1038-00002 · Cascade Retail Holdings · documents

engagement-letter.docx DOCUMENT Finance & Banking

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CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED

CALDERWOOD & HARKNESS LLP Counselors at Law 599 Lexington Avenue, 42nd Floor New York, NY 10022 Telephone: (212) 554-6000 Facsimile: (212) 554-6001 www.calderwoodharkness.com

February 13, 2023

VIA EMAIL AND OVERNIGHT COURIER

Derek Tanaka, Esq. General Counsel & Corporate Secretary Cascade Retail Holdings Inc. 2200 Elliott Avenue, Suite 1400 Seattle, WA 98121

Re: Engagement of Calderwood & Harkness LLP as Borrower's Counsel — Proposed $300,000,000 Senior Secured Asset-Based Revolving Credit Facility

Dear Mr. Tanaka:

We are delighted to have the opportunity to work with Cascade Retail Holdings Inc. and its affiliated entities in connection with the proposed financing transaction described below. This letter sets forth the terms and conditions of our engagement as your outside legal counsel for this matter. We ask that you review this letter carefully and, if the terms are acceptable to you, countersign and return a copy to us at your earliest convenience so that we may proceed with the work outlined herein.

1. Engagement and Scope of Representation

Calderwood & Harkness LLP ("Calderwood & Harkness," the "Firm," "we," or "us") is pleased to confirm its engagement by Cascade Retail Holdings Inc. ("Cascade," "CRH," or the "Company"), a Delaware corporation publicly traded on The Nasdaq Stock Market LLC (ticker symbol: CRHI), to serve as borrower's counsel in connection with the negotiation, documentation, and closing of a proposed senior secured asset-based revolving credit facility in an aggregate principal amount of up to Three Hundred Million Dollars ($300,000,000) (the "ABL Facility" or the "Transaction").

The ABL Facility is expected to be provided by a syndicate of lenders led by Crescent Harbor Bank, N.A. ("Crescent Harbor"), acting in its capacity as administrative agent and collateral agent for the benefit of the lenders, with the credit agreement and related loan documentation to be governed by the laws of the State of New York. It is our understanding that the ABL Facility will be secured by a first-priority lien on the eligible accounts receivable, eligible inventory, and related assets of the borrowers and guarantors, subject to customary exceptions and limitations to be negotiated in the definitive documentation. The specific terms of the ABL Facility, including pricing, availability, and covenants, are expected to be substantially consistent with the term sheet dated January 30, 2023, provided by Crescent Harbor to the Company (the "Term Sheet"), as such terms may be modified through negotiation.

In connection with this engagement, the Firm will provide the following legal services on behalf of the Company:

(a) Review and Negotiation of Loan Documentation. Review, drafting, and negotiation of the credit agreement and all ancillary loan documents associated with the ABL Facility, including, without limitation, the guaranty agreement, security agreement, pledge agreement, deposit account control agreements, promissory notes (if any), borrowing base certificates, compliance certificates, joinder agreements, and all other related instruments, schedules, and exhibits.

(b) UCC Filings and Lien Perfection. Preparation and filing of UCC-1 financing statements in all applicable jurisdictions required to perfect the security interests granted under the loan documents, and review of UCC, federal tax lien, judgment lien, and litigation lien searches to be ordered in connection with the Transaction.

(c) Intercreditor and Collateral Arrangements. Negotiation and review of any intercreditor agreements, collateral access agreements, landlord waivers, bailee letters, and other collateral-related arrangements necessary in connection with the ABL Facility, including coordination with any holders of existing or contemplated indebtedness of the Company that may hold liens on assets of the borrowers or guarantors.

(d) Payoff and Termination of Existing Facility. Coordination of the payoff and termination of Cascade's existing revolving asset-based lending facility in an aggregate committed amount of $175,000,000 with Harborview Lending Group, LLC ("Harborview"), including the review and negotiation of payoff letters, release documentation, and UCC-3 termination statements or amendments, and confirmation that all liens of Harborview are properly released upon closing of the ABL Facility.

(e) Closing Deliverables. Preparation of borrower-side closing deliverables required under the credit agreement and related loan documentation, including officer's certificates, secretary's certificates attesting to organizational documents and board resolutions, solvency certificates, and the legal opinion of borrower's counsel to be delivered at closing in form and substance reasonably satisfactory to the administrative agent and lenders' counsel.

(f) Insurance Review. Review of insurance certificates and endorsements required to be delivered as conditions precedent to closing, including verification that the administrative agent has been named as loss payee and additional insured, as applicable, in accordance with the requirements of the loan documents.

(g) Closing Mechanics and Post-Closing. Coordination of conditions precedent and closing mechanics, including preparation and maintenance of a comprehensive closing checklist, preparation of the funds flow memorandum for closing, and preparation of a post-closing obligations letter setting forth any items to be delivered or actions to be taken after the closing date within the time periods specified in the credit agreement.

Scope Limitations. The scope of this engagement is expressly limited to the Transaction described above. This engagement does not include, and the Firm will not be providing, representation or advice in connection with any of the following matters, unless separately agreed upon in a supplemental engagement letter or written amendment to this letter:

(i) securities law filings or compliance matters, including any filings required under the Securities Exchange Act of 1934 or the Securities Act of 1933 in connection with or as a result of the Transaction;

(ii) federal, state, local, or foreign tax advice or tax opinions of any nature;

(iii) regulatory matters, including banking regulatory, antitrust, or competition law matters;

(iv) environmental law matters, including any environmental due diligence, compliance assessments, or environmental indemnification provisions beyond those customarily included in loan documentation;

(v) ERISA, employee benefits, or pension-related matters;

(vi) real property matters, including title insurance, surveys, mortgage recording, or real estate diligence, except to the extent the Firm reviews mortgage or deed of trust documentation prepared by local counsel in connection with collateral perfection;

(vii) Canadian law matters, including any Canadian law governed security, guaranty, or other loan documentation, which we understand may be required if any Canadian subsidiary of the Company becomes a party to the loan documents;

(viii) litigation, arbitration, or dispute resolution proceedings of any kind; or

(ix) any other matters not expressly described in this Section 1.

Should any of the foregoing matters arise during the course of the Transaction and require legal assistance, we would be happy to discuss a separate engagement or referral to appropriate specialist counsel.

Subsidiary Representation. Calderwood & Harkness will not be acting as counsel to any subsidiary or affiliate of CRH except to the extent that such subsidiary or affiliate is a party to the loan documents as a co-borrower or guarantor under the ABL Facility. Based on our current understanding of the Transaction structure, the following subsidiaries of CRH are expected to be parties to the loan documents, and our representation extends to such entities solely in their capacities as co-borrowers or guarantors, as applicable:

• Cascade Retail Operating Company LLC, a Delaware limited liability company;

• Cascade Digital Commerce Inc., a Delaware corporation;

• Cascade Outlet Stores LLC, a Delaware limited liability company; and

• Cascade Fulfillment Services Inc., a Delaware corporation.

If additional subsidiaries are required to join the loan documents as borrowers or guarantors, we will confirm the extension of our representation to such entities at that time.

2. Firm Personnel and Staffing

Calderwood & Harkness has assembled a team of experienced banking and finance professionals to staff this engagement. The attorneys and their respective roles are as follows:

Claudia Merritt, Partner, Banking & Finance Group — Responsible Partner. Ms. Merritt will have overall supervisory responsibility for the engagement and will serve as lead negotiator on behalf of CRH in connection with the credit agreement and principal ancillary documents. Ms. Merritt has extensive experience representing borrowers, agents, and lender syndicates in asset-based lending transactions, leveraged finance, and restructuring matters, and has been lead partner on numerous ABL facilities in the retail and consumer products sector. She will be the primary point of contact at the Firm for strategic and substantive legal matters.

Ian Blackwood, Partner, Banking & Finance Group — Billing Partner. Mr. Blackwood will be responsible for billing, fee management, and overall client relationship oversight for this engagement. Mr. Blackwood has more than twenty years of experience in secured lending and structured finance transactions and brings significant expertise in collateral structuring and lien perfection matters.

Marcus Leung, Senior Associate, Banking & Finance Group — Lead Associate. Mr. Leung will serve as the day-to-day lead associate on the engagement and will be responsible for drafting and revising loan documentation, supporting negotiation sessions, coordinating with lenders' counsel at Whitfield, Greer & Holloway LLP, and managing closing logistics and document execution. Mr. Leung will be your primary contact for day-to-day questions and document circulation.

Sophie Tremblay, Associate, Banking & Finance Group — Working Associate. Ms. Tremblay will provide additional associate support, with a particular focus on collateral perfection matters, preparation and filing of UCC-1 financing statements, review and analysis of lien search results, due diligence review, and coordination of deposit account control agreements and other collateral-related documentation.

In addition to the attorneys named above, the Firm may assign additional attorneys, paralegals, or other paraprofessionals to the engagement as may be necessary or appropriate from time to time to ensure the efficient and timely completion of the work. The Firm will notify CRH of any material changes in staffing, including any change in the identity of the Responsible Partner or Lead Associate.

3. Matter Number

This engagement has been assigned Calderwood & Harkness Matter No. 1038-00002. We kindly request that all correspondence, billing inquiries, document submissions, and internal references to this matter cite this number to facilitate proper tracking and administration.

4. Fee Arrangements

Billing Basis. Our fees for this engagement will be based on time charges at the Firm's standard hourly rates in effect for the attorneys and paraprofessionals performing services on this matter. The Firm's standard hourly rates are reviewed and may be adjusted periodically, typically on an annual basis effective January 1 of each year. The current standard hourly rates for the attorneys assigned to this matter, effective as of January 1, 2023, are as follows:

If the Firm's standard hourly rates are adjusted during the course of this engagement, we will notify CRH of the adjusted rates, which will be applied to services rendered on or after the effective date of such adjustment.

Billing Frequency. Invoices for professional fees and disbursements will be rendered on a monthly basis and are payable within thirty (30) days of the date of the invoice. Each invoice will include a reasonably detailed description of the services performed, the timekeepers involved, the hours expended, and the applicable rates. If CRH has any questions or concerns regarding an invoice, we ask that you contact Mr. Blackwood promptly so that the matter can be addressed in a timely fashion.

Expenses and Disbursements. In addition to professional fees, CRH will be responsible for reimbursement of reasonable out-of-pocket disbursements incurred by the Firm in connection with this engagement. Such disbursements typically include, but are not limited to, the following:

• Filing fees, including UCC filing fees, Secretary of State filing fees, and lien search charges;

• Courier and overnight delivery charges;

• Travel expenses (airfare, ground transportation, lodging, and meals) incurred in connection with negotiation sessions, closings, or other meetings required for the Transaction, at cost;

• Computerized legal research and database charges (Westmark Data Systems, Sundial Solutions, and similar services);

• Photocopying, printing, and document production costs; and

• Long-distance telephone and teleconference charges.

We will endeavor to manage disbursements prudently and will seek CRH's advance approval before incurring any single disbursement in excess of $5,000.

Fee Estimates. While the Firm is unable to provide a fixed fee for the Transaction, given the inherent variability in the scope and complexity of the negotiation and documentation process, we recognize the importance of cost predictability to CRH. Based on our experience with comparable asset-based revolving credit facility transactions of this size and type — including multi-lender syndicated ABL facilities in the $200,000,000 to $400,000,000 range — and taking into account the anticipated scope of work described in Section 1 above, we estimate that total legal fees for the engagement will be in the range of $475,000 to $650,000, exclusive of disbursements. This estimate is provided for informational and budgeting purposes only and is not a cap or a commitment. The actual fees incurred will depend on a number of factors, including the complexity and duration of negotiations with lenders' counsel, the number of substantive revisions to the loan documents, the scope of collateral diligence required, and the extent of any post-signing issues or closing complications.

We will endeavor to keep CRH informed of fees incurred on a regular basis during the course of the engagement. If at any point we anticipate that fees will materially exceed the estimated range set forth above, we will promptly advise Mr. Tanaka and discuss the reasons for the variance and any available steps to manage costs going forward.

Lenders' Counsel Fees. Please note that, as is customary in credit facility transactions of this nature, the borrower is expected to be responsible for payment of both its own legal fees (i.e., Calderwood & Harkness's fees) and the reasonable fees and expenses of counsel to the administrative agent and the lenders, which we understand will be Whitfield, Greer & Holloway LLP, as described in Section 6 below. This payment obligation will be set forth in the credit agreement and/or the commitment letter for the ABL Facility. This engagement letter covers only Calderwood & Harkness's fees and expenses; CRH will receive invoices for lenders' counsel fees directly from or through the administrative agent.

5. Conflicts of Interest

Calderwood & Harkness has conducted a comprehensive conflicts-of-interest review in accordance with the Firm's standard procedures and the applicable New York Rules of Professional Conduct in connection with this engagement. Based on our review of the parties involved in the Transaction, including the Company, its subsidiaries, the administrative agent, and the expected members of the lending syndicate, the Firm does not currently represent any party in a matter adverse to CRH in connection with the ABL Facility or the Transaction.

We do, however, note the following relationships for purposes of full disclosure and transparency:

(a) Calderwood & Harkness has in the past represented, and may in the future represent, Crescent Harbor Bank, N.A. and its affiliates in matters unrelated to this Transaction, including in connection with other lending transactions, regulatory matters, and general corporate matters. These prior and potential future representations are wholly unrelated to the ABL Facility and do not involve the interests of CRH.

(b) Calderwood & Harkness has in the past represented, and may in the future represent, Northgate Capital Bank and its affiliates in matters unrelated to this Transaction. Northgate Capital Bank is expected to be a member of the lending syndicate for the ABL Facility. Any such representation of Northgate Capital Bank is and will be unrelated to the Transaction.

(c) Calderwood & Harkness has in the past represented, and may in the future represent, Bridgevale Financial Corporation and its affiliates in matters unrelated to this Transaction. Bridgevale Financial Corporation may participate in the lending syndicate for the ABL Facility. Any such representation of Bridgevale Financial Corporation is and will be unrelated to the Transaction.

We are confident that none of the foregoing relationships will impair the Firm's ability to represent CRH vigorously, independently, and with undivided loyalty in connection with the ABL Facility. In each instance, the Firm maintains appropriate information barriers and ethical screens to prevent the disclosure or misuse of confidential information across engagements.

By executing this engagement letter, CRH consents to the Firm's continued representation of the above-named institutions and their respective affiliates in matters unrelated to the Transaction, provided that such representations do not involve matters that are materially adverse to CRH in connection with the ABL Facility. This consent is limited to the representations described in this Section 5 and does not extend to any future adverse representation of the above-named institutions against CRH in connection with the Transaction.

If an actual conflict of interest arises during the course of this engagement that cannot be resolved through appropriate waivers, ethical screens, or other measures consistent with the applicable rules of professional conduct, the Firm will promptly notify CRH and, if necessary, take appropriate steps, which may include withdrawal from the representation. In such event, we will cooperate fully in effecting a smooth transition to successor counsel.

6. Counterparties and Their Counsel

For CRH's reference, the principal counterparties to the Transaction and their respective counsel, as currently known to us, are as follows:

Administrative Agent and Lead Arranger: Crescent Harbor Bank, N.A. 780 Park Avenue, 30th Floor New York, NY 10021

Attention: Thomas Reiland, Managing Director, ABL Origination

Telephone: (212) 489-3200

Email: t.reiland@crescentharbor.com

Lenders' Counsel: Whitfield, Greer & Holloway LLP 51 West 52nd Street, 35th Floor New York, NY 10019

Attention: Bernard Ashford, Partner

Telephone: (212) 776-8400

Email: bashford@wghlaw.com

We anticipate that the initial draft of the credit agreement and ancillary loan documents will be prepared and circulated by lenders' counsel, and that Calderwood & Harkness will provide CRH's comments and negotiate the documentation on CRH's behalf. We will coordinate directly with Mr. Ashford and his team at Whitfield, Greer & Holloway LLP on all documentation matters, keeping Mr. Tanaka and the authorized CRH contacts fully informed throughout the process.

7. Client Communications and Authorized Contacts

The Firm's primary contact at CRH for all matters relating to this engagement will be Derek Tanaka, General Counsel & Corporate Secretary. All privileged legal advice, work product, and confidential communications will be directed to Mr. Tanaka in the first instance unless he designates otherwise in writing.

In addition to Mr. Tanaka, the following individuals at CRH are authorized to communicate with the Firm, receive information, and provide instructions on behalf of CRH in connection with this engagement:

• Elena Kowalski, Chief Financial Officer — authorized to provide financial information, discuss business terms, and receive financial and structuring-related communications;

• Priya Anand, Treasurer — authorized to provide treasury-related information, coordinate deposit account matters, discuss borrowing base and availability mechanics, and receive communications relating to funds flow and closing logistics; and

• Nathaniel Voss, Chief Executive Officer — authorized to make material business decisions regarding the Transaction and to exercise signing authority on behalf of CRH with respect to the loan documents and related instruments.

We will rely upon instructions received from any of the above-named individuals as being duly authorized by CRH. If CRH wishes to add or remove any authorized contacts, please notify us in writing at your earliest convenience. We encourage CRH to establish clear internal protocols regarding the flow of information and decision-making authority to ensure that our communications are directed to the appropriate individuals in a timely manner.

8. Document Retention

Calderwood & Harkness will maintain files, both electronic and hard copy as applicable, in connection with this engagement in accordance with the Firm's standard document retention policy. Our current policy provides for the retention of client files for a period of ten (10) years following the conclusion of the engagement, after which time the files may be destroyed in the ordinary course unless CRH instructs us otherwise.

At the conclusion of the engagement, we will provide CRH with copies of all final executed versions of the loan documents and closing deliverables, including the executed credit agreement, security documents, legal opinions, officer's and secretary's certificates, and closing checklist. Internal work files, drafts, attorney notes, and internal memoranda generated during the course of the engagement are the property of the Firm; however, substantive work product prepared for CRH's benefit, including marked drafts of loan documents and research memoranda, will be made available to CRH upon reasonable request.

We recommend that CRH maintain its own complete set of all executed Transaction documents and closing binders for its records.

9. Confidentiality

Calderwood & Harkness will maintain the confidentiality of all information provided by CRH and its subsidiaries, officers, directors, employees, and agents in connection with this engagement, in accordance with the Firm's professional obligations under the New York Rules of Professional Conduct and applicable law. We will not disclose any such confidential information to any third party without CRH's prior written consent, except to the extent that (a) disclosure is required by applicable law, court order, or regulatory requirement; (b) disclosure is necessary in connection with the performance of our services under this engagement (for example, to lenders' counsel or the administrative agent as part of the negotiation and documentation process, with CRH's authorization); or (c) the information has become publicly available other than through a breach of our confidentiality obligations. The Firm's confidentiality obligations under this Section 9 shall survive the termination or conclusion of this engagement.

10. Termination

Either CRH or Calderwood & Harkness may terminate this engagement at any time, with or without cause, upon written notice to the other party. In the event of termination by either party, CRH will remain responsible for the payment of all professional fees and out-of-pocket disbursements incurred by the Firm through the effective date of termination. Upon termination, the Firm will take reasonable steps to protect CRH's interests, including cooperating in an orderly transition of the matter to successor counsel and, upon request, providing copies of all substantive work product and documents prepared for CRH's benefit up to the date of termination. The Firm reserves the right to withdraw from the engagement in accordance with the applicable rules of professional conduct, including in circumstances where continued representation would be ethically impermissible, where CRH fails to fulfill its payment obligations under this engagement letter, or where the Firm determines in good faith that withdrawal is otherwise warranted.

11. Limitation of Liability; No Guarantee of Outcome

While Calderwood & Harkness will devote its best professional efforts and judgment to representing CRH in connection with the Transaction, the Firm makes no guarantees or warranties, express or implied, regarding the outcome, timing, or ultimate success of the Transaction. The practice of law involves inherent uncertainties, and the successful closing of the ABL Facility is dependent on numerous factors outside the Firm's control, including the satisfaction of conditions precedent, the actions and decisions of counterparties and their counsel, market conditions, and the internal approvals and requirements of the members of the lending syndicate. Our legal advice is based on the facts provided to us by CRH and the law as it exists at the time such advice is rendered, and may be affected by subsequent factual or legal developments. CRH acknowledges that the Firm's advice should not be relied upon as a prediction of future events or outcomes.

12. Governing Law

This engagement letter, and any dispute arising out of or relating to the engagement or the Firm's representation of CRH hereunder, shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict-of-law principles. The parties consent to the exclusive jurisdiction of the state and federal courts located in the Borough of Manhattan, City of New York, for the resolution of any such dispute.

13. Acceptance and Confirmation

If the terms and conditions set forth in this engagement letter are acceptable to Cascade Retail Holdings Inc., we kindly request that you indicate CRH's agreement by countersigning this letter in the space provided below and returning an executed copy to us (an electronic PDF copy will suffice for our records, with an original to follow by mail or courier). Upon receipt of the executed copy, we will proceed with the engagement on the terms described herein.

Please do not hesitate to contact Claudia Merritt at (212) 554-6120 or Ian Blackwood at (212) 554-6085 if you have any questions regarding this engagement letter or the Transaction generally.

We look forward to working with you and the entire Cascade team on this important transaction.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Claudia Merritt Partner, Banking & Finance Group

By: ________

Ian Blackwood Partner, Banking & Finance Group

ACCEPTANCE AND CONFIRMATION

The undersigned, on behalf of Cascade Retail Holdings Inc., hereby acknowledges receipt of this engagement letter dated February 13, 2023, and confirms CRH's agreement to the terms and conditions set forth herein, including the scope of engagement, fee arrangements, conflicts disclosures and waivers, and all other provisions contained in this letter.

AGREED AND ACCEPTED:

CASCADE RETAIL HOLDINGS INC.

By: ________

Name: Derek Tanaka

Title: General Counsel & Corporate Secretary

Date: ________

cc (via email):

Nathaniel Voss, Chief Executive Officer, Cascade Retail Holdings Inc. Elena Kowalski, Chief Financial Officer, Cascade Retail Holdings Inc. Priya Anand, Treasurer, Cascade Retail Holdings Inc.

Enclosures: None

NY\12887432.3 — Calderwood & Harkness LLP — Engagement Letter — Cascade Retail Holdings Inc. — ABL Facility

Timekeeper	Title	Hourly Rate
Claudia Merritt	Partner	$1,350
Ian Blackwood	Partner	$1,275
Marcus Leung	Senior Associate (7th Year)	$895
Sophie Tremblay	Associate (4th Year)	$745
Paralegals	—	$350 – $425

CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED
CALDERWOOD & HARKNESS LLP Counselors at Law 599 Lexington Avenue, 42nd Floor New York, NY 10022 Telephone: (212) 554-6000 Facsimile: (212) 554-6001 www.calderwoodharkness.com
February 13, 2023
VIA EMAIL AND OVERNIGHT COURIER
Derek Tanaka, Esq. General Counsel & Corporate Secretary Cascade Retail Holdings Inc. 2200 Elliott Avenue, Suite 1400 Seattle, WA 98121
Re: Engagement of Calderwood & Harkness LLP as Borrower's Counsel — Proposed $300,000,000 Senior Secured Asset-Based Revolving Credit Facility
Dear Mr. Tanaka:
We are delighted to have the opportunity to work with Cascade Retail Holdings Inc. and its affiliated entities in connection with the proposed financing transaction described below. This letter sets forth the terms and conditions of our engagement as your outside legal counsel for this matter. We ask that you review this letter carefully and, if the terms are acceptable to you, countersign and return a copy to us at your earliest convenience so that we may proceed with the work outlined herein.
1. Engagement and Scope of Representation
Calderwood & Harkness LLP ("Calderwood & Harkness," the "Firm," "we," or "us") is pleased to confirm its engagement by Cascade Retail Holdings Inc. ("Cascade," "CRH," or the "Company"), a Delaware corporation publicly traded on The Nasdaq Stock Market LLC (ticker symbol: CRHI), to serve as borrower's counsel in connection with the negotiation, documentation, and closing of a proposed senior secured asset-based revolving credit facility in an aggregate principal amount of up to Three Hundred Million Dollars ($300,000,000) (the "ABL Facility" or the "Transaction").
The ABL Facility is expected to be provided by a syndicate of lenders led by Crescent Harbor Bank, N.A. ("Crescent Harbor"), acting in its capacity as administrative agent and collateral agent for the benefit of the lenders, with the credit agreement and related loan documentation to be governed by the laws of the State of New York. It is our understanding that the ABL Facility will be secured by a first-priority lien on the eligible accounts receivable, eligible inventory, and related assets of the borrowers and guarantors, subject to customary exceptions and limitations to be negotiated in the definitive documentation. The specific terms of the ABL Facility, including pricing, availability, and covenants, are expected to be substantially consistent with the term sheet dated January 30, 2023, provided by Crescent Harbor to the Company (the "Term Sheet"), as such terms may be modified through negotiation.
In connection with this engagement, the Firm will provide the following legal services on behalf of the Company:
(a) Review and Negotiation of Loan Documentation. Review, drafting, and negotiation of the credit agreement and all ancillary loan documents associated with the ABL Facility, including, without limitation, the guaranty agreement, security agreement, pledge agreement, deposit account control agreements, promissory notes (if any), borrowing base certificates, compliance certificates, joinder agreements, and all other related instruments, schedules, and exhibits.
(b) UCC Filings and Lien Perfection. Preparation and filing of UCC-1 financing statements in all applicable jurisdictions required to perfect the security interests granted under the loan documents, and review of UCC, federal tax lien, judgment lien, and litigation lien searches to be ordered in connection with the Transaction.
(c) Intercreditor and Collateral Arrangements. Negotiation and review of any intercreditor agreements, collateral access agreements, landlord waivers, bailee letters, and other collateral-related arrangements necessary in connection with the ABL Facility, including coordination with any holders of existing or contemplated indebtedness of the Company that may hold liens on assets of the borrowers or guarantors.
(d) Payoff and Termination of Existing Facility. Coordination of the payoff and termination of Cascade's existing revolving asset-based lending facility in an aggregate committed amount of $175,000,000 with Harborview Lending Group, LLC ("Harborview"), including the review and negotiation of payoff letters, release documentation, and UCC-3 termination statements or amendments, and confirmation that all liens of Harborview are properly released upon closing of the ABL Facility.
(e) Closing Deliverables. Preparation of borrower-side closing deliverables required under the credit agreement and related loan documentation, including officer's certificates, secretary's certificates attesting to organizational documents and board resolutions, solvency certificates, and the legal opinion of borrower's counsel to be delivered at closing in form and substance reasonably satisfactory to the administrative agent and lenders' counsel.
(f) Insurance Review. Review of insurance certificates and endorsements required to be delivered as conditions precedent to closing, including verification that the administrative agent has been named as loss payee and additional insured, as applicable, in accordance with the requirements of the loan documents.
(g) Closing Mechanics and Post-Closing. Coordination of conditions precedent and closing mechanics, including preparation and maintenance of a comprehensive closing checklist, preparation of the funds flow memorandum for closing, and preparation of a post-closing obligations letter setting forth any items to be delivered or actions to be taken after the closing date within the time periods specified in the credit agreement.
Scope Limitations. The scope of this engagement is expressly limited to the Transaction described above. This engagement does not include, and the Firm will not be providing, representation or advice in connection with any of the following matters, unless separately agreed upon in a supplemental engagement letter or written amendment to this letter:
(i) securities law filings or compliance matters, including any filings required under the Securities Exchange Act of 1934 or the Securities Act of 1933 in connection with or as a result of the Transaction;
(ii) federal, state, local, or foreign tax advice or tax opinions of any nature;
(iii) regulatory matters, including banking regulatory, antitrust, or competition law matters;
(iv) environmental law matters, including any environmental due diligence, compliance assessments, or environmental indemnification provisions beyond those customarily included in loan documentation;
(v) ERISA, employee benefits, or pension-related matters;
(vi) real property matters, including title insurance, surveys, mortgage recording, or real estate diligence, except to the extent the Firm reviews mortgage or deed of trust documentation prepared by local counsel in connection with collateral perfection;
(vii) Canadian law matters, including any Canadian law governed security, guaranty, or other loan documentation, which we understand may be required if any Canadian subsidiary of the Company becomes a party to the loan documents;
(viii) litigation, arbitration, or dispute resolution proceedings of any kind; or
(ix) any other matters not expressly described in this Section 1.
Should any of the foregoing matters arise during the course of the Transaction and require legal assistance, we would be happy to discuss a separate engagement or referral to appropriate specialist counsel.
Subsidiary Representation. Calderwood & Harkness will not be acting as counsel to any subsidiary or affiliate of CRH except to the extent that such subsidiary or affiliate is a party to the loan documents as a co-borrower or guarantor under the ABL Facility. Based on our current understanding of the Transaction structure, the following subsidiaries of CRH are expected to be parties to the loan documents, and our representation extends to such entities solely in their capacities as co-borrowers or guarantors, as applicable:
•  Cascade Retail Operating Company LLC, a Delaware limited liability company;
•  Cascade Digital Commerce Inc., a Delaware corporation;
•  Cascade Outlet Stores LLC, a Delaware limited liability company; and
•  Cascade Fulfillment Services Inc., a Delaware corporation.
If additional subsidiaries are required to join the loan documents as borrowers or guarantors, we will confirm the extension of our representation to such entities at that time.
2. Firm Personnel and Staffing
Calderwood & Harkness has assembled a team of experienced banking and finance professionals to staff this engagement. The attorneys and their respective roles are as follows:
Claudia Merritt, Partner, Banking & Finance Group — Responsible Partner. Ms. Merritt will have overall supervisory responsibility for the engagement and will serve as lead negotiator on behalf of CRH in connection with the credit agreement and principal ancillary documents. Ms. Merritt has extensive experience representing borrowers, agents, and lender syndicates in asset-based lending transactions, leveraged finance, and restructuring matters, and has been lead partner on numerous ABL facilities in the retail and consumer products sector. She will be the primary point of contact at the Firm for strategic and substantive legal matters.
Ian Blackwood, Partner, Banking & Finance Group — Billing Partner. Mr. Blackwood will be responsible for billing, fee management, and overall client relationship oversight for this engagement. Mr. Blackwood has more than twenty years of experience in secured lending and structured finance transactions and brings significant expertise in collateral structuring and lien perfection matters.
Marcus Leung, Senior Associate, Banking & Finance Group — Lead Associate. Mr. Leung will serve as the day-to-day lead associate on the engagement and will be responsible for drafting and revising loan documentation, supporting negotiation sessions, coordinating with lenders' counsel at Whitfield, Greer & Holloway LLP, and managing closing logistics and document execution. Mr. Leung will be your primary contact for day-to-day questions and document circulation.
Sophie Tremblay, Associate, Banking & Finance Group — Working Associate. Ms. Tremblay will provide additional associate support, with a particular focus on collateral perfection matters, preparation and filing of UCC-1 financing statements, review and analysis of lien search results, due diligence review, and coordination of deposit account control agreements and other collateral-related documentation.
In addition to the attorneys named above, the Firm may assign additional attorneys, paralegals, or other paraprofessionals to the engagement as may be necessary or appropriate from time to time to ensure the efficient and timely completion of the work. The Firm will notify CRH of any material changes in staffing, including any change in the identity of the Responsible Partner or Lead Associate.
3. Matter Number
This engagement has been assigned Calderwood & Harkness Matter No. 1038-00002. We kindly request that all correspondence, billing inquiries, document submissions, and internal references to this matter cite this number to facilitate proper tracking and administration.
4. Fee Arrangements
Billing Basis. Our fees for this engagement will be based on time charges at the Firm's standard hourly rates in effect for the attorneys and paraprofessionals performing services on this matter. The Firm's standard hourly rates are reviewed and may be adjusted periodically, typically on an annual basis effective January 1 of each year. The current standard hourly rates for the attorneys assigned to this matter, effective as of January 1, 2023, are as follows:
If the Firm's standard hourly rates are adjusted during the course of this engagement, we will notify CRH of the adjusted rates, which will be applied to services rendered on or after the effective date of such adjustment.
Billing Frequency. Invoices for professional fees and disbursements will be rendered on a monthly basis and are payable within thirty (30) days of the date of the invoice. Each invoice will include a reasonably detailed description of the services performed, the timekeepers involved, the hours expended, and the applicable rates. If CRH has any questions or concerns regarding an invoice, we ask that you contact Mr. Blackwood promptly so that the matter can be addressed in a timely fashion.
Expenses and Disbursements. In addition to professional fees, CRH will be responsible for reimbursement of reasonable out-of-pocket disbursements incurred by the Firm in connection with this engagement. Such disbursements typically include, but are not limited to, the following:
•  Filing fees, including UCC filing fees, Secretary of State filing fees, and lien search charges;
•  Courier and overnight delivery charges;
•  Travel expenses (airfare, ground transportation, lodging, and meals) incurred in connection with negotiation sessions, closings, or other meetings required for the Transaction, at cost;
•  Computerized legal research and database charges (Westmark Data Systems, Sundial Solutions, and similar services);
•  Photocopying, printing, and document production costs; and
•  Long-distance telephone and teleconference charges.
We will endeavor to manage disbursements prudently and will seek CRH's advance approval before incurring any single disbursement in excess of $5,000.
Fee Estimates. While the Firm is unable to provide a fixed fee for the Transaction, given the inherent variability in the scope and complexity of the negotiation and documentation process, we recognize the importance of cost predictability to CRH. Based on our experience with comparable asset-based revolving credit facility transactions of this size and type — including multi-lender syndicated ABL facilities in the $200,000,000 to $400,000,000 range — and taking into account the anticipated scope of work described in Section 1 above, we estimate that total legal fees for the engagement will be in the range of $475,000 to $650,000, exclusive of disbursements. This estimate is provided for informational and budgeting purposes only and is not a cap or a commitment. The actual fees incurred will depend on a number of factors, including the complexity and duration of negotiations with lenders' counsel, the number of substantive revisions to the loan documents, the scope of collateral diligence required, and the extent of any post-signing issues or closing complications.
We will endeavor to keep CRH informed of fees incurred on a regular basis during the course of the engagement. If at any point we anticipate that fees will materially exceed the estimated range set forth above, we will promptly advise Mr. Tanaka and discuss the reasons for the variance and any available steps to manage costs going forward.
Lenders' Counsel Fees. Please note that, as is customary in credit facility transactions of this nature, the borrower is expected to be responsible for payment of both its own legal fees (i.e., Calderwood & Harkness's fees) and the reasonable fees and expenses of counsel to the administrative agent and the lenders, which we understand will be Whitfield, Greer & Holloway LLP, as described in Section 6 below. This payment obligation will be set forth in the credit agreement and/or the commitment letter for the ABL Facility. This engagement letter covers only Calderwood & Harkness's fees and expenses; CRH will receive invoices for lenders' counsel fees directly from or through the administrative agent.
5. Conflicts of Interest
Calderwood & Harkness has conducted a comprehensive conflicts-of-interest review in accordance with the Firm's standard procedures and the applicable New York Rules of Professional Conduct in connection with this engagement. Based on our review of the parties involved in the Transaction, including the Company, its subsidiaries, the administrative agent, and the expected members of the lending syndicate, the Firm does not currently represent any party in a matter adverse to CRH in connection with the ABL Facility or the Transaction.
We do, however, note the following relationships for purposes of full disclosure and transparency:
(a) Calderwood & Harkness has in the past represented, and may in the future represent, Crescent Harbor Bank, N.A. and its affiliates in matters unrelated to this Transaction, including in connection with other lending transactions, regulatory matters, and general corporate matters. These prior and potential future representations are wholly unrelated to the ABL Facility and do not involve the interests of CRH.
(b) Calderwood & Harkness has in the past represented, and may in the future represent, Northgate Capital Bank and its affiliates in matters unrelated to this Transaction. Northgate Capital Bank is expected to be a member of the lending syndicate for the ABL Facility. Any such representation of Northgate Capital Bank is and will be unrelated to the Transaction.
(c) Calderwood & Harkness has in the past represented, and may in the future represent, Bridgevale Financial Corporation and its affiliates in matters unrelated to this Transaction. Bridgevale Financial Corporation may participate in the lending syndicate for the ABL Facility. Any such representation of Bridgevale Financial Corporation is and will be unrelated to the Transaction.
We are confident that none of the foregoing relationships will impair the Firm's ability to represent CRH vigorously, independently, and with undivided loyalty in connection with the ABL Facility. In each instance, the Firm maintains appropriate information barriers and ethical screens to prevent the disclosure or misuse of confidential information across engagements.
By executing this engagement letter, CRH consents to the Firm's continued representation of the above-named institutions and their respective affiliates in matters unrelated to the Transaction, provided that such representations do not involve matters that are materially adverse to CRH in connection with the ABL Facility. This consent is limited to the representations described in this Section 5 and does not extend to any future adverse representation of the above-named institutions against CRH in connection with the Transaction.
If an actual conflict of interest arises during the course of this engagement that cannot be resolved through appropriate waivers, ethical screens, or other measures consistent with the applicable rules of professional conduct, the Firm will promptly notify CRH and, if necessary, take appropriate steps, which may include withdrawal from the representation. In such event, we will cooperate fully in effecting a smooth transition to successor counsel.
6. Counterparties and Their Counsel
For CRH's reference, the principal counterparties to the Transaction and their respective counsel, as currently known to us, are as follows:
Administrative Agent and Lead Arranger: Crescent Harbor Bank, N.A. 780 Park Avenue, 30th Floor New York, NY 10021
Attention: Thomas Reiland, Managing Director, ABL Origination
Telephone: (212) 489-3200
Email: t.reiland@crescentharbor.com
Lenders' Counsel: Whitfield, Greer & Holloway LLP 51 West 52nd Street, 35th Floor New York, NY 10019
Attention: Bernard Ashford, Partner
Telephone: (212) 776-8400
Email: bashford@wghlaw.com
We anticipate that the initial draft of the credit agreement and ancillary loan documents will be prepared and circulated by lenders' counsel, and that Calderwood & Harkness will provide CRH's comments and negotiate the documentation on CRH's behalf. We will coordinate directly with Mr. Ashford and his team at Whitfield, Greer & Holloway LLP on all documentation matters, keeping Mr. Tanaka and the authorized CRH contacts fully informed throughout the process.
7. Client Communications and Authorized Contacts
The Firm's primary contact at CRH for all matters relating to this engagement will be Derek Tanaka, General Counsel & Corporate Secretary. All privileged legal advice, work product, and confidential communications will be directed to Mr. Tanaka in the first instance unless he designates otherwise in writing.
In addition to Mr. Tanaka, the following individuals at CRH are authorized to communicate with the Firm, receive information, and provide instructions on behalf of CRH in connection with this engagement:
•  Elena Kowalski, Chief Financial Officer — authorized to provide financial information, discuss business terms, and receive financial and structuring-related communications;
•  Priya Anand, Treasurer — authorized to provide treasury-related information, coordinate deposit account matters, discuss borrowing base and availability mechanics, and receive communications relating to funds flow and closing logistics; and
•  Nathaniel Voss, Chief Executive Officer — authorized to make material business decisions regarding the Transaction and to exercise signing authority on behalf of CRH with respect to the loan documents and related instruments.
We will rely upon instructions received from any of the above-named individuals as being duly authorized by CRH. If CRH wishes to add or remove any authorized contacts, please notify us in writing at your earliest convenience. We encourage CRH to establish clear internal protocols regarding the flow of information and decision-making authority to ensure that our communications are directed to the appropriate individuals in a timely manner.
8. Document Retention
Calderwood & Harkness will maintain files, both electronic and hard copy as applicable, in connection with this engagement in accordance with the Firm's standard document retention policy. Our current policy provides for the retention of client files for a period of ten (10) years following the conclusion of the engagement, after which time the files may be destroyed in the ordinary course unless CRH instructs us otherwise.
At the conclusion of the engagement, we will provide CRH with copies of all final executed versions of the loan documents and closing deliverables, including the executed credit agreement, security documents, legal opinions, officer's and secretary's certificates, and closing checklist. Internal work files, drafts, attorney notes, and internal memoranda generated during the course of the engagement are the property of the Firm; however, substantive work product prepared for CRH's benefit, including marked drafts of loan documents and research memoranda, will be made available to CRH upon reasonable request.
We recommend that CRH maintain its own complete set of all executed Transaction documents and closing binders for its records.
9. Confidentiality
Calderwood & Harkness will maintain the confidentiality of all information provided by CRH and its subsidiaries, officers, directors, employees, and agents in connection with this engagement, in accordance with the Firm's professional obligations under the New York Rules of Professional Conduct and applicable law. We will not disclose any such confidential information to any third party without CRH's prior written consent, except to the extent that (a) disclosure is required by applicable law, court order, or regulatory requirement; (b) disclosure is necessary in connection with the performance of our services under this engagement (for example, to lenders' counsel or the administrative agent as part of the negotiation and documentation process, with CRH's authorization); or (c) the information has become publicly available other than through a breach of our confidentiality obligations. The Firm's confidentiality obligations under this Section 9 shall survive the termination or conclusion of this engagement.
10. Termination
Either CRH or Calderwood & Harkness may terminate this engagement at any time, with or without cause, upon written notice to the other party. In the event of termination by either party, CRH will remain responsible for the payment of all professional fees and out-of-pocket disbursements incurred by the Firm through the effective date of termination. Upon termination, the Firm will take reasonable steps to protect CRH's interests, including cooperating in an orderly transition of the matter to successor counsel and, upon request, providing copies of all substantive work product and documents prepared for CRH's benefit up to the date of termination. The Firm reserves the right to withdraw from the engagement in accordance with the applicable rules of professional conduct, including in circumstances where continued representation would be ethically impermissible, where CRH fails to fulfill its payment obligations under this engagement letter, or where the Firm determines in good faith that withdrawal is otherwise warranted.
11. Limitation of Liability; No Guarantee of Outcome
While Calderwood & Harkness will devote its best professional efforts and judgment to representing CRH in connection with the Transaction, the Firm makes no guarantees or warranties, express or implied, regarding the outcome, timing, or ultimate success of the Transaction. The practice of law involves inherent uncertainties, and the successful closing of the ABL Facility is dependent on numerous factors outside the Firm's control, including the satisfaction of conditions precedent, the actions and decisions of counterparties and their counsel, market conditions, and the internal approvals and requirements of the members of the lending syndicate. Our legal advice is based on the facts provided to us by CRH and the law as it exists at the time such advice is rendered, and may be affected by subsequent factual or legal developments. CRH acknowledges that the Firm's advice should not be relied upon as a prediction of future events or outcomes.
12. Governing Law
This engagement letter, and any dispute arising out of or relating to the engagement or the Firm's representation of CRH hereunder, shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict-of-law principles. The parties consent to the exclusive jurisdiction of the state and federal courts located in the Borough of Manhattan, City of New York, for the resolution of any such dispute.
13. Acceptance and Confirmation
If the terms and conditions set forth in this engagement letter are acceptable to Cascade Retail Holdings Inc., we kindly request that you indicate CRH's agreement by countersigning this letter in the space provided below and returning an executed copy to us (an electronic PDF copy will suffice for our records, with an original to follow by mail or courier). Upon receipt of the executed copy, we will proceed with the engagement on the terms described herein.
Please do not hesitate to contact Claudia Merritt at (212) 554-6120 or Ian Blackwood at (212) 554-6085 if you have any questions regarding this engagement letter or the Transaction generally.
We look forward to working with you and the entire Cascade team on this important transaction.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Claudia Merritt Partner, Banking & Finance Group
By: ________
Ian Blackwood Partner, Banking & Finance Group
ACCEPTANCE AND CONFIRMATION
The undersigned, on behalf of Cascade Retail Holdings Inc., hereby acknowledges receipt of this engagement letter dated February 13, 2023, and confirms CRH's agreement to the terms and conditions set forth herein, including the scope of engagement, fee arrangements, conflicts disclosures and waivers, and all other provisions contained in this letter.
AGREED AND ACCEPTED:
CASCADE RETAIL HOLDINGS INC.
By: ________
Name: Derek Tanaka
Title: General Counsel & Corporate Secretary
Date: ________
cc (via email):
Nathaniel Voss, Chief Executive Officer, Cascade Retail Holdings Inc. Elena Kowalski, Chief Financial Officer, Cascade Retail Holdings Inc. Priya Anand, Treasurer, Cascade Retail Holdings Inc.
Enclosures: None
NY\12887432.3 — Calderwood & Harkness LLP — Engagement Letter — Cascade Retail Holdings Inc. — ABL Facility
Timekeeper | Title | Hourly Rate
Claudia Merritt | Partner | $1,350
Ian Blackwood | Partner | $1,275
Marcus Leung | Senior Associate (7th Year) | $895
Sophie Tremblay | Associate (4th Year) | $745
Paralegals | — | $350 – $425

CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED

VIA EMAIL AND OVERNIGHT COURIER

CALDERWOOD & HARKNESS LLP

ACCEPTANCE AND CONFIRMATION

AGREED AND ACCEPTED:

CASCADE RETAIL HOLDINGS INC.

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