CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED — NOT FOR DISTRIBUTION
CALDERWOOD & HARKNESS LLP 599 Lexington Avenue, 38th Floor New York, New York 10022
This memorandum is a confidential attorney-client privileged communication prepared by Calderwood & Harkness LLP for the exclusive use of Cascade Retail Holdings Inc. It contains legal analysis and advice protected by the attorney-client privilege and the work product doctrine. This memorandum should not be disclosed to any person other than those identified herein without the prior written consent of Calderwood & Harkness LLP. Unauthorized disclosure may result in a waiver of applicable privileges.
MEMORANDUM
I. Executive Summary
This memorandum provides a confidential review and analysis of the fee letter (the "Fee Letter") dated May 15, 2025, executed concurrently with the Commitment Letter (Ref: CL-2025-0515-CRNB) by and among Cascade Retail Holdings Inc. ("Cascade" or the "Borrower"), Cornerstone National Bank, N.A. ("Cornerstone"), in its capacities as Administrative Agent and Lead Left Bookrunner, and Caluvori Capital Partners, Inc. ("Marlowe Crane CPAs LLPP"), in its capacity as Co-Lead Arranger, in connection with the $750,000,000 Senior Secured Term Loan B facility (the "Term Loan B") to be used to partially finance Cascade's acquisition of 100% of the outstanding capital stock of NovaMart Global Inc. ("NovaMart") for an aggregate purchase price of $1,200,000,000 (the "Acquisition").
As a threshold matter, the Fee Letter is a confidential side letter to the Commitment Letter. By its terms and in accordance with customary market practice, the economic terms set forth in the Fee Letter are not disclosed to NovaMart, the Selling Stockholders (as defined below), or any of their respective advisors, including Calloway, Brandt & Loewe LLP (legal counsel to the Selling Stockholders) and Pemberton Strauss Advisory LLC (financial advisor to NovaMart). We emphasize the importance of maintaining this confidentiality, as discussed in greater detail in Section VI below.
We note that the Stock Purchase Agreement (the "SPA") among Cascade, NovaMart, and the Selling Stockholders was executed on May 20, 2025. The SPA is not subject to a financing condition — Cascade has represented to the Selling Stockholders and NovaMart that it has sufficient committed financing to consummate the Acquisition. This representation carries significant implications for the interplay between the Fee Letter, the Commitment Letter, and the SPA, as discussed in Section VII below.
Overall Assessment. Based on our review, the economic terms of the Fee Letter are within the current market range for a Term Loan B of this size and credit profile in the leveraged acquisition financing market. The total upfront financing costs to Cascade (including OID and arrangement fees) are estimated at approximately $19.7 million, with additional ticking fees likely to accrue depending on the closing timeline. Several provisions warrant particular attention from Cascade's management and financial team:
• The flex provisions (Section IV) grant the arrangers meaningful latitude to adjust pricing and structural terms to facilitate syndication, with a combined upward flex cap of 75 basis points on an all-in yield basis. While within customary parameters, the exercise of upward flex could materially increase Cascade's ongoing borrowing costs.
• The duration fees (Section V) begin to accrue on August 15, 2025, which, given the pendency of the DOJ Second Request review under the Hart-Scott-Rodino Act, makes some ticking fee accrual probable. The estimated ticking fee exposure ranges from approximately $313,000 (if closing occurs on the targeted October 15, 2025 date) to approximately $711,000 (if closing is delayed to the Outside Date).
• The confidentiality obligations (Section VI) are strict and limit Cascade's ability to share the Fee Letter terms, including in connection with any SEC filings that may be required.
• The arrangement fees (Section III.B) total $8,437,500 and may not have been included in the $47,300,000 estimated transaction cost figure previously presented to the Cascade Board of Directors. We recommend immediate clarification of this point with Cascade's independent auditors at Whitmore & Paige LLP.
The balance of this memorandum sets forth our detailed analysis of each component of the Fee Letter.
II. Transaction Context and Financing Overview
A. The Acquisition
Cascade is acquiring 100% of the outstanding capital stock of NovaMart from the following selling stockholders (collectively, the "Selling Stockholders"):
The aggregate purchase price for NovaMart is $1,200,000,000 in cash, subject to customary purchase price adjustments for net working capital, cash, indebtedness, and transaction expenses as of the closing date.
The Stock Purchase Agreement was executed on May 20, 2025. The targeted closing date is October 15, 2025, with an outside date (the "Outside Date") of December 31, 2025, after which either party may terminate the SPA if the closing has not occurred (subject to certain exceptions for a party whose breach of the SPA caused the failure to close).
The principal remaining closing condition is the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"). The Federal Trade Commission referred the matter to the Antitrust Division of the U.S. Department of Justice, which issued a Second Request for additional information and documentary materials on May 8, 2025. Based on discussions with Cascade's antitrust counsel and the current pace of document production, we understand that substantial compliance with the Second Request is expected in approximately August 2025, with HSR clearance (either by expiration of the waiting period following substantial compliance or by early termination) expected in September or October 2025.
No other material regulatory approvals are required for the closing of the Acquisition. State-level retail licensing and franchise transfer requirements applicable to NovaMart's operations in certain jurisdictions are expected to be completed prior to or substantially concurrently with the closing and are not expected to delay the transaction.
B. Sources and Uses Summary
The following table summarizes the sources and uses of funds for the Acquisition:
Sources:
In addition to the foregoing, Cascade estimates approximately $47,300,000 in transaction costs (which figure, as noted elsewhere herein, may need to be revised upward to account for arrangement fees), to be funded from Cascade's existing working capital and not from Term Loan B proceeds.
Uses:
We note that the total uses exceed the total equity-like sources ($1,200,000,000) because the payoff of NovaMart's existing revolving credit facility and the transaction costs are funded from a combination of Term Loan B proceeds and Cascade's working capital. The net Term Loan B proceeds, after deduction of the OID, will be $738,750,000. The allocation of proceeds among closing uses will be set forth in the funds flow memorandum to be prepared in advance of closing.
C. Term Loan B Key Terms (from Commitment Letter)
The following summary of key terms is drawn from the Commitment Letter and the Summary of Terms and Conditions attached thereto as Exhibit A. A separate, more detailed analysis of the Commitment Letter was provided in our Commitment Letter Review and Negotiation Memorandum dated May 16, 2025.
The definitive Term Loan B Credit Agreement is currently in draft form, with negotiation of documentation expected to occur during the period between signing and closing. Derek Okonkwo is coordinating the documentation process with counsel to Cornerstone (Veltason Aldridge & Towne LLP, Chicago office).
III. Fee Letter — Detailed Analysis of Fee Components
A. Original Issue discount (OID)
OID Rate: The Fee Letter provides for an original issue discount of 1.50% of the aggregate principal amount of the Term Loan B.
OID Amount: 1.50% × $750,000,000 = $11,250,000.
Mechanics. The OID will be deducted from the gross proceeds of the Term Loan B at the time of funding. Accordingly, Cascade will receive net cash proceeds of $738,750,000 ($750,000,000 minus $11,250,000) on the closing date, but will be obligated to repay the full $750,000,000 face amount of the Term Loan B over its seven-year term. The OID is economically equivalent to an upfront fee paid by the Borrower to the arrangers and/or participating lenders at closing; it is structured as a discount to the issue price rather than a separately invoiced fee for operational and market convention purposes.
Effective Yield Impact. The OID effectively increases the all-in yield to lenders above the stated coupon of SOFR + 275 basis points. The magnitude of the yield enhancement depends on the assumed average life of the Term Loan B. Because the Term Loan B has a relatively low scheduled amortization rate of 1.00% per annum, the actual average life will depend primarily on the timing and extent of voluntary and mandatory prepayments. Assuming a weighted average life of approximately three years (which is a common assumption in the leveraged loan market, reflecting typical refinancing patterns for Term Loan B facilities), the 1.50% OID adds approximately 50 basis points to the effective annual yield, bringing the all-in yield to approximately SOFR + 325 basis points equivalent on a spread-to-maturity basis. Over a longer assumed average life (e.g., five years), the annualized yield pickup from the OID would be lower (approximately 30 basis points per annum).
Market Assessment. An OID of 1.50% (i.e., an issue price of 98.50) is within the current market range for investment-grade/crossover leveraged acquisition financings of this size, though it is toward the higher end of the range. The typical OID range observed in recent comparable transactions has been 0.50% to 2.00%, with a median of approximately 1.00%. The slightly above-median OID in this case reflects several factors, including: (i) the size of the facility ($750 million), which places it in the upper quartile for single-tranche Term Loan B issuances in the retail sector; (ii) current secondary market conditions for leveraged loans, which have reflected modest spread widening in the retail/ecommerce segment; and (iii) the execution risk associated with the HSR Second Request process, which introduces timing uncertainty into the syndication timeline. We believe the OID was a negotiated outcome and that Cornerstone's initial proposal was an OID of 2.00%, which was negotiated down to 1.50% during the commitment letter process.
Accounting Treatment. Under ASC 835-30 (Imputation of Interest), the $11,250,000 OID will be recorded as a debt discount on Cascade's consolidated balance sheet and amortized to interest expense over the life of the Term Loan B using the effective interest method. This will result in an incremental non-cash interest expense charge in each period, in addition to the cash interest expense at the stated coupon rate. We recommend that Cascade's independent auditors at Whitmore & Paige LLP (Sandra Chiu, engagement partner) confirm the appropriate amortization schedule and effective interest rate calculation. Additionally, the transaction costs associated with the debt issuance (including arrangement fees, legal fees, and other direct costs) will be capitalized as deferred financing costs under ASC 470-10-25 and amortized on a similar basis. The accounting treatment may affect Cascade's reported Adjusted EBITDA and leverage ratios under the credit agreement, depending on the add-back provisions negotiated in the definitive documentation.
Impact on Total Transaction Costs. The $11,250,000 OID is included in Cascade's estimated total transaction costs of $47,300,000, as set forth in the Sources and Uses presentation provided to the Cascade Board of Directors. However, as discussed in Section III.B below, we have identified a potential discrepancy regarding the treatment of arrangement fees in the transaction cost budget.
B. Arrangement Fees
The Fee Letter provides for upfront arrangement fees payable to each of the arrangers at the closing of the Term Loan B, as follows:
Lead Left Bookrunner / Administrative Agent Fee (Cornerstone National Bank, N.A.):
Cornerstone, in its capacity as Lead Left Bookrunner and Administrative Agent for the Term Loan B, is entitled to receive an upfront arrangement fee equal to 0.75% of the total commitment amount of the Term Loan B.
• Fee Rate: 0.75%
• Fee Amount: 0.75% × $750,000,000 = $5,625,000
• Payment: Due and payable in full on the closing date, concurrently with the funding of the Term Loan B
Co-Lead Arranger Fee (Caluvori Capital Partners, Inc.):
Marlowe Crane CPAs LLPP, in its capacity as Co-Lead Arranger for the Term Loan B, is entitled to receive an upfront arrangement fee equal to 0.375% of the total commitment amount of the Term Loan B.
• Fee Rate: 0.375%
• Fee Amount: 0.375% × $750,000,000 = $2,812,500
• Payment: Due and payable in full on the closing date, concurrently with the funding of the Term Loan B
Total Arrangement Fees: $8,437,500
The arrangement fees are separate from and in addition to the OID. While the OID is a discount to the issue price of the Term Loan B that is shared between the arrangers and the syndicate lenders (as described in Section III.D below), the arrangement fees are payable exclusively to Cornerstone and Marlowe Crane CPAs LLPP as compensation for their underwriting risk, structuring work, and syndication services. The arrangement fees are not passed through to or shared with the syndicate participants.
Market Assessment. The arrangement fee split of 75 basis points for the Lead Left Bookrunner and 37.5 basis points for the Co-Lead Arranger is consistent with customary market practice for a two-arranger structure in which one bank serves as the lead left (i.e., the primary underwriter and bookrunner) and the other serves as a co-lead with a secondary role. The 2:1 ratio between the lead left and co-lead fees reflects the standard allocation in which the lead left assumes greater syndication risk and performs the bulk of the structuring, marketing, and bookrunning functions. Total arrangement fees of approximately 1.125% of the facility size are within the typical market range of 0.75% to 1.50% for leveraged acquisition Term Loan B facilities.
Observation Regarding Transaction Cost Budget. In the course of our review, we noted that the arrangement fees of $8,437,500 do not appear to have been separately itemized in the estimated transaction cost table provided to the Cascade Board of Directors in connection with the Board's approval of the Acquisition. The Board presentation included a line item of $11,250,000 for "financing fees," which corresponds to the OID amount but does not appear to include the arrangement fees. If the arrangement fees were excluded from the $47,300,000 estimated total transaction cost figure, the revised total estimated transaction costs would be approximately $55,737,500 ($47,300,000 + $8,437,500), representing an increase of approximately 17.8%.
We strongly recommend that Rajiv Sundaram confirm with Whitmore & Paige LLP (Sandra Chiu) whether the arrangement fees were included in or excluded from the $47,300,000 figure. If excluded, the updated transaction cost budget should be presented to the Board at the earliest opportunity, and the Sources and Uses analysis should be revised accordingly. The additional $8,437,500 in arrangement fees does not affect the adequacy of Cascade's committed financing sources for the Acquisition, as the arrangement fees are payable from working capital and not from Term Loan B proceeds, but the Board should be made aware of the revised total cost figure as a matter of good governance.
C. Administrative Agent Fee
Annual Administrative Agent Fee: Cornerstone, in its capacity as Administrative Agent under the Term Loan B Credit Agreement, is entitled to receive an annual administrative agent fee of $150,000 per annum, payable quarterly in arrears in installments of $37,500 per quarter.
The administrative agent fee commences on the closing date of the Term Loan B and continues for the entire life of the facility (i.e., until the Term Loan B is repaid in full and the credit agreement is terminated). The fee is non-refundable and is payable regardless of the outstanding principal balance of the Term Loan B at any given time.
Market Assessment. An annual administrative agent fee of $150,000 is consistent with market norms for a facility of this size. Administrative agent fees for leveraged loan facilities typically range from $100,000 to $250,000 per annum, depending on the complexity of the facility, the number of lenders in the syndicate, and the administrative burden on the agent. The $150,000 fee is at the midpoint of this range and reflects the relatively straightforward single-tranche structure of the Term Loan B.
The administrative agent fee covers Cornerstone's costs of performing its duties as Administrative Agent, including processing interest payments and principal payments, maintaining the lender register, administering amendment and waiver requests, monitoring compliance with financial covenants, and coordinating among the syndicate lenders. The fee does not cover Cornerstone's legal fees or out-of-pocket expenses, which are reimbursable separately under the credit agreement.
D. Syndication Fees / Selling Concession
The Fee Letter contemplates that Cornerstone and Marlowe Crane CPAs LLPP will syndicate the Term Loan B to a group of institutional lenders following the closing and funding of the facility. The syndication process is expected to be conducted as a "best efforts" primary syndication, with Cornerstone acting as Lead Left Bookrunner and managing the bookbuilding, allocation, and settlement process.
Selling Concession. To incentivize participation by institutional lenders in the syndication, Cornerstone and Marlowe Crane CPAs LLPP will offer participating lenders a selling concession of up to 0.25% of the principal amount of Term Loan B allocated to each such lender. The selling concession is structured as a portion of the OID that is passed through to the syndicate lenders, rather than as a separate fee payable by Cascade.
Specifically, the mechanics are as follows:
• The total OID of 1.50% ($11,250,000) is deducted from the gross proceeds of the Term Loan B at funding, as described in Section III.A above.
• Of the 1.50% OID, up to 0.25% may be allocated by the arrangers to participating lenders as a selling concession.
• The arrangers retain the balance of the OID after payment of selling concessions.
Illustrative Allocation. If the full 0.25% selling concession is paid to syndicate lenders on the entire $750,000,000 principal amount of the Term Loan B, the total selling concessions would equal $1,875,000 (0.25% × $750,000,000), and the arrangers would retain $9,375,000 ($11,250,000 minus $1,875,000) of the OID. In practice, the actual selling concession amounts will depend on the extent to which Cornerstone and Marlowe Crane CPAs LLPP retain portions of the Term Loan B on their own books (in which case no selling concession is paid on retained amounts) and the negotiated concession levels for individual syndicate participants.
Cascade's Exposure. Cascade's total OID cost is fixed at $11,250,000 regardless of the outcome of the syndication process. The allocation of the OID between the arrangers and the syndicate participants is entirely at the arrangers' discretion and does not affect Cascade's economic position. Whether the arrangers retain the entire OID (in the event they hold the full Term Loan B on their balance sheets) or pass through a portion as selling concessions, Cascade's cost is unchanged.
The Fee Letter does not grant Cascade any approval or consultation rights with respect to the syndication process, the identity of the syndicate lenders, or the allocation of the Term Loan B among participants, except to the extent set forth in the Commitment Letter (which includes a customary "disqualified lender" list and certain consultation rights regarding lender allocations).
IV. Flex Provisions
The flex provisions of the Fee Letter are among the most commercially significant terms and warrant careful attention. Flex provisions are standard features of commitment letters and fee letters in the leveraged finance market, granting the arrangers the ability to modify pricing and, in some cases, structural terms of the credit facility to facilitate successful syndication. The flex provisions in this Fee Letter include upward (borrower-adverse) flex, downward (borrower-favorable) reverse flex, and structural flex, each as described below.
A. Pricing Flex (Upward)
Spread Flex. Cornerstone and Marlowe Crane CPAs LLPP have the right to increase the interest rate spread on the Term Loan B by up to 50 basis points, from the base spread of SOFR + 275 basis points to a maximum of SOFR + 325 basis points, if, in the arrangers' reasonable judgment, such increase is necessary to achieve a successful syndication of the Term Loan B. The "reasonable judgment" standard provides Cascade with some protection against arbitrary exercise of the flex, as the arrangers must have a commercially reasonable basis for concluding that the base pricing is insufficient to achieve the desired syndication outcome (typically defined as the placement of at least a specified percentage of the facility with institutional lenders).
The potential impact of the full spread flex is significant. On a $750,000,000 facility, each 25 basis point increase in the spread results in additional annual interest expense of approximately $1,875,000 (assuming the full facility is outstanding). The full 50 basis point spread flex would therefore increase Cascade's annual interest expense by approximately $3,750,000, compounding over the seven-year term of the facility.
OID Flex. In addition to or in lieu of the spread flex, the arrangers may increase the OID by up to an additional 0.50% (50 basis points), from the base OID of 1.50% to a maximum of 2.00%. The additional OID flex would result in a maximum additional upfront cost to Cascade of $3,750,000 (0.50% × $750,000,000), bringing the maximum total OID to $15,000,000. The increased OID would be deducted from the gross proceeds at funding, reducing Cascade's net proceeds from $738,750,000 to $735,000,000.
Combined Flex Cap. Importantly, the Fee Letter includes a combined flex cap, which provides that the aggregate economic effect of any upward pricing flex (whether through spread increases, OID increases, or a combination thereof) shall not exceed an all-in yield increase of 75 basis points over the base terms, as measured on an effective yield basis assuming a three-year weighted average life. This cap limits the arrangers' ability to exercise both the spread flex and the OID flex simultaneously to the maximum extent of each. For example, if the arrangers exercise the full 50 basis point spread flex, the additional OID flex would be limited to the amount that, when combined with the spread flex, does not exceed the 75 basis point combined cap. The combined flex cap is a meaningful protection for Cascade, as it prevents an unconstrained stacking of pricing adjustments.
Trigger. The upward pricing flex may be exercised by written notice from Cornerstone to Cascade at any time prior to the launch of the syndication process, provided that the syndication has not been completed at the time of such notice. The arrangers are not required to provide advance warning or to consult with Cascade prior to exercising the flex, although as a practical matter, the exercise of flex is typically preceded by discussions between the arrangers and the borrower regarding syndication feedback and market conditions.
Duration. The arrangers' right to exercise upward pricing flex expires on the earlier of (i) 90 days after the closing date or (ii) the successful completion of the syndication of the Term Loan B. Once syndication is completed, the flex right terminates and the final pricing terms become permanent for the life of the facility.
Our Assessment. The upward flex parameters (50 basis points on spread, 50 basis points on OID, 75 basis point combined cap) are within the customary market range for leveraged acquisition Term Loan B facilities. In recent comparable transactions, upward spread flex has typically ranged from 25 to 75 basis points, and upward OID flex has typically ranged from 25 to 75 basis points. The 75 basis point combined cap is a favorable feature for Cascade, as some fee letters do not include a combined cap (permitting the full exercise of both spread flex and OID flex without limitation). We believe the flex parameters reflect a reasonable balance between the arrangers' need for syndication flexibility and Cascade's interest in cost certainty.
B. Pricing Flex (Downward / Reverse Flex)
Reverse Spread Flex. If the syndication of the Term Loan B is oversubscribed (i.e., lender commitments received exceed the $750,000,000 facility size), Cornerstone has agreed to reduce the interest rate spread by up to 25 basis points, from SOFR + 275 basis points to a minimum of SOFR + 250 basis points. The reverse flex operates as a mechanism to share the benefit of a successful syndication with Cascade through reduced ongoing borrowing costs.
Reverse OID Flex. Similarly, the OID may be reduced by up to 0.25% (25 basis points), from 1.50% to a minimum of 1.25%, resulting in a potential upfront savings to Cascade of $1,875,000. If the full reverse OID flex is applied, Cascade's net proceeds at funding would increase from $738,750,000 to $740,625,000.
Cascade's Consent. The reverse flex does not require Cascade's consent and will be applied at the arrangers' discretion to optimize the syndication outcome. This is consistent with standard market practice — while the reverse flex benefits Cascade economically, the arrangers retain discretion over whether and to what extent to apply it, as the decision depends on the arrangers' assessment of the optimal pricing to achieve the desired lender composition and hold levels.
Our Assessment. The inclusion of a reverse flex provision is favorable to Cascade and is not universally included in fee letters. In our recent experience, approximately 60-70% of leveraged acquisition fee letters include some form of reverse flex, but the parameters vary widely. The 25 basis point reverse spread flex and 25 basis point reverse OID flex are within the range observed in comparable transactions. We note that the reverse flex is asymmetric relative to the upward flex (25 bps vs. 50 bps on both spread and OID), which is typical — arrangers are willing to share upside with borrowers, but to a more limited degree than the downside protection they retain for themselves.
C. Structure Flex
In addition to the pricing flex provisions described above, the Fee Letter grants Cornerstone the right to modify certain non-economic terms of the Term Loan B Credit Agreement in consultation with Cascade, if reasonably necessary to ensure a successful syndication. The structural flex provision recognizes that syndication feedback may require adjustments to covenant levels, basket sizes, or other structural features of the credit agreement to satisfy the requirements of institutional lenders.
The structural flex right is subject to the following parameters:
• Cornerstone must consult with Cascade prior to exercising structural flex, and must provide Cascade with a reasonable opportunity to comment on proposed modifications.
• Certain structural modifications require Cascade's prior written consent, as identified in Schedule A to the Fee Letter (the "Consent Required Modifications"). Schedule A has been reviewed by Derek Okonkwo and includes, among other items, modifications to the financial maintenance covenant levels, changes to the mandatory prepayment excess cash flow sweep percentage, reductions in the general restricted payment basket below a specified threshold, and the addition of new affirmative or negative covenants not contemplated in the Summary of Terms and Conditions.
• Other structural modifications may be made by Cornerstone without Cascade's consent, provided they are consistent with market terms for comparable facilities and do not materially adversely affect Cascade's operating flexibility. These include adjustments to reporting requirements, modifications to definitions and mechanics, and refinements to basket calculation methodologies.
Observation and Recommendation. Cascade should be aware that the exercise of structural flex could result in more restrictive covenants in the definitive credit agreement than those set forth in the Summary of Terms and Conditions attached to the Commitment Letter. More restrictive covenants could limit Cascade's post-closing operating flexibility and its ability to integrate NovaMart's operations on the desired timeline. For example, tighter restricted payment baskets could limit Cascade's ability to upstream cash from NovaMart to service parent-level obligations, and more restrictive investment baskets could constrain Cascade's ability to make additional investments in NovaMart's growth initiatives.
We recommend that Elena Vasquez-Bright and Ted Langford be kept apprised of any syndication-related covenant negotiations so that Calderwood & Harkness can assess the impact of proposed structural modifications on Cascade's post-closing integration plan and operational flexibility. Derek Okonkwo will serve as the primary point of contact with Cornerstone's counsel regarding the credit documentation and will flag any proposed structural flex exercises for the deal team's review and input.
V. Duration / Ticking Fees
A. Commitment Duration Fee (Ticking Fee)
The Fee Letter provides for a commitment duration fee (commonly referred to as a "ticking fee") that begins to accrue if the closing of the Acquisition is delayed beyond a specified trigger date. The ticking fee compensates the arrangers for the ongoing commitment risk and balance sheet cost associated with maintaining the committed facility during an extended pre-closing period.
Trigger Date. The ticking fee begins to accrue on August 15, 2025, which is approximately 90 days (92 days, precisely) after the execution of the Commitment Letter on May 15, 2025. No ticking fee accrues prior to August 15, 2025.
Rate. The ticking fee accrues at a rate of 0.25% per annum on the undrawn commitment amount of $750,000,000.
Accrual Period. The ticking fee accrues from August 15, 2025 through the earlier of (i) the funding date of the Term Loan B (targeted for October 15, 2025, the expected closing date of the Acquisition) or (ii) the date on which the Commitment Letter is terminated in accordance with its terms.
Estimated Ticking Fee Exposure. The following table illustrates the estimated ticking fee under various closing scenarios:
These estimates are calculated on an actual/365 day-count basis (0.25% × $750,000,000 × days/365). The ticking fee exposure is relatively modest in the context of the overall transaction costs, but could become more significant if the DOJ Second Request process or other factors delay the closing beyond the current expectations.
Context. The August 15, 2025 trigger date for the ticking fee was a negotiated term. We understand that Cornerstone's initial proposal was for the ticking fee to commence 60 days after execution of the Commitment Letter (i.e., July 14, 2025), and that the 90-day grace period was negotiated by Cascade's financing team to align approximately with the expected timing of substantial compliance with the DOJ Second Request. The rationale was that, given the Second Request was issued on May 8, 2025, a 90-day production period was a reasonable estimate for the document review and production process, and Cascade should not bear the cost of a ticking fee during a period when the delay is attributable to normal regulatory review rather than deal execution issues.
Nevertheless, because there is typically a lag between the date of substantial compliance with a Second Request and the date on which HSR clearance is actually obtained (either by expiration of the waiting period or early termination), some ticking fee accrual is probable. Based on our current understanding of the DOJ's review timeline, we estimate that HSR clearance will be obtained in September or October 2025, which would result in a closing date in mid-to-late October 2025 and ticking fee accrual of approximately $313,000 to $375,000.
Payment. Accrued ticking fees are payable at funding (concurrently with the other closing payments) or, if the Commitment Letter is terminated without funding, upon the date of such termination.
B. Commitment Termination
The Commitment Letter (and, by its terms, the Fee Letter) terminates automatically on the earliest of:
(i) the closing date of the Acquisition and the funding of the Term Loan B;
(ii) 5:00 p.m. (Eastern Time) on the Outside Date (December 31, 2025);
(iii) the termination of the Stock Purchase Agreement in accordance with its terms (whether by mutual agreement, exercise of a termination right, or otherwise); or
(iv) the mutual written agreement of Cascade, Cornerstone, and Marlowe Crane CPAs LLPP.
Upon termination of the Commitment Letter, any accrued and unpaid ticking fees become immediately due and payable by Cascade to Cornerstone and Marlowe Crane CPAs LLPP. The arrangement fees described in Section III.B, however, are payable only if the Term Loan B is actually funded — if the Commitment Letter is terminated without funding (e.g., because the Acquisition does not close), no arrangement fees are owed.
The ticking fee obligation survives termination of the Commitment Letter to the extent accrued but unpaid as of the termination date. This means that even if the Acquisition fails to close and the Commitment Letter terminates, Cascade would owe any ticking fees that accrued during the period from August 15, 2025 through the termination date. Based on the maximum possible accrual period (August 15, 2025 through December 31, 2025), the maximum ticking fee exposure in a termination scenario would be approximately $710,959.
VI. Confidentiality Obligations
The Fee Letter contains strict confidentiality provisions that govern the disclosure and use of the Fee Letter and its terms. These provisions are typical of fee letters in leveraged acquisition financings and reflect the arrangers' interest in protecting the economic terms of their commitment, which are considered commercially sensitive information.
General Confidentiality Obligation. The Fee Letter is designated as confidential, and Cascade may not disclose the Fee Letter or any of its material terms to any third party without the prior written consent of both Cornerstone and Marlowe Crane CPAs LLPP. This prohibition applies to the existence of the Fee Letter, the specific fee amounts and rates, the flex provisions, and all other terms and conditions set forth therein.
Permitted Disclosures. The following disclosures are permitted without the prior consent of Cornerstone and Marlowe Crane CPAs LLPP:
(i) Internal Disclosures. Disclosure to Cascade's officers, directors, employees, accountants, and legal counsel (including Calderwood & Harkness LLP and Whitmore & Paige LLP) who have a bona fide need to know the information in connection with the Acquisition and the financing thereof, provided that such recipients are informed of the confidential nature of the information and agree to maintain its confidentiality.
(ii) Legally Required Disclosures. Disclosure as required by applicable law or regulation, including in connection with any filing with the U.S. Securities and Exchange Commission (the "SEC"), provided that with respect to any SEC filing, specific fee amounts and flex terms may be redacted to the extent permitted by applicable SEC rules and staff guidance.
(iii) Judicial Proceedings. Disclosure to the Delaware Court of Chancery (or any other court of competent jurisdiction) in connection with any dispute arising out of or relating to the Commitment Letter, the Fee Letter, or the Acquisition.
Prohibition on Disclosure to NovaMart and Selling Stockholders. The Fee Letter expressly provides that it may not be disclosed to NovaMart, any of the Selling Stockholders (including Ridgeline Equity Partners, LP, Brindoval Ventures Fund III, LP, Julian Reeves, and Priya Narasimhan), or any of their respective advisors, including Calloway, Brandt & Loewe LLP (legal counsel to the Selling Stockholders) and Pemberton Strauss Advisory LLC (financial advisor to NovaMart). This prohibition is common in acquisition financing fee letters and reflects the arrangers' desire to prevent the target or the sellers from obtaining information regarding the arrangers' economics, which could be used in future negotiations or competitive situations.
SEC Disclosure Considerations. As the closing of the Acquisition approaches, Cascade may be required to file the Fee Letter (or a summary of its material terms) with the SEC as an exhibit to a Current Report on Form 8-K, a proxy statement, or other filing. The Fee Letter's confidentiality provisions contemplate this possibility and permit such filing, subject to the right to redact specific fee amounts and flex terms. The extent of permissible redaction will depend on then-current SEC rules, staff guidance, and no-action letter precedent regarding the confidential treatment of fee letter terms in public filings.
We recommend that as the closing date approaches, Harrison Wexford and the Calderwood & Harkness team coordinate with Cornerstone regarding the scope of permissible redactions and, if necessary, prepare and submit a confidential treatment request to the SEC staff. The timing of this coordination should be discussed with Rajiv Sundaram and Elena Vasquez-Bright once the closing timeline becomes more certain.
Internal Distribution. Based on the confidentiality provisions described above, internal distribution of the Fee Letter and this memorandum within Cascade should be limited to the following individuals:
• Rajiv Sundaram, Chief Financial Officer
• Elena Vasquez-Bright, General Counsel
• Theodore ("Ted") Langford, SVP, Corporate Development
• Meg Alderton, as needed for Board reporting purposes
Any broader distribution within Cascade should be discussed with Calderwood & Harkness in advance to ensure compliance with the Fee Letter's confidentiality requirements.
VII. Conditions to Effectiveness
Effectiveness. The Fee Letter became effective upon its execution by all parties on May 15, 2025. The fee obligations of Cascade described therein are binding as of that date, subject to the conditions to payment described below.
Conditions to Payment. The obligation to pay the fees described in the Fee Letter (other than the ticking fee, which accrues and becomes payable as described in Section V above) is subject to the satisfaction or waiver of the conditions to funding set forth in the Commitment Letter. These conditions include:
(i) the execution and delivery of definitive credit documentation, including the Term Loan B Credit Agreement, the Guarantee and Collateral Agreement, and all related ancillary documents, in each case in form and substance consistent with the Commitment Letter and the Summary of Terms and Conditions (subject to the structural flex provisions);
(ii) the substantially simultaneous closing of the Acquisition pursuant to the Stock Purchase Agreement, including the delivery of all closing deliverables and the satisfaction of all conditions precedent to the obligations of the parties under the SPA;
(iii) the accuracy in all material respects of specified representations and warranties of Cascade in the credit documentation and of NovaMart in the SPA (limited to the "Specified Representations" identified in the Commitment Letter, consistent with the "SunGard" limited conditionality framework);
(iv) the delivery of customary closing documents, including legal opinions, officer's certificates, evidence of insurance, lien search results, and evidence of the payoff and lien release of NovaMart's existing $150,000,000 revolving credit facility with Ashford Savings Bank, N.A. (estimated approximately $143,200,000 in outstanding principal plus accrued interest as of the anticipated closing date); and
(v) the absence of a "Company Material Adverse Effect" as defined in the SPA (incorporating the SPA's MAE definition by reference into the credit documentation, as is customary in acquisition financing commitment letters).
No Financing Condition. The Fee Letter expressly confirms, consistent with the Commitment Letter and the SPA, that there is no "financing condition" under the Stock Purchase Agreement. Cascade has an unconditional obligation to consummate the Acquisition if all of the SPA closing conditions are satisfied or waived, regardless of whether the Term Loan B has funded or is available for funding. This is a critical point: if the Term Loan B does not fund for any reason (including a failure to satisfy the conditions to funding under the Commitment Letter), Cascade would be required to seek alternative financing or fund the Acquisition from other sources (including drawing additional amounts under its existing revolving credit facility, if available, or raising equity capital) in order to comply with its obligations under the SPA.
Failure by Cascade to close the Acquisition after all SPA closing conditions have been satisfied would constitute a breach of the SPA and would expose Cascade to the $30,000,000 reverse termination fee payable to the Selling Stockholders, as well as potential claims for specific performance by the Selling Stockholders (to the extent the SPA grants the sellers specific performance rights, which we understand it does under certain circumstances). Accordingly, it is imperative that Cascade maintain the viability of its committed financing sources throughout the pre-closing period and that any issues with the Commitment Letter or the arrangers' willingness to fund be identified and resolved well in advance of the closing.
We note that the conditions to funding under the Commitment Letter are drafted in a manner that is customary for acquisition financing and are intended to be limited and borrower-friendly, consistent with the "certain funds" framework. The primary closing condition — HSR clearance — is a condition under the SPA, not a separate condition under the Commitment Letter. Accordingly, the Commitment Letter should not present an independent barrier to closing once the SPA closing conditions are satisfied.
VIII. Comparison to Market Terms
To provide context for the Fee Letter economics, we have compared the key terms to those observed in recent comparable leveraged acquisition financings in the retail and ecommerce sector. The following table summarizes our findings:
Our market comparison is based on a review of publicly available information regarding recent leveraged loan transactions and our firm's proprietary database of commitment letter and fee letter terms from transactions in which Calderwood & Harkness has served as borrower's counsel or arranger's counsel. The comparable transactions reviewed include Term Loan B facilities in the $500 million to $1 billion range, with credit profiles in the BB/BB- range, for acquisitions in the retail, ecommerce, and consumer products sectors, completed or committed within the past twelve months.
Overall Assessment. The Fee Letter economics are within the current market range for a Term Loan B of this size and credit profile. The stated spread of SOFR + 275 basis points is at the median, and the arrangement fees of approximately 1.125% are slightly above the median but well within the range. The OID of 1.50% is the most notable above-market feature, sitting approximately 50 basis points above the median of approximately 1.00%. However, the OID level reflects the specific market conditions at the time of commitment (including secondary market trading levels for comparable leveraged loans and the competitive dynamics among potential arrangers), and is not outside the bounds of reasonable market terms.
On the favorable side, the inclusion of both a reverse spread flex and a reverse OID flex is a positive feature for Cascade. Not all fee letters include reverse flex provisions, and those that do typically provide for reverse flex on only one dimension (spread or OID, but not both). The 90-day grace period before the ticking fee commences is also favorable, as many comparable fee letters provide for a 60-day grace period.
On balance, we believe the Fee Letter represents a reasonable market outcome and does not contain any terms that would be considered materially adverse to Cascade.
IX. Summary of Total Financing Costs to Cascade
The following table summarizes the estimated total first-year financing costs to Cascade in connection with the Term Loan B:
Notes:
• The figures above represent upfront and first-year costs only. The OID and arrangement fees are one-time costs payable at closing. The administrative agent fee recurs annually ($150,000 per year) for the life of the facility. The ticking fee is a one-time cost based on the actual accrual period.
• If upward pricing flex is exercised to the maximum, the additional financing costs would include: (a) additional OID of up to $3,750,000 (increasing total OID to $15,000,000); and (b) increased ongoing annual interest expense of up to $3,750,000 per year (50 bps × $750,000,000). In a maximum upward flex scenario, the total estimated Year 1 financing costs (including additional OID) would increase to approximately $23,900,856, and the annual ongoing interest cost increase would be approximately $3,750,000.
• If reverse flex is applied to the maximum, the potential savings would include: (a) OID reduction of $1,875,000 (reducing total OID to $9,375,000); and (b) reduced ongoing annual interest expense of $1,875,000 per year (25 bps × $750,000,000). In a maximum reverse flex scenario, the total estimated Year 1 financing costs would decrease to approximately $18,275,856.
• Ongoing interest expense on the Term Loan B itself is not included in the table above. At the stated coupon of SOFR + 275 basis points and assuming a SOFR rate of approximately 4.50% (current market level), the all-in cash interest rate would be approximately 7.25%, resulting in annual interest expense of approximately $33,750,000 on the full $750,000,000 principal amount (before giving effect to scheduled amortization). After giving effect to the 1.00% per annum scheduled amortization ($7,500,000 per year), the interest expense would decline modestly over time as the outstanding principal balance decreases.
• Total debt service (interest plus scheduled amortization) in Year 1 is estimated at approximately $41,250,000 ($33,750,000 in interest plus $7,500,000 in scheduled amortization), exclusive of the upfront financing costs and any mandatory prepayments.
X. Recommendations and Action Items
Based on our review of the Fee Letter, we recommend the following action items for the Cascade deal team:
1. Transaction Cost Budget Update. We recommend that Rajiv Sundaram confirm with Whitmore & Paige LLP (Sandra Chiu, engagement partner) whether the arrangement fees of $8,437,500 were included in or excluded from the $47,300,000 estimated total transaction cost figure presented to the Cascade Board of Directors. If the arrangement fees were excluded, the revised total estimated transaction costs would be approximately $55,737,500 ($47,300,000 + $8,437,500), and an updated transaction cost summary should be presented to the Board at the next regularly scheduled meeting or by written action, as appropriate. Calderwood & Harkness is available to assist in preparing the revised disclosure.
2. Flex Monitoring. Calderwood & Harkness will actively monitor the syndication progress through regular communications with Cornerstone (Robert Frankel, SVP, Leveraged Finance) and Marlowe Crane CPAs LLPP (Irene Matsuda, Director). We will immediately advise Cascade if the arrangers indicate an intention to exercise upward pricing flex (whether spread flex, OID flex, or both) or structural flex. We recommend that Elena Vasquez-Bright designate a single point of contact within Cascade (we suggest Ted Langford) to serve as the primary liaison with Calderwood & Harkness on syndication-related matters, to ensure timely communication and decision-making.
3. Ticking Fee Management. Given the pendency of the DOJ Second Request review and the possibility that HSR clearance may be delayed beyond current expectations, we recommend that Ted Langford and the Cascade deal team keep the financing team (including Calderwood & Harkness and the arrangers) apprised of any changes to the expected HSR clearance timeline. Prompt communication of any delays will allow the team to model the updated ticking fee exposure and, if necessary, to explore options for managing the commitment period (e.g., requesting an extension of the ticking fee grace period, though this would require the arrangers' consent and is not guaranteed).
4. Confidentiality Compliance. The Fee Letter and its terms must not be shared with NovaMart, the Selling Stockholders, or any of their respective advisors (including Calloway, Brandt & Loewe LLP and Pemberton Strauss Advisory LLC). Internal distribution within Cascade should be strictly limited to Rajiv Sundaram, Elena Vasquez-Bright, Ted Langford, and Meg Alderton (the latter only as needed for Board reporting purposes). Any requests from NovaMart, the Selling Stockholders, or their advisors for information regarding Cascade's financing terms should be referred to Elena Vasquez-Bright, who should consult with Calderwood & Harkness before providing any response.
5. SEC Disclosure Coordination. As the closing date approaches, Calderwood & Harkness will coordinate with Cornerstone regarding the scope of permissible redactions to the Fee Letter in the event that it must be filed with the SEC (e.g., as an exhibit to a Form 8-K or proxy statement). We will advise Cascade on applicable SEC disclosure requirements, including whether a confidential treatment request should be submitted to the SEC staff to protect the specific fee amounts, flex terms, and other commercially sensitive information. Harrison Wexford will take the lead on this workstream.
6. Credit Agreement Drafting. The fee and OID mechanics described in the Fee Letter will be incorporated into the definitive Term Loan B Credit Agreement, which is currently in draft form. Derek Okonkwo is coordinating the documentation process with Veltason Aldridge & Towne LLP, counsel to Cornerstone, and will ensure that the credit agreement accurately reflects the Fee Letter terms. Key items to be addressed in the credit documentation include the OID mechanics, the payment waterfall, the administrative agent fee provisions, and the representations and warranties regarding the Fee Letter confidentiality obligations. We anticipate that the first full draft of the credit agreement will be circulated in late June 2025, with negotiation continuing through the pre-closing period.
XI. Document Attachments / Enclosures (Referenced)
The following documents are referenced in this memorandum but are not physically attached hereto:
Attachment A: Fee Letter dated May 15, 2025, executed by Cascade Retail Holdings Inc., Cornerstone National Bank, N.A., and Caluvori Capital Partners, Inc. (executed copy). This document is classified as Confidential and is maintained in the Calderwood & Harkness deal file under restricted access (Matter No. 1038-00009; deal code: CASCADE-NOVAMART). Access to the Fee Letter within Calderwood & Harkness is limited to the deal team members identified in the engagement letter.
Attachment B: Commitment Letter dated May 15, 2025 (Ref: CL-2025-0515-CRNB), executed by the same parties. The Commitment Letter was reviewed in the separate Commitment Letter Review and Negotiation Memorandum dated May 16, 2025, prepared by Harrison Wexford and Derek Okonkwo and delivered to Rajiv Sundaram and Elena Vasquez-Bright.
Attachment C: Schedule A to Fee Letter (Structural Flex Terms — Consent Required Modifications). Schedule A was reviewed by Derek Okonkwo on May 17, 2025. Key items from Schedule A are summarized in Section IV.C of this memorandum. A detailed mark-up of Schedule A identifying potential areas of concern will be provided separately if structural flex is exercised.
This memorandum is based on our review of the Fee Letter as executed on May 15, 2025, and does not address any subsequent amendments or modifications thereto. Our analysis is based on our understanding of the facts as of the date hereof and on current market conditions and legal requirements. If any of the facts or circumstances change, our analysis and recommendations may change accordingly. This memorandum does not constitute tax advice; Cascade should consult with its tax advisors (including Whitmore & Paige LLP) regarding the tax treatment of the fees and OID described herein.
\* \* \* \* \*
Please direct any questions regarding this memorandum or the Fee Letter to the undersigned at the contact information provided below. We are available to discuss any aspect of this analysis at your convenience.
Harrison Wexford Responsible Partner, Mergers & Acquisitions Calderwood & Harkness LLP 599 Lexington Avenue, 38th Floor New York, New York 10022 Telephone: (212) 558-4000
Email: hwexford@calderwoodharkness.com
Derek Okonkwo Lead Associate, Mergers & Acquisitions Calderwood & Harkness LLP 599 Lexington Avenue, 38th Floor New York, New York 10022 Telephone: (212) 558-4127
Email: dokonkwo@calderwoodharkness.com
CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED — NOT FOR DISTRIBUTION
© 2025 Calderwood & Harkness LLP. All rights reserved.
TO:
Elena Vasquez-Bright, General Counsel, Cascade Retail Holdings Inc.
CC:
Theodore ("Ted") Langford, SVP, Corporate Development, Cascade Retail Holdings Inc.
FROM:
Derek Okonkwo, Lead Associate, Mergers & Acquisitions, Calderwood & Harkness LLP
| DATE: | May 18, 2025 |
| RE: | Confidential Review and Analysis of Fee Letter dated May 15, 2025, in connection with the $750,000,000 Senior Secured Term Loan B — Acquisition of NovaMart Global Inc. |
| REFERENCE: | Commitment Letter Reference CL-2025-0515-CRNB; Fee Letter executed concurrently on May 15, 2025 |
| Selling Stockholder | Ownership Percentage |
| Ridgeline Equity Partners, LP | 41.2% |
| Brindoval Ventures Fund III, LP | 22.8% |
| Julian Reeves (Co-Founder and CEO) | 18.5% |
| Priya Narasimhan (Co-Founder and CTO) | 8.3% |
| Other management and employees | 9.2% |
| Total | 100.0% |
| Source | Amount |
| Senior Secured Term Loan B (new) | $750,000,000 |
| Revolving Credit Facility draw (existing $500,000,000 facility with Cornerstone National Bank, N.A.) | $200,000,000 |
| Cash on hand (Cascade balance sheet) | $250,000,000 |
| Total Sources | $1,200,000,000 |
| Use | Amount |
| Net cash consideration to Selling Stockholders at closing | $1,104,000,000 |
| Escrow deposit (Marlowe Asset Management Trust Company, N.A., as escrow agent) | $96,000,000 |
| Payoff of NovaMart existing $150,000,000 revolving credit facility with Ashford Savings Bank, N.A. (estimated ~$143,200,000 outstanding principal plus accrued interest) | ~$143,200,000 |
| Transaction costs (estimated) | ~$47,300,000 |
| Total Uses | ~$1,390,500,000 |
| Term | Description |
| Facility | $750,000,000 Senior Secured Term Loan B |
| Borrower | Cascade Retail Holdings Inc. |
| Administrative Agent | Cornerstone National Bank, N.A. (Robert Frankel, Senior Vice President, Leveraged Finance; 227 West Monroe Street, Chicago, IL 60606) |
| Co-Lead Arranger | Caluvori Capital Partners, Inc. (Irene Matsuda, Director; 350 California Street, Suite 1800, San Francisco, CA 94104) | |||
| Interest Rate | SOFR + 275 basis points (with a SOFR floor of 0.00%) | |||
| Maturity | 7 years from the closing date | |||
| Amortization | 1.00% per annum, payable in equal quarterly installments of 0.25% of the original principal amount ($1,875,000 per quarter) | |||
| Security | First-priority lien on substantially all assets of Cascade and, following the closing of the Acquisition, NovaMart and its domestic subsidiaries (subject to customary exceptions) | |||
| Guarantors | Each existing and future domestic subsidiary of Cascade (including, post-closing, NovaMart and its domestic subsidiaries) | |||
| Voluntary Prepayment | Permitted at par at any time without premium or penalty (subject to a 1.00% soft-call premium during the first six months) | |||
| Mandatory Prepayment | Customary for Term Loan B facilities (excess cash flow sweep, asset sale proceeds, insurance/condemnation proceeds, debt incurrence proceeds) | |||
| Closing Date Scenario | Accrual Period (Days) | Estimated Ticking Fee | ||
| October 15, 2025 (targeted closing) | 61 days (Aug 15 – Oct 15) | ~$313,356 | ||
| November 15, 2025 (delayed closing) | 92 days (Aug 15 – Nov 15) | ~$473,425 | ||
| December 15, 2025 (further delay) | 122 days (Aug 15 – Dec 15) | ~$627,397 | ||
| December 31, 2025 (Outside Date) | 138 days (Aug 15 – Dec 31) | ~$710,959 | ||
| Term | Fee Letter | Market Range | Market Median | Assessment |
| OID | 1.50% | 0.50% – 2.00% | ~1.00% | Above median; toward higher end |
| Spread | SOFR + 275 bps | SOFR + 225 – 350 bps | ~SOFR + 275 bps | At median |
| Total Arrangement Fees | ~1.125% | 0.75% – 1.50% | ~1.00% | Slightly above median |
| Ticking Fee | 25 bps, commencing 90 days post-commitment | 25 – 50 bps, commencing 60 – 90 days | 25 bps / 60 – 90 days | At market; trigger date favorable |
| Upward Spread Flex | 50 bps | 25 – 75 bps | 50 bps | At median |
| Upward OID Flex | 50 bps | 25 – 75 bps | 50 bps | At median |
| Combined Flex Cap | 75 bps all-in yield | 50 – 100 bps | 75 bps | At median; protective |
| Reverse Spread Flex | 25 bps | 0 – 50 bps | 25 bps | Favorable; not always included |
| Reverse OID Flex | 25 bps | 0 – 25 bps | N/A | Favorable; not always included |
| Cost Component | Amount | |||
| OID (1.50% of $750,000,000) | $11,250,000 |
| Arrangement Fee — Cornerstone National Bank, N.A. (0.75%) | $5,625,000 |
| Arrangement Fee — Caluvori Capital Partners, Inc. (0.375%) | $2,812,500 |
| Administrative Agent Fee (Year 1) | $150,000 |
| Estimated Ticking Fee (61 days, base case) | ~$313,356 |
| Total Estimated Financing Costs (Year 1) | ~$20,150,856 |