1038-00006 · Calderwood & Harkness LLP · Pre-Litigation Correspondence

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PRIVILEGED AND CONFIDENTIAL

CALDERWOOD & HARKNESS LLP Attorneys at Law

1301 K Street NW, Suite 1200 Washington, DC 20005 Telephone: (202) 555-8400 Facsimile: (202) 555-8401 www.calderwoodharkness.com

February 25, 2025

VIA OVERNIGHT COURIER AND ELECTRONIC MAIL

Helen Tsoi, Esq. General Counsel Verdana Commerce Group, Inc. 400 Christiana Gateway, Suite 700 Wilmington, DE 19801

Re: Cascade Retail Holdings Inc. — Demand to Cease and Desist from Tortious Interference with Restrictive Covenant Obligations and Misappropriation of Trade Secrets Matter No.: 1038-00006

Dear Ms. Tsoi:

I am a partner in the Labor & Employment practice of Calderwood & Harkness LLP. This firm represents Cascade Retail Holdings Inc. ("CRH"), a Delaware corporation publicly traded on the Nasdaq Stock Market under the ticker symbol CRHL, with its principal offices located at 2200 Elliott Avenue West, Suite 3400, Seattle, Washington 98119. I write on behalf of CRH to make a formal demand that Verdana Commerce Group, Inc. ("Verdana") immediately cease and desist from (i) employing or engaging eight former CRH employees identified herein in any capacity that would cause or facilitate the breach of their restrictive covenant obligations owed to CRH, (ii) engaging in conduct constituting tortious interference with CRH's contractual rights, and (iii) engaging in any activities constituting the misappropriation of CRH's trade secrets and confidential information. This letter sets forth CRH's factual and legal basis for these demands and the specific actions CRH requires Verdana to take immediately. CRH expressly reserves all rights and remedies available to it at law and in equity, whether or not specifically referenced in this letter.

1. Background and Factual Recitation

1.1 CRH's Business

CRH is a leading omnichannel retail and ecommerce company that operates 387 brick-and-mortar retail locations across 34 states and maintains a robust direct-to-consumer ecommerce platform serving millions of customers nationwide. CRH reported annual revenue of approximately $6.82 billion for its fiscal year ended January 31, 2025 ("FY2024"), and, as of the date of this letter, carries an approximate market capitalization of $4.1 billion. CRH's success is driven in large part by its merchandising division, which is the engine of the company's competitive differentiation in a crowded and intensely competitive retail landscape. The merchandising division alone accounted for approximately $2.3 billion in gross merchandise value ("GMV") in FY2024, reflecting the division's critical importance to CRH's overall financial performance, its brand equity, and its relationships with hundreds of domestic and international vendors. CRH has invested substantial resources over many years in developing proprietary merchandising strategies, analytics capabilities, vendor relationships, and private-label programs that are central to the company's competitive position.

1.2 The Departing Employees and Their Restrictive Covenants

On February 7, 2025, at approximately 4:47 PM Pacific Standard Time, the following eight senior members of CRH's merchandising division submitted simultaneous letters of resignation, each purporting to be effective immediately:

1. Priya Rathore — Former Senior Vice President, Merchandising. Ms. Rathore was employed by CRH from June 3, 2019 through February 7, 2025, and was party to an Amended and Restated Employment Agreement dated March 15, 2021 (the "Rathore Employment Agreement").

2. Derek Linden — Former Vice President, Hardlines Merchandising. Mr. Linden was employed by CRH for approximately seven (7) years and was party to an employment agreement containing restrictive covenant provisions substantially similar to those described herein.

3. Sonia Kaczmarek — Former Vice President, Softlines Merchandising. Ms. Kaczmarek was employed by CRH for approximately five (5) years and was party to an employment agreement containing restrictive covenant provisions.

4. Amara Osei — Former Director, Private Label Strategy. Ms. Osei was employed by CRH for approximately four (4) years and was party to an employment agreement containing restrictive covenant provisions.

5. Brent Halvorsen — Former Director, Seasonal Planning & Analytics. Mr. Halvorsen was employed by CRH for approximately six (6) years and was party to an employment agreement containing restrictive covenant provisions.

6. Lucia Fernandez-Gill — Former Director, Vendor Relations (Domestic). Ms. Fernandez-Gill was employed by CRH for approximately five (5) years and was party to an employment agreement containing restrictive covenant provisions.

7. Nathan Tsao — Former Senior Manager, eCommerce Merchandising. Mr. Tsao was employed by CRH for approximately three (3) years and was party to an employment agreement containing restrictive covenant provisions.

8. Kira Johansson — Former Senior Manager, Category Analytics. Ms. Johansson was employed by CRH for approximately four (4) years and was party to an employment agreement containing restrictive covenant provisions.

These eight individuals are referred to collectively herein as the "Rathore Group." Each member of the Rathore Group executed an employment agreement with CRH that contains comprehensive restrictive covenant provisions. These provisions include non-competition covenants with post-termination restricted periods ranging from twelve (12) to eighteen (18) months, non-solicitation covenants covering CRH employees with restricted periods of eighteen (18) to twenty-four (24) months, non-solicitation covenants covering CRH vendors with restricted periods of eighteen (18) to twenty-four (24) months, and perpetual confidentiality obligations with respect to CRH's trade secrets and confidential information.

By way of specific example, the Rathore Employment Agreement contains an eighteen (18)-month post-termination non-competition covenant with a geographic scope covering the entire United States, as well as a twenty-four (24)-month non-solicitation period applicable to both CRH employees and CRH vendors. The restrictive covenants in the Rathore Employment Agreement are supported by adequate consideration, including, without limitation, Ms. Rathore's continued at-will employment, a promotion to Senior Vice President, supplemental equity compensation, and access to CRH's most sensitive trade secrets and confidential information. The other members of the Rathore Group are bound by similarly enforceable restrictive covenants, each of which was executed in connection with the commencement of employment, a promotion, or the receipt of supplemental compensation.

All of the employment agreements at issue are governed by the laws of the State of Delaware. CRH is confident that each of these restrictive covenants is reasonable in scope, duration, and geographic reach and is fully enforceable under Delaware law.

1.3 Access to Confidential and Trade Secret Information

By virtue of their positions and seniority within CRH's merchandising division, the members of the Rathore Group had direct and comprehensive access to CRH's most competitively sensitive proprietary information. This information includes, but is not limited to:

• Proprietary Vendor Negotiation Playbooks. CRH has developed, at significant expense and over many years, detailed internal playbooks governing vendor negotiation strategies, pricing frameworks, volume discount thresholds, and deal structures for hundreds of domestic and international vendors. These playbooks are maintained under strict access controls and are not publicly available.

• Seasonal Buying Algorithms. CRH's merchandising division utilizes proprietary algorithms developed by its data science team to forecast seasonal buying trends, optimize inventory allocation across brick-and-mortar and ecommerce channels, and determine markdown timing and depth. These algorithms embody years of iterative refinement and represent a significant competitive advantage.

• Private-Label Sourcing Strategies. CRH's private-label business is a key growth driver, and the sourcing strategies underlying CRH's private-label products — including factory selection criteria, quality benchmarks, cost targets, and supplier relationship management protocols — constitute some of CRH's most closely guarded trade secrets.

• Customer Segmentation Data. CRH has invested heavily in developing proprietary customer segmentation models that inform merchandising assortment decisions, promotional targeting, and loyalty program design. This data is derived from CRH's first-party customer data platform and is treated as highly confidential.

• Project Ridgeline. In October 2024, CRH completed a confidential five-year category expansion roadmap known internally as "Project Ridgeline." Project Ridgeline is CRH's most strategically significant planning document, encompassing proprietary vendor terms, private-label margin targets, ecommerce assortment algorithms, new category entry strategies, and competitive positioning analyses. The document was completed after approximately eighteen months of development by a cross-functional team led by Ms. Rathore. Access to Project Ridgeline was restricted to a limited number of senior CRH executives, including all eight members of the Rathore Group. The disclosure of any portion of Project Ridgeline to a direct competitor would cause severe and irreparable competitive harm to CRH.

All of the foregoing information constitutes trade secrets within the meaning of the Delaware Uniform Trade Secrets Act, 6 Del. C. §§ 2001–2009 ("DUTSA"), and confidential information protected under the confidentiality provisions of each member of the Rathore Group's employment agreement with CRH. CRH has taken reasonable measures to maintain the secrecy of this information, including but not limited to restricting access on a need-to-know basis, requiring password protection and multi-factor authentication for electronic files, maintaining physical security at CRH facilities, and requiring all employees with access to sign confidentiality agreements.

1.4 Verdana's Coordinated Recruitment of the Rathore Group

On February 14, 2025, Verdana publicly issued a press release titled "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth," announcing that it had hired all eight members of the Rathore Group. CRH understands that Ms. Rathore has accepted the newly created position of President, Merchandising & Strategy at Verdana, reporting directly to Verdana's Chief Executive Officer.

The coordinated and simultaneous nature of the eight resignations — all submitted at essentially the same moment on the same date — coupled with Verdana's public announcement only seven days later, conclusively demonstrates that Verdana engaged in a deliberate, orchestrated campaign to recruit these employees en masse. This recruitment necessarily occurred over a period of weeks or months prior to the resignations, while all eight individuals were still employed by CRH and subject to ongoing duties of loyalty. The timing and coordination of the departure make clear that Verdana recruited these employees with full knowledge of — or, at minimum, willful blindness to — their existing restrictive covenant obligations to CRH. Given the seniority of the individuals involved and the standard industry practice of requiring restrictive covenants for senior merchandising executives, Verdana cannot plausibly claim ignorance of these obligations. Moreover, CRH's use of restrictive covenants for its senior employees is publicly disclosed in CRH's annual proxy statement filed with the U.S. Securities and Exchange Commission, which is freely available on the SEC's EDGAR system.

CRH is further aware that Verdana's majority equity holder is Greystone Capital Partners, LP, acting through Greystone Capital Fund VII, LP, which acquired a majority stake in Verdana in the third quarter of 2023 in a transaction valuing Verdana at an enterprise value of approximately $2.4 billion. CRH has reason to believe that Greystone Capital Partners and its representatives — including Elliot Westbrook, a Managing Director at Greystone Capital Partners who sits on Verdana's Board of Directors — provided the financial resources facilitating this coordinated recruitment, including aggregate sign-on bonuses for the Rathore Group estimated at approximately $6,200,000. The magnitude of these financial inducements further evidences a premeditated effort to strip CRH of its key merchandising leadership in order to benefit Verdana's competitive position.

Of particular significance, in January 2025, Verdana publicly announced a "transformational growth initiative" targeting $4 billion in annual revenue by 2028. In that announcement, Verdana specifically cited planned expansion into CRH's strongest merchandising categories: private-label home goods and seasonal décor. These are precisely the categories in which the members of the Rathore Group possess CRH's most sensitive competitive intelligence, including the strategies and data developed through Project Ridgeline. The alignment between Verdana's announced strategic priorities and the specific expertise and proprietary knowledge of the Rathore Group is not coincidental — it is the very purpose for which Verdana recruited them.

1.5 Verdana as a Direct Competitor

Verdana is a direct competitor of CRH in the omnichannel retail and ecommerce space. Verdana operates retail stores and an ecommerce platform that compete directly with CRH in the home goods, apparel, and seasonal décor categories, among others. As of the date of this letter, Verdana directly competes with CRH in no fewer than twenty-eight (28) overlapping product categories. Verdana's employment of the members of the Rathore Group in merchandising and strategy roles is squarely within the scope of the restrictive covenants to which those individuals are bound and will inevitably involve the use or disclosure of CRH's trade secrets and confidential information. There is no way for the members of the Rathore Group to perform the functions for which Verdana has hired them — merchandising strategy, vendor negotiations, category expansion, private-label development, seasonal planning, and ecommerce assortment — without drawing upon the proprietary knowledge, strategies, relationships, and data they acquired at CRH.

2. Evidence of Data Exfiltration

CRH's internal IT security team, upon learning of the simultaneous resignations, immediately initiated a comprehensive security audit and preliminary forensic investigation of the digital activity of all eight members of the Rathore Group in the weeks preceding their departure. That investigation has revealed that substantial volumes of CRH's proprietary data were downloaded from CRH's internal Aldermere Systems environment and Pinnacle Health IT instances to personal cloud storage accounts between approximately January 10, 2025 and February 4, 2025 — a period immediately preceding the coordinated resignations.

The data involved in these transfers comprises approximately 14,327 files totaling approximately 2.8 gigabytes. CRH's preliminary review indicates that the exfiltrated data includes, among other things, Project Ridgeline presentations and supporting materials, vendor negotiation term sheets and pricing schedules, private-label cost models and margin analyses, customer segmentation data and analytics reports, and category performance dashboards. These files represent some of the most competitively sensitive and commercially valuable proprietary information in CRH's possession.

CRH has engaged Pinnacle Forensics LLC, a nationally recognized digital forensics firm, to conduct a comprehensive forensic analysis of the circumstances surrounding the data exfiltration, including the precise scope of the data taken, the methods used, and the destinations to which the data was transmitted. That investigation is ongoing and CRH reserves the right to supplement the factual record as additional findings become available.

To the extent that any of this data has been shared with, transmitted to, or is currently in the possession or control of Verdana or any of its affiliates, subsidiaries, officers, directors, employees, agents, consultants, or representatives — including Greystone Capital Partners, LP and its personnel — CRH demands its immediate identification, sequestration, preservation, and return, as described in further detail in Section 4 below. Any review, use, or dissemination of such data by Verdana would constitute a separate and independent act of trade secret misappropriation and would dramatically compound Verdana's legal exposure.

3. Legal Basis for CRH's Demands

3.1 Tortious Interference with Contractual Relations

Under well-established Delaware law, a party that intentionally and improperly induces or facilitates the breach of another party's valid contractual obligations is liable for tortious interference with contractual relations. See, e.g., Irwin & Leighton, Inc. v. W.M. Anderson Co., 532 A.2d 983 (Del. 1987). To prevail on a claim for tortious interference, a plaintiff must demonstrate (1) the existence of a valid contract, (2) the defendant's knowledge of the contract, (3) intentional interference by the defendant inducing or causing a breach, (4) the absence of justification, and (5) resulting damages.

Each of these elements is satisfied here. Each member of the Rathore Group is party to a valid and enforceable employment agreement with CRH containing restrictive covenant provisions. Verdana's knowledge of these contractual obligations is established, at minimum, by the following: (a) the seniority of the positions involved — all eight individuals held Vice President, Director, or Senior Manager titles within CRH's merchandising division; (b) the well-known and standard industry practice of requiring restrictive covenants for senior merchandising and strategy executives in the retail sector; (c) the coordinated and simultaneous nature of the recruitment, which strongly suggests advance planning, due diligence, and deliberate decision-making by Verdana; and (d) the fact that CRH's use of restrictive covenants for senior employees is publicly disclosed in CRH's SEC filings, including its annual proxy statement, which is publicly available on the SEC's EDGAR system and which any competent acquirer of talent at this level would be expected to review.

Verdana's conduct — actively recruiting the entire Rathore Group, offering substantial financial inducements including an estimated $6,200,000 in aggregate sign-on bonuses, and immediately deploying these individuals in directly competing merchandising and strategy roles — constitutes intentional and unjustified interference with CRH's contractual rights. CRH will hold Verdana fully liable for all damages arising from such interference, which CRH anticipates will be substantial.

3.2 Misappropriation of Trade Secrets

Verdana's hiring of the Rathore Group under circumstances where those employees had access to — and, as set forth in Section 2 above, have demonstrably exfiltrated — CRH's trade secrets and confidential information, and Verdana's deployment of those employees in directly competing business functions, constitutes misappropriation of trade secrets in violation of DUTSA, 6 Del. C. §§ 2001–2009.

DUTSA defines "misappropriation" to include, among other things, the acquisition of a trade secret by a person who knows or has reason to know that the trade secret was acquired by improper means, as well as the disclosure or use of a trade secret without express or implied consent by a person who knew or had reason to know that the trade secret was acquired under circumstances giving rise to a duty to maintain its secrecy. 6 Del. C. § 2001(2). Verdana's conduct satisfies this standard.

Moreover, the doctrine of "inevitable disclosure" — recognized by Delaware courts as a factor supporting injunctive relief in trade secret cases — applies with full force to the present circumstances. See Bayer Corp. v. Leuthner, No. 1:99-CV-278, 2000 U.S. Dist. Calderon Systems 6383 (D. Del. Apr. 28, 2000). Given the depth and specificity of the Rathore Group's knowledge of CRH's most sensitive trade secrets, including Project Ridgeline, and given that Verdana has hired these individuals to perform precisely the same functions they performed at CRH — in the same product categories, against the same competitors, and targeting the same customer base — it is inevitable that CRH's trade secrets will be disclosed and utilized in the course of the Rathore Group's work for Verdana. The "inevitable disclosure" of CRH's trade secrets presents a clear and present risk of ongoing and irreparable harm to CRH that cannot be remedied by an award of money damages alone.

Verdana's January 2025 announcement of its "transformational growth initiative" — specifically targeting expansion into private-label home goods and seasonal décor, CRH's strongest categories — amplifies the certainty that CRH's proprietary strategies and trade secrets will be exploited for Verdana's direct competitive benefit.

3.3 Civil Conspiracy

The coordinated nature of the Rathore Group's departure — eight senior employees resigning simultaneously, at the same minute of the same day, after a period of pre-resignation planning and systematic data exfiltration — together with Verdana's active recruitment of the group, its provision of substantial financial inducements (including the estimated $6,200,000 in aggregate sign-on bonuses), and its immediate public announcement of the hires, supports a claim for civil conspiracy under Delaware law. A civil conspiracy exists where two or more persons combine or agree to commit an unlawful act or to commit a lawful act by unlawful means. See Nicolet, Inc. v. Nutt, 525 A.2d 146 (Del. 1987). The facts recited herein establish that Verdana and the members of the Rathore Group acted in concert to deprive CRH of its contractual rights and proprietary assets, and CRH will pursue this claim vigorously.

3.4 Aiding and Abetting Breach of Fiduciary Duty

To the extent that the members of the Rathore Group owed fiduciary duties of loyalty to CRH during the period of their employment — particularly Ms. Rathore in her capacity as Senior Vice President of Merchandising, an officer-level position — Verdana's active solicitation and coordination of their departure while those duties were still active constitutes aiding and abetting the breach of fiduciary duty. Delaware law is clear that a third party who knowingly participates in a fiduciary's breach of duty may be held liable for the resulting harm. See Gotham Partners, L.P. v. Hallwood Realty Partners, L.P., 817 A.2d 160 (Del. 2002). Verdana's recruitment campaign was conducted while all eight employees were actively employed by CRH, owed ongoing duties of loyalty to CRH, and had access to CRH's most confidential information. Verdana knowingly induced these employees to violate those duties for Verdana's own competitive advantage.

4. Specific Demands

In light of the foregoing, CRH hereby makes the following specific demands upon Verdana Commerce Group, Inc.:

4.1 Cessation of Employment in Restricted Capacities

Verdana must immediately cease employing, engaging, or utilizing the services of Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson in any merchandising, strategy, vendor relations, category management, private-label, seasonal planning, ecommerce merchandising, analytics, or related capacity — or in any other role that falls within the scope of their respective restrictive covenants — for the full duration of each individual's applicable non-compete period.

Without limitation, this demand encompasses Ms. Rathore's eighteen (18)-month non-competition period, which extends through approximately August 7, 2026, as well as the twelve (12)- or eighteen (18)-month non-competition periods applicable to the other members of the Rathore Group, as specified in their respective employment agreements. CRH takes the position that Verdana's employment of these individuals in any capacity within the scope of their restrictive covenants subjects Verdana to liability for tortious interference with CRH's contractual rights, and CRH will not tolerate any such employment.

4.2 Non-Solicitation Compliance

Verdana must ensure that none of the members of the Rathore Group solicits, recruits, contacts, or hires any current CRH employee or contacts any CRH vendor on Verdana's behalf, directly or indirectly, in compliance with the non-solicitation provisions of their respective employment agreements with CRH. This obligation extends for the full duration of each individual's applicable non-solicitation period, which ranges from eighteen (18) to twenty-four (24) months post-termination. Verdana must implement appropriate internal controls to ensure compliance with this demand, including but not limited to instructing the members of the Rathore Group in writing of their non-solicitation obligations and monitoring their compliance.

4.3 Data Sequestration and Return

Verdana must immediately take the following steps with respect to CRH's proprietary information:

(a) Identify any and all CRH confidential information, trade secrets, or proprietary data — in whatever form, whether physical, electronic, cloud-based, or otherwise — that is currently in the possession, custody, or control of Verdana, any of its affiliates or subsidiaries, any of its officers, directors, employees, agents, consultants, or representatives, or any third party acting on Verdana's behalf.

(b) Immediately sequester and preserve all such materials, ensuring that no further access, review, copying, distribution, or use occurs.

(c) Arrange for the prompt return of all such materials to CRH or its counsel at the address set forth below, or, where return is not practicable (e.g., in the case of electronic copies), arrange for their certified destruction under the supervision of a qualified forensic professional, with written certification of destruction provided to CRH's counsel.

(d) Within five (5) business days of receipt of this letter, provide written confirmation to the undersigned specifying what steps Verdana has taken to identify and secure any CRH data that may have been transmitted to Verdana, accessed through Verdana's systems, or stored on any device or platform under Verdana's control.

4.4 Written Confirmation

Verdana must provide written confirmation from Verdana's General Counsel, addressed to the undersigned, within five (5) business days of receipt of this letter, confirming that Verdana:

(a) has reviewed the restrictive covenant provisions applicable to each member of the Rathore Group, including each individual's non-competition, non-solicitation, and confidentiality obligations;

(b) will not employ or engage any member of the Rathore Group in any capacity that would violate those provisions for the duration of each individual's applicable restricted periods; and

(c) has taken affirmative steps to prevent the use, disclosure, or dissemination of CRH's confidential information and trade secrets within Verdana's organization, including by implementing information barriers or other appropriate controls.

5. Consequences of Non-Compliance

Let there be no ambiguity: failure to comply with the demands set forth in this letter, in full and within the time periods specified, will leave CRH with no alternative but to pursue all available legal remedies. Such remedies include, but are not limited to, the following:

• Filing suit in the Delaware Court of Chancery seeking emergency injunctive relief, including an application for a temporary restraining order and preliminary injunction to prevent the continued employment of the Rathore Group in restricted capacities and to prevent the further use or disclosure of CRH's trade secrets and confidential information. CRH is prepared to file such an action on an expedited basis and without further notice to Verdana.

• Assertion of claims for tortious interference with contractual relations, misappropriation of trade secrets under DUTSA (6 Del. C. §§ 2001–2009), civil conspiracy, and aiding and abetting breach of fiduciary duty.

• Recovery of the full measure of compensatory damages, consequential damages, unjust enrichment, and disgorgement of any profits derived by Verdana from the misappropriation of CRH's trade secrets or the exploitation of CRH's proprietary information.

• Recovery of punitive or exemplary damages where available under applicable law, including in connection with claims for willful and malicious misappropriation of trade secrets.

• Recovery of attorneys' fees and costs, including under DUTSA's fee-shifting provisions applicable to cases of willful and malicious misappropriation (6 Del. C. § 2004).

CRH estimates that the economic harm resulting from the Rathore Group's departure and the potential exploitation of CRH's trade secrets is substantial and growing. CRH's merchandising division generated $2.3 billion in GMV in FY2024, and Project Ridgeline encompasses CRH's comprehensive five-year strategic category expansion plan. The disclosure or use of this information by a direct competitor such as Verdana would cause competitive harm that is difficult to quantify but that CRH believes could reach hundreds of millions of dollars. CRH will seek damages commensurate with the full scope of its injuries.

6. Reservation of Rights

This letter is not intended to be, and shall not be construed as, a complete or exhaustive statement of CRH's rights, claims, or remedies against Verdana, the members of the Rathore Group, Greystone Capital Partners, LP, or any other person or entity. CRH expressly reserves all rights, claims, and remedies available to it at law and in equity, whether arising under statute, contract, common law, or otherwise, and whether or not specifically referenced in this letter.

Nothing in this letter shall be deemed a waiver of any right or remedy, including but not limited to the right to seek immediate injunctive relief, the right to assert additional claims not referenced herein, the right to seek relief against additional parties, or the right to supplement the factual and legal bases set forth herein. CRH's decision to send this demand letter prior to commencing litigation shall not be construed as an obligation to provide further notice before filing suit.

7. Litigation Hold and Document Preservation Demand

Pursuant to CRH's obligations and rights in anticipation of litigation, CRH hereby demands that Verdana immediately implement a comprehensive litigation hold and take all steps necessary to preserve any and all documents, communications, electronically stored information ("ESI"), and tangible items relating to the matters described in this letter. Verdana's preservation obligations extend to, but are not limited to, the following categories of materials:

• All documents and communications relating to the recruitment, hiring, onboarding, or employment of any member of the Rathore Group, including but not limited to offer letters, term sheets, compensation analyses, internal approvals, and communications with executive recruiters or search firms.

• Any and all CRH confidential information, trade secrets, or proprietary materials in Verdana's possession, custody, or control, regardless of the form or medium in which such materials are stored.

• All communications — whether by email, text message, instant message, voice message, video conference, or any other medium — between any Verdana officer, director, employee, or agent and any member of the Rathore Group, including communications that occurred prior to the Rathore Group's resignation from CRH on February 7, 2025.

• All communications between any representative of Greystone Capital Partners, LP — including, specifically, Elliot Westbrook — and any member of the Rathore Group, or between any representative of Greystone Capital Partners, LP and any Verdana officer, director, or employee relating to the recruitment or hiring of any member of the Rathore Group.

• All documents and communications relating to Verdana's "transformational growth initiative" announced in January 2025, including any strategic plans, board presentations, financial models, market analyses, or competitive assessments relating to Verdana's planned expansion into home goods, seasonal décor, private-label apparel, or any other category in which CRH competes.

• All documents and communications relating to any due diligence conducted by Verdana regarding the restrictive covenant obligations of any member of the Rathore Group.

CRH expects Verdana to issue a written litigation hold notice to all relevant custodians, to suspend any applicable document retention or destruction policies, and to take affirmative steps to ensure the preservation of all relevant ESI, including by disabling auto-delete functions, preserving backup tapes, and imaging relevant devices. The destruction, alteration, or spoliation of relevant evidence will be viewed by CRH as further evidence of bad faith and will be raised with the Court in connection with any subsequent litigation. CRH will not hesitate to seek sanctions, including adverse inference instructions, for any failure to preserve relevant evidence.

Conclusion

CRH expects Verdana's full and immediate compliance with each of the demands set forth in this letter. All responses should be directed to the undersigned at:

Bernard Crawford Calderwood & Harkness LLP 1301 K Street NW, Suite 1200 Washington, DC 20005 Telephone: (202) 555-8400

Email: bcrawford@calderwoodharkness.com

CRH requires a substantive written response within five (5) business days of Verdana's receipt of this letter. If a satisfactory response is not received within that period, CRH is prepared to act swiftly and decisively to protect its rights, including by seeking emergency injunctive relief in the Delaware Court of Chancery without further notice. CRH strongly urges Verdana to treat this matter with the seriousness and urgency it warrants.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Bernard Crawford Partner, Labor & Employment 1301 K Street NW, Suite 1200 Washington, DC 20005 Telephone: (202) 555-8400

Email: bcrawford@calderwoodharkness.com

cc:

Theresa Yun-Park, General Counsel, Cascade Retail Holdings Inc. Renata Vasquez, Calderwood & Harkness LLP (Los Angeles Office) James Underwood, Calderwood & Harkness LLP Devon Archer, Calderwood & Harkness LLP

Copy to Verdana's outside counsel to be provided upon identification or appearance of such counsel.

Enclosures: None. The employment agreements referenced herein, including the restrictive covenant provisions contained therein, are confidential CRH documents and have not been enclosed with this letter. CRH reserves the right to produce such agreements in connection with any legal proceedings.

PRIVILEGED AND CONFIDENTIAL
CALDERWOOD & HARKNESS LLP Attorneys at Law
1301 K Street NW, Suite 1200 Washington, DC 20005 Telephone: (202) 555-8400 Facsimile: (202) 555-8401 www.calderwoodharkness.com
February 25, 2025
VIA OVERNIGHT COURIER AND ELECTRONIC MAIL
Helen Tsoi, Esq. General Counsel Verdana Commerce Group, Inc. 400 Christiana Gateway, Suite 700 Wilmington, DE 19801
Re: Cascade Retail Holdings Inc. — Demand to Cease and Desist from Tortious Interference with Restrictive Covenant Obligations and Misappropriation of Trade Secrets Matter No.: 1038-00006
Dear Ms. Tsoi:
I am a partner in the Labor & Employment practice of Calderwood & Harkness LLP. This firm represents Cascade Retail Holdings Inc. ("CRH"), a Delaware corporation publicly traded on the Nasdaq Stock Market under the ticker symbol CRHL, with its principal offices located at 2200 Elliott Avenue West, Suite 3400, Seattle, Washington 98119. I write on behalf of CRH to make a formal demand that Verdana Commerce Group, Inc. ("Verdana") immediately cease and desist from (i) employing or engaging eight former CRH employees identified herein in any capacity that would cause or facilitate the breach of their restrictive covenant obligations owed to CRH, (ii) engaging in conduct constituting tortious interference with CRH's contractual rights, and (iii) engaging in any activities constituting the misappropriation of CRH's trade secrets and confidential information. This letter sets forth CRH's factual and legal basis for these demands and the specific actions CRH requires Verdana to take immediately. CRH expressly reserves all rights and remedies available to it at law and in equity, whether or not specifically referenced in this letter.
1. Background and Factual Recitation
1.1 CRH's Business
CRH is a leading omnichannel retail and ecommerce company that operates 387 brick-and-mortar retail locations across 34 states and maintains a robust direct-to-consumer ecommerce platform serving millions of customers nationwide. CRH reported annual revenue of approximately $6.82 billion for its fiscal year ended January 31, 2025 ("FY2024"), and, as of the date of this letter, carries an approximate market capitalization of $4.1 billion. CRH's success is driven in large part by its merchandising division, which is the engine of the company's competitive differentiation in a crowded and intensely competitive retail landscape. The merchandising division alone accounted for approximately $2.3 billion in gross merchandise value ("GMV") in FY2024, reflecting the division's critical importance to CRH's overall financial performance, its brand equity, and its relationships with hundreds of domestic and international vendors. CRH has invested substantial resources over many years in developing proprietary merchandising strategies, analytics capabilities, vendor relationships, and private-label programs that are central to the company's competitive position.
1.2 The Departing Employees and Their Restrictive Covenants
On February 7, 2025, at approximately 4:47 PM Pacific Standard Time, the following eight senior members of CRH's merchandising division submitted simultaneous letters of resignation, each purporting to be effective immediately:
1. Priya Rathore — Former Senior Vice President, Merchandising. Ms. Rathore was employed by CRH from June 3, 2019 through February 7, 2025, and was party to an Amended and Restated Employment Agreement dated March 15, 2021 (the "Rathore Employment Agreement").
2. Derek Linden — Former Vice President, Hardlines Merchandising. Mr. Linden was employed by CRH for approximately seven (7) years and was party to an employment agreement containing restrictive covenant provisions substantially similar to those described herein.
3. Sonia Kaczmarek — Former Vice President, Softlines Merchandising. Ms. Kaczmarek was employed by CRH for approximately five (5) years and was party to an employment agreement containing restrictive covenant provisions.
4. Amara Osei — Former Director, Private Label Strategy. Ms. Osei was employed by CRH for approximately four (4) years and was party to an employment agreement containing restrictive covenant provisions.
5. Brent Halvorsen — Former Director, Seasonal Planning & Analytics. Mr. Halvorsen was employed by CRH for approximately six (6) years and was party to an employment agreement containing restrictive covenant provisions.
6. Lucia Fernandez-Gill — Former Director, Vendor Relations (Domestic). Ms. Fernandez-Gill was employed by CRH for approximately five (5) years and was party to an employment agreement containing restrictive covenant provisions.
7. Nathan Tsao — Former Senior Manager, eCommerce Merchandising. Mr. Tsao was employed by CRH for approximately three (3) years and was party to an employment agreement containing restrictive covenant provisions.
8. Kira Johansson — Former Senior Manager, Category Analytics. Ms. Johansson was employed by CRH for approximately four (4) years and was party to an employment agreement containing restrictive covenant provisions.
These eight individuals are referred to collectively herein as the "Rathore Group." Each member of the Rathore Group executed an employment agreement with CRH that contains comprehensive restrictive covenant provisions. These provisions include non-competition covenants with post-termination restricted periods ranging from twelve (12) to eighteen (18) months, non-solicitation covenants covering CRH employees with restricted periods of eighteen (18) to twenty-four (24) months, non-solicitation covenants covering CRH vendors with restricted periods of eighteen (18) to twenty-four (24) months, and perpetual confidentiality obligations with respect to CRH's trade secrets and confidential information.
By way of specific example, the Rathore Employment Agreement contains an eighteen (18)-month post-termination non-competition covenant with a geographic scope covering the entire United States, as well as a twenty-four (24)-month non-solicitation period applicable to both CRH employees and CRH vendors. The restrictive covenants in the Rathore Employment Agreement are supported by adequate consideration, including, without limitation, Ms. Rathore's continued at-will employment, a promotion to Senior Vice President, supplemental equity compensation, and access to CRH's most sensitive trade secrets and confidential information. The other members of the Rathore Group are bound by similarly enforceable restrictive covenants, each of which was executed in connection with the commencement of employment, a promotion, or the receipt of supplemental compensation.
All of the employment agreements at issue are governed by the laws of the State of Delaware. CRH is confident that each of these restrictive covenants is reasonable in scope, duration, and geographic reach and is fully enforceable under Delaware law.
1.3 Access to Confidential and Trade Secret Information
By virtue of their positions and seniority within CRH's merchandising division, the members of the Rathore Group had direct and comprehensive access to CRH's most competitively sensitive proprietary information. This information includes, but is not limited to:
• Proprietary Vendor Negotiation Playbooks. CRH has developed, at significant expense and over many years, detailed internal playbooks governing vendor negotiation strategies, pricing frameworks, volume discount thresholds, and deal structures for hundreds of domestic and international vendors. These playbooks are maintained under strict access controls and are not publicly available.
• Seasonal Buying Algorithms. CRH's merchandising division utilizes proprietary algorithms developed by its data science team to forecast seasonal buying trends, optimize inventory allocation across brick-and-mortar and ecommerce channels, and determine markdown timing and depth. These algorithms embody years of iterative refinement and represent a significant competitive advantage.
• Private-Label Sourcing Strategies. CRH's private-label business is a key growth driver, and the sourcing strategies underlying CRH's private-label products — including factory selection criteria, quality benchmarks, cost targets, and supplier relationship management protocols — constitute some of CRH's most closely guarded trade secrets.
• Customer Segmentation Data. CRH has invested heavily in developing proprietary customer segmentation models that inform merchandising assortment decisions, promotional targeting, and loyalty program design. This data is derived from CRH's first-party customer data platform and is treated as highly confidential.
• Project Ridgeline. In October 2024, CRH completed a confidential five-year category expansion roadmap known internally as "Project Ridgeline." Project Ridgeline is CRH's most strategically significant planning document, encompassing proprietary vendor terms, private-label margin targets, ecommerce assortment algorithms, new category entry strategies, and competitive positioning analyses. The document was completed after approximately eighteen months of development by a cross-functional team led by Ms. Rathore. Access to Project Ridgeline was restricted to a limited number of senior CRH executives, including all eight members of the Rathore Group. The disclosure of any portion of Project Ridgeline to a direct competitor would cause severe and irreparable competitive harm to CRH.
All of the foregoing information constitutes trade secrets within the meaning of the Delaware Uniform Trade Secrets Act, 6 Del. C. §§ 2001–2009 ("DUTSA"), and confidential information protected under the confidentiality provisions of each member of the Rathore Group's employment agreement with CRH. CRH has taken reasonable measures to maintain the secrecy of this information, including but not limited to restricting access on a need-to-know basis, requiring password protection and multi-factor authentication for electronic files, maintaining physical security at CRH facilities, and requiring all employees with access to sign confidentiality agreements.
1.4 Verdana's Coordinated Recruitment of the Rathore Group
On February 14, 2025, Verdana publicly issued a press release titled "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth," announcing that it had hired all eight members of the Rathore Group. CRH understands that Ms. Rathore has accepted the newly created position of President, Merchandising & Strategy at Verdana, reporting directly to Verdana's Chief Executive Officer.
The coordinated and simultaneous nature of the eight resignations — all submitted at essentially the same moment on the same date — coupled with Verdana's public announcement only seven days later, conclusively demonstrates that Verdana engaged in a deliberate, orchestrated campaign to recruit these employees en masse. This recruitment necessarily occurred over a period of weeks or months prior to the resignations, while all eight individuals were still employed by CRH and subject to ongoing duties of loyalty. The timing and coordination of the departure make clear that Verdana recruited these employees with full knowledge of — or, at minimum, willful blindness to — their existing restrictive covenant obligations to CRH. Given the seniority of the individuals involved and the standard industry practice of requiring restrictive covenants for senior merchandising executives, Verdana cannot plausibly claim ignorance of these obligations. Moreover, CRH's use of restrictive covenants for its senior employees is publicly disclosed in CRH's annual proxy statement filed with the U.S. Securities and Exchange Commission, which is freely available on the SEC's EDGAR system.
CRH is further aware that Verdana's majority equity holder is Greystone Capital Partners, LP, acting through Greystone Capital Fund VII, LP, which acquired a majority stake in Verdana in the third quarter of 2023 in a transaction valuing Verdana at an enterprise value of approximately $2.4 billion. CRH has reason to believe that Greystone Capital Partners and its representatives — including Elliot Westbrook, a Managing Director at Greystone Capital Partners who sits on Verdana's Board of Directors — provided the financial resources facilitating this coordinated recruitment, including aggregate sign-on bonuses for the Rathore Group estimated at approximately $6,200,000. The magnitude of these financial inducements further evidences a premeditated effort to strip CRH of its key merchandising leadership in order to benefit Verdana's competitive position.
Of particular significance, in January 2025, Verdana publicly announced a "transformational growth initiative" targeting $4 billion in annual revenue by 2028. In that announcement, Verdana specifically cited planned expansion into CRH's strongest merchandising categories: private-label home goods and seasonal décor. These are precisely the categories in which the members of the Rathore Group possess CRH's most sensitive competitive intelligence, including the strategies and data developed through Project Ridgeline. The alignment between Verdana's announced strategic priorities and the specific expertise and proprietary knowledge of the Rathore Group is not coincidental — it is the very purpose for which Verdana recruited them.
1.5 Verdana as a Direct Competitor
Verdana is a direct competitor of CRH in the omnichannel retail and ecommerce space. Verdana operates retail stores and an ecommerce platform that compete directly with CRH in the home goods, apparel, and seasonal décor categories, among others. As of the date of this letter, Verdana directly competes with CRH in no fewer than twenty-eight (28) overlapping product categories. Verdana's employment of the members of the Rathore Group in merchandising and strategy roles is squarely within the scope of the restrictive covenants to which those individuals are bound and will inevitably involve the use or disclosure of CRH's trade secrets and confidential information. There is no way for the members of the Rathore Group to perform the functions for which Verdana has hired them — merchandising strategy, vendor negotiations, category expansion, private-label development, seasonal planning, and ecommerce assortment — without drawing upon the proprietary knowledge, strategies, relationships, and data they acquired at CRH.
2. Evidence of Data Exfiltration
CRH's internal IT security team, upon learning of the simultaneous resignations, immediately initiated a comprehensive security audit and preliminary forensic investigation of the digital activity of all eight members of the Rathore Group in the weeks preceding their departure. That investigation has revealed that substantial volumes of CRH's proprietary data were downloaded from CRH's internal Aldermere Systems environment and Pinnacle Health IT instances to personal cloud storage accounts between approximately January 10, 2025 and February 4, 2025 — a period immediately preceding the coordinated resignations.
The data involved in these transfers comprises approximately 14,327 files totaling approximately 2.8 gigabytes. CRH's preliminary review indicates that the exfiltrated data includes, among other things, Project Ridgeline presentations and supporting materials, vendor negotiation term sheets and pricing schedules, private-label cost models and margin analyses, customer segmentation data and analytics reports, and category performance dashboards. These files represent some of the most competitively sensitive and commercially valuable proprietary information in CRH's possession.
CRH has engaged Pinnacle Forensics LLC, a nationally recognized digital forensics firm, to conduct a comprehensive forensic analysis of the circumstances surrounding the data exfiltration, including the precise scope of the data taken, the methods used, and the destinations to which the data was transmitted. That investigation is ongoing and CRH reserves the right to supplement the factual record as additional findings become available.
To the extent that any of this data has been shared with, transmitted to, or is currently in the possession or control of Verdana or any of its affiliates, subsidiaries, officers, directors, employees, agents, consultants, or representatives — including Greystone Capital Partners, LP and its personnel — CRH demands its immediate identification, sequestration, preservation, and return, as described in further detail in Section 4 below. Any review, use, or dissemination of such data by Verdana would constitute a separate and independent act of trade secret misappropriation and would dramatically compound Verdana's legal exposure.
3. Legal Basis for CRH's Demands
3.1 Tortious Interference with Contractual Relations
Under well-established Delaware law, a party that intentionally and improperly induces or facilitates the breach of another party's valid contractual obligations is liable for tortious interference with contractual relations. See, e.g., Irwin & Leighton, Inc. v. W.M. Anderson Co., 532 A.2d 983 (Del. 1987). To prevail on a claim for tortious interference, a plaintiff must demonstrate (1) the existence of a valid contract, (2) the defendant's knowledge of the contract, (3) intentional interference by the defendant inducing or causing a breach, (4) the absence of justification, and (5) resulting damages.
Each of these elements is satisfied here. Each member of the Rathore Group is party to a valid and enforceable employment agreement with CRH containing restrictive covenant provisions. Verdana's knowledge of these contractual obligations is established, at minimum, by the following: (a) the seniority of the positions involved — all eight individuals held Vice President, Director, or Senior Manager titles within CRH's merchandising division; (b) the well-known and standard industry practice of requiring restrictive covenants for senior merchandising and strategy executives in the retail sector; (c) the coordinated and simultaneous nature of the recruitment, which strongly suggests advance planning, due diligence, and deliberate decision-making by Verdana; and (d) the fact that CRH's use of restrictive covenants for senior employees is publicly disclosed in CRH's SEC filings, including its annual proxy statement, which is publicly available on the SEC's EDGAR system and which any competent acquirer of talent at this level would be expected to review.
Verdana's conduct — actively recruiting the entire Rathore Group, offering substantial financial inducements including an estimated $6,200,000 in aggregate sign-on bonuses, and immediately deploying these individuals in directly competing merchandising and strategy roles — constitutes intentional and unjustified interference with CRH's contractual rights. CRH will hold Verdana fully liable for all damages arising from such interference, which CRH anticipates will be substantial.
3.2 Misappropriation of Trade Secrets
Verdana's hiring of the Rathore Group under circumstances where those employees had access to — and, as set forth in Section 2 above, have demonstrably exfiltrated — CRH's trade secrets and confidential information, and Verdana's deployment of those employees in directly competing business functions, constitutes misappropriation of trade secrets in violation of DUTSA, 6 Del. C. §§ 2001–2009.
DUTSA defines "misappropriation" to include, among other things, the acquisition of a trade secret by a person who knows or has reason to know that the trade secret was acquired by improper means, as well as the disclosure or use of a trade secret without express or implied consent by a person who knew or had reason to know that the trade secret was acquired under circumstances giving rise to a duty to maintain its secrecy. 6 Del. C. § 2001(2). Verdana's conduct satisfies this standard.
Moreover, the doctrine of "inevitable disclosure" — recognized by Delaware courts as a factor supporting injunctive relief in trade secret cases — applies with full force to the present circumstances. See Bayer Corp. v. Leuthner, No. 1:99-CV-278, 2000 U.S. Dist. Calderon Systems 6383 (D. Del. Apr. 28, 2000). Given the depth and specificity of the Rathore Group's knowledge of CRH's most sensitive trade secrets, including Project Ridgeline, and given that Verdana has hired these individuals to perform precisely the same functions they performed at CRH — in the same product categories, against the same competitors, and targeting the same customer base — it is inevitable that CRH's trade secrets will be disclosed and utilized in the course of the Rathore Group's work for Verdana. The "inevitable disclosure" of CRH's trade secrets presents a clear and present risk of ongoing and irreparable harm to CRH that cannot be remedied by an award of money damages alone.
Verdana's January 2025 announcement of its "transformational growth initiative" — specifically targeting expansion into private-label home goods and seasonal décor, CRH's strongest categories — amplifies the certainty that CRH's proprietary strategies and trade secrets will be exploited for Verdana's direct competitive benefit.
3.3 Civil Conspiracy
The coordinated nature of the Rathore Group's departure — eight senior employees resigning simultaneously, at the same minute of the same day, after a period of pre-resignation planning and systematic data exfiltration — together with Verdana's active recruitment of the group, its provision of substantial financial inducements (including the estimated $6,200,000 in aggregate sign-on bonuses), and its immediate public announcement of the hires, supports a claim for civil conspiracy under Delaware law. A civil conspiracy exists where two or more persons combine or agree to commit an unlawful act or to commit a lawful act by unlawful means. See Nicolet, Inc. v. Nutt, 525 A.2d 146 (Del. 1987). The facts recited herein establish that Verdana and the members of the Rathore Group acted in concert to deprive CRH of its contractual rights and proprietary assets, and CRH will pursue this claim vigorously.
3.4 Aiding and Abetting Breach of Fiduciary Duty
To the extent that the members of the Rathore Group owed fiduciary duties of loyalty to CRH during the period of their employment — particularly Ms. Rathore in her capacity as Senior Vice President of Merchandising, an officer-level position — Verdana's active solicitation and coordination of their departure while those duties were still active constitutes aiding and abetting the breach of fiduciary duty. Delaware law is clear that a third party who knowingly participates in a fiduciary's breach of duty may be held liable for the resulting harm. See Gotham Partners, L.P. v. Hallwood Realty Partners, L.P., 817 A.2d 160 (Del. 2002). Verdana's recruitment campaign was conducted while all eight employees were actively employed by CRH, owed ongoing duties of loyalty to CRH, and had access to CRH's most confidential information. Verdana knowingly induced these employees to violate those duties for Verdana's own competitive advantage.
4. Specific Demands
In light of the foregoing, CRH hereby makes the following specific demands upon Verdana Commerce Group, Inc.:
4.1 Cessation of Employment in Restricted Capacities
Verdana must immediately cease employing, engaging, or utilizing the services of Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson in any merchandising, strategy, vendor relations, category management, private-label, seasonal planning, ecommerce merchandising, analytics, or related capacity — or in any other role that falls within the scope of their respective restrictive covenants — for the full duration of each individual's applicable non-compete period.
Without limitation, this demand encompasses Ms. Rathore's eighteen (18)-month non-competition period, which extends through approximately August 7, 2026, as well as the twelve (12)- or eighteen (18)-month non-competition periods applicable to the other members of the Rathore Group, as specified in their respective employment agreements. CRH takes the position that Verdana's employment of these individuals in any capacity within the scope of their restrictive covenants subjects Verdana to liability for tortious interference with CRH's contractual rights, and CRH will not tolerate any such employment.
4.2 Non-Solicitation Compliance
Verdana must ensure that none of the members of the Rathore Group solicits, recruits, contacts, or hires any current CRH employee or contacts any CRH vendor on Verdana's behalf, directly or indirectly, in compliance with the non-solicitation provisions of their respective employment agreements with CRH. This obligation extends for the full duration of each individual's applicable non-solicitation period, which ranges from eighteen (18) to twenty-four (24) months post-termination. Verdana must implement appropriate internal controls to ensure compliance with this demand, including but not limited to instructing the members of the Rathore Group in writing of their non-solicitation obligations and monitoring their compliance.
4.3 Data Sequestration and Return
Verdana must immediately take the following steps with respect to CRH's proprietary information:
(a) Identify any and all CRH confidential information, trade secrets, or proprietary data — in whatever form, whether physical, electronic, cloud-based, or otherwise — that is currently in the possession, custody, or control of Verdana, any of its affiliates or subsidiaries, any of its officers, directors, employees, agents, consultants, or representatives, or any third party acting on Verdana's behalf.
(b) Immediately sequester and preserve all such materials, ensuring that no further access, review, copying, distribution, or use occurs.
(c) Arrange for the prompt return of all such materials to CRH or its counsel at the address set forth below, or, where return is not practicable (e.g., in the case of electronic copies), arrange for their certified destruction under the supervision of a qualified forensic professional, with written certification of destruction provided to CRH's counsel.
(d) Within five (5) business days of receipt of this letter, provide written confirmation to the undersigned specifying what steps Verdana has taken to identify and secure any CRH data that may have been transmitted to Verdana, accessed through Verdana's systems, or stored on any device or platform under Verdana's control.
4.4 Written Confirmation
Verdana must provide written confirmation from Verdana's General Counsel, addressed to the undersigned, within five (5) business days of receipt of this letter, confirming that Verdana:
(a) has reviewed the restrictive covenant provisions applicable to each member of the Rathore Group, including each individual's non-competition, non-solicitation, and confidentiality obligations;
(b) will not employ or engage any member of the Rathore Group in any capacity that would violate those provisions for the duration of each individual's applicable restricted periods; and
(c) has taken affirmative steps to prevent the use, disclosure, or dissemination of CRH's confidential information and trade secrets within Verdana's organization, including by implementing information barriers or other appropriate controls.
5. Consequences of Non-Compliance
Let there be no ambiguity: failure to comply with the demands set forth in this letter, in full and within the time periods specified, will leave CRH with no alternative but to pursue all available legal remedies. Such remedies include, but are not limited to, the following:
• Filing suit in the Delaware Court of Chancery seeking emergency injunctive relief, including an application for a temporary restraining order and preliminary injunction to prevent the continued employment of the Rathore Group in restricted capacities and to prevent the further use or disclosure of CRH's trade secrets and confidential information. CRH is prepared to file such an action on an expedited basis and without further notice to Verdana.
• Assertion of claims for tortious interference with contractual relations, misappropriation of trade secrets under DUTSA (6 Del. C. §§ 2001–2009), civil conspiracy, and aiding and abetting breach of fiduciary duty.
• Recovery of the full measure of compensatory damages, consequential damages, unjust enrichment, and disgorgement of any profits derived by Verdana from the misappropriation of CRH's trade secrets or the exploitation of CRH's proprietary information.
• Recovery of punitive or exemplary damages where available under applicable law, including in connection with claims for willful and malicious misappropriation of trade secrets.
• Recovery of attorneys' fees and costs, including under DUTSA's fee-shifting provisions applicable to cases of willful and malicious misappropriation (6 Del. C. § 2004).
CRH estimates that the economic harm resulting from the Rathore Group's departure and the potential exploitation of CRH's trade secrets is substantial and growing. CRH's merchandising division generated $2.3 billion in GMV in FY2024, and Project Ridgeline encompasses CRH's comprehensive five-year strategic category expansion plan. The disclosure or use of this information by a direct competitor such as Verdana would cause competitive harm that is difficult to quantify but that CRH believes could reach hundreds of millions of dollars. CRH will seek damages commensurate with the full scope of its injuries.
6. Reservation of Rights
This letter is not intended to be, and shall not be construed as, a complete or exhaustive statement of CRH's rights, claims, or remedies against Verdana, the members of the Rathore Group, Greystone Capital Partners, LP, or any other person or entity. CRH expressly reserves all rights, claims, and remedies available to it at law and in equity, whether arising under statute, contract, common law, or otherwise, and whether or not specifically referenced in this letter.
Nothing in this letter shall be deemed a waiver of any right or remedy, including but not limited to the right to seek immediate injunctive relief, the right to assert additional claims not referenced herein, the right to seek relief against additional parties, or the right to supplement the factual and legal bases set forth herein. CRH's decision to send this demand letter prior to commencing litigation shall not be construed as an obligation to provide further notice before filing suit.
7. Litigation Hold and Document Preservation Demand
Pursuant to CRH's obligations and rights in anticipation of litigation, CRH hereby demands that Verdana immediately implement a comprehensive litigation hold and take all steps necessary to preserve any and all documents, communications, electronically stored information ("ESI"), and tangible items relating to the matters described in this letter. Verdana's preservation obligations extend to, but are not limited to, the following categories of materials:
• All documents and communications relating to the recruitment, hiring, onboarding, or employment of any member of the Rathore Group, including but not limited to offer letters, term sheets, compensation analyses, internal approvals, and communications with executive recruiters or search firms.
• Any and all CRH confidential information, trade secrets, or proprietary materials in Verdana's possession, custody, or control, regardless of the form or medium in which such materials are stored.
• All communications — whether by email, text message, instant message, voice message, video conference, or any other medium — between any Verdana officer, director, employee, or agent and any member of the Rathore Group, including communications that occurred prior to the Rathore Group's resignation from CRH on February 7, 2025.
• All communications between any representative of Greystone Capital Partners, LP — including, specifically, Elliot Westbrook — and any member of the Rathore Group, or between any representative of Greystone Capital Partners, LP and any Verdana officer, director, or employee relating to the recruitment or hiring of any member of the Rathore Group.
• All documents and communications relating to Verdana's "transformational growth initiative" announced in January 2025, including any strategic plans, board presentations, financial models, market analyses, or competitive assessments relating to Verdana's planned expansion into home goods, seasonal décor, private-label apparel, or any other category in which CRH competes.
• All documents and communications relating to any due diligence conducted by Verdana regarding the restrictive covenant obligations of any member of the Rathore Group.
CRH expects Verdana to issue a written litigation hold notice to all relevant custodians, to suspend any applicable document retention or destruction policies, and to take affirmative steps to ensure the preservation of all relevant ESI, including by disabling auto-delete functions, preserving backup tapes, and imaging relevant devices. The destruction, alteration, or spoliation of relevant evidence will be viewed by CRH as further evidence of bad faith and will be raised with the Court in connection with any subsequent litigation. CRH will not hesitate to seek sanctions, including adverse inference instructions, for any failure to preserve relevant evidence.
Conclusion
CRH expects Verdana's full and immediate compliance with each of the demands set forth in this letter. All responses should be directed to the undersigned at:
Bernard Crawford Calderwood & Harkness LLP 1301 K Street NW, Suite 1200 Washington, DC 20005 Telephone: (202) 555-8400
Email: bcrawford@calderwoodharkness.com
CRH requires a substantive written response within five (5) business days of Verdana's receipt of this letter. If a satisfactory response is not received within that period, CRH is prepared to act swiftly and decisively to protect its rights, including by seeking emergency injunctive relief in the Delaware Court of Chancery without further notice. CRH strongly urges Verdana to treat this matter with the seriousness and urgency it warrants.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Bernard Crawford Partner, Labor & Employment 1301 K Street NW, Suite 1200 Washington, DC 20005 Telephone: (202) 555-8400
Email: bcrawford@calderwoodharkness.com
cc:
Theresa Yun-Park, General Counsel, Cascade Retail Holdings Inc. Renata Vasquez, Calderwood & Harkness LLP (Los Angeles Office) James Underwood, Calderwood & Harkness LLP Devon Archer, Calderwood & Harkness LLP
Copy to Verdana's outside counsel to be provided upon identification or appearance of such counsel.
Enclosures: None. The employment agreements referenced herein, including the restrictive covenant provisions contained therein, are confidential CRH documents and have not been enclosed with this letter. CRH reserves the right to produce such agreements in connection with any legal proceedings.

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