Ellingsen, Senior Vice President, Northbridge Risk Advisors LLC — C&H coordinated with Mr. Ellingsen, who serves as Cascade's representations and warranties insurance broker, regarding the R&W insurance placement with Meridian Specialty Insurance Company, the underwriting process, the scope of coverage and exclusions, and post-closing insurance integration considerations. C&H participated in calls with Mr.

4. Sandra Chiu, Whitmore & Paige LLP — C&H coordinated with Ms. Chiu of Whitmore & Paige LLP, Cascade's financial due diligence advisors, on insurance-related financial diligence items, including premium cost analysis, loss ratio trends, and the treatment of insurance recoveries in NovaMart's financial statements. C. Limitations and Qualifications This memorandum is based on the documents and information made availab

III. SUMMARY OF NOVAMART'S EXISTING INSURANCE PROGRAM Set forth below is a summary of each line of coverage maintained by NovaMart, including key policy terms, claims history, and our assessment of coverage adequacy. A tabular summary of all policies is attached as Appendix A. A. Commercial General Liability (CGL) Coverage Highlights. NovaMart's CGL policy provides occurrence-based coverage for bodily injury, propert

1. FY2023 — NJ Fulfillment Center (Edison). A third-party delivery driver alleged a slip-and-fall injury in the loading dock area. The claim was reported to the carrier and resolved for approximately $42,000 in medical expenses and lost wages. The claim was resolved below the $100,000 per-occurrence deductible and is closed.

2. FY2024 — GA Fulfillment Center (McDonough). A visitor to the fulfillment center alleged a trip-and-fall injury in the facility parking lot. The claim was reported and is currently being evaluated; initial reserves are approximately $28,000. NovaMart management expects this claim to resolve below the deductible. No claims for property damage, products liability, or personal and advertising injury have been reported

1. Austin, TX — Headquarters (1100 Congress Avenue, Suite 800)

2. Ontario, CA — Fulfillment Center

3. Stockton, CA — Fulfillment Center

4. Hayward, CA — Fulfillment Center

5. Edison, NJ — Fulfillment Center

6. Cranbury, NJ — Fulfillment Center

7. Savannah, GA — Fulfillment Center

8. McDonough, GA — Fulfillment Center

9. Columbus, OH — Fulfillment Center

10. Romeoville, IL — Fulfillment Center

11. Carlisle, PA — Fulfillment Center

12. Lebanon, TN — Fulfillment Center

13. Jacksonville, FL — Fulfillment Center

14. Tampa, FL — Fulfillment Center

15. Kent, WA — Fulfillment Center Sublimits. The policy contains certain sublimits for specific perils, including: (i) $10,000,000 for flood; (ii) $10,000,000 for earthquake (applicable primarily to the three California fulfillment centers); (iii) $5,000,000 for equipment breakdown/mechanical failure; and (iv) $2,500,000 for transit coverage (goods in transit between fulfillment centers). The windstorm/hail deductibl

1. FY2023 — Seller Platform Malfunction Claim. A seller on the NovaMart marketplace filed a claim alleging that a platform malfunction caused the seller's product listings to be incorrectly de-listed for a period of approximately 11 days during the Q4 2023 holiday shopping season, resulting in alleged lost sales. The claim was reported to Apex Professional Lines Insurance Co. and was settled by NovaMart for approxima

2. FY2024 — IP Infringement Claim (Pending). In Q4 FY2024, a third-party software company, DataLens Analytics Inc., asserted a claim against NovaMart alleging that certain aspects of NovaMart's proprietary search algorithm and product recommendation engine infringe one or more of DataLens's patents. The claim was reported to Apex Professional Lines Insurance Co. and is currently being evaluated by the carrier. NovaMa

I. Employment Practices Liability Insurance (EPLI) Coverage Highlights. NovaMart's EPLI policy provides claims-made coverage for employment-related claims, including wrongful termination, discrimination (based on race, sex, age, disability, religion, national origin, sexual orientation, and other protected characteristics), harassment (including sexual harassment), retaliation, and violation of employment laws. The p

1. FY2022 — Discrimination Claim. A former NovaMart employee at the Savannah, GA fulfillment center filed a claim alleging racial discrimination in connection with a termination decision. The claim was reported to Pinnacle Employment Practices Insurance Co. and was settled by NovaMart for approximately $125,000 (inclusive of legal fees). Because the settlement amount was below the $150,000 per-claim retention, the ca

2. FY2024 — Wrongful Termination Claim (Pending). A former senior manager at NovaMart's Austin headquarters filed a wrongful termination claim alleging that the manager was terminated in retaliation for reporting alleged financial irregularities to the Company's internal audit function. The claim was reported to Pinnacle Employment Practices Insurance Co. in Q3 FY2024 and is currently pending. NovaMart's employment l

IV. INSURANCE PROGRAM — CHANGE OF CONTROL ANALYSIS The acquisition by Cascade of 100% of NovaMart's outstanding capital stock will constitute a "change of control" under certain of NovaMart's existing insurance policies, as well as under a number of NovaMart's material contracts (as discussed in the Material Contracts Due Diligence Memorandum and summarized in Section V.D below). The occurrence of a change of control

1. Directors & Officers Liability (Sovereign Assurance Group Ltd.) As discussed in Section III.D above, the D&O policy contains a change of control provision that is triggered upon the closing of the Transaction. Upon the effective date of the change of control, the policy automatically converts to a run-off basis, covering only claims made after closing for wrongful acts occurring prior to closing. No go-forward cov

2. Employment Practices Liability Insurance (Pinnacle Employment Practices Insurance Co.) The EPLI policy contains a change of control clause that requires NovaMart to provide written notice to Pinnacle Employment Practices Insurance Co. within 30 days of the change of control. Upon receipt of such notice, the carrier has the option to continue coverage for claims arising from pre-closing wrongful acts for the remain

3. Errors & Omissions / Technology Professional Liability (Apex Professional Lines Insurance Co.) The E&O / technology professional liability policy contains an assignment restriction that prohibits the assignment of the policy without the prior written consent of Apex Professional Lines Insurance Co. A change of control in which the majority of NovaMart's capital stock is acquired by a new entity is treated as a de

4. Cyber Liability / Data Breach Insurance (Fortis Cyber Insurance Group Inc.) The cyber liability policy contains a similar assignment restriction to the E&O policy, requiring the prior written consent of Fortis Cyber Insurance Group Inc. for any assignment of the policy, including by operation of a change of control. The same analysis and recommendations applicable to the E&O policy apply here: Cascade should seek

V. POST-CLOSING INSURANCE NEEDS AND RECOMMENDATIONS A. D&O Tail Policy As discussed in Sections III.D and IV.A above, a six-year D&O tail policy from Sovereign Assurance Group Ltd. must be bound at or prior to the closing of the Transaction. The tail policy will provide claims-made coverage during the six-year run-off period for claims alleging wrongful acts by NovaMart's pre-closing directors and officers occurring