1038-00009 · Client 1038 · Correspondence

letter-wexford-to-vasquez-bright-signing-summary.docx DOCUMENT M&A / Corporate

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PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION

CALDERWOOD & HARKNESS LLP Attorneys at Law

599 Lexington Avenue, 38th Floor New York, NY 10022 Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com

May 21, 2025

Via Email and Hand Delivery

Elena Vasquez-Bright, Esq. General Counsel Cascade Retail Holdings Inc. 4500 Elliott Avenue West, Suite 3200 Seattle, WA 98119

Re: Acquisition of NovaMart Global Inc. — Post-Signing Summary and Pre-Closing Roadmap

Dear Elena:

I. Introduction

We write to confirm the successful execution and delivery of the Stock Purchase Agreement (the "SPA") and all related ancillary documents on May 20, 2025 (the "Signing Date"). On behalf of the entire Calderwood & Harkness team, I want to extend our congratulations to you, Meg Alderton, Rajiv Sundaram, Ted Langford, and the broader Cascade team on reaching this significant milestone. The execution of the SPA represents the culmination of months of intensive negotiation, due diligence, and strategic planning, and positions Cascade Retail Holdings Inc. ("Cascade" or the "Buyer") to complete a transformative acquisition.

The purpose of this letter is to provide you with: (a) a summary of the principal signed transaction terms; (b) a comprehensive pre-closing roadmap identifying all major workstreams, responsibilities, and timelines from signing through anticipated closing; and (c) a description of the immediate next steps that require attention in the coming days and weeks. We have endeavored to make this letter a comprehensive reference document for the deal team as we move through the pre-closing period.

As you know, the transaction involves the acquisition by Cascade of one hundred percent (100%) of the issued and outstanding capital stock of NovaMart Global Inc. ("NovaMart" or the "Company"), a Delaware corporation headquartered in Austin, Texas. The SPA was executed by Cascade Retail Holdings Inc. as Buyer, NovaMart Global Inc. as the Company, and the Selling Stockholders, consisting of Ridgeline Equity Partners, LP, Brindoval Ventures Fund III, LP, Julian Reeves, Priya Narasimhan, and other management and employee stockholders. Ridgeline Equity Partners, LP, acting through Franklin Osei, has been designated as the Stockholder Representative for all post-closing matters, including indemnification claims and the working capital true-up process.

The Selling Stockholders are represented by Calloway, Brandt & Loewe LLP, with Richard Calloway serving as lead partner and Simone Adesanya as associate lead. Their offices are located at 600 Travis Street, Suite 4500, Houston, TX 77002. We have maintained, and expect to continue, a productive working relationship with their team throughout the pre-closing period and anticipate their full cooperation in completing the workstreams described herein.

The balance of this letter is organized as follows: Section II provides a detailed summary of the principal transaction terms as reflected in the executed SPA; Section III outlines the conditions precedent to closing; Section IV sets forth the pre-closing roadmap, including all major workstreams, assigned responsibilities, and estimated timelines; Section V summarizes estimated transaction costs on the Buyer side; Section VI presents a consolidated timeline of key dates; Section VII identifies immediate next steps and priority action items; and Section VIII lists the Calderwood & Harkness team contacts for this engagement.

II. Summary of Principal Transaction Terms

A. Transaction Structure

The transaction is structured as a stock purchase, pursuant to which Cascade will acquire one hundred percent (100%) of the issued and outstanding capital stock of NovaMart from the Selling Stockholders. The SPA is governed by the laws of the State of Delaware, without regard to conflicts of law principles. The parties have agreed that the Delaware Court of Chancery (or, if the Court of Chancery lacks subject matter jurisdiction, any other state or federal court sitting in the State of Delaware) shall have exclusive jurisdiction over any disputes arising out of or relating to the SPA, with the exception that indemnification disputes shall be subject to the specific resolution procedures set forth in Article IX of the SPA, including the escalation and arbitration mechanisms described therein. Each party has irrevocably waived any objection to venue in such courts and has consented to service of process in accordance with the notice provisions of the SPA.

B. Purchase Price and Consideration

The aggregate purchase price for the transaction (the "Purchase Price") is One Billion Two Hundred Million Dollars ($1,200,000,000), payable entirely in cash at closing. There is no stock component, earnout, contingent value right, or other deferred consideration mechanism. The key elements of the Purchase Price structure are as follows:

• Escrow Amount: Ninety-Six Million Dollars ($96,000,000), representing eight percent (8%) of the Purchase Price, will be deposited at closing with Marlowe Asset Management Trust Company, N.A. (contact: Patricia Keane, Vice President, Escrow Services), located at One Liberty Place, 1650 Market Street, Suite 3600, Philadelphia, PA 19103. The Escrow Amount will be held in a segregated interest-bearing escrow account pursuant to the terms of the Escrow Agreement, a form of which is annexed to the SPA.

• Net Cash to Sellers at Closing: One Billion One Hundred Four Million Dollars ($1,104,000,000), representing the Purchase Price less the Escrow Amount, subject to the estimated working capital adjustment described below. The actual cash delivered to the Selling Stockholders at closing will be adjusted upward or downward based on the estimated closing date working capital relative to the Working Capital Target.

• Working Capital Target: The Working Capital Target has been established at Seventy-Eight Million Five Hundred Thousand Dollars ($78,500,000). The parties have agreed upon a collar of plus or minus Five Million Dollars ($5,000,000) around the Working Capital Target, meaning that no true-up adjustment will apply unless the estimated (and subsequently confirmed) closing date working capital exceeds or falls below the target by more than $5,000,000. The detailed methodology for calculating working capital, including the specific line items, accounting policies, and adjustment conventions, is set forth in the Working Capital Methodology Agreement attached as an exhibit to the SPA.

• Post-Closing Working Capital True-Up: Within ninety (90) days following the closing, Cascade will prepare a final closing date balance sheet and calculate the actual closing date working capital. The Stockholder Representative will have a thirty (30) day review period, followed by a dispute resolution procedure involving an independent accounting firm if the parties are unable to agree. Any true-up payment will be made promptly following final determination and will be paid from the escrow or by the Selling Stockholders (in the case of a shortfall) or by Cascade (in the case of an excess), as applicable.

C. Indemnification Framework

The SPA contains a comprehensive indemnification framework in Article IX, the key terms of which are summarized as follows:

• Indemnification Cap: The aggregate liability of the Selling Stockholders for indemnification claims under the SPA is capped at Two Hundred Sixteen Million Dollars ($216,000,000), representing eighteen percent (18%) of the Purchase Price. This cap applies to claims arising from breaches of general representations and warranties, as well as breaches of certain covenants. The cap does not apply to claims arising from breaches of Fundamental Representations or Tax Representations, which are subject to separate treatment as described below.

• Survival Period — General Representations and Warranties: The general representations and warranties of the Selling Stockholders and NovaMart survive for a period of twenty-four (24) months from the closing date. Claims for indemnification based on breaches of general representations and warranties must be asserted by written notice delivered to the Stockholder Representative within this survival period.

• Fundamental Representations: The Fundamental Representations (which include representations regarding organization, authority, capitalization, title to shares, and broker's fees) survive indefinitely and are not subject to the general indemnification cap.

• Tax Representations: The Tax Representations survive until sixty (60) days after the expiration of the applicable statute of limitations (including any extensions or tolling thereof) for the tax period to which such representation relates.

• Tax Indemnification: The Selling Stockholders have agreed to indemnify Cascade and its affiliates for all pre-closing tax liabilities of NovaMart and its subsidiaries without regard to the general indemnification cap. This is an uncapped, dollar-for-dollar indemnity, reflecting the parties' agreement that Cascade should not bear risk for tax liabilities attributable to periods prior to the closing.

• Escrow Fund: The Escrow Amount of $96,000,000 serves as the primary and first source of recovery for indemnification claims asserted by Cascade. The escrow fund is scheduled to be released to the Selling Stockholders twenty-four (24) months after the closing date, net of any amounts subject to pending and unresolved indemnification claims at that time. Interest earned on the escrow fund will be distributed in accordance with the terms of the Escrow Agreement.

D. Representations & Warranties Insurance

In addition to the contractual indemnification framework, Cascade has procured a Representations & Warranties Insurance Policy to provide an additional layer of protection against losses arising from breaches of representations and warranties in the SPA. The key terms of the R&W insurance policy are as follows:

• Insurer: Meridian Specialty Insurance Company

• Policy Number: MSI-RWI-2025-07832

• Policy Limit: Two Hundred Sixteen Million Dollars ($216,000,000), matching the contractual indemnification cap under the SPA

• Retention (Self-Insured Amount): Twelve Million Dollars ($12,000,000), representing one percent (1%) of the total deal value. Claims must exceed this retention threshold before the policy responds. The retention will be satisfied first from the escrow fund and/or through direct indemnification by the Selling Stockholders under the SPA.

• Premium: Five Million Four Hundred Thousand Dollars ($5,400,000), representing 2.5% of the policy limit, payable at binding

• Insurance Broker: Northbridge Risk Advisors LLC (contact: Thomas Ellingsen, Senior Vice President), located at 125 High Street, Suite 1400, Boston, MA 02110

The R&W insurance policy is a buy-side policy, meaning that Cascade is the named insured and the policy is designed to respond to Cascade's losses. The policy does not relieve the Selling Stockholders of their contractual indemnification obligations but provides Cascade with an independent and additional source of recovery, which may be particularly valuable in circumstances where the contractual indemnification cap or escrow fund has been exhausted, or where the Selling Stockholders dispute liability.

E. Termination Provisions

The SPA contains mutual termination rights, subject to the payment of termination fees in specified circumstances:

• Reverse Termination Fee: In the event the SPA is terminated due to Cascade's failure to consummate the closing where all conditions to Cascade's obligations have been satisfied or waived, or due to Cascade's willful breach of the SPA, Cascade shall pay to the Stockholder Representative (on behalf of the Selling Stockholders) a reverse termination fee of Thirty Million Dollars ($30,000,000), representing 2.5% of the Purchase Price.

• Forward Termination Fee: In the event the SPA is terminated due to a material breach by NovaMart or the Selling Stockholders that is not cured within the applicable cure period specified in the SPA, or due to NovaMart's acceptance of a Superior Proposal (as defined in the SPA), the Selling Stockholders shall pay to Cascade a forward termination fee of Thirty Million Dollars ($30,000,000), also representing 2.5% of the Purchase Price.

• Outside Date: Either party may terminate the SPA if the closing has not occurred on or before December 31, 2025 (the "Outside Date"), provided that the terminating party's failure to fulfill any obligation under the SPA has not been the principal cause of the failure to close by such date. The Outside Date provides approximately seven months of runway from the Signing Date, which we believe is adequate to complete all pre-closing workstreams, including the DOJ Second Request compliance process discussed in detail below.

F. Financing. The SPA does not contain a financing condition. Cascade has represented and warranted in the SPA that it has, and at the closing will have, sufficient funds available to consummate the transactions contemplated by the SPA and to pay the Purchase Price and all related transaction costs. The total sources of financing for the transaction are summarized below:

The key terms of each financing source are as follows:

• Senior Secured Term Loan B ($750,000,000): The Term Loan B will bear interest at SOFR plus 275 basis points, with a seven (7) year maturity and one percent (1%) annual amortization. The commitment is evidenced by Commitment Letter Reference No. CL-2025-0515-CRNB, dated May 15, 2025, issued by Cornerstone National Bank, N.A. (Administrative Agent; contact: Robert Frankel, SVP, Leveraged Finance) and Caluvori Capital Partners, Inc. (Co-Lead Arranger; contact: Irene Matsuda, Director). The original issue discount ("OID") on the Term Loan B is $11,250,000, representing 1.5% of the principal amount. The Term Loan B Credit Agreement and related ancillary financing documents remain subject to finalization, as discussed further in Section IV.B below.

• Revolving Credit Facility Draw ($200,000,000): Cascade intends to draw $200,000,000 at closing under its existing $500,000,000 revolving credit facility with Cornerstone National Bank, N.A. The revolving facility bears interest at SOFR plus 200 basis points and matures in March 2029. The revolver will require an amendment to permit the acquisition, the incurrence of the Term Loan B indebtedness, and the $200,000,000 draw at closing, as well as to update certain financial covenants and cross-default provisions. This amendment is discussed further in Section IV.B below.

• Cash on Hand ($250,000,000): Cascade will fund the balance of the Purchase Price from existing cash on hand.

• Estimated Transaction Costs: Approximately $47,300,000, to be funded from Cascade's working capital and not from the deal financing sources. A detailed breakdown is provided in Section V below.

G. Key Deal Metrics

The following table summarizes the key financial metrics for the transaction:

These metrics reflect the strategic value of the NovaMart platform and its complementary position within Cascade's broader retail ecosystem. The implied multiples are consistent with recent precedent transactions in the online marketplace and ecommerce sector.

H. NovaMart Ownership at Signing

The ownership of NovaMart's issued and outstanding capital stock as of the Signing Date is as follows:

All Selling Stockholders have executed the SPA or, in the case of management and employee stockholders, joinder agreements and letters of transmittal in the forms prescribed by the SPA. The foregoing percentages reflect the fully-diluted capitalization of NovaMart, including all vested and exercised stock options.

III. Conditions Precedent to Closing (SPA Article VII Overview)

The following is a summary of the principal conditions that remain to be satisfied (or, where applicable, waived) before the closing can occur. Each condition is set forth in Article VII of the SPA, and we have noted the relevant SPA section references for your convenience.

A. HSR / Antitrust Clearance

The expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), must have occurred. This condition includes compliance with any requests for additional information or documentary material issued by the Department of Justice ("DOJ") Antitrust Division, including the DOJ Second Request that was issued on May 8, 2025. The HSR clearance process is discussed in detail in Section IV.A below.

B. No Legal Impediment

No order, injunction, decree, or other legal restraint or prohibition issued by any court of competent jurisdiction or governmental authority shall be in effect that prohibits, restrains, or makes illegal the consummation of the transactions contemplated by the SPA. This condition is mutual and applies to both Cascade's and the Selling Stockholders' obligations to close.

C. Accuracy of Representations and Warranties

The representations and warranties of NovaMart and the Selling Stockholders set forth in the SPA must be accurate in all material respects (or, with respect to representations and warranties qualified by materiality or Material Adverse Effect, in all respects) as of the closing date, as though made on and as of the closing date, except to the extent such representations and warranties are made as of a specified date, in which case they must be accurate as of such date. The accuracy standard is subject to the Material Adverse Effect ("MAE") qualification set forth in the SPA. Similarly, the representations and warranties of Cascade must be accurate in all material respects as of the closing date.

D. Performance of Covenants

All covenants and agreements required to be performed by each party at or prior to the closing must have been performed and complied with in all material respects. This includes, among other things, NovaMart's obligations under the interim operating covenants (SPA Section 6.01), the consent solicitation obligations, and the parties' respective obligations to use commercially reasonable efforts to consummate the transactions.

E. No Material Adverse Effect

No Material Adverse Effect shall have occurred with respect to NovaMart or its subsidiaries since the Signing Date. The definition of "Material Adverse Effect" in the SPA contains customary carve-outs for changes affecting the industry generally, changes in economic or market conditions, changes in applicable law or accounting standards, and other customary exclusions, in each case except to the extent such changes have a disproportionate impact on NovaMart relative to other participants in its industry.

F. Third-Party Consents

Cascade's obligation to close is conditioned upon the receipt of certain required consents under NovaMart's material contracts that contain change of control provisions. The specific consents required as conditions to closing, and the broader universe of consents that are being solicited, are discussed in Section IV.C below.

G. Deliverables. All closing deliverables specified in the SPA must have been delivered or be ready for delivery at closing, including but not limited to officer's certificates, secretary's certificates, the FIRPTA non-foreign person certificate, good standing certificates, the executed escrow agreement, stock powers, letters of transmittal, and all other instruments and documents contemplated by Sections 7.02 and 7.03 of the SPA.

H. Financing Confirmation

While the SPA does not contain a financing condition, and Cascade has represented that it has sufficient committed financing to consummate the transaction, Cascade will nonetheless need to ensure that all conditions precedent under the Term Loan B Credit Agreement and the revolver amendment have been satisfied in order to draw down the committed financing at closing. These financing workstreams are described in Section IV.B below. We note that the absence of a financing condition means that Cascade's obligation to close is not excused by any failure to obtain financing, and the reverse termination fee provisions described in Section II.E above would apply in such a scenario.

IV. Pre-Closing Roadmap: Key Workstreams

Set forth below is a detailed description of each major pre-closing workstream, together with assigned responsibilities and estimated timelines. We have organized these workstreams in approximate order of priority and complexity.

A. HSR / Antitrust — DOJ Second Request Compliance

This workstream represents the longest lead-time item in the pre-closing period and is the most significant driver of the overall closing timeline.

Background. Cascade and NovaMart filed their respective HSR Act notifications with the Federal Trade Commission and the DOJ Antitrust Division on April 11, 2025 (internal Calderwood & Harkness tracking number 1038-00009). The HSR filing fee of $2,390,000 was paid by Cascade at the time of filing. The initial thirty (30) day waiting period under the HSR Act would have expired on May 11, 2025; however, the DOJ Antitrust Division issued a Request for Additional Information and Documentary Material (a "Second Request") on May 8, 2025, before the initial waiting period expired.

Scope of Second Request. The Second Request requires substantial additional document production and data from both Cascade and NovaMart. The DOJ's inquiry is focused on the competitive overlap between Cascade's online marketplace operations (principally CascadeDirect.com) and NovaMart's online marketplace and ecommerce platform. Specifically, the DOJ is evaluating market concentration in what it has preliminarily defined as the "online marketplace for specialty consumer goods" segment.

Internal Market Share Analysis. Our preliminary internal analysis, which has been reviewed by our economic expert (described below), indicates the following approximate market shares in the relevant segment:

These market share figures, together with the relatively low level of post-merger concentration (well below the thresholds that typically trigger enforcement action), form the foundation of our advocacy strategy with the DOJ.

Calderwood & Harkness and Outside Counsel Team. The antitrust workstream is being led by Howard Bellamy, Specialist Partner, Antitrust & Competition, at Calderwood & Harkness. In addition, we have engaged Whitfield & Crane LLP (contact: Gabriela Montoya, Partner), located at 1200 New Hampshire Avenue NW, Suite 500, Washington, DC 20036, to serve as outside antitrust counsel and to lead the day-to-day engagement with DOJ staff on the Second Request process. Ms. Montoya is a highly experienced antitrust practitioner with deep relationships at the DOJ Antitrust Division and extensive experience in Second Request proceedings in the retail and technology sectors.

Economic Expert. We have retained Dr. Henrik Johansson through Apex Economics LLC, located at 900 G Street NW, Suite 700, Washington, DC 20001, to serve as our economic expert. Dr. Johansson is preparing the economic analysis that will underpin our advocacy with the DOJ, including HHI (Herfindahl-Hirschman Index) calculations, market definition analysis, and merger simulation results.

Key Workstreams within the Second Request Process:

(i) Document Production. We are in the process of identifying custodians (both at Cascade and at NovaMart) whose files are responsive to the Second Request specifications, developing search terms to be applied to electronic document repositories, and establishing the privilege review protocol. Calderwood & Harkness will coordinate closely with NovaMart and Calloway, Brandt & Loewe on their parallel document production obligations. We anticipate that custodian identification and search term development will be completed within the next two weeks, with rolling document production commencing thereafter.

(ii) White Paper / Advocacy Document. Calderwood & Harkness and Whitfield & Crane are preparing a comprehensive advocacy document (commonly referred to as a "white paper") for submission to the DOJ, arguing that the transaction does not substantially lessen competition in any relevant market. The white paper will incorporate Dr. Johansson's economic analysis, including HHI calculations demonstrating that post-merger concentration remains well below the levels that would raise competitive concerns, a detailed market definition analysis supporting a broader market definition than the DOJ's preliminary framing, and merger simulation results demonstrating that the transaction is not expected to result in a meaningful increase in prices or reduction in output or innovation. We expect to deliver a draft of the white paper for Cascade's review by mid-July 2025.

(iii) Timing Agreement. We will negotiate with DOJ staff a timing agreement governing the post-Second Request review process, including commitments regarding notice before consummation of the transaction and procedures for potential pull-and-refile if circumstances warrant. Timing agreements are customary in Second Request proceedings and provide both the parties and the DOJ with predictability regarding the review timeline.

(iv) Contingency Planning — Potential Divestiture Remedy. While we do not currently anticipate that the DOJ will require any divestiture or other structural remedy as a condition to clearance, we have identified the potential divestiture of NovaMart's NovaHome home décor vertical (representing approximately $620,000,000 in gross merchandise value) as a fallback remedy package in the event that the DOJ identifies competitive concerns that cannot be resolved through advocacy alone. This contingency is being developed on a parallel track, and we will discuss it further with Cascade management if and when it becomes necessary to engage the DOJ on potential remedies.

Timeline. Our target is to achieve substantial compliance with the Second Request by August 2025, with anticipated HSR clearance (either through expiration of the post-compliance waiting period or through a consent decree or closing letter from the DOJ) in September–October 2025. Calderwood & Harkness and Whitfield & Crane will provide regular updates to Cascade management and the Board on the status of the antitrust review process throughout the pre-closing period.

B. Financing Workstreams

The financing workstreams are proceeding on a parallel track and must be completed in advance of the closing date. The principal components are as follows:

Term Loan B Credit Agreement. Calderwood & Harkness is working with Cornerstone National Bank, N.A., as Administrative Agent, Caluvori Capital Partners, Inc., as Co-Lead Arranger, and their respective counsel to finalize the negotiation of the $750,000,000 Senior Secured Term Loan B Credit Agreement. The credit agreement will reflect the economic terms set forth in the Commitment Letter (including SOFR + 275 bps pricing, seven-year maturity, 1% annual amortization, and 1.5% OID) and will contain customary representations, covenants, events of default, and conditions to funding. We will circulate revised drafts to Cascade for review as they become available and will ensure that all conditions to funding are on track for satisfaction at or prior to closing.

Guarantee and Collateral Agreement. In connection with the Term Loan B, we are finalizing the Guarantee and Collateral Agreement (also referred to as the "Pledge and Security Agreement"), pursuant to which NovaMart and its subsidiaries will become guarantors of Cascade's obligations under the Term Loan B Credit Agreement upon the closing and will grant a first-priority security interest in substantially all of their respective assets to Cornerstone National Bank, N.A., in its capacity as Collateral Agent. This will require the preparation and filing of UCC-1 financing statements, intellectual property security agreements (covering NovaMart's registered patents, trademarks, and copyrights), and related perfection documentation.

Revolving Credit Facility Amendment. We are preparing an amendment to Cascade's existing $500,000,000 revolving credit facility with Cornerstone National Bank, N.A. The amendment will permit the acquisition, authorize the incurrence of the Term Loan B indebtedness, authorize the $200,000,000 draw at closing, and update the financial covenants (including the leverage ratio covenant and the interest coverage ratio covenant) and cross-default provisions to reflect the post-closing capital structure. We expect to have a substantially final draft of the amendment available for circulation within the next three weeks.

Funds Flow Memorandum. Calderwood & Harkness will prepare and circulate a detailed funds flow memorandum reflecting all sources and uses of funds at closing. The funds flow will incorporate, among other things, the Purchase Price payable to the Selling Stockholders (net of the Escrow Amount and any working capital adjustment), the deposit of the Escrow Amount with Marlowe Asset Management Trust Company, N.A., the payoff of NovaMart's existing $150,000,000 revolving credit facility with Ashford Savings Bank, N.A. (estimated outstanding principal of approximately $143,200,000 plus accrued interest and any prepayment fees), the disbursement of the Term Loan B loan proceeds (net of OID), the draw under Cascade's revolving credit facility, the payment of all transaction costs, and all applicable wire transfer instructions for each party. We will finalize the wire instructions for all parties in advance of the closing date and will coordinate a dry-run of the funds flow with all lenders and escrow agents.

The financing workstreams are being managed by Harrison Wexford and Derek Okonkwo of Calderwood & Harkness, in coordination with Rajiv Sundaram at Cascade and Robert Frankel (Cornerstone National Bank) and Irene Matsuda (Caluvori Capital Partners) on the lender side.

C. Third-Party Consents — Change of Control

The acquisition of NovaMart will constitute a "change of control" (or similar triggering event) under approximately thirty-four (34) identified NovaMart material contracts. Calderwood & Harkness has prepared a master consent tracker (the "Change of Control Consent Tracker") and a form consent solicitation letter, which have been reviewed and approved by Cascade and are being coordinated with Calloway, Brandt & Loewe for distribution to the relevant counterparties.

The most significant consents required include the following:

• Pinnacle Cloud Solutions Inc. — Master Services Agreement for cloud hosting services (NovaMart's primary cloud infrastructure provider)

• Redline Freight Corp. — Logistics Partnership Agreement for freight and third-party logistics (3PL) services

• Arcwave Software LLC — Technology License Agreement for NovaMart's proprietary search algorithm license

• Congress Tower Partners LP — Office Lease for NovaMart's headquarters at 1100 Congress Avenue, Austin, Texas

• Fourteen (14) Fulfillment Center Landlords — Leases for NovaMart's fulfillment center facilities located across nine states: California (3 facilities), New Jersey (2 facilities), Georgia (2 facilities), Ohio (1 facility), Illinois (1 facility), Pennsylvania (1 facility), Tennessee (1 facility), Florida (2 facilities), and Washington (1 facility)

• Stratton Digital Media Inc. — Advertising Revenue Share Agreement

• PayStream Financial Technologies Inc. — Payment Processing Agreement

In addition, NovaMart's existing $150,000,000 revolving credit facility with Ashford Savings Bank, N.A. will be repaid and terminated at closing. Calderwood & Harkness has prepared a draft payoff letter and lien release documentation, including UCC-3 termination statements for the existing UCC-1 financing statements filed by or on behalf of Ashford Savings Bank. We will coordinate with Ashford Savings Bank's counsel to finalize the payoff letter and lien release, and to ensure that all liens and security interests are released simultaneously with the closing.

Calderwood & Harkness and Calloway, Brandt & Loewe are coordinating the consent solicitation efforts. Amanda Trevino at NovaMart has been designated as the primary point of contact with the relevant counterparties, given NovaMart's existing relationships with each of them. We expect that many of the consents can be obtained through routine correspondence, but we are prepared to negotiate any amendments or modifications that counterparties may request as a condition to granting consent. Consent status updates will be tracked via the Change of Control Consent Tracker and reported to Cascade on a weekly basis.

D. Employment Agreements and Key Employee Retention

A critical component of the transaction is the retention of NovaMart's key personnel, including its founders and senior management team. The following employment and retention arrangements are contemplated:

Julian Reeves (Founder & CEO). Mr. Reeves will enter into a three (3) year post-closing employment agreement with Cascade, pursuant to which he will continue to serve in a senior leadership role. The principal terms are as follows: annual base salary of $625,000; target annual bonus opportunity of 75% of base salary; equity grant of 150,000 restricted shares of Cascade common stock (Nasdaq: CRHI), vesting ratably over three (3) years; and customary non-competition, non-solicitation, and intellectual property assignment provisions. A draft employment agreement has been circulated to Mr. Reeves and his personal counsel through Calloway, Brandt & Loewe.

Priya Narasimhan (Co-Founder & CTO). Ms. Narasimhan will enter into a three (3) year post-closing employment agreement with Cascade on substantially similar terms: annual base salary of $575,000; target annual bonus opportunity of 70% of base salary; equity grant of 125,000 restricted shares of Cascade common stock (Nasdaq: CRHI), vesting ratably over three (3) years; and customary non-competition, non-solicitation, and intellectual property assignment provisions. A draft employment agreement has been circulated to Ms. Narasimhan through Calloway, Brandt & Loewe.

We anticipate scheduling calls with Mr. Reeves and Ms. Narasimhan, through Calloway, Brandt & Loewe, over the coming weeks to finalize the terms of these employment agreements. Several open points remain, including the scope of the non-competition covenants, the treatment of the equity grants upon a termination without cause, and certain severance provisions.

Key Employee Retention Plan. In addition to the founder employment agreements, Cascade has approved a Key Employee Retention Plan with an aggregate retention pool of Eighteen Million Dollars ($18,000,000) for other key NovaMart employees. NovaMart currently employs approximately 2,400 individuals. The retention pool will be allocated to identified key employees, with fifty percent (50%) of each individual's retention bonus ($9,000,000 in the aggregate) payable at closing and the remaining fifty percent (50%) ($9,000,000 in the aggregate) payable on the first anniversary of the closing, in each case subject to continued employment through the applicable payment date. Calderwood & Harkness has prepared a summary memorandum describing the retention plan and form retention bonus letters for distribution to the identified participants. Cascade's human resources team, in consultation with Ted Langford, will be responsible for identifying the specific employees to be included in the retention pool.

Restrictive Covenant Analysis. Calderwood & Harkness has conducted an analysis of the enforceability of existing NovaMart restrictive covenant agreements (including non-competition, non-solicitation, and confidentiality agreements) under the laws of the states in which NovaMart's employees are located, including Texas, California, Washington, and other jurisdictions where NovaMart maintains operations or has employees. We note in particular that California's Business and Professions Code Section 16600 generally prohibits the enforcement of employee non-competition covenants, which will affect the scope of any post-closing restrictive covenants for NovaMart employees based in California (including employees at NovaMart's three California fulfillment centers). We will provide a separate memorandum to you summarizing our analysis and recommendations.

E. Tax Matters

The transaction will be treated as a stock purchase for federal income tax purposes. No election under Section 338(h)(10) of the Internal Revenue Code is contemplated, as the parties were unable to reach agreement on the appropriate pricing for a tax basis step-up. The key tax considerations are summarized as follows:

NovaMart Tax Jurisdictions. NovaMart files tax returns in the following jurisdictions: federal; Texas (noting that Texas does not impose a state income tax but does impose a franchise tax, also known as the Texas Margin Tax); Delaware (franchise tax); and various nexus states for its fulfillment center operations, including California, New Jersey, Georgia, Ohio, Illinois, Pennsylvania, Tennessee, Florida, and Washington.

NovaMart EIN. NovaMart's federal Employer Identification Number is 84-3291547. NovaMart's estimated FY2024 federal income tax liability was approximately $23,800,000.

Pre-Closing Tax Returns. Pursuant to SPA Section 6.09, NovaMart is obligated to prepare and file all tax returns for all pre-closing tax periods in a manner consistent with past practice. Cascade has review and comment rights with respect to any such returns filed after the Signing Date, and the Selling Stockholders may not amend any pre-closing tax return without Cascade's prior written consent.

Tax Indemnification. As noted in Section II.C above, the Selling Stockholders have agreed to indemnify Cascade for all pre-closing tax liabilities without regard to the general indemnification cap. This indemnification obligation is an uncapped, dollar-for-dollar indemnity. The Tax Representations survive until sixty (60) days after the expiration of the applicable statute of limitations (including any extensions or tolling thereof).

Transfer Taxes. Estimated transfer taxes associated with the transaction are approximately $1,200,000, which will be borne equally by the Buyer and the Sellers ($600,000 each), as provided in the SPA.

FIRPTA Compliance. NovaMart is required to deliver at closing a non-foreign person certificate in compliance with Section 1445 of the Internal Revenue Code and the Treasury Regulations thereunder, certifying that NovaMart is not a "foreign person" within the meaning of FIRPTA and that no withholding is required in connection with the stock transfer.

The tax workstream is being managed by Sylvia Hartwell (Calderwood & Harkness, Tax) in coordination with Sandra Chiu of Whitmore & Paige LLP, located at 100 Federal Street, Suite 2500, Boston, MA 02110.

F. Interim Operating Covenant Monitoring

During the period between the Signing Date (May 20, 2025) and the closing, NovaMart is subject to interim operating covenants set forth in SPA Section 6.01, which require NovaMart to conduct its business in the ordinary course of business, consistent with past practice, and to use commercially reasonable efforts to preserve its business relationships, workforce, and goodwill. Any action outside the ordinary course of business requires Cascade's prior written consent. The interim operating covenants cover a wide range of activities, including limitations on capital expenditures, hiring and compensation changes, contract execution, asset dispositions, dividend declarations, and other specified actions.

Calderwood & Harkness has established a monitoring protocol to ensure timely identification and resolution of any consent requests or potential covenant compliance issues during the interim period. Derek Okonkwo of Calderwood & Harkness will serve as the primary point of contact for all consent requests submitted by NovaMart or Calloway, Brandt & Loewe. We have also established a reporting cadence and escalation procedure, pursuant to which any consent request or compliance issue will be escalated promptly to Cascade's deal team — specifically, Ted Langford and Elena Vasquez-Bright — for review and decision.

We encourage the Cascade team to respond to consent requests expeditiously, as unreasonable delays or unreasonable withholding of consent could give rise to claims by the Selling Stockholders that Cascade has breached its obligations under the SPA.

G. D&O Tail Insurance

Pursuant to the SPA, Cascade is required to obtain (or cause NovaMart to obtain) a six (6) year "tail" directors' and officers' liability insurance policy for NovaMart's pre-closing directors and officers, effective as of the closing date. This tail policy will provide coverage for claims arising from acts, errors, or omissions occurring prior to the closing. The tail policy is being placed with Sovereign Assurance Group Ltd. The estimated premium for the six-year tail policy is $1,800,000, which is included in the estimated transaction costs set forth in Section V below.

H. Title Insurance

Title insurance for NovaMart-owned real property will be provided by Ridgecrest Title Group Inc. (contact: Janet Morales, underwriter). Calderwood & Harkness is coordinating with Ridgecrest Title Group to obtain title commitments and to identify and resolve any title exceptions or encumbrances that may affect NovaMart's owned real property. We do not anticipate material title issues based on the results of our due diligence, but will advise you promptly if any issues arise during the title review process.

I. Closing Deliverables Preparation

Calderwood & Harkness is responsible for the preparation and coordination of all closing deliverables contemplated by the SPA. These include the following:

• Officer's Certificates (Cascade and NovaMart), certifying the satisfaction of closing conditions

• Secretary's Certificates (Cascade and NovaMart), with attached certificates of incorporation (or formation documents, as applicable), bylaws (or operating agreements), board and/or stockholder resolutions authorizing the transaction, and incumbency certificates for all officers executing closing documents

• Good standing certificates (certificates of status) for NovaMart and each of its subsidiaries from the Secretary of State of Delaware and Texas, and from each state in which NovaMart or its subsidiaries are qualified to do business as a foreign entity (California, New Jersey, Georgia, Ohio, Illinois, Pennsylvania, Tennessee, Florida, and Washington)

• FIRPTA Non-Foreign Person Certificate, as described in Section IV.E above

• Letters of transmittal for each Selling Stockholder, referencing Continental Stocktransfer & Trust, Inc. as NovaMart's transfer agent, for use in surrendering NovaMart stock certificates (or book-entry shares) in exchange for the applicable portion of the Purchase Price

• Stock powers for the transfer of NovaMart shares from each Selling Stockholder to Cascade

• Bring-down due diligence searches, including litigation searches, UCC lien searches, judgment and tax lien searches, bankruptcy searches, and patent/trademark status checks, to be conducted immediately prior to closing to confirm the absence of intervening liens, judgments, or proceedings

• Estimated closing statement and working capital calculation, prepared in accordance with the Working Capital Methodology Agreement

• Finalized funds flow memorandum with executed wire instructions for all parties

• Payoff letter and lien releases from Ashford Savings Bank, N.A., including UCC-3 termination statements

We will begin preparing drafts of these deliverables in the coming weeks and will circulate them for review as they approach final form. We anticipate that the majority of these deliverables can be substantially completed well in advance of the targeted closing date, with final execution and delivery occurring at or immediately prior to closing.

V. Estimated Transaction Costs (Buyer Side)

The following table summarizes the estimated transaction costs to be borne by Cascade in connection with the acquisition. These costs are funded from Cascade's working capital and are not funded from the deal financing sources.

We note that the foregoing estimates are based on information currently available and may be subject to adjustment as the transaction progresses. In particular, the Calderwood & Harkness legal fees estimate reflects our current assessment of the scope and complexity of the remaining pre-closing work, including the Second Request compliance process, and will depend in part on the duration and intensity of the DOJ review. We will endeavor to provide updated estimates as the pre-closing workstreams develop.

VI. Timeline Summary

The following table summarizes the key dates and milestones for the transaction:

The targeted closing date of October 15, 2025 is based on our current assessment of the HSR clearance timeline and assumes that no material delays are encountered in the Second Request compliance process or in the satisfaction of the other conditions to closing. The Outside Date of December 31, 2025 provides an adequate buffer of approximately two and a half months beyond the targeted closing date in the event of unanticipated delays.

VII. Immediate Next Steps

The following priority action items require attention during the coming days and weeks:

1. Second Request Compliance. Howard Bellamy and Gabriela Montoya (Whitfield & Crane) will circulate the proposed custodian list and search term proposals by the end of this week. Document collection and privilege review will commence promptly thereafter, with the goal of beginning rolling production to the DOJ within two to three weeks.

2. Financing Documents. Calderwood & Harkness will circulate revised drafts of the Term Loan B Credit Agreement, the Guarantee and Collateral Agreement, and the Revolving Credit Facility Amendment for Cascade's review within the next three weeks. We will coordinate with Cornerstone National Bank, Caluvori Capital Partners, and their respective counsel to resolve any outstanding issues.

3. Third-Party Consents. NovaMart (Amanda Trevino) will begin distributing consent solicitation letters to counterparties this week, beginning with the highest-priority contracts (Pinnacle Cloud Solutions, Redline Freight, and Arcwave Software). Calderwood & Harkness will track the status of all consent solicitations via the Change of Control Consent Tracker and will report to Cascade on a weekly basis.

4. Employment Agreements. Calderwood & Harkness will schedule calls with Julian Reeves and Priya Narasimhan (through Calloway, Brandt & Loewe) to finalize the terms of their respective post-closing employment agreements. We anticipate that two to three rounds of negotiation will be required to resolve the remaining open points.

5. Retention Plan. Cascade's human resources team and Ted Langford will identify the participants to be included in the Key Employee Retention Plan. Calderwood & Harkness will finalize the form retention bonus letters for distribution promptly after participants have been identified.

6. Working Capital. Sandra Chiu (Whitmore & Paige) and Doug Whitfield will coordinate on the preparation of the estimated closing date balance sheet and the preliminary working capital calculation. Early engagement on this workstream will facilitate a smoother post-closing true-up process.

7. Good Standing Certificates. Calderwood & Harkness will order good standing certificates (certificates of status) for NovaMart and each of its subsidiaries from the Secretary of State of Delaware, Texas, and all qualification states (California, New Jersey, Georgia, Ohio, Illinois, Pennsylvania, Tennessee, Florida, and Washington). Good standing certificates are typically dated within thirty (30) days of closing, so we will coordinate the timing of these orders with the expected closing date.

8. Board Resolutions. Calderwood & Harkness will prepare draft closing resolutions for adoption by the Cascade Board of Directors closer to the closing date. These resolutions will authorize the execution and delivery of the closing deliverables, the drawdown of financing, the payment of the Purchase Price, and all other actions necessary to consummate the transaction.

9. Weekly Status Calls. We propose establishing a standing weekly conference call among Calderwood & Harkness (Harrison Wexford and Derek Okonkwo), Cascade (Elena Vasquez-Bright, Ted Langford, and Rajiv Sundaram), Hargrove Mead & Co. (Christopher Dunleavy), and Whitmore & Paige LLP (Sandra Chiu) to track all workstreams, identify and resolve issues as they arise, and maintain alignment among all members of the deal team. We suggest scheduling the first such call for the week of May 26, 2025, and will coordinate with your assistant to identify a recurring time slot.

VIII. Calderwood & Harkness Team Contacts

The following members of the Calderwood & Harkness team are assigned to this engagement and are available to address any questions or issues that may arise:

We also note that Whitfield & Crane LLP (Gabriela Montoya, Partner) continues to serve as outside antitrust counsel for the DOJ Second Request process and will remain actively engaged through the completion of the HSR clearance workstream. Ms. Montoya can be reached directly at her Washington, D.C. office at (202) 555-1200 or by email.

Derek Okonkwo is your primary day-to-day contact for all deal management matters and can be reached at (212) 558-4127 or by email at d.okonkwo@calderwoodharkness.com. For matters requiring partner-level attention, please do not hesitate to reach out to me directly.

IX. Closing Remarks

We are confident in the team's ability to navigate the remaining pre-closing workstreams efficiently and to achieve the targeted closing date of October 15, 2025. The Outside Date of December 31, 2025 provides adequate buffer in the event of unanticipated delays in the HSR clearance process or any other workstream. The transaction team — across Cascade, Calderwood & Harkness, Whitfield & Crane, Hargrove Mead, and Whitmore & Paige — is experienced, well-coordinated, and fully resourced to execute on the pre-closing roadmap described in this letter.

We would be pleased to schedule an in-person or video briefing with Cascade's senior management team and Board members at your convenience to review the post-signing status and pre-closing roadmap in further detail. Please let us know if you would like us to arrange such a session, and we will coordinate accordingly.

Finally, we remind you that this letter and its contents are protected by the attorney-client privilege and constitute a confidential communication between Calderwood & Harkness LLP and Cascade Retail Holdings Inc. The contents of this letter should not be shared outside the Cascade deal team without prior consultation with Calderwood & Harkness.

We look forward to working with you and the entire Cascade team through the closing and beyond. Please do not hesitate to call with any questions.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Harrison Wexford Partner, Mergers & Acquisitions Calderwood & Harkness LLP 599 Lexington Avenue, 38th Floor New York, NY 10022 Tel: (212) 558-4100

Email: h.wexford@calderwoodharkness.com

cc: (via email)

Margaret "Meg" Alderton, Chief Executive Officer, Cascade Retail Holdings Inc. Rajiv Sundaram, Chief Financial Officer, Cascade Retail Holdings Inc. Theodore "Ted" Langford, SVP Corporate Development, Cascade Retail Holdings Inc. Beatrice Holloway, Calderwood & Harkness LLP Derek Okonkwo, Calderwood & Harkness LLP Sylvia Hartwell, Calderwood & Harkness LLP Howard Bellamy, Calderwood & Harkness LLP Christopher Dunleavy, Hargrove Mead & Co. Sandra Chiu, Whitmore & Paige LLP

Enclosures: None. The executed SPA, ancillary documents, and signing deliverables have been separately distributed to all addressees and copy recipients via the deal data room (Thackeray Solutions Project Cascade) and by direct delivery. Please contact Derek Okonkwo if you require access to any documents or if you have questions regarding the data room.

Source	Amount
Senior Secured Term Loan B	$750,000,000
Revolving Credit Facility Draw	$200,000,000
Cash on Hand	$250,000,000
Total Sources	$1,200,000,000
Metric	Value
Implied EV/EBITDA Multiple	~8.96x ($1,200,000,000 ÷ NovaMart FY2024 EBITDA of $134,000,000)
Implied EV/Revenue Multiple	~1.35x ($1,200,000,000 ÷ NovaMart FY2024 Revenue of $891,000,000)
NovaMart FY2024 Gross Merchandise Value (GMV)	$6,200,000,000
NovaMart Active Sellers	~62,400
NovaMart Registered Buyers	~9.1 million
Cascade FY2024 Revenue	$14,700,000,000
Cascade FY2024 EBITDA	$1,830,000,000
Cascade Approximate Market Capitalization (as of May 19, 2025)	$22,400,000,000
Stockholder	Ownership Percentage
Ridgeline Equity Partners, LP	41.2%
Brindoval Ventures Fund III, LP	22.8%
Julian Reeves (Founder)	18.5%
Priya Narasimhan (Co-Founder)	8.3%
Other management and employee stockholders (incl. vested stock options)	9.2%
Total	100.0%
Company	Approximate Market Share
Cascade (CascadeDirect.com)	8.3%
NovaMart	5.7%
Combined (post-transaction)	14.0%

BrightBazaar Inc. (next largest competitor)	6.1%
Cost Item	Estimated Amount
Calderwood & Harkness LLP legal fees	$8,200,000
Hargrove Mead & Co. advisory fee (1.2% of deal value)	$14,400,000
Whitmore & Paige LLP accounting/tax advisory	$3,100,000
HSR filing fee	$2,390,000
R&W insurance premium (Meridian Specialty Insurance Company)	$5,400,000
Financing fees (Term Loan B OID, 1.5%)	$11,250,000
D&O tail insurance premium (Sovereign Assurance Group Ltd.)	$1,800,000
Miscellaneous (title insurance, transfer taxes, filing fees, etc.)	$760,000
Total Estimated Transaction Costs	$47,300,000
Event	Date / Estimated Date
SPA Signed	May 20, 2025
Expected Substantial Compliance with DOJ Second Request	August 2025 (estimated)
Expected HSR Clearance	September – October 2025 (estimated)
Targeted Closing Date	October 15, 2025
Outside Date (SPA Termination Right)	December 31, 2025
Escrow Release (if no pending claims)	24 months after Closing
General Representations Survival Expiration	24 months after Closing
Team Member	Role
Harrison Wexford	Responsible Partner, M&A
Beatrice Holloway	Billing Partner, M&A
Derek Okonkwo	Lead Associate, M&A (day-to-day deal management contact)
Tiffany Rosenthal	Working Associate, M&A
Sylvia Hartwell	Specialist Partner, Tax

Howard Bellamy

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION
CALDERWOOD & HARKNESS LLP Attorneys at Law
599 Lexington Avenue, 38th Floor New York, NY 10022 Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com
May 21, 2025
Via Email and Hand Delivery
Elena Vasquez-Bright, Esq. General Counsel Cascade Retail Holdings Inc. 4500 Elliott Avenue West, Suite 3200 Seattle, WA 98119
Re: Acquisition of NovaMart Global Inc. — Post-Signing Summary and Pre-Closing Roadmap
Dear Elena:
I. Introduction
We write to confirm the successful execution and delivery of the Stock Purchase Agreement (the "SPA") and all related ancillary documents on May 20, 2025 (the "Signing Date"). On behalf of the entire Calderwood & Harkness team, I want to extend our congratulations to you, Meg Alderton, Rajiv Sundaram, Ted Langford, and the broader Cascade team on reaching this significant milestone. The execution of the SPA represents the culmination of months of intensive negotiation, due diligence, and strategic planning, and positions Cascade Retail Holdings Inc. ("Cascade" or the "Buyer") to complete a transformative acquisition.
The purpose of this letter is to provide you with: (a) a summary of the principal signed transaction terms; (b) a comprehensive pre-closing roadmap identifying all major workstreams, responsibilities, and timelines from signing through anticipated closing; and (c) a description of the immediate next steps that require attention in the coming days and weeks. We have endeavored to make this letter a comprehensive reference document for the deal team as we move through the pre-closing period.
As you know, the transaction involves the acquisition by Cascade of one hundred percent (100%) of the issued and outstanding capital stock of NovaMart Global Inc. ("NovaMart" or the "Company"), a Delaware corporation headquartered in Austin, Texas. The SPA was executed by Cascade Retail Holdings Inc. as Buyer, NovaMart Global Inc. as the Company, and the Selling Stockholders, consisting of Ridgeline Equity Partners, LP, Brindoval Ventures Fund III, LP, Julian Reeves, Priya Narasimhan, and other management and employee stockholders. Ridgeline Equity Partners, LP, acting through Franklin Osei, has been designated as the Stockholder Representative for all post-closing matters, including indemnification claims and the working capital true-up process.
The Selling Stockholders are represented by Calloway, Brandt & Loewe LLP, with Richard Calloway serving as lead partner and Simone Adesanya as associate lead. Their offices are located at 600 Travis Street, Suite 4500, Houston, TX 77002. We have maintained, and expect to continue, a productive working relationship with their team throughout the pre-closing period and anticipate their full cooperation in completing the workstreams described herein.
The balance of this letter is organized as follows: Section II provides a detailed summary of the principal transaction terms as reflected in the executed SPA; Section III outlines the conditions precedent to closing; Section IV sets forth the pre-closing roadmap, including all major workstreams, assigned responsibilities, and estimated timelines; Section V summarizes estimated transaction costs on the Buyer side; Section VI presents a consolidated timeline of key dates; Section VII identifies immediate next steps and priority action items; and Section VIII lists the Calderwood & Harkness team contacts for this engagement.
II. Summary of Principal Transaction Terms
A. Transaction Structure
The transaction is structured as a stock purchase, pursuant to which Cascade will acquire one hundred percent (100%) of the issued and outstanding capital stock of NovaMart from the Selling Stockholders. The SPA is governed by the laws of the State of Delaware, without regard to conflicts of law principles. The parties have agreed that the Delaware Court of Chancery (or, if the Court of Chancery lacks subject matter jurisdiction, any other state or federal court sitting in the State of Delaware) shall have exclusive jurisdiction over any disputes arising out of or relating to the SPA, with the exception that indemnification disputes shall be subject to the specific resolution procedures set forth in Article IX of the SPA, including the escalation and arbitration mechanisms described therein. Each party has irrevocably waived any objection to venue in such courts and has consented to service of process in accordance with the notice provisions of the SPA.
B. Purchase Price and Consideration
The aggregate purchase price for the transaction (the "Purchase Price") is One Billion Two Hundred Million Dollars ($1,200,000,000), payable entirely in cash at closing. There is no stock component, earnout, contingent value right, or other deferred consideration mechanism. The key elements of the Purchase Price structure are as follows:
• Escrow Amount: Ninety-Six Million Dollars ($96,000,000), representing eight percent (8%) of the Purchase Price, will be deposited at closing with Marlowe Asset Management Trust Company, N.A. (contact: Patricia Keane, Vice President, Escrow Services), located at One Liberty Place, 1650 Market Street, Suite 3600, Philadelphia, PA 19103. The Escrow Amount will be held in a segregated interest-bearing escrow account pursuant to the terms of the Escrow Agreement, a form of which is annexed to the SPA.
• Net Cash to Sellers at Closing: One Billion One Hundred Four Million Dollars ($1,104,000,000), representing the Purchase Price less the Escrow Amount, subject to the estimated working capital adjustment described below. The actual cash delivered to the Selling Stockholders at closing will be adjusted upward or downward based on the estimated closing date working capital relative to the Working Capital Target.
• Working Capital Target: The Working Capital Target has been established at Seventy-Eight Million Five Hundred Thousand Dollars ($78,500,000). The parties have agreed upon a collar of plus or minus Five Million Dollars ($5,000,000) around the Working Capital Target, meaning that no true-up adjustment will apply unless the estimated (and subsequently confirmed) closing date working capital exceeds or falls below the target by more than $5,000,000. The detailed methodology for calculating working capital, including the specific line items, accounting policies, and adjustment conventions, is set forth in the Working Capital Methodology Agreement attached as an exhibit to the SPA.
• Post-Closing Working Capital True-Up: Within ninety (90) days following the closing, Cascade will prepare a final closing date balance sheet and calculate the actual closing date working capital. The Stockholder Representative will have a thirty (30) day review period, followed by a dispute resolution procedure involving an independent accounting firm if the parties are unable to agree. Any true-up payment will be made promptly following final determination and will be paid from the escrow or by the Selling Stockholders (in the case of a shortfall) or by Cascade (in the case of an excess), as applicable.
C. Indemnification Framework
The SPA contains a comprehensive indemnification framework in Article IX, the key terms of which are summarized as follows:
• Indemnification Cap: The aggregate liability of the Selling Stockholders for indemnification claims under the SPA is capped at Two Hundred Sixteen Million Dollars ($216,000,000), representing eighteen percent (18%) of the Purchase Price. This cap applies to claims arising from breaches of general representations and warranties, as well as breaches of certain covenants. The cap does not apply to claims arising from breaches of Fundamental Representations or Tax Representations, which are subject to separate treatment as described below.
• Survival Period — General Representations and Warranties: The general representations and warranties of the Selling Stockholders and NovaMart survive for a period of twenty-four (24) months from the closing date. Claims for indemnification based on breaches of general representations and warranties must be asserted by written notice delivered to the Stockholder Representative within this survival period.
• Fundamental Representations: The Fundamental Representations (which include representations regarding organization, authority, capitalization, title to shares, and broker's fees) survive indefinitely and are not subject to the general indemnification cap.
• Tax Representations: The Tax Representations survive until sixty (60) days after the expiration of the applicable statute of limitations (including any extensions or tolling thereof) for the tax period to which such representation relates.
• Tax Indemnification: The Selling Stockholders have agreed to indemnify Cascade and its affiliates for all pre-closing tax liabilities of NovaMart and its subsidiaries without regard to the general indemnification cap. This is an uncapped, dollar-for-dollar indemnity, reflecting the parties' agreement that Cascade should not bear risk for tax liabilities attributable to periods prior to the closing.
• Escrow Fund: The Escrow Amount of $96,000,000 serves as the primary and first source of recovery for indemnification claims asserted by Cascade. The escrow fund is scheduled to be released to the Selling Stockholders twenty-four (24) months after the closing date, net of any amounts subject to pending and unresolved indemnification claims at that time. Interest earned on the escrow fund will be distributed in accordance with the terms of the Escrow Agreement.
D. Representations & Warranties Insurance
In addition to the contractual indemnification framework, Cascade has procured a Representations & Warranties Insurance Policy to provide an additional layer of protection against losses arising from breaches of representations and warranties in the SPA. The key terms of the R&W insurance policy are as follows:
• Insurer: Meridian Specialty Insurance Company
• Policy Number: MSI-RWI-2025-07832
• Policy Limit: Two Hundred Sixteen Million Dollars ($216,000,000), matching the contractual indemnification cap under the SPA
• Retention (Self-Insured Amount): Twelve Million Dollars ($12,000,000), representing one percent (1%) of the total deal value. Claims must exceed this retention threshold before the policy responds. The retention will be satisfied first from the escrow fund and/or through direct indemnification by the Selling Stockholders under the SPA.
• Premium: Five Million Four Hundred Thousand Dollars ($5,400,000), representing 2.5% of the policy limit, payable at binding
• Insurance Broker: Northbridge Risk Advisors LLC (contact: Thomas Ellingsen, Senior Vice President), located at 125 High Street, Suite 1400, Boston, MA 02110
The R&W insurance policy is a buy-side policy, meaning that Cascade is the named insured and the policy is designed to respond to Cascade's losses. The policy does not relieve the Selling Stockholders of their contractual indemnification obligations but provides Cascade with an independent and additional source of recovery, which may be particularly valuable in circumstances where the contractual indemnification cap or escrow fund has been exhausted, or where the Selling Stockholders dispute liability.
E. Termination Provisions
The SPA contains mutual termination rights, subject to the payment of termination fees in specified circumstances:
• Reverse Termination Fee: In the event the SPA is terminated due to Cascade's failure to consummate the closing where all conditions to Cascade's obligations have been satisfied or waived, or due to Cascade's willful breach of the SPA, Cascade shall pay to the Stockholder Representative (on behalf of the Selling Stockholders) a reverse termination fee of Thirty Million Dollars ($30,000,000), representing 2.5% of the Purchase Price.
• Forward Termination Fee: In the event the SPA is terminated due to a material breach by NovaMart or the Selling Stockholders that is not cured within the applicable cure period specified in the SPA, or due to NovaMart's acceptance of a Superior Proposal (as defined in the SPA), the Selling Stockholders shall pay to Cascade a forward termination fee of Thirty Million Dollars ($30,000,000), also representing 2.5% of the Purchase Price.
• Outside Date: Either party may terminate the SPA if the closing has not occurred on or before December 31, 2025 (the "Outside Date"), provided that the terminating party's failure to fulfill any obligation under the SPA has not been the principal cause of the failure to close by such date. The Outside Date provides approximately seven months of runway from the Signing Date, which we believe is adequate to complete all pre-closing workstreams, including the DOJ Second Request compliance process discussed in detail below.
F. Financing. The SPA does not contain a financing condition. Cascade has represented and warranted in the SPA that it has, and at the closing will have, sufficient funds available to consummate the transactions contemplated by the SPA and to pay the Purchase Price and all related transaction costs. The total sources of financing for the transaction are summarized below:
The key terms of each financing source are as follows:
• Senior Secured Term Loan B ($750,000,000): The Term Loan B will bear interest at SOFR plus 275 basis points, with a seven (7) year maturity and one percent (1%) annual amortization. The commitment is evidenced by Commitment Letter Reference No. CL-2025-0515-CRNB, dated May 15, 2025, issued by Cornerstone National Bank, N.A. (Administrative Agent; contact: Robert Frankel, SVP, Leveraged Finance) and Caluvori Capital Partners, Inc. (Co-Lead Arranger; contact: Irene Matsuda, Director). The original issue discount ("OID") on the Term Loan B is $11,250,000, representing 1.5% of the principal amount. The Term Loan B Credit Agreement and related ancillary financing documents remain subject to finalization, as discussed further in Section IV.B below.
• Revolving Credit Facility Draw ($200,000,000): Cascade intends to draw $200,000,000 at closing under its existing $500,000,000 revolving credit facility with Cornerstone National Bank, N.A. The revolving facility bears interest at SOFR plus 200 basis points and matures in March 2029. The revolver will require an amendment to permit the acquisition, the incurrence of the Term Loan B indebtedness, and the $200,000,000 draw at closing, as well as to update certain financial covenants and cross-default provisions. This amendment is discussed further in Section IV.B below.
• Cash on Hand ($250,000,000): Cascade will fund the balance of the Purchase Price from existing cash on hand.
• Estimated Transaction Costs: Approximately $47,300,000, to be funded from Cascade's working capital and not from the deal financing sources. A detailed breakdown is provided in Section V below.
G. Key Deal Metrics
The following table summarizes the key financial metrics for the transaction:
These metrics reflect the strategic value of the NovaMart platform and its complementary position within Cascade's broader retail ecosystem. The implied multiples are consistent with recent precedent transactions in the online marketplace and ecommerce sector.
H. NovaMart Ownership at Signing
The ownership of NovaMart's issued and outstanding capital stock as of the Signing Date is as follows:
All Selling Stockholders have executed the SPA or, in the case of management and employee stockholders, joinder agreements and letters of transmittal in the forms prescribed by the SPA. The foregoing percentages reflect the fully-diluted capitalization of NovaMart, including all vested and exercised stock options.
III. Conditions Precedent to Closing (SPA Article VII Overview)
The following is a summary of the principal conditions that remain to be satisfied (or, where applicable, waived) before the closing can occur. Each condition is set forth in Article VII of the SPA, and we have noted the relevant SPA section references for your convenience.
A. HSR / Antitrust Clearance
The expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), must have occurred. This condition includes compliance with any requests for additional information or documentary material issued by the Department of Justice ("DOJ") Antitrust Division, including the DOJ Second Request that was issued on May 8, 2025. The HSR clearance process is discussed in detail in Section IV.A below.
B. No Legal Impediment
No order, injunction, decree, or other legal restraint or prohibition issued by any court of competent jurisdiction or governmental authority shall be in effect that prohibits, restrains, or makes illegal the consummation of the transactions contemplated by the SPA. This condition is mutual and applies to both Cascade's and the Selling Stockholders' obligations to close.
C. Accuracy of Representations and Warranties
The representations and warranties of NovaMart and the Selling Stockholders set forth in the SPA must be accurate in all material respects (or, with respect to representations and warranties qualified by materiality or Material Adverse Effect, in all respects) as of the closing date, as though made on and as of the closing date, except to the extent such representations and warranties are made as of a specified date, in which case they must be accurate as of such date. The accuracy standard is subject to the Material Adverse Effect ("MAE") qualification set forth in the SPA. Similarly, the representations and warranties of Cascade must be accurate in all material respects as of the closing date.
D. Performance of Covenants
All covenants and agreements required to be performed by each party at or prior to the closing must have been performed and complied with in all material respects. This includes, among other things, NovaMart's obligations under the interim operating covenants (SPA Section 6.01), the consent solicitation obligations, and the parties' respective obligations to use commercially reasonable efforts to consummate the transactions.
E. No Material Adverse Effect
No Material Adverse Effect shall have occurred with respect to NovaMart or its subsidiaries since the Signing Date. The definition of "Material Adverse Effect" in the SPA contains customary carve-outs for changes affecting the industry generally, changes in economic or market conditions, changes in applicable law or accounting standards, and other customary exclusions, in each case except to the extent such changes have a disproportionate impact on NovaMart relative to other participants in its industry.
F. Third-Party Consents
Cascade's obligation to close is conditioned upon the receipt of certain required consents under NovaMart's material contracts that contain change of control provisions. The specific consents required as conditions to closing, and the broader universe of consents that are being solicited, are discussed in Section IV.C below.
G. Deliverables. All closing deliverables specified in the SPA must have been delivered or be ready for delivery at closing, including but not limited to officer's certificates, secretary's certificates, the FIRPTA non-foreign person certificate, good standing certificates, the executed escrow agreement, stock powers, letters of transmittal, and all other instruments and documents contemplated by Sections 7.02 and 7.03 of the SPA.
H. Financing Confirmation
While the SPA does not contain a financing condition, and Cascade has represented that it has sufficient committed financing to consummate the transaction, Cascade will nonetheless need to ensure that all conditions precedent under the Term Loan B Credit Agreement and the revolver amendment have been satisfied in order to draw down the committed financing at closing. These financing workstreams are described in Section IV.B below. We note that the absence of a financing condition means that Cascade's obligation to close is not excused by any failure to obtain financing, and the reverse termination fee provisions described in Section II.E above would apply in such a scenario.
IV. Pre-Closing Roadmap: Key Workstreams
Set forth below is a detailed description of each major pre-closing workstream, together with assigned responsibilities and estimated timelines. We have organized these workstreams in approximate order of priority and complexity.
A. HSR / Antitrust — DOJ Second Request Compliance
This workstream represents the longest lead-time item in the pre-closing period and is the most significant driver of the overall closing timeline.
Background. Cascade and NovaMart filed their respective HSR Act notifications with the Federal Trade Commission and the DOJ Antitrust Division on April 11, 2025 (internal Calderwood & Harkness tracking number 1038-00009). The HSR filing fee of $2,390,000 was paid by Cascade at the time of filing. The initial thirty (30) day waiting period under the HSR Act would have expired on May 11, 2025; however, the DOJ Antitrust Division issued a Request for Additional Information and Documentary Material (a "Second Request") on May 8, 2025, before the initial waiting period expired.
Scope of Second Request. The Second Request requires substantial additional document production and data from both Cascade and NovaMart. The DOJ's inquiry is focused on the competitive overlap between Cascade's online marketplace operations (principally CascadeDirect.com) and NovaMart's online marketplace and ecommerce platform. Specifically, the DOJ is evaluating market concentration in what it has preliminarily defined as the "online marketplace for specialty consumer goods" segment.
Internal Market Share Analysis. Our preliminary internal analysis, which has been reviewed by our economic expert (described below), indicates the following approximate market shares in the relevant segment:
These market share figures, together with the relatively low level of post-merger concentration (well below the thresholds that typically trigger enforcement action), form the foundation of our advocacy strategy with the DOJ.
Calderwood & Harkness and Outside Counsel Team. The antitrust workstream is being led by Howard Bellamy, Specialist Partner, Antitrust & Competition, at Calderwood & Harkness. In addition, we have engaged Whitfield & Crane LLP (contact: Gabriela Montoya, Partner), located at 1200 New Hampshire Avenue NW, Suite 500, Washington, DC 20036, to serve as outside antitrust counsel and to lead the day-to-day engagement with DOJ staff on the Second Request process. Ms. Montoya is a highly experienced antitrust practitioner with deep relationships at the DOJ Antitrust Division and extensive experience in Second Request proceedings in the retail and technology sectors.
Economic Expert. We have retained Dr. Henrik Johansson through Apex Economics LLC, located at 900 G Street NW, Suite 700, Washington, DC 20001, to serve as our economic expert. Dr. Johansson is preparing the economic analysis that will underpin our advocacy with the DOJ, including HHI (Herfindahl-Hirschman Index) calculations, market definition analysis, and merger simulation results.
Key Workstreams within the Second Request Process:
(i) Document Production. We are in the process of identifying custodians (both at Cascade and at NovaMart) whose files are responsive to the Second Request specifications, developing search terms to be applied to electronic document repositories, and establishing the privilege review protocol. Calderwood & Harkness will coordinate closely with NovaMart and Calloway, Brandt & Loewe on their parallel document production obligations. We anticipate that custodian identification and search term development will be completed within the next two weeks, with rolling document production commencing thereafter.
(ii) White Paper / Advocacy Document. Calderwood & Harkness and Whitfield & Crane are preparing a comprehensive advocacy document (commonly referred to as a "white paper") for submission to the DOJ, arguing that the transaction does not substantially lessen competition in any relevant market. The white paper will incorporate Dr. Johansson's economic analysis, including HHI calculations demonstrating that post-merger concentration remains well below the levels that would raise competitive concerns, a detailed market definition analysis supporting a broader market definition than the DOJ's preliminary framing, and merger simulation results demonstrating that the transaction is not expected to result in a meaningful increase in prices or reduction in output or innovation. We expect to deliver a draft of the white paper for Cascade's review by mid-July 2025.
(iii) Timing Agreement. We will negotiate with DOJ staff a timing agreement governing the post-Second Request review process, including commitments regarding notice before consummation of the transaction and procedures for potential pull-and-refile if circumstances warrant. Timing agreements are customary in Second Request proceedings and provide both the parties and the DOJ with predictability regarding the review timeline.
(iv) Contingency Planning — Potential Divestiture Remedy. While we do not currently anticipate that the DOJ will require any divestiture or other structural remedy as a condition to clearance, we have identified the potential divestiture of NovaMart's NovaHome home décor vertical (representing approximately $620,000,000 in gross merchandise value) as a fallback remedy package in the event that the DOJ identifies competitive concerns that cannot be resolved through advocacy alone. This contingency is being developed on a parallel track, and we will discuss it further with Cascade management if and when it becomes necessary to engage the DOJ on potential remedies.
Timeline. Our target is to achieve substantial compliance with the Second Request by August 2025, with anticipated HSR clearance (either through expiration of the post-compliance waiting period or through a consent decree or closing letter from the DOJ) in September–October 2025. Calderwood & Harkness and Whitfield & Crane will provide regular updates to Cascade management and the Board on the status of the antitrust review process throughout the pre-closing period.
B. Financing Workstreams
The financing workstreams are proceeding on a parallel track and must be completed in advance of the closing date. The principal components are as follows:
Term Loan B Credit Agreement. Calderwood & Harkness is working with Cornerstone National Bank, N.A., as Administrative Agent, Caluvori Capital Partners, Inc., as Co-Lead Arranger, and their respective counsel to finalize the negotiation of the $750,000,000 Senior Secured Term Loan B Credit Agreement. The credit agreement will reflect the economic terms set forth in the Commitment Letter (including SOFR + 275 bps pricing, seven-year maturity, 1% annual amortization, and 1.5% OID) and will contain customary representations, covenants, events of default, and conditions to funding. We will circulate revised drafts to Cascade for review as they become available and will ensure that all conditions to funding are on track for satisfaction at or prior to closing.
Guarantee and Collateral Agreement. In connection with the Term Loan B, we are finalizing the Guarantee and Collateral Agreement (also referred to as the "Pledge and Security Agreement"), pursuant to which NovaMart and its subsidiaries will become guarantors of Cascade's obligations under the Term Loan B Credit Agreement upon the closing and will grant a first-priority security interest in substantially all of their respective assets to Cornerstone National Bank, N.A., in its capacity as Collateral Agent. This will require the preparation and filing of UCC-1 financing statements, intellectual property security agreements (covering NovaMart's registered patents, trademarks, and copyrights), and related perfection documentation.
Revolving Credit Facility Amendment. We are preparing an amendment to Cascade's existing $500,000,000 revolving credit facility with Cornerstone National Bank, N.A. The amendment will permit the acquisition, authorize the incurrence of the Term Loan B indebtedness, authorize the $200,000,000 draw at closing, and update the financial covenants (including the leverage ratio covenant and the interest coverage ratio covenant) and cross-default provisions to reflect the post-closing capital structure. We expect to have a substantially final draft of the amendment available for circulation within the next three weeks.
Funds Flow Memorandum. Calderwood & Harkness will prepare and circulate a detailed funds flow memorandum reflecting all sources and uses of funds at closing. The funds flow will incorporate, among other things, the Purchase Price payable to the Selling Stockholders (net of the Escrow Amount and any working capital adjustment), the deposit of the Escrow Amount with Marlowe Asset Management Trust Company, N.A., the payoff of NovaMart's existing $150,000,000 revolving credit facility with Ashford Savings Bank, N.A. (estimated outstanding principal of approximately $143,200,000 plus accrued interest and any prepayment fees), the disbursement of the Term Loan B loan proceeds (net of OID), the draw under Cascade's revolving credit facility, the payment of all transaction costs, and all applicable wire transfer instructions for each party. We will finalize the wire instructions for all parties in advance of the closing date and will coordinate a dry-run of the funds flow with all lenders and escrow agents.
The financing workstreams are being managed by Harrison Wexford and Derek Okonkwo of Calderwood & Harkness, in coordination with Rajiv Sundaram at Cascade and Robert Frankel (Cornerstone National Bank) and Irene Matsuda (Caluvori Capital Partners) on the lender side.
C. Third-Party Consents — Change of Control
The acquisition of NovaMart will constitute a "change of control" (or similar triggering event) under approximately thirty-four (34) identified NovaMart material contracts. Calderwood & Harkness has prepared a master consent tracker (the "Change of Control Consent Tracker") and a form consent solicitation letter, which have been reviewed and approved by Cascade and are being coordinated with Calloway, Brandt & Loewe for distribution to the relevant counterparties.
The most significant consents required include the following:
• Pinnacle Cloud Solutions Inc. — Master Services Agreement for cloud hosting services (NovaMart's primary cloud infrastructure provider)
• Redline Freight Corp. — Logistics Partnership Agreement for freight and third-party logistics (3PL) services
• Arcwave Software LLC — Technology License Agreement for NovaMart's proprietary search algorithm license
• Congress Tower Partners LP — Office Lease for NovaMart's headquarters at 1100 Congress Avenue, Austin, Texas
• Fourteen (14) Fulfillment Center Landlords — Leases for NovaMart's fulfillment center facilities located across nine states: California (3 facilities), New Jersey (2 facilities), Georgia (2 facilities), Ohio (1 facility), Illinois (1 facility), Pennsylvania (1 facility), Tennessee (1 facility), Florida (2 facilities), and Washington (1 facility)
• Stratton Digital Media Inc. — Advertising Revenue Share Agreement
• PayStream Financial Technologies Inc. — Payment Processing Agreement
In addition, NovaMart's existing $150,000,000 revolving credit facility with Ashford Savings Bank, N.A. will be repaid and terminated at closing. Calderwood & Harkness has prepared a draft payoff letter and lien release documentation, including UCC-3 termination statements for the existing UCC-1 financing statements filed by or on behalf of Ashford Savings Bank. We will coordinate with Ashford Savings Bank's counsel to finalize the payoff letter and lien release, and to ensure that all liens and security interests are released simultaneously with the closing.
Calderwood & Harkness and Calloway, Brandt & Loewe are coordinating the consent solicitation efforts. Amanda Trevino at NovaMart has been designated as the primary point of contact with the relevant counterparties, given NovaMart's existing relationships with each of them. We expect that many of the consents can be obtained through routine correspondence, but we are prepared to negotiate any amendments or modifications that counterparties may request as a condition to granting consent. Consent status updates will be tracked via the Change of Control Consent Tracker and reported to Cascade on a weekly basis.
D. Employment Agreements and Key Employee Retention
A critical component of the transaction is the retention of NovaMart's key personnel, including its founders and senior management team. The following employment and retention arrangements are contemplated:
Julian Reeves (Founder & CEO). Mr. Reeves will enter into a three (3) year post-closing employment agreement with Cascade, pursuant to which he will continue to serve in a senior leadership role. The principal terms are as follows: annual base salary of $625,000; target annual bonus opportunity of 75% of base salary; equity grant of 150,000 restricted shares of Cascade common stock (Nasdaq: CRHI), vesting ratably over three (3) years; and customary non-competition, non-solicitation, and intellectual property assignment provisions. A draft employment agreement has been circulated to Mr. Reeves and his personal counsel through Calloway, Brandt & Loewe.
Priya Narasimhan (Co-Founder & CTO). Ms. Narasimhan will enter into a three (3) year post-closing employment agreement with Cascade on substantially similar terms: annual base salary of $575,000; target annual bonus opportunity of 70% of base salary; equity grant of 125,000 restricted shares of Cascade common stock (Nasdaq: CRHI), vesting ratably over three (3) years; and customary non-competition, non-solicitation, and intellectual property assignment provisions. A draft employment agreement has been circulated to Ms. Narasimhan through Calloway, Brandt & Loewe.
We anticipate scheduling calls with Mr. Reeves and Ms. Narasimhan, through Calloway, Brandt & Loewe, over the coming weeks to finalize the terms of these employment agreements. Several open points remain, including the scope of the non-competition covenants, the treatment of the equity grants upon a termination without cause, and certain severance provisions.
Key Employee Retention Plan. In addition to the founder employment agreements, Cascade has approved a Key Employee Retention Plan with an aggregate retention pool of Eighteen Million Dollars ($18,000,000) for other key NovaMart employees. NovaMart currently employs approximately 2,400 individuals. The retention pool will be allocated to identified key employees, with fifty percent (50%) of each individual's retention bonus ($9,000,000 in the aggregate) payable at closing and the remaining fifty percent (50%) ($9,000,000 in the aggregate) payable on the first anniversary of the closing, in each case subject to continued employment through the applicable payment date. Calderwood & Harkness has prepared a summary memorandum describing the retention plan and form retention bonus letters for distribution to the identified participants. Cascade's human resources team, in consultation with Ted Langford, will be responsible for identifying the specific employees to be included in the retention pool.
Restrictive Covenant Analysis. Calderwood & Harkness has conducted an analysis of the enforceability of existing NovaMart restrictive covenant agreements (including non-competition, non-solicitation, and confidentiality agreements) under the laws of the states in which NovaMart's employees are located, including Texas, California, Washington, and other jurisdictions where NovaMart maintains operations or has employees. We note in particular that California's Business and Professions Code Section 16600 generally prohibits the enforcement of employee non-competition covenants, which will affect the scope of any post-closing restrictive covenants for NovaMart employees based in California (including employees at NovaMart's three California fulfillment centers). We will provide a separate memorandum to you summarizing our analysis and recommendations.
E. Tax Matters
The transaction will be treated as a stock purchase for federal income tax purposes. No election under Section 338(h)(10) of the Internal Revenue Code is contemplated, as the parties were unable to reach agreement on the appropriate pricing for a tax basis step-up. The key tax considerations are summarized as follows:
NovaMart Tax Jurisdictions. NovaMart files tax returns in the following jurisdictions: federal; Texas (noting that Texas does not impose a state income tax but does impose a franchise tax, also known as the Texas Margin Tax); Delaware (franchise tax); and various nexus states for its fulfillment center operations, including California, New Jersey, Georgia, Ohio, Illinois, Pennsylvania, Tennessee, Florida, and Washington.
NovaMart EIN. NovaMart's federal Employer Identification Number is 84-3291547. NovaMart's estimated FY2024 federal income tax liability was approximately $23,800,000.
Pre-Closing Tax Returns. Pursuant to SPA Section 6.09, NovaMart is obligated to prepare and file all tax returns for all pre-closing tax periods in a manner consistent with past practice. Cascade has review and comment rights with respect to any such returns filed after the Signing Date, and the Selling Stockholders may not amend any pre-closing tax return without Cascade's prior written consent.
Tax Indemnification. As noted in Section II.C above, the Selling Stockholders have agreed to indemnify Cascade for all pre-closing tax liabilities without regard to the general indemnification cap. This indemnification obligation is an uncapped, dollar-for-dollar indemnity. The Tax Representations survive until sixty (60) days after the expiration of the applicable statute of limitations (including any extensions or tolling thereof).
Transfer Taxes. Estimated transfer taxes associated with the transaction are approximately $1,200,000, which will be borne equally by the Buyer and the Sellers ($600,000 each), as provided in the SPA.
FIRPTA Compliance. NovaMart is required to deliver at closing a non-foreign person certificate in compliance with Section 1445 of the Internal Revenue Code and the Treasury Regulations thereunder, certifying that NovaMart is not a "foreign person" within the meaning of FIRPTA and that no withholding is required in connection with the stock transfer.
The tax workstream is being managed by Sylvia Hartwell (Calderwood & Harkness, Tax) in coordination with Sandra Chiu of Whitmore & Paige LLP, located at 100 Federal Street, Suite 2500, Boston, MA 02110.
F. Interim Operating Covenant Monitoring
During the period between the Signing Date (May 20, 2025) and the closing, NovaMart is subject to interim operating covenants set forth in SPA Section 6.01, which require NovaMart to conduct its business in the ordinary course of business, consistent with past practice, and to use commercially reasonable efforts to preserve its business relationships, workforce, and goodwill. Any action outside the ordinary course of business requires Cascade's prior written consent. The interim operating covenants cover a wide range of activities, including limitations on capital expenditures, hiring and compensation changes, contract execution, asset dispositions, dividend declarations, and other specified actions.
Calderwood & Harkness has established a monitoring protocol to ensure timely identification and resolution of any consent requests or potential covenant compliance issues during the interim period. Derek Okonkwo of Calderwood & Harkness will serve as the primary point of contact for all consent requests submitted by NovaMart or Calloway, Brandt & Loewe. We have also established a reporting cadence and escalation procedure, pursuant to which any consent request or compliance issue will be escalated promptly to Cascade's deal team — specifically, Ted Langford and Elena Vasquez-Bright — for review and decision.
We encourage the Cascade team to respond to consent requests expeditiously, as unreasonable delays or unreasonable withholding of consent could give rise to claims by the Selling Stockholders that Cascade has breached its obligations under the SPA.
G. D&O Tail Insurance
Pursuant to the SPA, Cascade is required to obtain (or cause NovaMart to obtain) a six (6) year "tail" directors' and officers' liability insurance policy for NovaMart's pre-closing directors and officers, effective as of the closing date. This tail policy will provide coverage for claims arising from acts, errors, or omissions occurring prior to the closing. The tail policy is being placed with Sovereign Assurance Group Ltd. The estimated premium for the six-year tail policy is $1,800,000, which is included in the estimated transaction costs set forth in Section V below.
H. Title Insurance
Title insurance for NovaMart-owned real property will be provided by Ridgecrest Title Group Inc. (contact: Janet Morales, underwriter). Calderwood & Harkness is coordinating with Ridgecrest Title Group to obtain title commitments and to identify and resolve any title exceptions or encumbrances that may affect NovaMart's owned real property. We do not anticipate material title issues based on the results of our due diligence, but will advise you promptly if any issues arise during the title review process.
I. Closing Deliverables Preparation
Calderwood & Harkness is responsible for the preparation and coordination of all closing deliverables contemplated by the SPA. These include the following:
• Officer's Certificates (Cascade and NovaMart), certifying the satisfaction of closing conditions
• Secretary's Certificates (Cascade and NovaMart), with attached certificates of incorporation (or formation documents, as applicable), bylaws (or operating agreements), board and/or stockholder resolutions authorizing the transaction, and incumbency certificates for all officers executing closing documents
• Good standing certificates (certificates of status) for NovaMart and each of its subsidiaries from the Secretary of State of Delaware and Texas, and from each state in which NovaMart or its subsidiaries are qualified to do business as a foreign entity (California, New Jersey, Georgia, Ohio, Illinois, Pennsylvania, Tennessee, Florida, and Washington)
• FIRPTA Non-Foreign Person Certificate, as described in Section IV.E above
• Letters of transmittal for each Selling Stockholder, referencing Continental Stocktransfer & Trust, Inc. as NovaMart's transfer agent, for use in surrendering NovaMart stock certificates (or book-entry shares) in exchange for the applicable portion of the Purchase Price
• Stock powers for the transfer of NovaMart shares from each Selling Stockholder to Cascade
• Bring-down due diligence searches, including litigation searches, UCC lien searches, judgment and tax lien searches, bankruptcy searches, and patent/trademark status checks, to be conducted immediately prior to closing to confirm the absence of intervening liens, judgments, or proceedings
• Estimated closing statement and working capital calculation, prepared in accordance with the Working Capital Methodology Agreement
• Finalized funds flow memorandum with executed wire instructions for all parties
• Payoff letter and lien releases from Ashford Savings Bank, N.A., including UCC-3 termination statements
We will begin preparing drafts of these deliverables in the coming weeks and will circulate them for review as they approach final form. We anticipate that the majority of these deliverables can be substantially completed well in advance of the targeted closing date, with final execution and delivery occurring at or immediately prior to closing.
V. Estimated Transaction Costs (Buyer Side)
The following table summarizes the estimated transaction costs to be borne by Cascade in connection with the acquisition. These costs are funded from Cascade's working capital and are not funded from the deal financing sources.
We note that the foregoing estimates are based on information currently available and may be subject to adjustment as the transaction progresses. In particular, the Calderwood & Harkness legal fees estimate reflects our current assessment of the scope and complexity of the remaining pre-closing work, including the Second Request compliance process, and will depend in part on the duration and intensity of the DOJ review. We will endeavor to provide updated estimates as the pre-closing workstreams develop.
VI. Timeline Summary
The following table summarizes the key dates and milestones for the transaction:
The targeted closing date of October 15, 2025 is based on our current assessment of the HSR clearance timeline and assumes that no material delays are encountered in the Second Request compliance process or in the satisfaction of the other conditions to closing. The Outside Date of December 31, 2025 provides an adequate buffer of approximately two and a half months beyond the targeted closing date in the event of unanticipated delays.
VII. Immediate Next Steps
The following priority action items require attention during the coming days and weeks:
1. Second Request Compliance. Howard Bellamy and Gabriela Montoya (Whitfield & Crane) will circulate the proposed custodian list and search term proposals by the end of this week. Document collection and privilege review will commence promptly thereafter, with the goal of beginning rolling production to the DOJ within two to three weeks.
2. Financing Documents. Calderwood & Harkness will circulate revised drafts of the Term Loan B Credit Agreement, the Guarantee and Collateral Agreement, and the Revolving Credit Facility Amendment for Cascade's review within the next three weeks. We will coordinate with Cornerstone National Bank, Caluvori Capital Partners, and their respective counsel to resolve any outstanding issues.
3. Third-Party Consents. NovaMart (Amanda Trevino) will begin distributing consent solicitation letters to counterparties this week, beginning with the highest-priority contracts (Pinnacle Cloud Solutions, Redline Freight, and Arcwave Software). Calderwood & Harkness will track the status of all consent solicitations via the Change of Control Consent Tracker and will report to Cascade on a weekly basis.
4. Employment Agreements. Calderwood & Harkness will schedule calls with Julian Reeves and Priya Narasimhan (through Calloway, Brandt & Loewe) to finalize the terms of their respective post-closing employment agreements. We anticipate that two to three rounds of negotiation will be required to resolve the remaining open points.
5. Retention Plan. Cascade's human resources team and Ted Langford will identify the participants to be included in the Key Employee Retention Plan. Calderwood & Harkness will finalize the form retention bonus letters for distribution promptly after participants have been identified.
6. Working Capital. Sandra Chiu (Whitmore & Paige) and Doug Whitfield will coordinate on the preparation of the estimated closing date balance sheet and the preliminary working capital calculation. Early engagement on this workstream will facilitate a smoother post-closing true-up process.
7. Good Standing Certificates. Calderwood & Harkness will order good standing certificates (certificates of status) for NovaMart and each of its subsidiaries from the Secretary of State of Delaware, Texas, and all qualification states (California, New Jersey, Georgia, Ohio, Illinois, Pennsylvania, Tennessee, Florida, and Washington). Good standing certificates are typically dated within thirty (30) days of closing, so we will coordinate the timing of these orders with the expected closing date.
8. Board Resolutions. Calderwood & Harkness will prepare draft closing resolutions for adoption by the Cascade Board of Directors closer to the closing date. These resolutions will authorize the execution and delivery of the closing deliverables, the drawdown of financing, the payment of the Purchase Price, and all other actions necessary to consummate the transaction.
9. Weekly Status Calls. We propose establishing a standing weekly conference call among Calderwood & Harkness (Harrison Wexford and Derek Okonkwo), Cascade (Elena Vasquez-Bright, Ted Langford, and Rajiv Sundaram), Hargrove Mead & Co. (Christopher Dunleavy), and Whitmore & Paige LLP (Sandra Chiu) to track all workstreams, identify and resolve issues as they arise, and maintain alignment among all members of the deal team. We suggest scheduling the first such call for the week of May 26, 2025, and will coordinate with your assistant to identify a recurring time slot.
VIII. Calderwood & Harkness Team Contacts
The following members of the Calderwood & Harkness team are assigned to this engagement and are available to address any questions or issues that may arise:
We also note that Whitfield & Crane LLP (Gabriela Montoya, Partner) continues to serve as outside antitrust counsel for the DOJ Second Request process and will remain actively engaged through the completion of the HSR clearance workstream. Ms. Montoya can be reached directly at her Washington, D.C. office at (202) 555-1200 or by email.
Derek Okonkwo is your primary day-to-day contact for all deal management matters and can be reached at (212) 558-4127 or by email at d.okonkwo@calderwoodharkness.com. For matters requiring partner-level attention, please do not hesitate to reach out to me directly.
IX. Closing Remarks
We are confident in the team's ability to navigate the remaining pre-closing workstreams efficiently and to achieve the targeted closing date of October 15, 2025. The Outside Date of December 31, 2025 provides adequate buffer in the event of unanticipated delays in the HSR clearance process or any other workstream. The transaction team — across Cascade, Calderwood & Harkness, Whitfield & Crane, Hargrove Mead, and Whitmore & Paige — is experienced, well-coordinated, and fully resourced to execute on the pre-closing roadmap described in this letter.
We would be pleased to schedule an in-person or video briefing with Cascade's senior management team and Board members at your convenience to review the post-signing status and pre-closing roadmap in further detail. Please let us know if you would like us to arrange such a session, and we will coordinate accordingly.
Finally, we remind you that this letter and its contents are protected by the attorney-client privilege and constitute a confidential communication between Calderwood & Harkness LLP and Cascade Retail Holdings Inc. The contents of this letter should not be shared outside the Cascade deal team without prior consultation with Calderwood & Harkness.
We look forward to working with you and the entire Cascade team through the closing and beyond. Please do not hesitate to call with any questions.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Harrison Wexford Partner, Mergers & Acquisitions Calderwood & Harkness LLP 599 Lexington Avenue, 38th Floor New York, NY 10022 Tel: (212) 558-4100
Email: h.wexford@calderwoodharkness.com
cc: (via email)
Margaret "Meg" Alderton, Chief Executive Officer, Cascade Retail Holdings Inc. Rajiv Sundaram, Chief Financial Officer, Cascade Retail Holdings Inc. Theodore "Ted" Langford, SVP Corporate Development, Cascade Retail Holdings Inc. Beatrice Holloway, Calderwood & Harkness LLP Derek Okonkwo, Calderwood & Harkness LLP Sylvia Hartwell, Calderwood & Harkness LLP Howard Bellamy, Calderwood & Harkness LLP Christopher Dunleavy, Hargrove Mead & Co. Sandra Chiu, Whitmore & Paige LLP
Enclosures: None. The executed SPA, ancillary documents, and signing deliverables have been separately distributed to all addressees and copy recipients via the deal data room (Thackeray Solutions Project Cascade) and by direct delivery. Please contact Derek Okonkwo if you require access to any documents or if you have questions regarding the data room.
Source | Amount
Senior Secured Term Loan B | $750,000,000
Revolving Credit Facility Draw | $200,000,000
Cash on Hand | $250,000,000
Total Sources | $1,200,000,000
Metric | Value
Implied EV/EBITDA Multiple | ~8.96x ($1,200,000,000 ÷ NovaMart FY2024 EBITDA of $134,000,000)
Implied EV/Revenue Multiple | ~1.35x ($1,200,000,000 ÷ NovaMart FY2024 Revenue of $891,000,000)
NovaMart FY2024 Gross Merchandise Value (GMV) | $6,200,000,000
NovaMart Active Sellers | ~62,400
NovaMart Registered Buyers | ~9.1 million
Cascade FY2024 Revenue | $14,700,000,000
Cascade FY2024 EBITDA | $1,830,000,000
Cascade Approximate Market Capitalization (as of May 19, 2025) | $22,400,000,000
Stockholder | Ownership Percentage
Ridgeline Equity Partners, LP | 41.2%
Brindoval Ventures Fund III, LP | 22.8%
Julian Reeves (Founder) | 18.5%
Priya Narasimhan (Co-Founder) | 8.3%
Other management and employee stockholders (incl. vested stock options) | 9.2%
Total | 100.0%
Company | Approximate Market Share
Cascade (CascadeDirect.com) | 8.3%
NovaMart | 5.7%
Combined (post-transaction) | 14.0%
BrightBazaar Inc. (next largest competitor) | 6.1%
Cost Item | Estimated Amount
Calderwood & Harkness LLP legal fees | $8,200,000
Hargrove Mead & Co. advisory fee (1.2% of deal value) | $14,400,000
Whitmore & Paige LLP accounting/tax advisory | $3,100,000
HSR filing fee | $2,390,000
R&W insurance premium (Meridian Specialty Insurance Company) | $5,400,000
Financing fees (Term Loan B OID, 1.5%) | $11,250,000
D&O tail insurance premium (Sovereign Assurance Group Ltd.) | $1,800,000
Miscellaneous (title insurance, transfer taxes, filing fees, etc.) | $760,000
Total Estimated Transaction Costs | $47,300,000
Event | Date / Estimated Date
SPA Signed | May 20, 2025
Expected Substantial Compliance with DOJ Second Request | August 2025 (estimated)
Expected HSR Clearance | September – October 2025 (estimated)
Targeted Closing Date | October 15, 2025
Outside Date (SPA Termination Right) | December 31, 2025
Escrow Release (if no pending claims) | 24 months after Closing
General Representations Survival Expiration | 24 months after Closing
Team Member | Role
Harrison Wexford | Responsible Partner, M&A
Beatrice Holloway | Billing Partner, M&A
Derek Okonkwo | Lead Associate, M&A (day-to-day deal management contact)
Tiffany Rosenthal | Working Associate, M&A
Sylvia Hartwell | Specialist Partner, Tax
Howard Bellamy | Specialist Partner, Antitrust & Competition

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