standstill-settlement-agreement-v2.docx

1038-00006 · Calderwood & Harkness LLP · Settlement & Standstill

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SECOND DRAFT – March 31, 2025 Prepared by Calderwood & Harkness LLP Reflecting comments received from Whitfield, Nygaard & Doyle LLP (on behalf of the Rathore Group) and Blackhall & Soren LLP (on behalf of Verdana Commerce Group, Inc.) Matter No. 1038-00006

STANDSTILL AND SETTLEMENT AGREEMENT

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STANDSTILL AND SETTLEMENT AGREEMENT

This Standstill and Settlement Agreement (this "Agreement") is entered into as of __, 2025 (the "Execution Date"), by and among:

CASCADE RETAIL HOLDINGS INC., a Delaware corporation, with its principal executive offices located at 2200 Elliott Avenue West, Suite 3400, Seattle, Washington 98119 ("CRH" or the "Company");

PRIYA RATHORE, an individual residing at 14 Harbor Ridge Lane, Bellevue, Washington 98004 ("Rathore");

DEREK LINDEN, an individual ("Linden");

SONIA KACZMAREK, an individual ("Kaczmarek");

AMARA OSEI, an individual ("Osei");

BRENT HALVORSEN, an individual ("Halvorsen");

LUCIA FERNANDEZ-GILL, an individual ("Fernandez-Gill");

NATHAN TSAO, an individual ("Tsao");

KIRA JOHANSSON, an individual ("Johansson");

(Rathore, Linden, Kaczmarek, Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson are referred to individually as an "Individual Defendant" and collectively as the "Individual Defendants" or the "Rathore Group"); and

VERDANA COMMERCE GROUP, INC., a Delaware corporation, with its principal executive offices located at 400 Christiana Gateway, Suite 700, Wilmington, Delaware 19801 ("Verdana" or "VCG").

CRH, the Individual Defendants, and Verdana are each referred to herein individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS, CRH is a publicly traded omnichannel retail company listed on the Nasdaq Stock Market LLC under the ticker symbol "CRHL," with fiscal year 2024 ("FY2024") annual revenue of approximately Six Billion Eight Hundred Twenty Million Dollars ($6,820,000,000), operating 387 brick-and-mortar retail locations across 34 states and a direct-to-consumer ecommerce platform that serves customers nationwide;

WHEREAS, each of the Individual Defendants was formerly employed by CRH in senior merchandising roles within CRH's merchandising division, which generated approximately Two Billion Three Hundred Million Dollars ($2,300,000,000) in gross merchandise value in FY2024 and which constituted a core revenue-generating function of CRH's business;

WHEREAS, each Individual Defendant entered into an employment agreement with CRH containing restrictive covenant provisions, including non-competition, non-solicitation (of both employees and vendors), and confidentiality obligations, all of which are governed by the laws of the State of Delaware (each, an "Employment Agreement," and collectively, the "Employment Agreements");

WHEREAS, Rathore's applicable Employment Agreement is the Amended and Restated Employment Agreement dated March 15, 2021 (the "Rathore Employment Agreement"), which contains, among other provisions, an eighteen (18)-month post-termination non-competition period, a twenty-four (24)-month post-termination non-solicitation period with respect to both employees and vendors, and perpetual confidentiality obligations with respect to proprietary and trade secret information of CRH;

WHEREAS, on February 7, 2025, all eight Individual Defendants submitted simultaneous resignation letters to CRH, each effective immediately, in what CRH alleges was a coordinated mass departure, and subsequently accepted employment with Verdana, a direct competitor of CRH in twenty-eight (28) overlapping product categories within the retail merchandising industry;

WHEREAS, CRH's forensic investigation, conducted by Pinnacle Forensics LLC ("Pinnacle Forensics"), a digital forensics firm retained by CRH on February 10, 2025, revealed that between January 10, 2025 and February 4, 2025, approximately 14,327 files (totaling approximately 2.8 gigabytes of data) were downloaded from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts maintained by various members of the Rathore Group, including materials related to the confidential five-year category expansion plan known internally as "Project Ridgeline," vendor negotiation term sheets and playbooks, private-label cost models and sourcing strategies, seasonal buying algorithms, and customer segmentation data;

WHEREAS, on March 5, 2025, CRH filed a Verified Complaint and Motion for Temporary Restraining Order and Preliminary Injunction in the Court of Chancery of the State of Delaware, C.A. No. 2025-0198-MTZ (the "Action"), before Vice Chancellor Margaret T. Zhao, asserting claims for: (1) breach of restrictive covenant obligations against the Individual Defendants; (2) breach of confidentiality obligations against the Individual Defendants; (3) misappropriation of trade secrets under the Delaware Uniform Trade Secrets Act, 6 Del. C. § 2001 et seq. ("DUTSA"), against the Individual Defendants and Verdana; (4) tortious interference with contractual relations against Verdana; and (5) civil conspiracy against all defendants;

WHEREAS, on March 7, 2025, Vice Chancellor Zhao granted a Temporary Restraining Order (the "TRO") restraining the Individual Defendants from commencing employment in merchandising roles at Verdana or any other competitor of CRH for a period of fourteen (14) days, and CRH posted an injunction bond in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000) through Broadview Surety Corp. (Bond No. BSC-2025-TRO-04419) as a condition of the TRO;

WHEREAS, on March 18, 2025, the Parties participated in a court-ordered mediation session before the Honorable Philip Ashford (Ret.), conducted through Meridian ADR Services LLC (Reference No. Meridian-2025-0318-CRH), and on March 20, 2025, following extensive negotiations, reached a framework for settlement of all claims asserted in the Action;

WHEREAS, on March 21, 2025, the Court entered a Consent Interim Order maintaining the status quo during the documentation of settlement terms and adjourning the previously scheduled preliminary injunction hearing sine die;

WHEREAS, the Parties now desire to fully and finally resolve the Action and all disputes among them arising from the facts, circumstances, and claims set forth in the Verified Complaint and related proceedings, on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties, and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Party, the Parties agree as follows:

ARTICLE I — DEFINITIONS

Section 1.1 — Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

"Action" means the civil action styled Cascade Retail Holdings Inc. v. Rathore et al., C.A. No. 2025-0198-MTZ, pending in the Court of Chancery of the State of Delaware before Vice Chancellor Margaret T. Zhao.

"Aldwyn" means Aldwyn Compliance Solutions LLC, an independent compliance consulting firm with offices at 1700 Market Street, Suite 2800, Philadelphia, Pennsylvania 19103.

"Competing Business" means any person, entity, or enterprise that is engaged, directly or indirectly, in the retail sale, distribution, merchandising, buying, sourcing, or category management of consumer goods in one or more of the Restricted Categories within the Geographic Scope.

"Compliance Monitor" means the independent compliance monitor appointed pursuant to Article VII of this Agreement, which shall be Aldwyn.

"Compliance Monitor Engagement Letter" means the engagement letter between Aldwyn, CRH, and Verdana in the form attached hereto as Exhibit D, setting forth the terms and conditions of the Compliance Monitor's engagement.

"Consent Interim Order" means the Consent Interim Order entered by the Court on March 21, 2025, maintaining the status quo and adjourning the preliminary injunction hearing pending documentation of the settlement.

"Consent Order" means the Stipulated Consent Order to be entered by the Court in the Action pursuant to Article IX of this Agreement, incorporating the modified restrictive covenant terms, data return and destruction obligations, and compliance monitoring provisions set forth herein.

"Court" means the Court of Chancery of the State of Delaware.

"CRH Confidential Information" means all information, data, materials, documents, and work product (in any form, whether tangible or intangible, written, electronic, or oral) that constitutes or contains: (a) trade secrets as defined under DUTSA; (b) proprietary data, methodologies, algorithms, models, or analytical tools; (c) any information relating to Project Ridgeline, including all strategic plans, projections, analyses, presentations, memoranda, and supporting data; (d) vendor negotiation playbooks, vendor term sheets, vendor pricing data, and vendor relationship strategies; (e) seasonal buying algorithms and purchasing models; (f) private-label sourcing strategies, cost models, supplier agreements, and product specifications; (g) customer segmentation data, customer analytics, and consumer behavior models; (h) category expansion roadmaps, market entry strategies, and competitive analyses; (i) financial projections, budgets, and internal performance metrics not publicly disclosed; and (j) any other information that falls within the definition of "Confidential Information" as set forth in each Individual Defendant's respective Employment Agreement. For the avoidance of doubt, CRH Confidential Information includes the Exfiltrated Data and all copies, extracts, summaries, or derivatives thereof.

"Data Destruction Protocol" means the protocol for the return or certified destruction of CRH Confidential Information and Exfiltrated Data, in the form attached hereto as Exhibit B.

"Employment Agreements" means, collectively, the individual employment agreements between CRH and each Individual Defendant, each governed by the laws of the State of Delaware, as more particularly described in Section 3.5 and Exhibit A.

"Exfiltrated Data" means the approximately 14,327 files (totaling approximately 2.8 gigabytes) that were downloaded from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts maintained by members of the Rathore Group between January 10, 2025 and February 4, 2025, as identified in the forensic investigation report prepared by Pinnacle Forensics and delivered to CRH on February 28, 2025.

"Execution Date" means the date first written above, being the date on which this Agreement is executed and delivered by all Parties.

"Geographic Scope" means the United States of America, including all fifty states and the District of Columbia.

"Greystone" means Greystone Capital Partners, LP, a Delaware limited partnership, which is referenced herein but is not a signatory Party to this Agreement.

"Modified Non-Compete Period" has the meaning set forth in Section 3.1 of this Agreement.

"Modified Non-Solicitation Period (Employees)" has the meaning set forth in Section 3.2 of this Agreement.

"Modified Non-Solicitation Period (Vendors)" has the meaning set forth in Section 3.3 of this Agreement.

"Pinnacle Forensics" means Pinnacle Forensics LLC, a digital forensics consulting firm with offices at 8700 Georgia Avenue, Suite 300, Silver Spring, Maryland 20910.

"Project Ridgeline" means CRH's confidential five-year strategic category expansion plan, completed in or about October 2024, encompassing market entry strategies, competitive positioning analyses, product development roadmaps, financial projections, and related strategic planning materials for twenty-three (23) new and expanded product categories.

"Rathore Employment Agreement" means the Amended and Restated Employment Agreement between CRH and Priya Rathore, dated as of March 15, 2021, as in effect on the date of Rathore's resignation.

"Restricted Categories" has the meaning set forth in Section 3.1(c) of this Agreement.

"Settlement Payment" has the meaning set forth in Section 4.1 of this Agreement.

"Top 50 Vendors" means the fifty (50) vendors of CRH identified by name, vendor identification number, and CRH spend category on Exhibit C attached hereto, ranked by aggregate CRH spend for FY2024, which Exhibit shall be filed under seal pursuant to Section 9.5.

"TRO" means the Temporary Restraining Order entered by the Court on March 7, 2025, in the Action, restraining the Individual Defendants from commencing employment in merchandising roles at Verdana or any other competitor of CRH for a period of fourteen (14) days.

Section 1.2 — Rules of Construction. For the purposes of this Agreement, except as otherwise expressly provided herein or unless the context otherwise requires: (a) the terms "hereof," "herein," "hereto," "hereunder," and similar terms refer to this Agreement as a whole, including all Exhibits and Schedules hereto, and not to any particular Section, Article, Exhibit, or Schedule; (b) references to any Article, Section, Exhibit, or Schedule are references to an Article or Section of, or an Exhibit or Schedule to, this Agreement; (c) the words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation"; (d) words in the singular shall include the plural and vice versa, and words of one gender shall include the other gender, as the context requires; (e) references to any Person shall include such Person's successors and permitted assigns; (f) references to any agreement or other document shall be to such agreement or document as amended, modified, supplemented, or restated from time to time; (g) references to "dollars" or "$" shall mean United States dollars; (h) headings and captions are for convenience of reference only and shall not affect the interpretation of this Agreement; (i) references to any statute or regulation shall include all amendments thereto and any successor statute or regulation; and (j) all Exhibits and Schedules attached hereto are incorporated herein by reference and made a part of this Agreement.

ARTICLE II — STANDSTILL AND STATUS QUO

Section 2.1 — Standstill Period. From the Execution Date through the later of (a) the expiration of all Modified Non-Compete Periods applicable to the Individual Defendants and (b) the expiration of all Modified Non-Solicitation Periods applicable to the Individual Defendants (such period, the "Standstill Period"), the Parties agree to maintain the status quo as set forth in this Agreement and the Consent Order. During the Standstill Period, no Party shall take any action that is inconsistent with the terms and conditions of this Agreement or the Consent Order, and each Party shall use reasonable best efforts to preserve and protect the rights and obligations established hereunder.

Section 2.2 — Continuation of Consent Interim Order. The Consent Interim Order entered by the Court on March 21, 2025, shall remain in full force and effect and shall continue to govern the Parties' conduct until such time as it is superseded by entry of the Consent Order in accordance with Article IX of this Agreement. In the event of any conflict between the terms of the Consent Interim Order and the terms of this Agreement during the period prior to entry of the Consent Order, the terms of this Agreement shall control as between the Parties, provided that the Parties shall comply with the Consent Interim Order to the extent required by the Court.

Section 2.3 — Verdana Employment. Subject to and in accordance with the restrictions set forth in Article III of this Agreement and the Consent Order, Verdana may continue to employ each of the Individual Defendants in roles that do not involve, directly or indirectly, any of the Restricted Categories during the applicable Modified Non-Compete Period for each such Individual Defendant. Each Individual Defendant may continue his or her employment at Verdana in a non-restricted capacity, including in roles related to product categories other than the Restricted Categories, general corporate management, finance, operations, human resources, or other functional areas that do not implicate the Restricted Categories. Upon the expiration of the applicable Modified Non-Compete Period for a given Individual Defendant, the restriction on that Individual Defendant's involvement in the Restricted Categories at Verdana shall automatically lapse, and such Individual Defendant may thereafter assume responsibilities involving the Restricted Categories, subject to the continuing confidentiality obligations set forth in Section 3.4 and the modified non-solicitation obligations set forth in Sections 3.2 and 3.3, to the extent such obligations remain in effect. For the avoidance of doubt, nothing in this Section 2.3 shall be construed as CRH's consent to or approval of the Individual Defendants' employment by Verdana, except to the extent expressly provided herein.

ARTICLE III — MODIFIED RESTRICTIVE COVENANTS

Section 3.1 — Modified Non-Competition Obligations.

(a) Rathore. Rathore shall be subject to a modified non-competition period of twelve (12) months, commencing on February 7, 2025 (the date of Rathore's resignation from CRH) and expiring on February 6, 2026 (the "Rathore Modified Non-Compete Period"), which represents a reduction from the original eighteen (18)-month non-competition period set forth in the Rathore Employment Agreement. During the Rathore Modified Non-Compete Period, Rathore shall not, directly or indirectly, whether as an employee, officer, director, consultant, advisor, independent contractor, agent, partner, member, shareholder (other than as a passive holder of less than two percent (2%) of the outstanding shares of a publicly traded company), or in any other capacity, engage in, manage, supervise, direct, or perform any merchandising, sourcing, buying, category management, product development, or strategic planning function in connection with any of the Restricted Categories for any Competing Business, including Verdana.

(b) Other Individual Defendants. Each of the other seven Individual Defendants — Linden, Kaczmarek, Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson — shall be subject to a modified non-competition period of nine (9) months, commencing on February 7, 2025 (the date of each such Individual Defendant's resignation from CRH) and expiring on November 6, 2025 (as applicable to each, the "Other Defendants' Modified Non-Compete Period," and together with the Rathore Modified Non-Compete Period, each a "Modified Non-Compete Period"). The Other Defendants' Modified Non-Compete Period represents a reduction from the original twelve (12)-month or eighteen (18)-month non-competition periods (as applicable per each Individual Defendant's Employment Agreement, as set forth in Exhibit A). During the applicable Other Defendants' Modified Non-Compete Period, each such Individual Defendant shall not, directly or indirectly, whether as an employee, officer, director, consultant, advisor, independent contractor, agent, partner, member, shareholder (other than as a passive holder of less than two percent (2%) of the outstanding shares of a publicly traded company), or in any other capacity, engage in, manage, supervise, direct, or perform any merchandising, sourcing, buying, category management, product development, or strategic planning function in connection with any of the Restricted Categories for any Competing Business, including Verdana.

(c) Restricted Categories. The modified non-competition obligation set forth in this Section 3.1 is limited to the following three product categories (collectively, the "Restricted Categories"):

(i) home goods (including home furnishings, kitchenware, bath accessories, home organization, and related subcategories as classified within CRH's internal category taxonomy);

(ii) seasonal décor (including holiday decorations, seasonal outdoor products, and related limited-edition seasonal merchandise); and

(iii) private-label apparel (including all apparel lines designed, developed, sourced, or sold under any proprietary brand name owned or controlled by CRH, including but not limited to the "Ridgeway Collection," "Cascade Essentials," and "Summit & Stone" brands).

The designation of the Restricted Categories represents a significant narrowing from the scope of the original non-competition covenants set forth in the Employment Agreements, which covered all retail product categories without limitation. The Parties acknowledge that the narrowing to the Restricted Categories reflects a negotiated compromise and is intended to balance CRH's legitimate interest in protecting its confidential business strategies in its most competitively sensitive categories against the Individual Defendants' interest in pursuing their livelihoods.

(d) Geographic Scope. The geographic scope of the modified non-competition obligations shall be the United States of America, including all fifty states and the District of Columbia. This geographic scope is unchanged from the original non-competition covenants in the Employment Agreements.

(e) Clarification of Permissible Activities. Notwithstanding anything to the contrary in this Section 3.1, the Individual Defendants may engage in general corporate management, finance, operations, human resources, information technology, legal, or other functional roles at Verdana that do not involve, directly or indirectly, any of the Restricted Categories. [WND Proposed Language: Whitfield, Nygaard & Doyle has proposed that attendance at general management meetings, leadership off-sites, board presentations, or other enterprise-level forums at which the Restricted Categories are incidentally discussed shall not constitute a violation of the modified non-competition obligations, provided that the Individual Defendant promptly recuses himself or herself from any substantive discussion of the Restricted Categories and provides prompt written notification of such incidental exposure to the Compliance Monitor. C&H Note: CRH is reviewing this proposed language and may accept with modifications, including a requirement that a contemporaneous log of all such incidental exposures be maintained and made available to CRH upon request. This provision remains bracketed pending resolution.]

Section 3.2 — Modified Non-Solicitation of Employees.

(a) Non-Solicitation Obligation. Each of the eight Individual Defendants agrees to a non-solicitation obligation with respect to employees of CRH for a period of eighteen (18) months, commencing on February 7, 2025 and expiring on August 6, 2026 (the "Modified Non-Solicitation Period (Employees)"). During the Modified Non-Solicitation Period (Employees), no Individual Defendant shall, directly or indirectly, solicit, induce, encourage, recruit, hire, or attempt to solicit, induce, encourage, recruit, or hire any person who is then, or was within the preceding six (6) months, an employee, independent contractor, or consultant of CRH, to leave the employ of CRH or to accept employment or engagement with Verdana or any other Competing Business. This prohibition extends to any form of solicitation, including but not limited to personal contact, telephone, email, text message, social media communication, or solicitation through recruiters, headhunters, or other third-party intermediaries.

(b) General Advertising Carve-Out. Notwithstanding the foregoing, the non-solicitation obligation in this Section 3.2 shall not prohibit Verdana or any Individual Defendant from posting general public advertisements for employment positions (including job postings on general-purpose employment websites, company career pages, or general media advertisements) that are not specifically targeted at or directed toward CRH employees. Any response by a CRH employee to such a general public advertisement shall not, by itself, be deemed a violation of this Section 3.2, provided that no Individual Defendant has directly or indirectly encouraged or directed the CRH employee to apply. [Note: This carve-out reflects a comment from WND that was accepted by CRH as a standard market provision.]

Section 3.3 — Modified Non-Solicitation of Vendors.

(a) Non-Solicitation Obligation. Each of the eight Individual Defendants agrees to a non-solicitation obligation with respect to CRH's Top 50 Vendors (as listed on Exhibit C) for a period of twelve (12) months, commencing on February 7, 2025 and expiring on February 6, 2026 (the "Modified Non-Solicitation Period (Vendors)"). During the Modified Non-Solicitation Period (Vendors), no Individual Defendant shall, directly or indirectly, solicit, contact, approach, or engage with any Top 50 Vendor for the purpose of: (i) diverting, redirecting, or interfering with business between the Top 50 Vendor and CRH; (ii) obtaining pricing, terms, conditions, or commercial arrangements that are materially similar to, or derived from, those that CRH has negotiated with such Top 50 Vendor; or (iii) inducing or encouraging any Top 50 Vendor to reduce, terminate, or materially alter its business relationship with CRH.

(b) Pre-Existing Vendor Relationships Carve-Out. Notwithstanding the foregoing, the non-solicitation obligation in this Section 3.3 shall not restrict or prohibit Verdana from continuing its pre-existing vendor relationships with any Top 50 Vendor (i.e., vendor relationships that were established and in effect between Verdana and the Top 50 Vendor prior to February 7, 2025). Only new solicitations, contacts, or engagements initiated by the Individual Defendants on behalf of Verdana with Top 50 Vendors after February 7, 2025 are covered by this Section 3.3. Verdana shall maintain records sufficient to demonstrate the existence and scope of any pre-existing vendor relationships claimed under this carve-out and shall make such records available to the Compliance Monitor upon request. [Note: This clarification reflects a comment from Blackhall & Soren that was incorporated into this draft.]

(c) Prohibition on Use of Proprietary Terms. [CRH Proposed Proviso: CRH proposes adding the following language: "Notwithstanding Section 3.3(b), Verdana shall not use, and shall not permit any Individual Defendant to use, CRH's proprietary vendor negotiation terms, pricing structures, cost models, or other CRH Confidential Information in connection with any engagement with a Top 50 Vendor, regardless of whether Verdana has a pre-existing relationship with such Top 50 Vendor." Blackhall Note: Verdana's position is that this proviso is already covered by the confidentiality provisions in Section 3.4 and is therefore duplicative. CRH responds that inclusion of this proviso in the vendor non-solicitation section provides additional clarity and enforceability. This provision remains bracketed pending resolution.]

Section 3.4 — Confidentiality Obligations.

(a) Reaffirmation. Each Individual Defendant hereby reaffirms, acknowledges, and agrees to be bound by the perpetual confidentiality obligations contained in his or her respective Employment Agreement, as such obligations are further supplemented and reinforced by this Agreement. The Individual Defendants acknowledge and agree that the confidentiality obligations contained in the Employment Agreements survived the termination of their employment with CRH and remain in full force and effect.

(b) Specific Reaffirmation. Without limiting the generality of Section 3.4(a), each Individual Defendant specifically reaffirms and agrees that the following categories of information constitute CRH Confidential Information and are subject to the perpetual confidentiality obligations: (i) all Project Ridgeline materials, including strategic plans, projections, analyses, presentations, and supporting data; (ii) vendor negotiation playbooks and vendor term sheets; (iii) seasonal buying algorithms and purchasing models; (iv) private-label sourcing strategies, cost models, and supplier agreements; (v) customer segmentation data and consumer behavior analytics; and (vi) category expansion roadmaps and competitive positioning analyses.

(c) Prohibition on Disclosure. No Individual Defendant shall disclose, transmit, communicate, furnish, provide access to, or otherwise make available any CRH Confidential Information to Verdana, Greystone Capital Partners, LP, or any other third party, whether directly or indirectly, in whole or in part, in any form or medium, at any time. This prohibition applies regardless of whether the CRH Confidential Information is recalled from memory, reproduced from notes, or derived from any other source.

(d) Verdana Covenant. Verdana hereby covenants and agrees that it shall not solicit, request, accept, use, benefit from, or otherwise exploit any CRH Confidential Information, directly or indirectly, from any Individual Defendant or any other source. In the event that Verdana becomes aware that any CRH Confidential Information has been disclosed to any Verdana employee, officer, director, agent, or representative, Verdana shall immediately notify CRH and the Compliance Monitor in writing and shall take all reasonable steps to sequester and destroy such information in accordance with the Data Destruction Protocol.

Section 3.5 — Superseding Effect. The modified restrictive covenants set forth in this Article III and in Exhibit A attached hereto supersede the corresponding restrictive covenant provisions of the individual Employment Agreements solely with respect to the duration, scope, and category limitations of the non-competition and non-solicitation obligations. In all other respects, including with respect to the perpetual confidentiality obligations, the terms and conditions of the Employment Agreements remain in full force and effect and are not modified, amended, or superseded by this Agreement. In the event of any conflict between the modified restrictive covenants set forth in this Article III and the corresponding provisions of any Employment Agreement, the terms of this Article III shall control.

Section 3.6 — Court Enforcement. The modified restrictive covenants set forth in this Article III shall be incorporated in their entirety into the Consent Order entered by the Court in the Action. Upon entry of the Consent Order, the modified restrictive covenants shall be enforceable by the Court through contempt proceedings, sanctions, and such other equitable remedies as may be available under the laws of the State of Delaware and the rules and procedures of the Court of Chancery, in addition to any contractual remedies available to CRH under this Agreement or the Employment Agreements. The Parties acknowledge and agree that a breach of the modified restrictive covenants would cause irreparable harm to CRH that could not be adequately compensated by monetary damages, and that CRH shall be entitled to seek injunctive relief and specific performance without the necessity of proving actual damages or posting a bond.

ARTICLE IV — MONETARY TERMS

Section 4.1 — Settlement Payment.

(a) Amount and Payment. Verdana shall pay to CRH the aggregate sum of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000) (the "Settlement Payment") in immediately available funds by wire transfer to a bank account designated by CRH, no later than thirty (30) days following the Execution Date. [Blackhall Comment: Verdana has requested a forty-five (45)-day payment period. CRH has counter-proposed thirty (30) days, which is reflected in the current draft. This remains a bracketed point for further negotiation.]

(b) Wire Instructions. CRH shall provide Verdana with written wire transfer instructions for the designated receiving account within three (3) business days following the Execution Date. Verdana shall confirm receipt of the wire transfer instructions and shall provide CRH with confirmation of the wire transfer upon completion.

(c) Late Payment. In the event that Verdana fails to make the Settlement Payment within the time period specified in Section 4.1(a), interest shall accrue on the unpaid amount at the rate of the lesser of (i) one and one-half percent (1.5%) per month (eighteen percent (18%) per annum) and (ii) the maximum rate permitted by applicable law, from the date such payment was due until the date of actual payment.

Section 4.2 — Litigation Cost Reimbursement.

(a) Amount and Payment. Verdana shall reimburse CRH the aggregate sum of Four Hundred Twenty-Five Thousand Dollars ($425,000) toward CRH's litigation costs and expenses incurred in connection with the Action, including but not limited to court filing fees, forensic investigation costs, injunction bond premiums, and mediation fees (the "Litigation Cost Reimbursement"). The Litigation Cost Reimbursement shall be payable concurrently with the Settlement Payment by wire transfer to the same bank account designated by CRH pursuant to Section 4.1(b).

(b) Own Fees and Costs. Except as expressly provided in this Section 4.2, each Party shall bear its own attorneys' fees, costs, and expenses incurred in connection with the Action and the negotiation, drafting, and execution of this Agreement.

Section 4.3 — Equity Forfeitures.

(a) Rathore RSU Forfeiture. Rathore acknowledges and agrees to the forfeiture of equity in the aggregate amount of Three Hundred Sixty-Two Thousand Five Hundred Dollars ($362,500), consisting of:

(i) One Hundred Eighty-One Thousand Two Hundred Fifty Dollars ($181,250) in unvested restricted stock units ("RSUs"), representing the remaining twenty-five percent (25%) unvested tranche of an RSU grant with a total grant date fair value of Seven Hundred Twenty-Five Thousand Dollars ($725,000), granted on March 15, 2021, pursuant to the Rathore Employment Agreement, subject to four-year ratable annual vesting of twenty-five percent (25%) per year (the first three tranches having vested on March 15, 2022, March 15, 2023, and March 15, 2024, respectively, and the fourth tranche not having vested as of the February 7, 2025 resignation date); and

(ii) One Hundred Eighty-One Thousand Two Hundred Fifty Dollars ($181,250) representing the clawback of the most recently vested tranche (the third tranche, which vested on March 15, 2024) pursuant to the for-cause clawback provision set forth in Section 7(d) of the Rathore Employment Agreement, which clawback was triggered by Rathore's breach of restrictive covenant obligations as alleged in the Action.

(b) Other Individual Defendants' Equity Forfeiture. Each of the other seven Individual Defendants — Linden, Kaczmarek, Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson — acknowledges and agrees to the forfeiture of unvested equity on a pro rata basis, with individual forfeiture amounts as set forth on Schedule 4.3(b) attached hereto. The aggregate forfeiture value for the seven other Individual Defendants is Four Hundred Eighty-Seven Thousand Dollars ($487,000).

(c) Direction to Transfer Agent. Promptly following the Execution Date, CRH shall direct Northland Trust Company, as CRH's transfer agent and RSU plan administrator, to cancel the unvested RSU awards and effectuate the equity clawback reflected in Sections 4.3(a) and 4.3(b) above. Each Individual Defendant shall execute such documents and take such actions as may be reasonably requested by CRH or Northland Trust Company to effectuate such cancellation and forfeiture, including the execution of any required stock power, forfeiture acknowledgment, or plan administrator notification.

(d) Total Economic Recovery. For the avoidance of doubt, the total economic recovery to CRH under this Agreement, calculated as of the Execution Date, is Ten Million Twenty-Four Thousand Five Hundred Dollars ($10,024,500), consisting of the following components:

Section 4.4 — Tax Treatment. Each Party shall be solely responsible for any and all federal, state, and local tax liabilities, including income taxes, employment taxes, and any applicable penalties or interest, arising from or attributable to the payments received or equity forfeitures made under this Article IV. No Party makes any representation or warranty to any other Party regarding the tax treatment, tax consequences, or tax characterization of any payment, forfeiture, or other economic transfer made pursuant to this Agreement. Each Party is advised to consult with his, her, or its own independent tax advisors regarding the tax implications of this Agreement.

Section 4.5 — No Admission. The Settlement Payment, Litigation Cost Reimbursement, equity forfeitures, and all other monetary terms and payments set forth in this Article IV are made in compromise and settlement of disputed claims and do not constitute, and shall not be construed as, an admission of liability, fault, wrongdoing, or the validity of any claim or defense by any Party. The Parties acknowledge that this Agreement reflects a negotiated resolution and that each Party has entered into this Agreement to avoid the expense, burden, and uncertainty of continued litigation.

ARTICLE V — DATA RETURN AND DESTRUCTION

Section 5.1 — Return or Destruction of Exfiltrated Data.

(a) Obligation. Within ten (10) business days following the Execution Date, each Individual Defendant shall return to CRH, or certify the destruction of, all CRH Confidential Information in such Individual Defendant's possession, custody, or control, including but not limited to the Exfiltrated Data (consisting of approximately 14,327 files totaling approximately 2.8 gigabytes). The return or destruction shall encompass all copies, duplicates, extracts, summaries, compilations, analyses, or derivative works based on or incorporating CRH Confidential Information, whether stored in electronic form (including on personal computers, laptops, mobile devices, external storage media, cloud storage accounts, email accounts, or any other digital repository) or in physical form (including printed documents, handwritten notes, or photographic reproductions).

(b) Data Destruction Protocol. The destruction of CRH Confidential Information shall be performed in strict accordance with the Data Destruction Protocol attached hereto as Exhibit B, which sets forth the specific procedures, technical standards, and verification methods to be employed in the destruction process. Each Individual Defendant shall retain the services of a qualified data destruction vendor (if applicable) at his or her own expense to ensure compliance with the Data Destruction Protocol.

(c) Sworn Certification. Upon completion of the return or destruction process, each Individual Defendant shall execute a sworn certification of compliance, in the form attached as Annex 1 to Exhibit B, attesting under penalty of perjury that he or she has returned or destroyed all CRH Confidential Information in his or her possession, custody, or control. Such sworn certifications shall be delivered to CRH's General Counsel, Theresa Yun-Park, and to the Compliance Monitor within the ten (10) business day period specified in Section 5.1(a).

Section 5.2 — Verdana Data Purge.

(a) Comprehensive Search and Purge. Verdana shall, within ten (10) business days following the Execution Date, conduct a comprehensive search of all Verdana systems, networks, servers, devices, and repositories (including but not limited to email servers, shared network drives, cloud storage platforms, document management systems, collaboration tools, and any desktop computers, laptop computers, mobile devices, or other electronic devices that have been issued to or used by any Individual Defendant in connection with his or her employment at Verdana) and shall purge, delete, and destroy all CRH Confidential Information identified in such search. The search shall be conducted using commercially reasonable search methodologies, including keyword searches, hash-value matching against the Pinnacle Forensics file inventory, and metadata analysis.

(b) Corporate Certification. Upon completion of the comprehensive search and purge, Verdana shall execute a corporate certification of compliance, signed by Helen Tsoi, General Counsel of Verdana, attesting that Verdana has conducted the required search and purge and that, to the best of Verdana's knowledge after diligent inquiry, all CRH Confidential Information has been identified and destroyed. Such corporate certification shall be delivered to CRH's General Counsel and to the Compliance Monitor within the ten (10) business day period specified in Section 5.2(a).

Section 5.3 — Independent Forensic Audit.

(a) Engagement of Pinnacle Forensics. Verdana shall permit, and shall fully cooperate with, an independent forensic audit of Verdana's systems to be conducted by Pinnacle Forensics LLC (engagement lead: Dr. Rajiv Anand, Principal Forensic Analyst) for the purpose of verifying compliance with the data return and destruction obligations set forth in Sections 5.1 and 5.2 of this Agreement.

(b) Timing. The forensic audit shall commence no later than fifteen (15) business days following the Execution Date and shall be completed within thirty (30) business days following the Execution Date.

(c) Cost. Verdana shall bear the full cost of the independent forensic audit, subject to a cap of One Hundred Seventy-Five Thousand Dollars ($175,000). In the event that the cost of the forensic audit exceeds such cap due to circumstances beyond the reasonable control of Pinnacle Forensics, the Parties shall negotiate in good faith regarding the allocation of any excess costs. For the avoidance of doubt, in the event that Pinnacle Forensics identifies evidence of non-compliance requiring additional forensic investigation, the costs of such additional investigation shall be borne by Verdana without regard to the cap.

(d) Scope Limitations. The scope of the forensic audit shall be limited to the identification and verification of the destruction of CRH Confidential Information within Verdana's systems and shall not extend to Verdana's proprietary business data, trade secrets, or other information that is unrelated to CRH. Pinnacle Forensics shall use commercially reasonable efforts to minimize disruption to Verdana's business operations during the audit process. [Note: This scope limitation reflects a comment from Blackhall & Soren that was accepted by CRH.]

(e) Confidentiality of Verdana Information. In the event that Pinnacle Forensics incidentally accesses Verdana proprietary information that is unrelated to CRH during the course of the forensic audit, such information shall be treated as confidential and shall not be disclosed to CRH or any third party. Pinnacle Forensics shall execute a non-disclosure agreement in a form reasonably acceptable to Verdana and CRH, covering Verdana proprietary information that is unrelated to CRH. [Note: This provision reflects a Blackhall & Soren comment that was agreed to by CRH.]

(f) Reporting. Pinnacle Forensics shall prepare a written report of its findings and shall deliver such report to CRH (attention: Theresa Yun-Park, General Counsel), Verdana (attention: Helen Tsoi, General Counsel), and the Compliance Monitor within five (5) business days following completion of the forensic audit. The report shall include a detailed summary of the audit methodology, files identified, destruction verification results, and any findings of non-compliance.

(g) Cooperation. Verdana shall cooperate fully with Pinnacle Forensics in connection with the forensic audit, including by providing reasonable access to Verdana's premises, systems, and personnel during normal business hours, and by producing such documents, records, and information as may be reasonably requested by Pinnacle Forensics in connection with the audit.

Section 5.4 — Ongoing Obligations. The obligations set forth in this Article V are in addition to, and do not limit, modify, or supersede, the perpetual confidentiality obligations set forth in Section 3.4 of this Agreement and the Employment Agreements. The completion of the data return, destruction, and forensic audit processes described in this Article V shall not relieve any Individual Defendant or Verdana of any obligation to maintain the confidentiality of CRH Confidential Information or to refrain from using, disclosing, or benefiting from CRH Confidential Information at any time.

ARTICLE VI — INJUNCTION BOND AND TRO DISSOLUTION

Section 6.1 — Dissolution of TRO. Upon entry of the Consent Order by the Court in the Action, the Temporary Restraining Order entered by Vice Chancellor Zhao on March 7, 2025 shall be dissolved and shall be of no further force or effect. The Consent Order shall expressly provide for the dissolution of the TRO and shall supersede the TRO in all respects. The restrictions on the Individual Defendants' conduct shall thereafter be governed exclusively by the modified restrictive covenants set forth in Article III of this Agreement, as incorporated into the Consent Order.

Section 6.2 — Release of Injunction Bond. Promptly following the entry of the Consent Order dissolving the TRO, and in any event within ten (10) business days following such entry, CRH shall submit a written request to Broadview Surety Corp. for the discharge and release of the Two Million Five Hundred Thousand Dollar ($2,500,000) injunction bond (Bond No. BSC-2025-TRO-04419) posted by CRH in connection with the TRO. The Individual Defendants and Verdana shall cooperate in providing any consents, acknowledgments, or other documentation reasonably required by Broadview Surety Corp. to effectuate the discharge and release of the bond.

Section 6.3 — No Damages on Bond. Each of the Individual Defendants and Verdana hereby irrevocably waives any and all claims for damages, losses, costs, expenses, or other recovery on the injunction bond arising from or related to the issuance, maintenance, or enforcement of the TRO, including any claims under 10 Del. C. § 3104 or any other provision of applicable law. This waiver shall survive the dissolution of the TRO and the discharge of the injunction bond.

ARTICLE VII — COMPLIANCE MONITOR

Section 7.1 — Appointment of Compliance Monitor.

(a) Appointment. The Parties agree to the appointment of Aldwyn Compliance Solutions LLC, located at 1700 Market Street, Suite 2800, Philadelphia, Pennsylvania 19103, as the independent Compliance Monitor for a period of twelve (12) months commencing on the Execution Date (the "Monitoring Period"). Aldwyn has been selected by mutual agreement of the Parties following arm's-length negotiations and is independent of all Parties.

(b) Engagement Terms. The Compliance Monitor shall operate under the terms and conditions of the Compliance Monitor Engagement Letter attached hereto as Exhibit D, which has been agreed upon by CRH, Verdana, and Aldwyn. The Compliance Monitor Engagement Letter sets forth the specific scope of services, reporting obligations, confidentiality protections, and other material terms of the engagement.

(c) Independence. The Compliance Monitor shall at all times act independently and impartially, and shall not be an agent, representative, or advocate of any Party. The Compliance Monitor's findings and conclusions shall be based solely on its professional judgment and the evidence and information available to it.

Section 7.2 — Scope of Monitoring.

(a) Quarterly Verification. The Compliance Monitor shall conduct quarterly verification of compliance by all Individual Defendants and Verdana with: (i) the modified non-competition obligations set forth in Section 3.1 of this Agreement; (ii) the modified non-solicitation obligations set forth in Sections 3.2 and 3.3 of this Agreement; and (iii) the data return and destruction obligations set forth in Article V of this Agreement. The first quarterly verification shall cover the period from the Execution Date through the end of the first full calendar quarter following the Execution Date, and subsequent quarterly verifications shall cover each successive calendar quarter during the Monitoring Period.

(b) Access to Records and Personnel. The Compliance Monitor shall have reasonable access to relevant records, documents, and personnel of both CRH and Verdana, as set forth in the Compliance Monitor Engagement Letter and a separate Letter Agreement among CRH, Verdana, and Aldwyn regarding information-sharing and access protocols. Such access shall be exercised during normal business hours and upon reasonable advance notice, and shall be subject to appropriate confidentiality protections to safeguard the proprietary information of both CRH and Verdana.

(c) Monitoring of Individual Defendants. [WND Comment: Whitfield, Nygaard & Doyle has requested that monitoring of Individual Defendants be limited to written certifications and document review, and shall not include in-person interviews without (i) at least five (5) business days' advance written notice to the affected Individual Defendant and his or her counsel and (ii) the opportunity for counsel to be present at any such interview. C&H Note: CRH is reviewing this request and is inclined to accept it with the modification that the Compliance Monitor may conduct telephonic or video interviews on three (3) business days' advance notice in exigent circumstances, with counsel present. This provision remains bracketed pending final resolution.]

Section 7.3 — Cost Allocation.

(a) Total Estimated Cost. The total estimated cost of the Compliance Monitor engagement for the twelve (12)-month Monitoring Period is Three Hundred Sixty Thousand Dollars ($360,000), subject to adjustment in accordance with the terms of the Compliance Monitor Engagement Letter.

(b) Allocation. The cost of the Compliance Monitor engagement shall be allocated as follows: Verdana shall bear sixty percent (60%) of the total cost (estimated at Two Hundred Sixteen Thousand Dollars ($216,000)), and CRH shall bear forty percent (40%) of the total cost (estimated at One Hundred Forty-Four Thousand Dollars ($144,000)).

(c) Payment Schedule. Payments to Aldwyn shall be made quarterly in advance, in equal installments of Ninety Thousand Dollars ($90,000) per quarter (of which Verdana shall pay Fifty-Four Thousand Dollars ($54,000) and CRH shall pay Thirty-Six Thousand Dollars ($36,000)), due on the first business day of each calendar quarter during the Monitoring Period, beginning with the first calendar quarter following the Execution Date.

Section 7.4 — Reports.

(a) Quarterly Reports. The Compliance Monitor shall provide quarterly written reports to CRH (attention: Theresa Yun-Park, General Counsel, Cascade Retail Holdings Inc.) and Verdana (attention: Helen Tsoi, General Counsel, Verdana Commerce Group, Inc.), with copies to all counsel of record in the Action. Each quarterly report shall include: (i) a summary of monitoring activities conducted during the applicable quarter; (ii) a description of any information reviewed and interviews conducted; (iii) the Compliance Monitor's findings and conclusions regarding compliance; and (iv) any recommendations for remedial action or enhanced monitoring.

(b) Immediate Violation Notices. In the event that the Compliance Monitor identifies a suspected violation of any provision of this Agreement, the Compliance Monitor shall provide immediate written notice thereof to all Parties and their respective counsel. If the Consent Order so requires, the Compliance Monitor shall also provide such notice to the Court. The notice shall include a description of the suspected violation, the evidence supporting the Compliance Monitor's conclusion, and any recommended immediate remedial actions.

(c) Final Report. At the conclusion of the Monitoring Period, the Compliance Monitor shall prepare and deliver a comprehensive final report summarizing all monitoring activities, findings, and conclusions for the entire Monitoring Period, including a statement as to whether, in the Compliance Monitor's professional judgment, all Parties have complied with the applicable provisions of this Agreement.

Section 7.5 — Removal and Replacement. The Compliance Monitor may be removed prior to the expiration of the Monitoring Period only by (a) the unanimous written agreement of all Parties or (b) an order of the Court upon a showing of cause, including but not limited to a material conflict of interest, a material failure to perform monitoring duties, or a material breach of the Compliance Monitor Engagement Letter. In the event of removal, the Parties shall negotiate in good faith to agree upon a replacement compliance monitor within fifteen (15) business days. If the Parties are unable to agree on a replacement within such period, any Party may apply to the Court for the appointment of a replacement monitor.

Section 7.6 — Indemnification of Compliance Monitor. The Parties shall jointly and severally indemnify, defend, and hold harmless Aldwyn and its officers, employees, agents, and representatives from and against any and all claims, demands, losses, liabilities, damages, costs, and expenses (including reasonable attorneys' fees) arising from or related to the good-faith performance of Aldwyn's monitoring duties under this Agreement and the Compliance Monitor Engagement Letter, except for claims arising from the gross negligence or willful misconduct of Aldwyn. [Blackhall Comment: Verdana has proposed that the indemnification obligation be subject to an aggregate cap. CRH is reviewing this proposal. The specific cap amount has not yet been proposed by Verdana. This provision remains bracketed pending resolution.]

ARTICLE VIII — REPRESENTATIONS AND WARRANTIES

Section 8.1 — Mutual Representations. Each Party represents and warrants to each other Party, as of the Execution Date, as follows:

(a) Power and Authority. Such Party has the full right, power, and authority to enter into this Agreement and to perform all of its obligations hereunder. In the case of CRH and Verdana, the execution, delivery, and performance of this Agreement have been duly authorized by all necessary corporate action. In the case of each Individual Defendant, such Individual Defendant has the legal capacity to enter into this Agreement.

(b) Valid and Binding Obligation. This Agreement constitutes the legal, valid, and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally, and subject to general principles of equity (whether considered in a proceeding in equity or at law).

(c) No Conflict. The execution, delivery, and performance of this Agreement by such Party does not and will not (i) violate, conflict with, or result in a breach of any provision of such Party's organizational documents (if applicable); (ii) violate any applicable law, rule, regulation, judgment, order, or decree; or (iii) conflict with, result in a breach of, or constitute a default under any material agreement, contract, or instrument to which such Party is a party or by which such Party is bound.

(d) Independent Counsel. Such Party has been represented by independent legal counsel of its own choosing in connection with the negotiation, drafting, and execution of this Agreement. CRH has been represented by Calderwood & Harkness LLP; the Individual Defendants have been represented by Whitfield, Nygaard & Doyle LLP; and Verdana has been represented by Blackhall & Soren LLP. Each Party has had the opportunity to consult with its counsel regarding the terms, meaning, and legal effect of this Agreement and has done so to the extent it deems appropriate.

Section 8.2 — CRH Representations. CRH represents and warrants to each other Party, as of the Execution Date, as follows:

(a) Corporate Authority. CRH has the corporate authority to enter into this Agreement, and the execution and delivery of this Agreement has been authorized by CRH's management, subject to ratification by CRH's Board of Directors. CRH represents that it expects to obtain such Board ratification promptly following the Execution Date and that, in the event such ratification is not obtained, CRH shall promptly notify the other Parties. The obligations of CRH under this Agreement shall become fully effective upon such Board ratification.

(b) Top 50 Vendors List. CRH represents that the Top 50 Vendors list set forth on Exhibit C is accurate and complete as of the Execution Date, reflecting CRH's top fifty vendors by aggregate spend for FY2024 based on CRH's internal records and accounting systems. CRH further represents that the list has been compiled in good faith and has not been manipulated or altered for the purpose of this Agreement.

Section 8.3 — Individual Defendant Representations. Each Individual Defendant represents and warrants to CRH, as of the Execution Date, as follows:

(a) Non-Disclosure. Since the date of his or her resignation from CRH on February 7, 2025, such Individual Defendant has not disclosed, transmitted, or otherwise provided any CRH Confidential Information to any person or entity other than Verdana and its officers, directors, employees, agents, and legal advisors, and any disclosure to Verdana has been limited to information disclosed prior to the date of this Agreement.

(b) Data Destruction Compliance. Such Individual Defendant will comply fully with the Data Destruction Protocol attached as Exhibit B and will execute the sworn certification required by Section 5.1(c) within the timeframe specified therein.

(c) Completeness of Data Disclosure. The list of files and data in such Individual Defendant's possession, custody, or control is complete and accurate as disclosed to Pinnacle Forensics during the course of the forensic investigation. [WND Comment: Whitfield, Nygaard & Doyle has requested the addition of the following qualifier: "to the best of his or her knowledge and belief, after reasonable inquiry." WND's position is that absolute representations regarding completeness are unreasonable given the volume of data involved (14,327 files) and the possibility of inadvertent omissions. C&H Note: CRH is reviewing this request. The current draft includes both formulations for bracketed consideration: [to the best of his or her knowledge and belief, after reasonable inquiry / complete and accurate in all respects]. Final language to be agreed.]

Section 8.4 — Verdana Representations. Verdana represents and warrants to CRH, as of the Execution Date, as follows:

(a) Non-Use of CRH Confidential Information. Verdana has not used, incorporated, relied upon, or otherwise benefited from any CRH Confidential Information in connection with its business operations, strategic planning, vendor negotiations, product development, or any other aspect of its business, and will not do so at any time in the future.

(b) Forensic Audit Compliance. Verdana will comply fully with the independent forensic audit required by Section 5.3 and will provide all necessary cooperation, access, and documentation to Pinnacle Forensics in connection therewith.

(c) Financial Ability. Verdana has the financial ability and sufficient available funds to make the Settlement Payment and Litigation Cost Reimbursement within the timeframes required by Sections 4.1 and 4.2 of this Agreement, and the making of such payments will not render Verdana insolvent or unable to meet its obligations as they become due.

(d) Greystone Awareness. [Bracketed — Open Point] [CRH Position: Greystone Capital Partners, LP, as the majority equity holder of Verdana, is aware of this Agreement and the material terms hereof, and does not object to Verdana's entry into this Agreement or the performance of Verdana's obligations hereunder. CRH proposes retention of this representation given Greystone's alleged role in financing the coordinated recruitment of the Individual Defendants through approximately $6.2 million in aggregate sign-on bon

SECOND DRAFT – March 31, 2025 Prepared by Calderwood & Harkness LLP Reflecting comments received from Whitfield, Nygaard & Doyle LLP (on behalf of the Rathore Group) and Blackhall & Soren LLP (on behalf of Verdana Commerce Group, Inc.) Matter No. 1038-00006
STANDSTILL AND SETTLEMENT AGREEMENT
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STANDSTILL AND SETTLEMENT AGREEMENT
This Standstill and Settlement Agreement (this "Agreement") is entered into as of __, 2025 (the "Execution Date"), by and among:
CASCADE RETAIL HOLDINGS INC., a Delaware corporation, with its principal executive offices located at 2200 Elliott Avenue West, Suite 3400, Seattle, Washington 98119 ("CRH" or the "Company");
PRIYA RATHORE, an individual residing at 14 Harbor Ridge Lane, Bellevue, Washington 98004 ("Rathore");
DEREK LINDEN, an individual ("Linden");
SONIA KACZMAREK, an individual ("Kaczmarek");
AMARA OSEI, an individual ("Osei");
BRENT HALVORSEN, an individual ("Halvorsen");
LUCIA FERNANDEZ-GILL, an individual ("Fernandez-Gill");
NATHAN TSAO, an individual ("Tsao");
KIRA JOHANSSON, an individual ("Johansson");
(Rathore, Linden, Kaczmarek, Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson are referred to individually as an "Individual Defendant" and collectively as the "Individual Defendants" or the "Rathore Group"); and
VERDANA COMMERCE GROUP, INC., a Delaware corporation, with its principal executive offices located at 400 Christiana Gateway, Suite 700, Wilmington, Delaware 19801 ("Verdana" or "VCG").
CRH, the Individual Defendants, and Verdana are each referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, CRH is a publicly traded omnichannel retail company listed on the Nasdaq Stock Market LLC under the ticker symbol "CRHL," with fiscal year 2024 ("FY2024") annual revenue of approximately Six Billion Eight Hundred Twenty Million Dollars ($6,820,000,000), operating 387 brick-and-mortar retail locations across 34 states and a direct-to-consumer ecommerce platform that serves customers nationwide;
WHEREAS, each of the Individual Defendants was formerly employed by CRH in senior merchandising roles within CRH's merchandising division, which generated approximately Two Billion Three Hundred Million Dollars ($2,300,000,000) in gross merchandise value in FY2024 and which constituted a core revenue-generating function of CRH's business;
WHEREAS, each Individual Defendant entered into an employment agreement with CRH containing restrictive covenant provisions, including non-competition, non-solicitation (of both employees and vendors), and confidentiality obligations, all of which are governed by the laws of the State of Delaware (each, an "Employment Agreement," and collectively, the "Employment Agreements");
WHEREAS, Rathore's applicable Employment Agreement is the Amended and Restated Employment Agreement dated March 15, 2021 (the "Rathore Employment Agreement"), which contains, among other provisions, an eighteen (18)-month post-termination non-competition period, a twenty-four (24)-month post-termination non-solicitation period with respect to both employees and vendors, and perpetual confidentiality obligations with respect to proprietary and trade secret information of CRH;
WHEREAS, on February 7, 2025, all eight Individual Defendants submitted simultaneous resignation letters to CRH, each effective immediately, in what CRH alleges was a coordinated mass departure, and subsequently accepted employment with Verdana, a direct competitor of CRH in twenty-eight (28) overlapping product categories within the retail merchandising industry;
WHEREAS, CRH's forensic investigation, conducted by Pinnacle Forensics LLC ("Pinnacle Forensics"), a digital forensics firm retained by CRH on February 10, 2025, revealed that between January 10, 2025 and February 4, 2025, approximately 14,327 files (totaling approximately 2.8 gigabytes of data) were downloaded from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts maintained by various members of the Rathore Group, including materials related to the confidential five-year category expansion plan known internally as "Project Ridgeline," vendor negotiation term sheets and playbooks, private-label cost models and sourcing strategies, seasonal buying algorithms, and customer segmentation data;
WHEREAS, on March 5, 2025, CRH filed a Verified Complaint and Motion for Temporary Restraining Order and Preliminary Injunction in the Court of Chancery of the State of Delaware, C.A. No. 2025-0198-MTZ (the "Action"), before Vice Chancellor Margaret T. Zhao, asserting claims for: (1) breach of restrictive covenant obligations against the Individual Defendants; (2) breach of confidentiality obligations against the Individual Defendants; (3) misappropriation of trade secrets under the Delaware Uniform Trade Secrets Act, 6 Del. C. § 2001 et seq. ("DUTSA"), against the Individual Defendants and Verdana; (4) tortious interference with contractual relations against Verdana; and (5) civil conspiracy against all defendants;
WHEREAS, on March 7, 2025, Vice Chancellor Zhao granted a Temporary Restraining Order (the "TRO") restraining the Individual Defendants from commencing employment in merchandising roles at Verdana or any other competitor of CRH for a period of fourteen (14) days, and CRH posted an injunction bond in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000) through Broadview Surety Corp. (Bond No. BSC-2025-TRO-04419) as a condition of the TRO;
WHEREAS, on March 18, 2025, the Parties participated in a court-ordered mediation session before the Honorable Philip Ashford (Ret.), conducted through Meridian ADR Services LLC (Reference No. Meridian-2025-0318-CRH), and on March 20, 2025, following extensive negotiations, reached a framework for settlement of all claims asserted in the Action;
WHEREAS, on March 21, 2025, the Court entered a Consent Interim Order maintaining the status quo during the documentation of settlement terms and adjourning the previously scheduled preliminary injunction hearing sine die;
WHEREAS, the Parties now desire to fully and finally resolve the Action and all disputes among them arising from the facts, circumstances, and claims set forth in the Verified Complaint and related proceedings, on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties, and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Party, the Parties agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:
"Action" means the civil action styled Cascade Retail Holdings Inc. v. Rathore et al., C.A. No. 2025-0198-MTZ, pending in the Court of Chancery of the State of Delaware before Vice Chancellor Margaret T. Zhao.
"Aldwyn" means Aldwyn Compliance Solutions LLC, an independent compliance consulting firm with offices at 1700 Market Street, Suite 2800, Philadelphia, Pennsylvania 19103.
"Competing Business" means any person, entity, or enterprise that is engaged, directly or indirectly, in the retail sale, distribution, merchandising, buying, sourcing, or category management of consumer goods in one or more of the Restricted Categories within the Geographic Scope.
"Compliance Monitor" means the independent compliance monitor appointed pursuant to Article VII of this Agreement, which shall be Aldwyn.
"Compliance Monitor Engagement Letter" means the engagement letter between Aldwyn, CRH, and Verdana in the form attached hereto as Exhibit D, setting forth the terms and conditions of the Compliance Monitor's engagement.
"Consent Interim Order" means the Consent Interim Order entered by the Court on March 21, 2025, maintaining the status quo and adjourning the preliminary injunction hearing pending documentation of the settlement.
"Consent Order" means the Stipulated Consent Order to be entered by the Court in the Action pursuant to Article IX of this Agreement, incorporating the modified restrictive covenant terms, data return and destruction obligations, and compliance monitoring provisions set forth herein.
"Court" means the Court of Chancery of the State of Delaware.
"CRH Confidential Information" means all information, data, materials, documents, and work product (in any form, whether tangible or intangible, written, electronic, or oral) that constitutes or contains: (a) trade secrets as defined under DUTSA; (b) proprietary data, methodologies, algorithms, models, or analytical tools; (c) any information relating to Project Ridgeline, including all strategic plans, projections, analyses, presentations, memoranda, and supporting data; (d) vendor negotiation playbooks, vendor term sheets, vendor pricing data, and vendor relationship strategies; (e) seasonal buying algorithms and purchasing models; (f) private-label sourcing strategies, cost models, supplier agreements, and product specifications; (g) customer segmentation data, customer analytics, and consumer behavior models; (h) category expansion roadmaps, market entry strategies, and competitive analyses; (i) financial projections, budgets, and internal performance metrics not publicly disclosed; and (j) any other information that falls within the definition of "Confidential Information" as set forth in each Individual Defendant's respective Employment Agreement. For the avoidance of doubt, CRH Confidential Information includes the Exfiltrated Data and all copies, extracts, summaries, or derivatives thereof.
"Data Destruction Protocol" means the protocol for the return or certified destruction of CRH Confidential Information and Exfiltrated Data, in the form attached hereto as Exhibit B.
"Employment Agreements" means, collectively, the individual employment agreements between CRH and each Individual Defendant, each governed by the laws of the State of Delaware, as more particularly described in Section 3.5 and Exhibit A.
"Exfiltrated Data" means the approximately 14,327 files (totaling approximately 2.8 gigabytes) that were downloaded from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts maintained by members of the Rathore Group between January 10, 2025 and February 4, 2025, as identified in the forensic investigation report prepared by Pinnacle Forensics and delivered to CRH on February 28, 2025.
"Execution Date" means the date first written above, being the date on which this Agreement is executed and delivered by all Parties.
"Geographic Scope" means the United States of America, including all fifty states and the District of Columbia.
"Greystone" means Greystone Capital Partners, LP, a Delaware limited partnership, which is referenced herein but is not a signatory Party to this Agreement.
"Modified Non-Compete Period" has the meaning set forth in Section 3.1 of this Agreement.
"Modified Non-Solicitation Period (Employees)" has the meaning set forth in Section 3.2 of this Agreement.
"Modified Non-Solicitation Period (Vendors)" has the meaning set forth in Section 3.3 of this Agreement.
"Pinnacle Forensics" means Pinnacle Forensics LLC, a digital forensics consulting firm with offices at 8700 Georgia Avenue, Suite 300, Silver Spring, Maryland 20910.
"Project Ridgeline" means CRH's confidential five-year strategic category expansion plan, completed in or about October 2024, encompassing market entry strategies, competitive positioning analyses, product development roadmaps, financial projections, and related strategic planning materials for twenty-three (23) new and expanded product categories.
"Rathore Employment Agreement" means the Amended and Restated Employment Agreement between CRH and Priya Rathore, dated as of March 15, 2021, as in effect on the date of Rathore's resignation.
"Restricted Categories" has the meaning set forth in Section 3.1(c) of this Agreement.
"Settlement Payment" has the meaning set forth in Section 4.1 of this Agreement.
"Top 50 Vendors" means the fifty (50) vendors of CRH identified by name, vendor identification number, and CRH spend category on Exhibit C attached hereto, ranked by aggregate CRH spend for FY2024, which Exhibit shall be filed under seal pursuant to Section 9.5.
"TRO" means the Temporary Restraining Order entered by the Court on March 7, 2025, in the Action, restraining the Individual Defendants from commencing employment in merchandising roles at Verdana or any other competitor of CRH for a period of fourteen (14) days.
Section 1.2 — Rules of Construction. For the purposes of this Agreement, except as otherwise expressly provided herein or unless the context otherwise requires: (a) the terms "hereof," "herein," "hereto," "hereunder," and similar terms refer to this Agreement as a whole, including all Exhibits and Schedules hereto, and not to any particular Section, Article, Exhibit, or Schedule; (b) references to any Article, Section, Exhibit, or Schedule are references to an Article or Section of, or an Exhibit or Schedule to, this Agreement; (c) the words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation"; (d) words in the singular shall include the plural and vice versa, and words of one gender shall include the other gender, as the context requires; (e) references to any Person shall include such Person's successors and permitted assigns; (f) references to any agreement or other document shall be to such agreement or document as amended, modified, supplemented, or restated from time to time; (g) references to "dollars" or "$" shall mean United States dollars; (h) headings and captions are for convenience of reference only and shall not affect the interpretation of this Agreement; (i) references to any statute or regulation shall include all amendments thereto and any successor statute or regulation; and (j) all Exhibits and Schedules attached hereto are incorporated herein by reference and made a part of this Agreement.
ARTICLE II — STANDSTILL AND STATUS QUO
Section 2.1 — Standstill Period. From the Execution Date through the later of (a) the expiration of all Modified Non-Compete Periods applicable to the Individual Defendants and (b) the expiration of all Modified Non-Solicitation Periods applicable to the Individual Defendants (such period, the "Standstill Period"), the Parties agree to maintain the status quo as set forth in this Agreement and the Consent Order. During the Standstill Period, no Party shall take any action that is inconsistent with the terms and conditions of this Agreement or the Consent Order, and each Party shall use reasonable best efforts to preserve and protect the rights and obligations established hereunder.
Section 2.2 — Continuation of Consent Interim Order. The Consent Interim Order entered by the Court on March 21, 2025, shall remain in full force and effect and shall continue to govern the Parties' conduct until such time as it is superseded by entry of the Consent Order in accordance with Article IX of this Agreement. In the event of any conflict between the terms of the Consent Interim Order and the terms of this Agreement during the period prior to entry of the Consent Order, the terms of this Agreement shall control as between the Parties, provided that the Parties shall comply with the Consent Interim Order to the extent required by the Court.
Section 2.3 — Verdana Employment. Subject to and in accordance with the restrictions set forth in Article III of this Agreement and the Consent Order, Verdana may continue to employ each of the Individual Defendants in roles that do not involve, directly or indirectly, any of the Restricted Categories during the applicable Modified Non-Compete Period for each such Individual Defendant. Each Individual Defendant may continue his or her employment at Verdana in a non-restricted capacity, including in roles related to product categories other than the Restricted Categories, general corporate management, finance, operations, human resources, or other functional areas that do not implicate the Restricted Categories. Upon the expiration of the applicable Modified Non-Compete Period for a given Individual Defendant, the restriction on that Individual Defendant's involvement in the Restricted Categories at Verdana shall automatically lapse, and such Individual Defendant may thereafter assume responsibilities involving the Restricted Categories, subject to the continuing confidentiality obligations set forth in Section 3.4 and the modified non-solicitation obligations set forth in Sections 3.2 and 3.3, to the extent such obligations remain in effect. For the avoidance of doubt, nothing in this Section 2.3 shall be construed as CRH's consent to or approval of the Individual Defendants' employment by Verdana, except to the extent expressly provided herein.
ARTICLE III — MODIFIED RESTRICTIVE COVENANTS
Section 3.1 — Modified Non-Competition Obligations.
(a) Rathore. Rathore shall be subject to a modified non-competition period of twelve (12) months, commencing on February 7, 2025 (the date of Rathore's resignation from CRH) and expiring on February 6, 2026 (the "Rathore Modified Non-Compete Period"), which represents a reduction from the original eighteen (18)-month non-competition period set forth in the Rathore Employment Agreement. During the Rathore Modified Non-Compete Period, Rathore shall not, directly or indirectly, whether as an employee, officer, director, consultant, advisor, independent contractor, agent, partner, member, shareholder (other than as a passive holder of less than two percent (2%) of the outstanding shares of a publicly traded company), or in any other capacity, engage in, manage, supervise, direct, or perform any merchandising, sourcing, buying, category management, product development, or strategic planning function in connection with any of the Restricted Categories for any Competing Business, including Verdana.
(b) Other Individual Defendants. Each of the other seven Individual Defendants — Linden, Kaczmarek, Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson — shall be subject to a modified non-competition period of nine (9) months, commencing on February 7, 2025 (the date of each such Individual Defendant's resignation from CRH) and expiring on November 6, 2025 (as applicable to each, the "Other Defendants' Modified Non-Compete Period," and together with the Rathore Modified Non-Compete Period, each a "Modified Non-Compete Period"). The Other Defendants' Modified Non-Compete Period represents a reduction from the original twelve (12)-month or eighteen (18)-month non-competition periods (as applicable per each Individual Defendant's Employment Agreement, as set forth in Exhibit A). During the applicable Other Defendants' Modified Non-Compete Period, each such Individual Defendant shall not, directly or indirectly, whether as an employee, officer, director, consultant, advisor, independent contractor, agent, partner, member, shareholder (other than as a passive holder of less than two percent (2%) of the outstanding shares of a publicly traded company), or in any other capacity, engage in, manage, supervise, direct, or perform any merchandising, sourcing, buying, category management, product development, or strategic planning function in connection with any of the Restricted Categories for any Competing Business, including Verdana.
(c) Restricted Categories. The modified non-competition obligation set forth in this Section 3.1 is limited to the following three product categories (collectively, the "Restricted Categories"):
(i) home goods (including home furnishings, kitchenware, bath accessories, home organization, and related subcategories as classified within CRH's internal category taxonomy);
(ii) seasonal décor (including holiday decorations, seasonal outdoor products, and related limited-edition seasonal merchandise); and
(iii) private-label apparel (including all apparel lines designed, developed, sourced, or sold under any proprietary brand name owned or controlled by CRH, including but not limited to the "Ridgeway Collection," "Cascade Essentials," and "Summit & Stone" brands).
The designation of the Restricted Categories represents a significant narrowing from the scope of the original non-competition covenants set forth in the Employment Agreements, which covered all retail product categories without limitation. The Parties acknowledge that the narrowing to the Restricted Categories reflects a negotiated compromise and is intended to balance CRH's legitimate interest in protecting its confidential business strategies in its most competitively sensitive categories against the Individual Defendants' interest in pursuing their livelihoods.
(d) Geographic Scope. The geographic scope of the modified non-competition obligations shall be the United States of America, including all fifty states and the District of Columbia. This geographic scope is unchanged from the original non-competition covenants in the Employment Agreements.
(e) Clarification of Permissible Activities. Notwithstanding anything to the contrary in this Section 3.1, the Individual Defendants may engage in general corporate management, finance, operations, human resources, information technology, legal, or other functional roles at Verdana that do not involve, directly or indirectly, any of the Restricted Categories. [WND Proposed Language: Whitfield, Nygaard & Doyle has proposed that attendance at general management meetings, leadership off-sites, board presentations, or other enterprise-level forums at which the Restricted Categories are incidentally discussed shall not constitute a violation of the modified non-competition obligations, provided that the Individual Defendant promptly recuses himself or herself from any substantive discussion of the Restricted Categories and provides prompt written notification of such incidental exposure to the Compliance Monitor. C&H Note: CRH is reviewing this proposed language and may accept with modifications, including a requirement that a contemporaneous log of all such incidental exposures be maintained and made available to CRH upon request. This provision remains bracketed pending resolution.]
Section 3.2 — Modified Non-Solicitation of Employees.
(a) Non-Solicitation Obligation. Each of the eight Individual Defendants agrees to a non-solicitation obligation with respect to employees of CRH for a period of eighteen (18) months, commencing on February 7, 2025 and expiring on August 6, 2026 (the "Modified Non-Solicitation Period (Employees)"). During the Modified Non-Solicitation Period (Employees), no Individual Defendant shall, directly or indirectly, solicit, induce, encourage, recruit, hire, or attempt to solicit, induce, encourage, recruit, or hire any person who is then, or was within the preceding six (6) months, an employee, independent contractor, or consultant of CRH, to leave the employ of CRH or to accept employment or engagement with Verdana or any other Competing Business. This prohibition extends to any form of solicitation, including but not limited to personal contact, telephone, email, text message, social media communication, or solicitation through recruiters, headhunters, or other third-party intermediaries.
(b) General Advertising Carve-Out. Notwithstanding the foregoing, the non-solicitation obligation in this Section 3.2 shall not prohibit Verdana or any Individual Defendant from posting general public advertisements for employment positions (including job postings on general-purpose employment websites, company career pages, or general media advertisements) that are not specifically targeted at or directed toward CRH employees. Any response by a CRH employee to such a general public advertisement shall not, by itself, be deemed a violation of this Section 3.2, provided that no Individual Defendant has directly or indirectly encouraged or directed the CRH employee to apply. [Note: This carve-out reflects a comment from WND that was accepted by CRH as a standard market provision.]
Section 3.3 — Modified Non-Solicitation of Vendors.
(a) Non-Solicitation Obligation. Each of the eight Individual Defendants agrees to a non-solicitation obligation with respect to CRH's Top 50 Vendors (as listed on Exhibit C) for a period of twelve (12) months, commencing on February 7, 2025 and expiring on February 6, 2026 (the "Modified Non-Solicitation Period (Vendors)"). During the Modified Non-Solicitation Period (Vendors), no Individual Defendant shall, directly or indirectly, solicit, contact, approach, or engage with any Top 50 Vendor for the purpose of: (i) diverting, redirecting, or interfering with business between the Top 50 Vendor and CRH; (ii) obtaining pricing, terms, conditions, or commercial arrangements that are materially similar to, or derived from, those that CRH has negotiated with such Top 50 Vendor; or (iii) inducing or encouraging any Top 50 Vendor to reduce, terminate, or materially alter its business relationship with CRH.
(b) Pre-Existing Vendor Relationships Carve-Out. Notwithstanding the foregoing, the non-solicitation obligation in this Section 3.3 shall not restrict or prohibit Verdana from continuing its pre-existing vendor relationships with any Top 50 Vendor (i.e., vendor relationships that were established and in effect between Verdana and the Top 50 Vendor prior to February 7, 2025). Only new solicitations, contacts, or engagements initiated by the Individual Defendants on behalf of Verdana with Top 50 Vendors after February 7, 2025 are covered by this Section 3.3. Verdana shall maintain records sufficient to demonstrate the existence and scope of any pre-existing vendor relationships claimed under this carve-out and shall make such records available to the Compliance Monitor upon request. [Note: This clarification reflects a comment from Blackhall & Soren that was incorporated into this draft.]
(c) Prohibition on Use of Proprietary Terms. [CRH Proposed Proviso: CRH proposes adding the following language: "Notwithstanding Section 3.3(b), Verdana shall not use, and shall not permit any Individual Defendant to use, CRH's proprietary vendor negotiation terms, pricing structures, cost models, or other CRH Confidential Information in connection with any engagement with a Top 50 Vendor, regardless of whether Verdana has a pre-existing relationship with such Top 50 Vendor." Blackhall Note: Verdana's position is that this proviso is already covered by the confidentiality provisions in Section 3.4 and is therefore duplicative. CRH responds that inclusion of this proviso in the vendor non-solicitation section provides additional clarity and enforceability. This provision remains bracketed pending resolution.]
Section 3.4 — Confidentiality Obligations.
(a) Reaffirmation. Each Individual Defendant hereby reaffirms, acknowledges, and agrees to be bound by the perpetual confidentiality obligations contained in his or her respective Employment Agreement, as such obligations are further supplemented and reinforced by this Agreement. The Individual Defendants acknowledge and agree that the confidentiality obligations contained in the Employment Agreements survived the termination of their employment with CRH and remain in full force and effect.
(b) Specific Reaffirmation. Without limiting the generality of Section 3.4(a), each Individual Defendant specifically reaffirms and agrees that the following categories of information constitute CRH Confidential Information and are subject to the perpetual confidentiality obligations: (i) all Project Ridgeline materials, including strategic plans, projections, analyses, presentations, and supporting data; (ii) vendor negotiation playbooks and vendor term sheets; (iii) seasonal buying algorithms and purchasing models; (iv) private-label sourcing strategies, cost models, and supplier agreements; (v) customer segmentation data and consumer behavior analytics; and (vi) category expansion roadmaps and competitive positioning analyses.
(c) Prohibition on Disclosure. No Individual Defendant shall disclose, transmit, communicate, furnish, provide access to, or otherwise make available any CRH Confidential Information to Verdana, Greystone Capital Partners, LP, or any other third party, whether directly or indirectly, in whole or in part, in any form or medium, at any time. This prohibition applies regardless of whether the CRH Confidential Information is recalled from memory, reproduced from notes, or derived from any other source.
(d) Verdana Covenant. Verdana hereby covenants and agrees that it shall not solicit, request, accept, use, benefit from, or otherwise exploit any CRH Confidential Information, directly or indirectly, from any Individual Defendant or any other source. In the event that Verdana becomes aware that any CRH Confidential Information has been disclosed to any Verdana employee, officer, director, agent, or representative, Verdana shall immediately notify CRH and the Compliance Monitor in writing and shall take all reasonable steps to sequester and destroy such information in accordance with the Data Destruction Protocol.
Section 3.5 — Superseding Effect. The modified restrictive covenants set forth in this Article III and in Exhibit A attached hereto supersede the corresponding restrictive covenant provisions of the individual Employment Agreements solely with respect to the duration, scope, and category limitations of the non-competition and non-solicitation obligations. In all other respects, including with respect to the perpetual confidentiality obligations, the terms and conditions of the Employment Agreements remain in full force and effect and are not modified, amended, or superseded by this Agreement. In the event of any conflict between the modified restrictive covenants set forth in this Article III and the corresponding provisions of any Employment Agreement, the terms of this Article III shall control.
Section 3.6 — Court Enforcement. The modified restrictive covenants set forth in this Article III shall be incorporated in their entirety into the Consent Order entered by the Court in the Action. Upon entry of the Consent Order, the modified restrictive covenants shall be enforceable by the Court through contempt proceedings, sanctions, and such other equitable remedies as may be available under the laws of the State of Delaware and the rules and procedures of the Court of Chancery, in addition to any contractual remedies available to CRH under this Agreement or the Employment Agreements. The Parties acknowledge and agree that a breach of the modified restrictive covenants would cause irreparable harm to CRH that could not be adequately compensated by monetary damages, and that CRH shall be entitled to seek injunctive relief and specific performance without the necessity of proving actual damages or posting a bond.
ARTICLE IV — MONETARY TERMS
Section 4.1 — Settlement Payment.
(a) Amount and Payment. Verdana shall pay to CRH the aggregate sum of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000) (the "Settlement Payment") in immediately available funds by wire transfer to a bank account designated by CRH, no later than thirty (30) days following the Execution Date. [Blackhall Comment: Verdana has requested a forty-five (45)-day payment period. CRH has counter-proposed thirty (30) days, which is reflected in the current draft. This remains a bracketed point for further negotiation.]
(b) Wire Instructions. CRH shall provide Verdana with written wire transfer instructions for the designated receiving account within three (3) business days following the Execution Date. Verdana shall confirm receipt of the wire transfer instructions and shall provide CRH with confirmation of the wire transfer upon completion.
(c) Late Payment. In the event that Verdana fails to make the Settlement Payment within the time period specified in Section 4.1(a), interest shall accrue on the unpaid amount at the rate of the lesser of (i) one and one-half percent (1.5%) per month (eighteen percent (18%) per annum) and (ii) the maximum rate permitted by applicable law, from the date such payment was due until the date of actual payment.
Section 4.2 — Litigation Cost Reimbursement.
(a) Amount and Payment. Verdana shall reimburse CRH the aggregate sum of Four Hundred Twenty-Five Thousand Dollars ($425,000) toward CRH's litigation costs and expenses incurred in connection with the Action, including but not limited to court filing fees, forensic investigation costs, injunction bond premiums, and mediation fees (the "Litigation Cost Reimbursement"). The Litigation Cost Reimbursement shall be payable concurrently with the Settlement Payment by wire transfer to the same bank account designated by CRH pursuant to Section 4.1(b).
(b) Own Fees and Costs. Except as expressly provided in this Section 4.2, each Party shall bear its own attorneys' fees, costs, and expenses incurred in connection with the Action and the negotiation, drafting, and execution of this Agreement.
Section 4.3 — Equity Forfeitures.
(a) Rathore RSU Forfeiture. Rathore acknowledges and agrees to the forfeiture of equity in the aggregate amount of Three Hundred Sixty-Two Thousand Five Hundred Dollars ($362,500), consisting of:
(i) One Hundred Eighty-One Thousand Two Hundred Fifty Dollars ($181,250) in unvested restricted stock units ("RSUs"), representing the remaining twenty-five percent (25%) unvested tranche of an RSU grant with a total grant date fair value of Seven Hundred Twenty-Five Thousand Dollars ($725,000), granted on March 15, 2021, pursuant to the Rathore Employment Agreement, subject to four-year ratable annual vesting of twenty-five percent (25%) per year (the first three tranches having vested on March 15, 2022, March 15, 2023, and March 15, 2024, respectively, and the fourth tranche not having vested as of the February 7, 2025 resignation date); and
(ii) One Hundred Eighty-One Thousand Two Hundred Fifty Dollars ($181,250) representing the clawback of the most recently vested tranche (the third tranche, which vested on March 15, 2024) pursuant to the for-cause clawback provision set forth in Section 7(d) of the Rathore Employment Agreement, which clawback was triggered by Rathore's breach of restrictive covenant obligations as alleged in the Action.
(b) Other Individual Defendants' Equity Forfeiture. Each of the other seven Individual Defendants — Linden, Kaczmarek, Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson — acknowledges and agrees to the forfeiture of unvested equity on a pro rata basis, with individual forfeiture amounts as set forth on Schedule 4.3(b) attached hereto. The aggregate forfeiture value for the seven other Individual Defendants is Four Hundred Eighty-Seven Thousand Dollars ($487,000).
(c) Direction to Transfer Agent. Promptly following the Execution Date, CRH shall direct Northland Trust Company, as CRH's transfer agent and RSU plan administrator, to cancel the unvested RSU awards and effectuate the equity clawback reflected in Sections 4.3(a) and 4.3(b) above. Each Individual Defendant shall execute such documents and take such actions as may be reasonably requested by CRH or Northland Trust Company to effectuate such cancellation and forfeiture, including the execution of any required stock power, forfeiture acknowledgment, or plan administrator notification.
(d) Total Economic Recovery. For the avoidance of doubt, the total economic recovery to CRH under this Agreement, calculated as of the Execution Date, is Ten Million Twenty-Four Thousand Five Hundred Dollars ($10,024,500), consisting of the following components:
Section 4.4 — Tax Treatment. Each Party shall be solely responsible for any and all federal, state, and local tax liabilities, including income taxes, employment taxes, and any applicable penalties or interest, arising from or attributable to the payments received or equity forfeitures made under this Article IV. No Party makes any representation or warranty to any other Party regarding the tax treatment, tax consequences, or tax characterization of any payment, forfeiture, or other economic transfer made pursuant to this Agreement. Each Party is advised to consult with his, her, or its own independent tax advisors regarding the tax implications of this Agreement.
Section 4.5 — No Admission. The Settlement Payment, Litigation Cost Reimbursement, equity forfeitures, and all other monetary terms and payments set forth in this Article IV are made in compromise and settlement of disputed claims and do not constitute, and shall not be construed as, an admission of liability, fault, wrongdoing, or the validity of any claim or defense by any Party. The Parties acknowledge that this Agreement reflects a negotiated resolution and that each Party has entered into this Agreement to avoid the expense, burden, and uncertainty of continued litigation.
ARTICLE V — DATA RETURN AND DESTRUCTION
Section 5.1 — Return or Destruction of Exfiltrated Data.
(a) Obligation. Within ten (10) business days following the Execution Date, each Individual Defendant shall return to CRH, or certify the destruction of, all CRH Confidential Information in such Individual Defendant's possession, custody, or control, including but not limited to the Exfiltrated Data (consisting of approximately 14,327 files totaling approximately 2.8 gigabytes). The return or destruction shall encompass all copies, duplicates, extracts, summaries, compilations, analyses, or derivative works based on or incorporating CRH Confidential Information, whether stored in electronic form (including on personal computers, laptops, mobile devices, external storage media, cloud storage accounts, email accounts, or any other digital repository) or in physical form (including printed documents, handwritten notes, or photographic reproductions).
(b) Data Destruction Protocol. The destruction of CRH Confidential Information shall be performed in strict accordance with the Data Destruction Protocol attached hereto as Exhibit B, which sets forth the specific procedures, technical standards, and verification methods to be employed in the destruction process. Each Individual Defendant shall retain the services of a qualified data destruction vendor (if applicable) at his or her own expense to ensure compliance with the Data Destruction Protocol.
(c) Sworn Certification. Upon completion of the return or destruction process, each Individual Defendant shall execute a sworn certification of compliance, in the form attached as Annex 1 to Exhibit B, attesting under penalty of perjury that he or she has returned or destroyed all CRH Confidential Information in his or her possession, custody, or control. Such sworn certifications shall be delivered to CRH's General Counsel, Theresa Yun-Park, and to the Compliance Monitor within the ten (10) business day period specified in Section 5.1(a).
Section 5.2 — Verdana Data Purge.
(a) Comprehensive Search and Purge. Verdana shall, within ten (10) business days following the Execution Date, conduct a comprehensive search of all Verdana systems, networks, servers, devices, and repositories (including but not limited to email servers, shared network drives, cloud storage platforms, document management systems, collaboration tools, and any desktop computers, laptop computers, mobile devices, or other electronic devices that have been issued to or used by any Individual Defendant in connection with his or her employment at Verdana) and shall purge, delete, and destroy all CRH Confidential Information identified in such search. The search shall be conducted using commercially reasonable search methodologies, including keyword searches, hash-value matching against the Pinnacle Forensics file inventory, and metadata analysis.
(b) Corporate Certification. Upon completion of the comprehensive search and purge, Verdana shall execute a corporate certification of compliance, signed by Helen Tsoi, General Counsel of Verdana, attesting that Verdana has conducted the required search and purge and that, to the best of Verdana's knowledge after diligent inquiry, all CRH Confidential Information has been identified and destroyed. Such corporate certification shall be delivered to CRH's General Counsel and to the Compliance Monitor within the ten (10) business day period specified in Section 5.2(a).
Section 5.3 — Independent Forensic Audit.
(a) Engagement of Pinnacle Forensics. Verdana shall permit, and shall fully cooperate with, an independent forensic audit of Verdana's systems to be conducted by Pinnacle Forensics LLC (engagement lead: Dr. Rajiv Anand, Principal Forensic Analyst) for the purpose of verifying compliance with the data return and destruction obligations set forth in Sections 5.1 and 5.2 of this Agreement.
(b) Timing. The forensic audit shall commence no later than fifteen (15) business days following the Execution Date and shall be completed within thirty (30) business days following the Execution Date.
(c) Cost. Verdana shall bear the full cost of the independent forensic audit, subject to a cap of One Hundred Seventy-Five Thousand Dollars ($175,000). In the event that the cost of the forensic audit exceeds such cap due to circumstances beyond the reasonable control of Pinnacle Forensics, the Parties shall negotiate in good faith regarding the allocation of any excess costs. For the avoidance of doubt, in the event that Pinnacle Forensics identifies evidence of non-compliance requiring additional forensic investigation, the costs of such additional investigation shall be borne by Verdana without regard to the cap.
(d) Scope Limitations. The scope of the forensic audit shall be limited to the identification and verification of the destruction of CRH Confidential Information within Verdana's systems and shall not extend to Verdana's proprietary business data, trade secrets, or other information that is unrelated to CRH. Pinnacle Forensics shall use commercially reasonable efforts to minimize disruption to Verdana's business operations during the audit process. [Note: This scope limitation reflects a comment from Blackhall & Soren that was accepted by CRH.]
(e) Confidentiality of Verdana Information. In the event that Pinnacle Forensics incidentally accesses Verdana proprietary information that is unrelated to CRH during the course of the forensic audit, such information shall be treated as confidential and shall not be disclosed to CRH or any third party. Pinnacle Forensics shall execute a non-disclosure agreement in a form reasonably acceptable to Verdana and CRH, covering Verdana proprietary information that is unrelated to CRH. [Note: This provision reflects a Blackhall & Soren comment that was agreed to by CRH.]
(f) Reporting. Pinnacle Forensics shall prepare a written report of its findings and shall deliver such report to CRH (attention: Theresa Yun-Park, General Counsel), Verdana (attention: Helen Tsoi, General Counsel), and the Compliance Monitor within five (5) business days following completion of the forensic audit. The report shall include a detailed summary of the audit methodology, files identified, destruction verification results, and any findings of non-compliance.
(g) Cooperation. Verdana shall cooperate fully with Pinnacle Forensics in connection with the forensic audit, including by providing reasonable access to Verdana's premises, systems, and personnel during normal business hours, and by producing such documents, records, and information as may be reasonably requested by Pinnacle Forensics in connection with the audit.
Section 5.4 — Ongoing Obligations. The obligations set forth in this Article V are in addition to, and do not limit, modify, or supersede, the perpetual confidentiality obligations set forth in Section 3.4 of this Agreement and the Employment Agreements. The completion of the data return, destruction, and forensic audit processes described in this Article V shall not relieve any Individual Defendant or Verdana of any obligation to maintain the confidentiality of CRH Confidential Information or to refrain from using, disclosing, or benefiting from CRH Confidential Information at any time.
ARTICLE VI — INJUNCTION BOND AND TRO DISSOLUTION
Section 6.1 — Dissolution of TRO. Upon entry of the Consent Order by the Court in the Action, the Temporary Restraining Order entered by Vice Chancellor Zhao on March 7, 2025 shall be dissolved and shall be of no further force or effect. The Consent Order shall expressly provide for the dissolution of the TRO and shall supersede the TRO in all respects. The restrictions on the Individual Defendants' conduct shall thereafter be governed exclusively by the modified restrictive covenants set forth in Article III of this Agreement, as incorporated into the Consent Order.
Section 6.2 — Release of Injunction Bond. Promptly following the entry of the Consent Order dissolving the TRO, and in any event within ten (10) business days following such entry, CRH shall submit a written request to Broadview Surety Corp. for the discharge and release of the Two Million Five Hundred Thousand Dollar ($2,500,000) injunction bond (Bond No. BSC-2025-TRO-04419) posted by CRH in connection with the TRO. The Individual Defendants and Verdana shall cooperate in providing any consents, acknowledgments, or other documentation reasonably required by Broadview Surety Corp. to effectuate the discharge and release of the bond.
Section 6.3 — No Damages on Bond. Each of the Individual Defendants and Verdana hereby irrevocably waives any and all claims for damages, losses, costs, expenses, or other recovery on the injunction bond arising from or related to the issuance, maintenance, or enforcement of the TRO, including any claims under 10 Del. C. § 3104 or any other provision of applicable law. This waiver shall survive the dissolution of the TRO and the discharge of the injunction bond.
ARTICLE VII — COMPLIANCE MONITOR
Section 7.1 — Appointment of Compliance Monitor.
(a) Appointment. The Parties agree to the appointment of Aldwyn Compliance Solutions LLC, located at 1700 Market Street, Suite 2800, Philadelphia, Pennsylvania 19103, as the independent Compliance Monitor for a period of twelve (12) months commencing on the Execution Date (the "Monitoring Period"). Aldwyn has been selected by mutual agreement of the Parties following arm's-length negotiations and is independent of all Parties.
(b) Engagement Terms. The Compliance Monitor shall operate under the terms and conditions of the Compliance Monitor Engagement Letter attached hereto as Exhibit D, which has been agreed upon by CRH, Verdana, and Aldwyn. The Compliance Monitor Engagement Letter sets forth the specific scope of services, reporting obligations, confidentiality protections, and other material terms of the engagement.
(c) Independence. The Compliance Monitor shall at all times act independently and impartially, and shall not be an agent, representative, or advocate of any Party. The Compliance Monitor's findings and conclusions shall be based solely on its professional judgment and the evidence and information available to it.
Section 7.2 — Scope of Monitoring.
(a) Quarterly Verification. The Compliance Monitor shall conduct quarterly verification of compliance by all Individual Defendants and Verdana with: (i) the modified non-competition obligations set forth in Section 3.1 of this Agreement; (ii) the modified non-solicitation obligations set forth in Sections 3.2 and 3.3 of this Agreement; and (iii) the data return and destruction obligations set forth in Article V of this Agreement. The first quarterly verification shall cover the period from the Execution Date through the end of the first full calendar quarter following the Execution Date, and subsequent quarterly verifications shall cover each successive calendar quarter during the Monitoring Period.
(b) Access to Records and Personnel. The Compliance Monitor shall have reasonable access to relevant records, documents, and personnel of both CRH and Verdana, as set forth in the Compliance Monitor Engagement Letter and a separate Letter Agreement among CRH, Verdana, and Aldwyn regarding information-sharing and access protocols. Such access shall be exercised during normal business hours and upon reasonable advance notice, and shall be subject to appropriate confidentiality protections to safeguard the proprietary information of both CRH and Verdana.
(c) Monitoring of Individual Defendants. [WND Comment: Whitfield, Nygaard & Doyle has requested that monitoring of Individual Defendants be limited to written certifications and document review, and shall not include in-person interviews without (i) at least five (5) business days' advance written notice to the affected Individual Defendant and his or her counsel and (ii) the opportunity for counsel to be present at any such interview. C&H Note: CRH is reviewing this request and is inclined to accept it with the modification that the Compliance Monitor may conduct telephonic or video interviews on three (3) business days' advance notice in exigent circumstances, with counsel present. This provision remains bracketed pending final resolution.]
Section 7.3 — Cost Allocation.
(a) Total Estimated Cost. The total estimated cost of the Compliance Monitor engagement for the twelve (12)-month Monitoring Period is Three Hundred Sixty Thousand Dollars ($360,000), subject to adjustment in accordance with the terms of the Compliance Monitor Engagement Letter.
(b) Allocation. The cost of the Compliance Monitor engagement shall be allocated as follows: Verdana shall bear sixty percent (60%) of the total cost (estimated at Two Hundred Sixteen Thousand Dollars ($216,000)), and CRH shall bear forty percent (40%) of the total cost (estimated at One Hundred Forty-Four Thousand Dollars ($144,000)).
(c) Payment Schedule. Payments to Aldwyn shall be made quarterly in advance, in equal installments of Ninety Thousand Dollars ($90,000) per quarter (of which Verdana shall pay Fifty-Four Thousand Dollars ($54,000) and CRH shall pay Thirty-Six Thousand Dollars ($36,000)), due on the first business day of each calendar quarter during the Monitoring Period, beginning with the first calendar quarter following the Execution Date.
Section 7.4 — Reports.
(a) Quarterly Reports. The Compliance Monitor shall provide quarterly written reports to CRH (attention: Theresa Yun-Park, General Counsel, Cascade Retail Holdings Inc.) and Verdana (attention: Helen Tsoi, General Counsel, Verdana Commerce Group, Inc.), with copies to all counsel of record in the Action. Each quarterly report shall include: (i) a summary of monitoring activities conducted during the applicable quarter; (ii) a description of any information reviewed and interviews conducted; (iii) the Compliance Monitor's findings and conclusions regarding compliance; and (iv) any recommendations for remedial action or enhanced monitoring.
(b) Immediate Violation Notices. In the event that the Compliance Monitor identifies a suspected violation of any provision of this Agreement, the Compliance Monitor shall provide immediate written notice thereof to all Parties and their respective counsel. If the Consent Order so requires, the Compliance Monitor shall also provide such notice to the Court. The notice shall include a description of the suspected violation, the evidence supporting the Compliance Monitor's conclusion, and any recommended immediate remedial actions.
(c) Final Report. At the conclusion of the Monitoring Period, the Compliance Monitor shall prepare and deliver a comprehensive final report summarizing all monitoring activities, findings, and conclusions for the entire Monitoring Period, including a statement as to whether, in the Compliance Monitor's professional judgment, all Parties have complied with the applicable provisions of this Agreement.
Section 7.5 — Removal and Replacement. The Compliance Monitor may be removed prior to the expiration of the Monitoring Period only by (a) the unanimous written agreement of all Parties or (b) an order of the Court upon a showing of cause, including but not limited to a material conflict of interest, a material failure to perform monitoring duties, or a material breach of the Compliance Monitor Engagement Letter. In the event of removal, the Parties shall negotiate in good faith to agree upon a replacement compliance monitor within fifteen (15) business days. If the Parties are unable to agree on a replacement within such period, any Party may apply to the Court for the appointment of a replacement monitor.
Section 7.6 — Indemnification of Compliance Monitor. The Parties shall jointly and severally indemnify, defend, and hold harmless Aldwyn and its officers, employees, agents, and representatives from and against any and all claims, demands, losses, liabilities, damages, costs, and expenses (including reasonable attorneys' fees) arising from or related to the good-faith performance of Aldwyn's monitoring duties under this Agreement and the Compliance Monitor Engagement Letter, except for claims arising from the gross negligence or willful misconduct of Aldwyn. [Blackhall Comment: Verdana has proposed that the indemnification obligation be subject to an aggregate cap. CRH is reviewing this proposal. The specific cap amount has not yet been proposed by Verdana. This provision remains bracketed pending resolution.]
ARTICLE VIII — REPRESENTATIONS AND WARRANTIES
Section 8.1 — Mutual Representations. Each Party represents and warrants to each other Party, as of the Execution Date, as follows:
(a) Power and Authority. Such Party has the full right, power, and authority to enter into this Agreement and to perform all of its obligations hereunder. In the case of CRH and Verdana, the execution, delivery, and performance of this Agreement have been duly authorized by all necessary corporate action. In the case of each Individual Defendant, such Individual Defendant has the legal capacity to enter into this Agreement.
(b) Valid and Binding Obligation. This Agreement constitutes the legal, valid, and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally, and subject to general principles of equity (whether considered in a proceeding in equity or at law).
(c) No Conflict. The execution, delivery, and performance of this Agreement by such Party does not and will not (i) violate, conflict with, or result in a breach of any provision of such Party's organizational documents (if applicable); (ii) violate any applicable law, rule, regulation, judgment, order, or decree; or (iii) conflict with, result in a breach of, or constitute a default under any material agreement, contract, or instrument to which such Party is a party or by which such Party is bound.
(d) Independent Counsel. Such Party has been represented by independent legal counsel of its own choosing in connection with the negotiation, drafting, and execution of this Agreement. CRH has been represented by Calderwood & Harkness LLP; the Individual Defendants have been represented by Whitfield, Nygaard & Doyle LLP; and Verdana has been represented by Blackhall & Soren LLP. Each Party has had the opportunity to consult with its counsel regarding the terms, meaning, and legal effect of this Agreement and has done so to the extent it deems appropriate.
Section 8.2 — CRH Representations. CRH represents and warrants to each other Party, as of the Execution Date, as follows:
(a) Corporate Authority. CRH has the corporate authority to enter into this Agreement, and the execution and delivery of this Agreement has been authorized by CRH's management, subject to ratification by CRH's Board of Directors. CRH represents that it expects to obtain such Board ratification promptly following the Execution Date and that, in the event such ratification is not obtained, CRH shall promptly notify the other Parties. The obligations of CRH under this Agreement shall become fully effective upon such Board ratification.
(b) Top 50 Vendors List. CRH represents that the Top 50 Vendors list set forth on Exhibit C is accurate and complete as of the Execution Date, reflecting CRH's top fifty vendors by aggregate spend for FY2024 based on CRH's internal records and accounting systems. CRH further represents that the list has been compiled in good faith and has not been manipulated or altered for the purpose of this Agreement.
Section 8.3 — Individual Defendant Representations. Each Individual Defendant represents and warrants to CRH, as of the Execution Date, as follows:
(a) Non-Disclosure. Since the date of his or her resignation from CRH on February 7, 2025, such Individual Defendant has not disclosed, transmitted, or otherwise provided any CRH Confidential Information to any person or entity other than Verdana and its officers, directors, employees, agents, and legal advisors, and any disclosure to Verdana has been limited to information disclosed prior to the date of this Agreement.
(b) Data Destruction Compliance. Such Individual Defendant will comply fully with the Data Destruction Protocol attached as Exhibit B and will execute the sworn certification required by Section 5.1(c) within the timeframe specified therein.
(c) Completeness of Data Disclosure. The list of files and data in such Individual Defendant's possession, custody, or control is complete and accurate as disclosed to Pinnacle Forensics during the course of the forensic investigation. [WND Comment: Whitfield, Nygaard & Doyle has requested the addition of the following qualifier: "to the best of his or her knowledge and belief, after reasonable inquiry." WND's position is that absolute representations regarding completeness are unreasonable given the volume of data involved (14,327 files) and the possibility of inadvertent omissions. C&H Note: CRH is reviewing this request. The current draft includes both formulations for bracketed consideration: [to the best of his or her knowledge and belief, after reasonable inquiry / complete and accurate in all respects]. Final language to be agreed.]
Section 8.4 — Verdana Representations. Verdana represents and warrants to CRH, as of the Execution Date, as follows:
(a) Non-Use of CRH Confidential Information. Verdana has not used, incorporated, relied upon, or otherwise benefited from any CRH Confidential Information in connection with its business operations, strategic planning, vendor negotiations, product development, or any other aspect of its business, and will not do so at any time in the future.
(b) Forensic Audit Compliance. Verdana will comply fully with the independent forensic audit required by Section 5.3 and will provide all necessary cooperation, access, and documentation to Pinnacle Forensics in connection therewith.
(c) Financial Ability. Verdana has the financial ability and sufficient available funds to make the Settlement Payment and Litigation Cost Reimbursement within the timeframes required by Sections 4.1 and 4.2 of this Agreement, and the making of such payments will not render Verdana insolvent or unable to meet its obligations as they become due.
(d) Greystone Awareness. [Bracketed — Open Point] [CRH Position: Greystone Capital Partners, LP, as the majority equity holder of Verdana, is aware of this Agreement and the material terms hereof, and does not object to Verdana's entry into this Agreement or the performance of Verdana's obligations hereunder. CRH proposes retention of this representation given Greystone's alleged role in financing the coordinated recruitment of the Individual Defendants through approximately $6.2 million in aggregate sign-on bon

STANDSTILL AND SETTLEMENT AGREEMENT

STANDSTILL AND SETTLEMENT AGREEMENT

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