Contract analysis

I. Purpose and Background I write in connection with the Joint Defense and Common Interest Agreement executed on July 1, 2025 (the "JDA"), between Calderwood & Harkness LLP, on behalf of our client Cascade Retail Holdings Inc. ("Cascade"), and Whitfield, Greer & Tanaka LLP ("WGT"), on behalf of your client Pinnacle Market Group Inc. ("Pinnacle"). The purpose of this letter is to formalize and memorialize the coordina

II. Overview of FTC's Claims and Litigation Posture Before turning to the allocation of responsibilities, it is useful to briefly summarize the FTC's claims and the current posture of the litigation to ensure our teams are operating from a shared understanding of the case. On June 23, 2025, the FTC filed a Complaint for Temporary Restraining Order and Preliminary Injunction in the United States District Court for the

III. Allocation of Briefing Responsibilities for PI Opposition Given the breadth of the issues to be addressed in the Opposition to the FTC's Motion for Preliminary Injunction and the distinct factual and legal contributions that each defense team is best positioned to make, we propose the following allocation of briefing responsibilities. This allocation reflects the natural division between Cascade-specific and Pin

1. Market Definition. Calderwood & Harkness will take primary responsibility for briefing the argument that the FTC's proposed relevant market of "online marketplace platform services for third-party sellers" is artificially narrow, exclusionary, and inconsistent with commercial realities and established principles of antitrust market definition. The defense position, as we have discussed, is that the relevant market

2. Procompetitive Efficiencies. Calderwood & Harkness will lead the presentation of merger-specific, verifiable, and cognizable efficiencies that the proposed transaction is reasonably expected to generate. These efficiencies are substantial, well-documented, and directly tied to the integration of the two companies' complementary assets. The merging parties project total annual efficiencies of approximately $340 mil

3. Legal Framework (Section 13(b) Standard). Calderwood & Harkness will draft the legal standard section of the Opposition, setting forth the applicable framework for evaluating the FTC's Motion for Preliminary Injunction under Section 13(b) of the FTC Act, 15 U.S.C. § 53(b). As you know, the standard for granting a preliminary injunction under Section 13(b) differs from the traditional four-factor preliminary injunc

4. Ease of Entry and Expansion. Calderwood & Harkness will prepare the sections of the Opposition addressing the ease of entry into and expansion within the relevant market. This argument is closely related to the market definition analysis and provides an independent basis for concluding that the proposed transaction will not substantially lessen competition. Our briefing will highlight the evidence of successful ne

5. Daubert Motion re: Dr. Wallace Keenan. Calderwood & Harkness will prepare and file a motion under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and Federal Rule of Evidence 702, to exclude or limit the testimony of the FTC's economic expert, Dr. Wallace Keenan of Thornfield Research Group. Our review of the FTC's supporting declarations and the publicly available summary of Dr. Keenan's antici

6. Opposition to IOSA's Motion to Intervene. Calderwood & Harkness will prepare and file the Opposition to the Motion to Intervene filed by Galloway & Peck LLP on behalf of the Independent Online Sellers Alliance. Our opposition will argue that IOSA lacks Article III standing to intervene, that IOSA's interests are adequately represented by the FTC as the government plaintiff in this action, and that granting interve

1. Pinnacle-Specific Competitive Trajectory Evidence. We request that WGT take the lead on developing and presenting evidence of Pinnacle's weakening competitive position, a critical component of the defense that speaks directly to the competitive dynamics underlying the transaction. The available data demonstrate that Pinnacle has experienced a significant and sustained deceleration in its competitive trajectory. Pi

2. Pinnacle's Independent Business Rationale for the Transaction. We also request that WGT prepare the sections of the Opposition addressing Pinnacle's independent business rationale for entering into the transaction—that is, why Pinnacle's board of directors and management team determined that the acquisition was in the best interests of Pinnacle and its shareholders. The key elements of this argument include the fo

3. Pinnacle's Seller and Consumer Benefits. Finally, we request that WGT develop the evidence and briefing regarding the specific benefits that the transaction will deliver to Pinnacle's approximately 185,000 active third-party sellers and, by extension, to the consumers those sellers serve. This evidence is complementary to the efficiencies analysis that Calderwood & Harkness will lead and should be presented in a m

IV. Expert Coordination Effective coordination of our expert work is essential to presenting a unified and credible economic analysis to the court. The following summarizes the current state of expert retention and the coordination we require from WGT. Calderwood & Harkness has retained Brindoval Analytics LLC ("Brindoval") pursuant to an expert retention agreement dated July 2, 2025. The engagement team at Brindoval

V. Deposition Coordination Fact discovery in this matter closes on August 4, 2025. All depositions—including depositions of party witnesses and any third-party depositions—must be completed before that date. Coordination on deposition strategy and scheduling is therefore a matter of immediate priority. A. Defense Depositions of FTC Witnesses The Defendants intend to depose the following FTC witnesses, and we propose

VI. Document Sharing Protocols Under the Joint Defense Agreement Effective document sharing is the backbone of a coordinated joint defense. This section reiterates the document sharing framework established in the JDA dated July 1, 2025, and identifies specific categories of documents that should be shared promptly between the defense teams. All materials shared between Calderwood & Harkness and WGT pursuant to the J

VII. Weekly Coordination Call Schedule Given the compressed timeline and the volume of work to be completed before the August 11 filing deadline and the September 8 evidentiary hearing, regular coordination between our teams is essential. We propose the following schedule: Standing Weekly Calls. Beginning the week of July 14, 2025—following the initial case management conference—we propose a standing weekly coordinat

VIII. Preliminary Injunction Hearing Preparation The evidentiary hearing on the FTC's Motion for Preliminary Injunction is scheduled to commence on September 8, 2025, before Judge Johannsen at the United States District Court for the Western District of Washington, located at 700 Stewart Street, Seattle, WA 98101. The hearing is estimated to span five court days. Thorough and coordinated preparation is essential to p

IX. Budget and Cost Allocation Each firm will bear its own fees and expenses for work performed on behalf of its respective client, consistent with each firm's engagement letter with its client. Shared costs—including, but not limited to, expert fees payable to Brindoval Analytics LLC, court reporter fees for joint depositions, charges associated with the secure document sharing platform, and any other costs incurred

X. Miscellaneous Coordination Items Several additional coordination matters warrant attention: Communications with the Court. All joint filings, joint status reports, and other joint communications with the court should be coordinated between our teams. The next joint status report is expected to be filed following the July 14, 2025 case management conference, and we should confer in advance of that conference to ens

XI. Closing We are confident in the strength of the joint defense position. The FTC's case rests on an artificially narrow market definition that ignores the realities of a dynamic and rapidly evolving e-commerce landscape. The transaction generates substantial, well-documented, and verifiable efficiencies that will benefit sellers and consumers. The evidence of new entry and the competitive strength of existing riva