DRAFT — FOR DISCUSSION PURPOSES ONLY
TIMING AGREEMENT
between
CASCADE RETAIL HOLDINGS INC.
and
THE UNITED STATES DEPARTMENT OF JUSTICE, ANTITRUST DIVISION
In Connection with the Proposed Acquisition of NovaMart Global Inc.
HSR Internal Tracking Number: 1038-00009
Draft Dated: May 30, 2025
Prepared by Calderwood & Harkness LLP (Howard Bellamy, Specialist Partner, Antitrust & Competition) and Whitfield & Crane LLP (Gabriela Montoya, Partner), on behalf of Cascade Retail Holdings Inc. This document is a draft submitted for discussion with the Antitrust Division of the United States Department of Justice and does not constitute a binding obligation of any party unless and until executed by all parties hereto. This document is subject to the attorney-client privilege and the work-product doctrine to the fullest extent applicable.
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I. PREAMBLE AND INTRODUCTORY RECITALS
This Timing Agreement (the "Agreement") is entered into as of the date last set forth on the signature pages hereto, by and between:
(a) Cascade Retail Holdings Inc., a corporation organized and existing under the laws of the State of Delaware, with its principal executive offices located at 4500 Elliott Avenue West, Suite 3200, Seattle, Washington 98119, and whose common stock is listed on the Nasdaq Global Select Market under the ticker symbol "CRHI" (hereinafter referred to as "Cascade" or the "Acquiring Person"); and
(b) The United States Department of Justice, Antitrust Division, located at 950 Pennsylvania Avenue NW, Washington, DC 20530 (hereinafter referred to as the "Division" or "DOJ").
Cascade is represented in connection with this matter by Howard Bellamy, Specialist Partner, Antitrust & Competition, Calderwood & Harkness LLP, 599 Lexington Avenue, 38th Floor, New York, New York 10022, and Gabriela Montoya, Partner, Whitfield & Crane LLP, 1200 New Hampshire Avenue NW, Suite 500, Washington, DC 20036, acting as outside counsel to Cascade (collectively, "Cascade's Counsel").
A. Background Recitals
WHEREAS, on April 11, 2025, Cascade filed a Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (15 U.S.C. § 18a) (the "HSR Act"), and the rules promulgated thereunder (16 C.F.R. Parts 801–803), in connection with the proposed acquisition of one hundred percent (100%) of the outstanding capital stock of NovaMart Global Inc., a corporation organized and existing under the laws of the State of Delaware, with its principal executive offices located at 1100 Congress Avenue, Suite 800, Austin, Texas 78701 ("NovaMart" or the "Acquired Person"), for aggregate consideration of One Billion Two Hundred Million Dollars ($1,200,000,000) (the "Transaction");
WHEREAS, NovaMart Global Inc., acting on behalf of the selling stockholders identified in the Notification and Report Form, also filed a Notification and Report Form with the Federal Trade Commission and the Department of Justice on April 11, 2025, in connection with the Transaction;
WHEREAS, the initial waiting period under Section 7A(b)(1)(B) of the HSR Act, 15 U.S.C. § 18a(b)(1)(B), with respect to the Transaction was scheduled to expire at 11:59 p.m. Eastern Time on May 11, 2025;
WHEREAS, on May 8, 2025, the Division issued a Request for Additional Information and Documentary Material (the "Second Request") to both Cascade and NovaMart pursuant to Section 7A(e)(1)(A) of the HSR Act, 15 U.S.C. § 18a(e)(1)(A), thereby extending the waiting period under the HSR Act until the thirtieth day after the date on which both Cascade and NovaMart have substantially complied with such Second Request, or such later date as may result from the operation of this Agreement;
WHEREAS, the Stock Purchase Agreement governing the Transaction (the "SPA") was executed on May 20, 2025, by and among Cascade Retail Holdings Inc., NovaMart Global Inc., and the selling stockholders named therein, and provides for a targeted closing date of October 15, 2025, and an outside date (the "Outside Date") of December 31, 2025, after which either party may terminate the SPA if the Transaction has not been consummated;
WHEREAS, Cascade and the Division desire to enter into this Timing Agreement to establish a clear and orderly procedural framework for the Division's review of the Transaction following substantial compliance with the Second Request, and to provide for adequate notice and procedures prior to consummation of the Transaction;
B. Purpose
NOW, THEREFORE, in consideration of the mutual commitments set forth herein, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
The purpose of this Agreement is: (i) to facilitate the Division's investigation and review of the Transaction in an efficient and timely manner, while providing the Division with sufficient time and information to conduct a thorough competitive analysis; (ii) to provide the Division with adequate notice and a meaningful opportunity to seek injunctive or other relief in an appropriate court of competent jurisdiction if the Division determines that the Transaction may substantially lessen competition or tend to create a monopoly in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18, or may otherwise violate the antitrust laws of the United States; (iii) to provide Cascade with a clear procedural framework and defined timeline for the Division's review process, thereby enabling Cascade to plan for the orderly consummation of the Transaction in accordance with the terms of the SPA; and (iv) to promote cooperation and the efficient exchange of information between Cascade and the Division during the investigatory process.
This Agreement is entered into voluntarily by both parties. Nothing in this Agreement shall constitute a waiver of any rights, claims, defenses, or legal positions by either Cascade or the Division, except as expressly set forth herein. In particular, entry into this Agreement does not constitute a waiver by the Division of its authority to enforce the antitrust laws, nor does it constitute a waiver by Cascade of any right to challenge any action taken by the Division in connection with its review of the Transaction.
II. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below:
"Acquiring Person" means Cascade Retail Holdings Inc., a Delaware corporation.
"Acquired Person" means NovaMart Global Inc., a Delaware corporation.
"Agreement" means this Timing Agreement, including all appendices attached hereto, as the same may be amended, modified, or supplemented from time to time in accordance with Section XI hereof.
"Certification of Substantial Compliance" or "Certification" means the written notice provided by Cascade's Counsel to the Division certifying that Cascade has substantially complied with the Second Request, in the form and manner described in Section III.A of this Agreement.
"Certification Date" means the date on which Cascade certifies to the Division that it has substantially complied with the Second Request. Based on current production schedules and the scope of the Second Request, Cascade estimates that the Certification Date will occur on or about August 2025, although the actual date may vary depending on the progress of document collection, review, and production.
"Clearance Letter" means written confirmation from the Division, addressed to Cascade's Counsel, that the Division has completed its review of the Transaction and does not intend to challenge the Transaction or seek injunctive or other relief.
"Closing" means the consummation of the Transaction in accordance with the terms of the SPA, including the transfer of one hundred percent (100%) of the outstanding capital stock of NovaMart from the selling stockholders to Cascade and the payment of the aggregate consideration therefor.
"Division" means the Antitrust Division of the United States Department of Justice, including its staff, attorneys, economists, and other personnel assigned to the investigation and review of the Transaction.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, 15 U.S.C. § 18a, and the rules and regulations promulgated thereunder, 16 C.F.R. Parts 801–803.
"Notice of Intent to Close" means the written notice provided by Cascade to the Division in accordance with Section V.A of this Agreement, stating Cascade's intention to consummate the Transaction and specifying the anticipated closing date.
"Outside Date" means December 31, 2025, as defined in the SPA, being the date after which either party to the SPA may terminate the SPA if the Transaction has not been consummated, subject to the terms and conditions set forth in Article VIII of the SPA.
"Review Period" means the period following the Division's receipt of the Certifications of substantial compliance from both Cascade and NovaMart during which the Division shall conduct its review of the Transaction, as further described in Section IV of this Agreement.
"Second Request" means the Request for Additional Information and Documentary Material issued by the Division to Cascade and NovaMart on May 8, 2025, pursuant to Section 7A(e)(1)(A) of the HSR Act, 15 U.S.C. § 18a(e)(1)(A).
"SPA" means the Stock Purchase Agreement dated as of May 20, 2025, by and among Cascade Retail Holdings Inc., NovaMart Global Inc., and the selling stockholders named therein, as the same may be amended, modified, or supplemented from time to time.
"Transaction" means the proposed acquisition by Cascade of one hundred percent (100%) of the outstanding capital stock of NovaMart Global Inc. for aggregate consideration of One Billion Two Hundred Million Dollars ($1,200,000,000), as more fully described in the Notification and Report Form filed by Cascade on April 11, 2025, and in the SPA.
"Waiting Period" means the waiting period under Section 7A of the HSR Act, 15 U.S.C. § 18a, as extended by the issuance of the Second Request, which shall not expire until the thirtieth (30th) day after the date on which both Cascade and NovaMart have substantially complied with the Second Request (or such later date as the parties may agree or as may result from the operation of this Agreement).
III. COMMITMENTS REGARDING SUBSTANTIAL COMPLIANCE WITH THE SECOND REQUEST
A. Cascade's Certification Obligations
Cascade shall use its reasonable best efforts to substantially comply with the Second Request as expeditiously as practicable. Cascade has assembled a comprehensive document review team, has initiated custodian interviews, and has commenced the collection, processing, review, and production of responsive documents and data. Based on its current assessment of the scope and volume of materials responsive to the Second Request, Cascade estimates that it will be in a position to certify substantial compliance by approximately August 2025.
Upon reaching substantial compliance, Cascade shall provide the Division with a written Certification of Substantial Compliance (the "Certification") specifying the date on which Cascade believes it has substantially complied with the terms of the Second Request. The Certification shall describe, in reasonable detail, the scope of the production, including the number of custodians from whom documents have been collected, the total volume of documents and data produced, any limitations on the production (including any claims of privilege), and any ongoing or supplemental production obligations of which Cascade is aware at the time of certification.
The Certification shall be signed by counsel for Cascade. Specifically, the Certification shall bear the signature of Howard Bellamy, Specialist Partner, Calderwood & Harkness LLP, or Gabriela Montoya, Partner, Whitfield & Crane LLP, or both, as appropriate. Counsel's signature on the Certification shall constitute a representation, made in good faith and to the best of counsel's knowledge and belief after reasonable inquiry, that Cascade has substantially complied with the Second Request as of the date stated in the Certification.
Cascade acknowledges that the Division retains the right to dispute Cascade's Certification of substantial compliance and to notify Cascade of any deficiencies in its production. In the event that the Division disputes the Certification, Cascade agrees to engage in good-faith discussions with the Division to resolve any identified deficiencies and to supplement its production as necessary. The Review Period described in Section IV of this Agreement shall not commence until the Division acknowledges receipt of the Certification and does not dispute it within a reasonable period, or until any dispute regarding substantial compliance has been resolved by mutual agreement.
B. NovaMart's Compliance
Cascade represents that, pursuant to the terms of the SPA and in particular Section 6.05 thereof (Cooperation with Regulatory Filings), NovaMart Global Inc. has agreed to use its reasonable best efforts to comply with the Second Request on a parallel timeline with Cascade. Cascade further represents that it will use its reasonable best efforts to cause NovaMart to comply with the Second Request in a timely and complete manner.
NovaMart's outside counsel in this matter is Calloway, Brandt & Loewe LLP, represented by Richard Calloway and Simone Adesanya, with offices at 600 Travis Street, Suite 4500, Houston, Texas 77002. NovaMart's Certification of Substantial Compliance will be submitted separately by NovaMart's counsel and will be subject to the same standards and requirements as Cascade's Certification, as applicable.
Cascade understands and acknowledges that the Review Period described in Section IV of this Agreement will not commence until the Division has received and acknowledged Certifications of substantial compliance from both Cascade and NovaMart, and that Cascade's ability to meet the targeted closing date under the SPA is therefore dependent, in part, on NovaMart's timely compliance with the Second Request.
C. Supplemental Productions
Cascade agrees that its obligation to cooperate with the Division's investigation does not terminate upon the submission of the Certification of Substantial Compliance. Accordingly, Cascade agrees to promptly produce any supplemental documents, data, or information reasonably requested by the Division following certification, including, without limitation, documents from additional custodians identified during the course of the Division's investigation, documents responsive to clarified or narrowed search terms or specifications, and updated financial or transactional data.
Cascade further agrees to make its executives, officers, and employees available for interviews, depositions, and investigational hearings on reasonable notice from the Division. Without limiting the generality of the foregoing, Cascade commits to making the following individuals available upon reasonable request:
(i) Margaret "Meg" Alderton, Chief Executive Officer, Cascade Retail Holdings Inc.;
(ii) Rajiv Sundaram, Chief Financial Officer, Cascade Retail Holdings Inc.;
(iii) Theodore "Ted" Langford, Senior Vice President, Corporate Development, Cascade Retail Holdings Inc.;
(iv) Julian Reeves, Chief Executive Officer, NovaMart Global Inc. (subject to NovaMart's agreement and cooperation under the SPA);
(v) Priya Narasimhan, Chief Technology Officer, NovaMart Global Inc. (subject to NovaMart's agreement and cooperation under the SPA); and
(vi) Douglas "Doug" Whitfield, Chief Financial Officer, NovaMart Global Inc. (subject to NovaMart's agreement and cooperation under the SPA).
Cascade will use reasonable best efforts to coordinate the scheduling of witness interviews and depositions with the Division's staff to accommodate the Division's investigatory timeline while minimizing disruption to the ongoing business operations of Cascade and NovaMart. Cascade further agrees to provide updated or corrected data in response to Division requests within a reasonable time following such requests, taking into account the nature and complexity of the data involved.
IV. POST-CERTIFICATION REVIEW PERIOD
A. Duration of Review Period
Following the Division's receipt of the Certifications of Substantial Compliance from both Cascade and NovaMart, the Division shall have a review period (the "Review Period") of sixty (60) calendar days to complete its investigation of the Transaction and to determine whether to: (i) challenge the Transaction by filing a complaint or seeking injunctive or other relief in an appropriate court of competent jurisdiction; (ii) seek a remedy from Cascade, whether structural (including divestiture) or behavioral (including conduct restrictions), as a condition for permitting the Transaction to proceed without challenge; or (iii) close its investigation and issue a Clearance Letter to Cascade's Counsel.
The Review Period shall commence on the later of: (i) the date on which the Division provides written acknowledgment of receipt of Cascade's Certification of Substantial Compliance, and (ii) the date on which the Division provides written acknowledgment of receipt of NovaMart's Certification of Substantial Compliance. For purposes of clarity, if the Division acknowledges receipt of Cascade's Certification on a date that is earlier than the date on which it acknowledges receipt of NovaMart's Certification, the Review Period shall not begin until the later date, and vice versa.
The Division shall use reasonable efforts to provide written acknowledgment of receipt of each Certification within five (5) business days of its receipt thereof, together with any preliminary observations regarding the completeness of the production. If the Division does not provide written acknowledgment within ten (10) business days of receipt of a Certification, the Certification shall be deemed acknowledged as of the eleventh (11th) business day following its receipt.
B. Extension of Review Period
The Division may request one (1) extension of the Review Period of up to thirty (30) additional calendar days (for a total Review Period of up to ninety (90) calendar days) by providing written notice of such request to Cascade's Counsel at least five (5) business days prior to the expiration of the initial sixty (60) day Review Period. The Division's extension request shall be in writing and shall include a general description of the additional matters under review that necessitate the extension, including, to the extent practicable, an identification of the competitive issues or market segments that remain under active investigation.
Cascade agrees that, upon receipt of such a timely extension request from the Division, the Review Period shall be automatically extended for the additional thirty (30) calendar day period without further action by either party. Cascade acknowledges that a single extension of this nature is a reasonable accommodation to enable the Division to conduct a thorough investigation and is consistent with the Division's standard practices in merger investigations of this scope and complexity.
Any further extension of the Review Period beyond ninety (90) calendar days shall require the mutual written agreement of the Division and Cascade. Cascade is under no obligation to consent to any such further extension, and the Division acknowledges that Cascade's willingness to consider a further extension may be influenced by the applicable deadlines under the SPA, including the Outside Date of December 31, 2025. In the event that the parties are unable to agree on a further extension, the Review Period shall terminate at the expiration of the ninety (90) day period, and Cascade shall thereafter be entitled to provide the Notice of Intent to Close in accordance with Section V.A of this Agreement, subject to any other obligations under applicable law.
C. Tolling
The Review Period shall be tolled during any period in which the Division has made a reasonable, material supplemental production request to Cascade and such request remains outstanding for more than ten (10) business days beyond the agreed-upon production deadline for such request. For purposes of this Section IV.C, a supplemental production request is "reasonable" if it seeks documents, data, or information that are relevant to the Division's competitive analysis and that are within Cascade's possession, custody, or control, and is "material" if the requested documents, data, or information are significant to the Division's assessment of the competitive effects of the Transaction.
In the event that the Division asserts that the Review Period should be tolled under this provision, the Division shall provide Cascade's Counsel with written notice of the basis for the tolling, including identification of the outstanding supplemental production request and the agreed-upon production deadline. Cascade shall have five (5) business days following receipt of such notice to cure any outstanding production obligation or to dispute the basis for tolling. If Cascade disputes the tolling, the parties shall endeavor to resolve the dispute through good-faith discussions. The Review Period shall resume upon the earlier of: (i) Cascade's completion of the outstanding supplemental production, or (ii) resolution of the dispute by mutual agreement.
Nothing in this Section IV.C shall be construed to authorize the Division to toll the Review Period for immaterial or duplicative production requests, or for requests that are not reasonably related to the Division's competitive analysis of the Transaction.
V. PRE-CONSUMMATION NOTICE AND WAITING OBLIGATIONS
A. Notice of Intent to Consummate
Cascade shall provide the Division with not less than ten (10) business days' prior written notice of its intent to consummate the Transaction (the "Notice of Intent to Close"). The Notice of Intent to Close shall be delivered to the Division's designated contact(s) identified in Section XII.A of this Agreement and shall be signed by Cascade's Counsel or by an authorized officer of Cascade.
The Notice of Intent to Close shall specify: (i) the anticipated date of closing; (ii) a confirmation that all conditions precedent to closing under Article VII of the SPA have been satisfied or waived by the appropriate party (other than conditions that by their nature are to be satisfied at closing, such as the delivery of closing certificates and customary closing deliverables); and (iii) a representation that Cascade is not aware of any material change in the facts or circumstances previously disclosed to the Division that would be relevant to the Division's competitive analysis of the Transaction.
The Notice of Intent to Close shall not be delivered prior to the expiration or termination of the Review Period (including any extensions granted or agreed to under Section IV.B of this Agreement). For purposes of clarity, Cascade may deliver the Notice of Intent to Close on or after the date on which the Review Period expires, and the ten (10) business day notice period shall run concurrently with any remaining period under the HSR Act's waiting period, to the extent applicable.
B. Post-Review Period Consummation
Cascade shall not consummate the Transaction before the earlier of:
(i) the expiration of the Review Period (including any extensions granted or agreed to under Section IV.B) plus the ten (10) business day notice period described in Section V.A above; or
(ii) the date on which Cascade receives written confirmation from the Division that it has completed its review and does not intend to challenge the Transaction (a "Clearance Letter").
Upon receipt of a Clearance Letter, Cascade may consummate the Transaction at any time thereafter, subject to compliance with the notice provisions of Section V.A above and any remaining obligations under the HSR Act. Cascade acknowledges that the issuance of a Clearance Letter does not constitute a determination by the Division that the Transaction does not violate the antitrust laws, and the Division reserves the right to take any action authorized by law at any time, including after the consummation of the Transaction, if the Division subsequently determines that the Transaction may violate Section 7 of the Clayton Act or any other provision of law.
In the event that the Division notifies Cascade during the Review Period that it intends to seek injunctive or other relief to prevent the consummation of the Transaction, or that it intends to file a complaint challenging the Transaction, the provisions of Section VII of this Agreement shall apply, and Cascade shall not consummate the Transaction pending the resolution of such proceedings, except as may be ordered by a court of competent jurisdiction or as the parties may otherwise agree.
C. Coordination with SPA Timeline
The parties acknowledge that the SPA provides for a targeted closing date of October 15, 2025, and an Outside Date of December 31, 2025. This Timing Agreement is designed to be consistent with and to facilitate compliance with those contractual dates. Cascade has structured its Second Request compliance efforts and the timelines set forth in this Agreement with a view to enabling the Transaction to be consummated on or before the targeted closing date, to the extent consistent with the Division's need for a thorough review.
Cascade reserves all rights under the SPA regarding the extension or termination of the SPA in the event that HSR clearance is not obtained by the Outside Date. Nothing in this Agreement shall be construed to extend the Outside Date or to modify the terms of the SPA. In the event that the Division's review is not completed by the Outside Date, Cascade and the Division shall endeavor to discuss the status of the investigation and the Division's anticipated timeline, but neither party shall be obligated to extend the deadlines set forth in this Agreement or in the SPA beyond the Outside Date except by mutual written agreement.
VI. PULL-AND-REFILE PROCEDURES
A. Right to Withdraw and Refile
In the event that the HSR waiting period (as extended by the Second Request and this Agreement) would expire before the parties are prepared to close the Transaction, or if the Division requests that the parties withdraw and refile their HSR notifications in order to restart the waiting period and preserve the Division's ability to seek injunctive relief under Section 7A(f) of the HSR Act, Cascade and NovaMart agree to cooperate in withdrawing and refiling their respective HSR Notification and Report Forms within five (5) business days of a mutual determination by the parties that such withdrawal and refiling is desirable, or upon the reasonable request of the Division.
Each pull-and-refile shall be coordinated between Cascade's Counsel (Howard Bellamy, Calderwood & Harkness LLP, and Gabriela Montoya, Whitfield & Crane LLP) and NovaMart's counsel (Richard Calloway, Calloway, Brandt & Loewe LLP) to ensure simultaneous submission of the refiled notifications to the Federal Trade Commission and the Department of Justice. The parties acknowledge that prompt coordination is essential to avoid any gap in the HSR process and to ensure that both the acquiring person and the acquired person refile their respective notifications concurrently.
B. Effect on Second Request
In the event of a withdrawal and refiling, the Division agrees that, provided Cascade and NovaMart have previously certified substantial compliance with the Second Request in accordance with Section III of this Agreement, the Division shall not issue a new Second Request solely on the basis of the refiled notification. The Division acknowledges that the investigation will be a continuation of the review initiated in connection with the original filings and the Second Request, and that the purpose of the pull-and-refile is to preserve the Division's procedural rights under the HSR Act rather than to initiate a new investigation.
Any supplemental production obligations arising from the pull-and-refile shall be limited to documents and data created or received after the date of the original Certification of Substantial Compliance that are responsive to the specifications of the original Second Request. Cascade agrees to use reasonable best efforts to identify and produce such supplemental documents and data on an expedited basis following the refiling.
Notwithstanding the foregoing, the Division reserves the right to request additional documents or information from Cascade and NovaMart in connection with the refiled notification if the Division identifies new competitive concerns or issues that were not apparent at the time of the original Second Request, subject to the Division's obligation to act reasonably and in good faith.
C. Filing Fee
Each refiling shall require payment of the applicable HSR filing fee as determined by the Federal Trade Commission's annual fee schedule. As of the date of this Agreement, the applicable filing fee for a transaction valued at One Billion Two Hundred Million Dollars ($1,200,000,000) is Two Million Three Hundred Ninety Thousand Dollars ($2,390,000), subject to adjustment by the FTC in accordance with its annual fee schedule published pursuant to the Consolidated Appropriations Act.
The filing fee for any pull-and-refile shall be the responsibility of Cascade, as the acquiring person, consistent with the allocation of regulatory costs set forth in Section 6.04 of the SPA. Cascade acknowledges that refiling fees are non-refundable and that the obligation to pay such fees is a cost of compliance with the HSR Act and this Agreement.
D. Waiting Period Upon Refiling
Upon refiling, a new initial waiting period of thirty (30) calendar days shall commence in accordance with Section 7A(b)(1)(B) of the HSR Act, 15 U.S.C. § 18a(b)(1)(B). The shortened fifteen (15) calendar day waiting period applicable to cash tender offers under Section 7A(b)(1)(A) of the HSR Act does not apply to the Transaction, as the Transaction is structured as a stock purchase rather than a cash tender offer.
The Division reserves the right to issue a Second Request during such new waiting period in accordance with Section 7A(e)(1)(A) of the HSR Act, although the parties' expectation, consistent with Section VI.B of this Agreement, is that no new Second Request will be issued where the parties have previously certified substantial compliance with the original Second Request and the Division has not identified new competitive concerns necessitating additional investigation. If the Division does issue a new Second Request in connection with a refiled notification, the parties shall discuss in good faith any modifications to the timelines and procedures set forth in this Agreement that may be appropriate in light of such new Second Request.
VII. RESERVATION OF DIVISION'S RIGHTS TO SEEK RELIEF
A. Right to File Suit
Nothing in this Agreement shall be construed to limit, waive, or otherwise affect the Division's authority or right to file a complaint or to seek injunctive, equitable, or other relief under Section 7 of the Clayton Act, 15 U.S.C. § 18, Section 1 or Section 2 of the Sherman Act, 15 U.S.C. §§ 1–2, or any other applicable provision of federal or state law, at any time before, during, or after the Review Period. The Division retains all rights, powers, and authorities conferred upon it by law, including, without limitation, the right to seek a temporary restraining order, a preliminary injunction, or a permanent injunction in any court of competent jurisdiction, including the United States District Court for the District of Columbia or any other appropriate federal court.
Cascade acknowledges that this Agreement is intended to provide a procedural framework for the Division's review of the Transaction and is not intended to restrict the Division's enforcement authority in any manner. The Division's agreement to the procedures and timelines set forth in this Agreement is made in the exercise of its prosecutorial discretion and does not create any enforceable right in Cascade to compel the Division to complete its review within any particular time frame or to refrain from taking enforcement action.
B. Remedy Discussions
The parties acknowledge that, during the Review Period, the Division may engage in discussions with Cascade and Cascade's Counsel regarding potential remedies that might address any competitive concerns identified by the Division, including structural remedies (such as the divestiture of assets, business lines, or ongoing business operations) or behavioral remedies (such as conduct restrictions, licensing obligations, firewalls, or supply commitments).
Cascade acknowledges that it has identified and is prepared to discuss, as a contingency and without any commitment to offer or accept, a potential divestiture package consisting of NovaMart's NovaHome home décor vertical, which represents approximately Six Hundred Twenty Million Dollars ($620,000,000) in gross merchandise value based on the twelve-month period ending March 31, 2025. Cascade's identification of this potential divestiture package is made solely for the purpose of facilitating discussions with the Division and does not constitute an offer, commitment, or admission by Cascade that the Transaction raises any competitive concerns, that a divestiture is necessary, or that the NovaHome vertical is an appropriate remedy package. Cascade reserves all rights to modify, withdraw, or supplement any remedy proposal during the course of discussions with the Division.
Any remedy discussions between Cascade and the Division shall be conducted on a without-prejudice basis and shall not constitute an admission by Cascade that the Transaction violates or may violate any provision of the antitrust laws. Similarly, the Division's participation in remedy discussions shall not constitute a commitment by the Division to accept any particular remedy or to refrain from challenging the Transaction.
C. Notice of Decision to Challenge
If the Division determines to challenge the Transaction by filing a complaint or seeking injunctive or other relief in a court of competent jurisdiction, the Division shall provide Cascade's Counsel with at least three (3) business days' advance written notice of its intention to do so, unless exigent circumstances (including circumstances in which the Division reasonably believes that advance notice would result in the consummation of the Transaction before the Division could seek judicial relief) require the Division to take action without such notice.
Such advance notice shall be provided to the following persons:
Howard Bellamy Calderwood & Harkness LLP 599 Lexington Avenue, 38th Floor New York, New York 10022
Gabriela Montoya Whitfield & Crane LLP 1200 New Hampshire Avenue NW, Suite 500 Washington, DC 20036
The Division's notice shall include, to the extent practicable, a general description of the basis for its challenge and the nature of the relief it intends to seek. Cascade acknowledges that the three (3) business day notice period is intended to provide Cascade with a reasonable opportunity to be heard before the Division files a complaint, and is not intended to delay or impede the Division's ability to obtain prompt judicial relief.
VIII. CASCADE'S COMMITMENTS REGARDING THE TRANSACTION PENDING REVIEW
A. No Consummation During Review
Cascade commits that it will not consummate the Transaction during the pendency of the Division's review under this Agreement, except as specifically provided in Section V of this Agreement. For purposes of this provision, "consummation" includes the closing of the stock purchase, the transfer of NovaMart's capital stock, the payment of the aggregate consideration, and any other action that would result in Cascade acquiring beneficial ownership or control of NovaMart's assets or operations prior to the satisfaction of the conditions set forth in this Agreement and the HSR Act.
B. Compliance with SPA Interim Operating Covenants
Cascade represents that NovaMart is operating in the ordinary course of business consistent with past practice and in material compliance with the interim operating covenants set forth in Section 6.01 of the SPA, which require, among other things, that NovaMart: (i) preserve intact its business organization, goodwill, and relationships with customers, suppliers, employees, and other business partners; (ii) refrain from making material capital expenditures, acquisitions, or dispositions outside the ordinary course; and (iii) refrain from taking any action that would reasonably be expected to materially impair the value of the business or the assets being acquired by Cascade.
Cascade agrees to use its reasonable best efforts to cause NovaMart to continue to comply with such interim operating covenants pending the consummation or termination of the Transaction, and to promptly notify the Division of any material changes in the operation of NovaMart's business that are relevant to the Division's competitive analysis. For purposes of this provision, "material changes" include, without limitation, the loss of a significant customer or supplier relationship, any significant expansion or contraction of NovaMart's product or service offerings, any significant changes in pricing or promotional strategy, any significant changes in personnel, and any other events or developments that could affect the competitive significance of NovaMart's business in the relevant markets.
C. No Integration Pending Closing
Cascade commits that it will not take any steps to integrate the operations, assets, personnel, or business functions of Cascade and NovaMart prior to the consummation of the Transaction. This commitment includes, without limitation, a prohibition on: (i) the sharing of competitively sensitive information (including pricing, costs, customer lists, supplier terms, and strategic plans) between Cascade and NovaMart outside the scope of the due diligence and integration planning activities specifically authorized by the Clean Team / Antitrust Protocol Agreement; (ii) the coordination of pricing, output, or marketing strategies between Cascade and NovaMart; (iii) the transfer of employees, assets, or contracts between Cascade and NovaMart; and (iv) the exercise by Cascade of any operational control or direction over NovaMart's day-to-day business activities.
Cascade and NovaMart will continue to operate as independent competitors during the pendency of the Division's review, in all respects consistent with the Clean Team / Antitrust Protocol Agreement dated February 18, 2025, which governs the exchange of information between Cascade and NovaMart in connection with the Transaction and limits access to competitively sensitive information to designated members of each party's respective clean teams. A copy of the Clean Team / Antitrust Protocol Agreement has been provided to the Division and will be supplemented if modified.
IX. COOPERATION AND INFORMATION SHARING
A. Cascade's Ongoing Cooperation
Cascade agrees to cooperate fully and in good faith with the Division's investigation of the Transaction throughout the duration of this Agreement. Without limiting the generality of the foregoing, Cascade's cooperation obligations include:
(i) Making officers, executives, employees, and other personnel of Cascade available for interviews, depositions, and investigational hearings on reasonable notice from the Division, with Cascade's Counsel present, and cooperating in the scheduling of such interviews to accommodate the Division's investigatory timeline;
(ii) Promptly responding to informal requests for information, data, or documents from the Division's staff, including requests made by telephone, email, or letter, and endeavoring to provide responsive information within a reasonable time following each such request;
(iii) Providing access to economic analyses, financial models, reports, studies, surveys, or other documents or data that are relevant to the Division's competitive analysis and that have not previously been produced in response to the Second Request, including any analyses prepared by or for Cascade's management, board of directors, or advisors in connection with the Transaction;
(iv) Facilitating the Division's access to NovaMart personnel and documents through coordination with NovaMart's counsel (Calloway, Brandt & Loewe LLP), consistent with the terms of the SPA and the Clean Team / Antitrust Protocol Agreement; and
(v) Responding to requests from the Division for the identification of customers, competitors, suppliers, and other market participants who may have information relevant to the Division's investigation, and assisting in the Division's efforts to contact such third parties, subject to the provisions of Section IX.B below.
B. Third-Party Contact Notification
Cascade respectfully requests that, to the extent practicable and consistent with the Division's investigatory prerogatives and the Division's obligation to conduct a thorough and independent investigation, the Division provide advance notice to Cascade's Counsel before contacting customers, competitors, suppliers, or other third parties identified by Cascade as having sensitive commercial relationships with Cascade or NovaMart. Cascade recognizes that such notice may not always be feasible or appropriate and that this request is not intended to limit, restrict, or in any way impair the Division's investigatory authority, its ability to obtain information from third parties, or its ability to maintain the confidentiality of its investigation.
In the event that the Division provides such advance notice, Cascade may, at the Division's discretion, provide the Division with background information regarding the third party's relationship with Cascade or NovaMart that may assist the Division in framing its inquiries. Cascade acknowledges that the Division is under no obligation to accept or act upon any such information provided by Cascade.
C. Status Conferences
The parties agree to hold regular status conferences, either in person at the Division's offices in Washington, DC or by telephone or videoconference, at mutually convenient intervals, occurring not less frequently than bi-weekly during the active review period, to discuss the following topics, among others:
(i) The status of Cascade's and NovaMart's document and data production, including any outstanding production obligations;
(ii) The scheduling of witness interviews and depositions;
(iii) The Division's anticipated timeline for completing its review and reaching a decision regarding the Transaction;
(iv) Any preliminary competitive concerns identified by the Division's staff and economists;
(v) The status of any remedy discussions, if applicable; and
(vi) Any other matters relevant to the efficient progress of the investigation.
Counsel for Cascade — specifically, Howard Bellamy of Calderwood & Harkness LLP and Gabriela Montoya of Whitfield & Crane LLP — shall serve as the primary contacts for scheduling and conducting such status conferences. The Division shall designate a staff attorney or section chief to serve as the Division's primary contact for such conferences.
D. Reference to Economic Expert
Cascade has retained Dr. Henrik Johansson of Apex Economics LLC, located at 900 G Street NW, Suite 700, Washington, DC 20001, as its economic expert in connection with this matter. Dr. Johansson is an economist with recognized expertise in retail competition, market definition, and merger simulation modeling. Dr. Johansson's economic analyses and reports, including any merger simulation models, competitive effects analyses, and market definition studies prepared in connection with the Transaction, will be made available to the Division as appropriate during the review process, consistent with any applicable claims of attorney-client privilege or work-product protection.
Cascade anticipates that Dr. Johansson may also be available to participate in meetings or discussions with the Division's economic staff, including economists in the Division's Economic Analysis Group, to discuss economic methodology, data sources, and the economic evidence relevant to the Transaction.
X. CONFIDENTIALITY
A. Treatment of Confidential Business Information
The Division agrees to treat all confidential business information, documents, data, and materials produced by Cascade and NovaMart in connection with this investigation in accordance with the Division's standard procedures for handling confidential materials, including the provisions of the HSR Act, 15 U.S.C. § 18a, the Antitrust Civil Process Act, 15 U.S.C. §§ 1311–1314, and the Freedom of Information Act, 5 U.S.C. § 552, as applicable. The Division acknowledges that the materials produced by Cascade and NovaMart in connection with the Second Request and this Agreement contain highly sensitive trade secrets, proprietary business information, financial data, customer information, and other confidential materials, the disclosure of which could cause competitive harm to Cascade, NovaMart, or their respective customers, suppliers, and business partners.
Cascade requests that, in the event the Division receives a request or demand for disclosure of any confidential business information produced by Cascade or NovaMart in connection with this investigation (whether pursuant to a Freedom of Information Act request, a congressional subpoena, a court order, or otherwise), the Division provide Cascade's Counsel with prompt notice of such request or demand so that Cascade may take appropriate steps to protect its confidential information.
Nothing in this Agreement shall require the Division to disclose to Cascade any confidential information received from third parties in connection with the Division's investigation, including information received from customers, competitors, suppliers, or other market participants. The Division retains sole discretion regarding the use and disclosure of third-party confidential information in accordance with applicable law.
B. Public Disclosure
Neither party shall make any public disclosure regarding the existence or specific terms of this Timing Agreement without the prior written consent of the other party, except as follows:
(i) Required Disclosures. Cascade may disclose the existence and material terms of this Agreement to the extent required by applicable law, rule, or regulation, including, without limitation, the securities disclosure obligations of Cascade as a public company listed on the Nasdaq Global Select Market under the ticker symbol "CRHI," including any obligations under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission thereunder. Cascade shall use reasonable efforts to provide the Division with advance notice of any such disclosure and to limit the scope of such disclosure to the extent consistent with its legal obligations.
(ii) Legal Proceedings. Either party may disclose the existence and terms of this Agreement in connection with any legal proceeding arising out of or related to the Transaction or this Agreement, including any action brought by the Division to enjoin the Transaction or any action brought by Cascade to enforce its rights under this Agreement or the SPA.
XI. MODIFICATIONS, WAIVERS, AND TERMINATION
A. Amendments
This Agreement may be amended, modified, or supplemented only by a written instrument executed by authorized representatives of both Cascade and the Division. No oral agreement, understanding, or course of dealing between the parties shall be deemed to amend or modify any provision of this Agreement. Any amendment shall specify the sections or provisions being amended and shall be incorporated into and become a part of this Agreement as of the date specified in such amendment.
B. Termination
This Agreement shall terminate automatically, without further action by either party, upon the earliest to occur of the following events:
(i) The consummation of the Transaction in accordance with the terms of the SPA and this Agreement;
(ii) The termination of the SPA in accordance with its terms, including, without limitation, termination by either party pursuant to Article VIII of the SPA upon the Outside Date of December 31, 2025, if the conditions precedent to closing under Article VII of the SPA have not been satisfied or waived by such date;
(iii) The entry of a final, non-appealable judgment in any action brought by the Division to permanently enjoin the consummation of the Transaction;
(iv) The entry of an order by a court of competent jurisdiction granting a preliminary injunction enjoining the consummation of the Transaction, unless such order is stayed, reversed, or vacated, in which case this Agreement shall remain in effect; or
(v) The mutual written agreement of the parties to terminate this Agreement.
Upon termination of this Agreement, neither party shall have any further obligations hereunder, except as provided in Section XI.C below.
C. Survival
The provisions of Section X (Confidentiality) and Section XII (General Provisions) of this Agreement shall survive the termination of this Agreement and shall continue in full force and effect indefinitely with respect to confidential business information and for a period of two (2) years following termination with respect to other general provisions, or for such longer period as may be required by applicable law.
XII. GENERAL PROVISIONS
A. Notices
All notices, requests, demands, consents, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally, when sent by overnight courier (with confirmation of delivery), when transmitted by electronic mail (with confirmation of receipt), or when sent by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
For Cascade Retail Holdings Inc.:
Howard Bellamy Calderwood & Harkness LLP 599 Lexington Avenue, 38th Floor New York, New York 10022
Email: hbellamy@calderwoodharkness.com
with a copy to:
Gabriela Montoya Whitfield & Crane LLP 1200 New Hampshire Avenue NW, Suite 500 Washington, DC 20036
Email: gmontoya@whitfieldcrane.com
and a copy to:
Elena Vasquez-Bright General Counsel Cascade Retail Holdings Inc. 4500 Elliott Avenue West, Suite 3200 Seattle, Washington 98119
Email: evasquezbright@cascadeholdings.com
For the Antitrust Division of the United States Department of Justice:
[Name of Designated Staff Attorney or Section Chief] United States Department of Justice Antitrust Division, Civil Enforcement Section 950 Pennsylvania Avenue NW Washington, DC 20530
Email: [To be completed upon final submission]
Either party may change its address for purposes of this Section XII.A by providing written notice of such change to the other party in accordance with this Section.
B. No Admission
Entry into this Agreement does not constitute an admission by Cascade that the Transaction violates or may violate any provision of the antitrust laws of the United States, including Section 7 of the Clayton Act, 15 U.S.C. § 18, or any other federal or state antitrust statute. Similarly, entry into this Agreement does not constitute a determination by the Division that the Transaction does or does not violate any provision of the antitrust laws. The parties acknowledge that this Agreement is a procedural accommodation to facilitate the Division's review of the Transaction and does not reflect any substantive assessment of the competitive effects of the Transaction.
C. Authority
Cascade represents and warrants that it has the full corporate power and authority to enter into this Agreement and to perform and comply with its obligations hereunder. Cascade further represents that its entry into this Agreement has been duly authorized by all necessary corporate action and is consistent with its obligations under the SPA, including, without limitation, its obligations under Section 6.05 (Cooperation with Regulatory Filings) and Section 6.06 (Reasonable Best Efforts) of the SPA.
The signatory for the Division represents that he or she has the authority to enter into this Agreement on behalf of the Antitrust Division of the United States Department of Justice and that the Division's obligations hereunder have been duly authorized.
D. Governing Law
This Agreement shall be governed by and construed in accordance with the federal laws of the United States. To the extent that any dispute arises under this Agreement that requires judicial resolution, the parties consent to the jurisdiction of the United States District Court for the District of Columbia, without prejudice to the Division's right to file any enforcement action in any other court of competent jurisdiction.
E. Counterparts
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile, electronic mail (including PDF format), or other electronic transmission shall be effective as delivery of a manually executed counterpart.
F. Entire Agreement