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6 6 1 to use before granule? 2 MR. SPARKS: They're synonyms, at 3 least as I know. 4 Thank you, Your Honor. 5 MR. HOLZMAN: Likewise, Your Honor, as far as I'm concerned, if we get down to trial dates THE COURT: Sure. MR. HOLZMAN: I yield to Miss O'Connor. 10 THE COURT: Miss O'Connor, as I 11 understand it, we're not really in a disagreement i 12 'I 13 :1 about whether we're going to expedite this, but how. So why shouldn't I at least hear the 14 motion and then get a frame on the contractual issues? 15 MS. O'CONNOR: Your Honor, the motion 16 to dismiss, as we point out in our papers! seeks to 17 introduce extraneous evidence that' s real. It's 18 really not a simple motion to dismiss. We have 19 identified in our letter specific factual disputes 20 that exist when comparing our pleading with their 21 motion. And so it really 22 THE COURT: The motion -- I don't know why lawyers feel the need to, like, say, I have to, you know, defend the sacred honor of my client. CHANCERY COURT REPORTERS

7 7 1 I can understand it if your client has 2 been accused of treason or infidelity to a spouse. 3 I'm not sure in commercial matters like this it really matters much. friend's brief they basically But my sense, as I recall reading your and I read it twice this morning -- "We cannot leave the good name of 7 Blackstone undefended, even though we realize that 8 these things we're saying now can't be considered," 9 Which I think, you know, they shouldn't be doing that. 10 But on the other hand, what I think you have to deal 11 with is your own complaint says some things about how 12 far they have been prepared to go. Right? 13 MS. O'CONNOR: Yes. And they stopped. 14 THE COURT: Okay. And that' s the 15 question, I guess. The point is, if you assume they 16 stopped where you said they stopped, and you've 17 attached the position of the office of -- the 18 controller of the currency, I believe, that says this 19 is where they have to go MS. O'CONNOR: Correct. 21 THE COURT: isn' t the legal issue 22 framed fairly nicely just on the facts of your 23 complaint, which is I don't have to assume anything 24 about their state of mind. This is as far as they CHANCERY COURT REPORTERS

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15 15 1 describing my household, actually. 2 THE COURT: I see these all the time. 3 So, well, I couldn't deny my child a 4 BlackBerry. It' s amazing. There have been stricter 5 parents in time that have done harsher things than 6 deny a child a BlackBerry. 7 What I'm saying is, what is the theory 8 on which the signatories to the contract can compel 9 nonparties to the contract to do a thing? 10 MS. O'CONNOR: Well, first of all, 11 under Article 6.5, there is the commitment to cause 12 these things to occur. The notice of change of 13 control that is required for the OCC approval and 14 which is specifically culled out in Section is 15 something that has to be submitted by the upstream 16 entities. And they did submit it all the way up to 17 the Blackstone Group LP and even Mr. Schwarzman 18 himself individually. That is what is in the process. 19 That is what needs to be obtained. Blackstone knew 20 that going into this transaction and that' s what's 21 required to be obtained. 22 This Court can, of course, cause these 23 entities to cause their affiliates to satisfy the 24 conditions. CHANCERY COURT REPORTERS

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28 28 1 communication, I wish you were with us over the 2 weekend, as we were trying to explain to our clients 3 that, notwithstanding the fact that ADS has said some 4 things in public and then filed this complaint, that 5 i t' s unnecessary to write a preliminary statement that 6 defends your virtue. But we succeeded to a 7 significant extent, Your Honor, but not entirely. 8 With respect to the specific question 9 as to why not grant -- why not accede to discovery, I 10 think we've heard the reason why not. Because the 11 only articulated reason to have discovery at this 12 point is with respect to some unstated motivation or 13 state of mind of Blackstone, the ultimate investor in 14 this proposed transaction, and that is irrelevant. 15 This lawsuit, as pleaded, states a set of facts that 16 we accept for purposes of the motion to dismiss and 17 that Your Honor can rule as a matter of law. 18 Now, counsel THE COURT: For example, I believe 20 that your friends suggest that developments in the 21 economy diminished Blackstone's ardor for closing. 22 And you would be accepting, for purposes -- for 23 purposes of a motion to dismiss, the potential that 24 Blackstone's behavior might have been influenced to CHANCERY COURT REPORTERS

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43 43 1 THE COURT: What I'm saying -- it 2 won't be voluntary once you open it up to the OCC; 3 4 right? It won't be a matter of contract -- MR. ANGIOLILLO: If the OCC yes, 5 it's a voluntary offer. If the OCC accepts it as a 6 condition, it becomes part of the agreement. 7 THE COURT: Yes. It becomes an 8 agreement between -- it becomes a condition of 9 regulatory approval and essentially a binding 10 obligation to the feds. 11 MR. ANGIOLILLO: Yes. 12 THE COURT: And what I'm trying to get 13 at in terms of how we go forward, wouldn't I have to 14 assume, for purposes of hearing a motion to dismiss, 15 that the nonparty -- Blackstone -- went into this 16 deal, and the acquiring entities went into this deal 17 believing it was probable that the OCC would seek a 18 material level of financial support from Blackstone or 19 the acquiring entities? 20 MR. ANGIOLILLO: I'm sorry. 21 THE COURT: I'll put the question mark 22 right there. 23 MR. ANGIOLILLO: What I was trying to 24 just ascertain -- and maybe others will remember CHANCERY COURT REPORTERS

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49 49 1 Hear me out. 2 MR. ANGIOLILLO: I apologize. 3 THE COURT: I'm not arguing with you. 4 I'm trying to -- in my own mind -- I'm trying to think 5 about these issues in terms of what we're trying to 6 deal with. 7 Obviously you're going to state that 8 9 these are shell entities. the theory of your motion. In fact, that is part of It's shell entities and 10 they have no ability, for example. Their only 11 financial assets, as I understand it, are a guarantee 12 letter to fund the equity portion of the purchase, and 13 whatever -- I forget what you're calling the 14 termination fee. 15 MS. O'CONNOR: The business 16 interruption fee. 17 THE COURT: The business interruption 18 fee. The BIF. Like the Death of a Salesman. But one 19 F, not two. And the $3 million. 20 MR. ANGIOLILLO: Right. 21 THE COURT: You can calion the BIF, 22 plus three. That is the financial assets of these 23 shells in total, and that' s what they knew they were 24 signing up for. CHANCERY COURT REPORTERS

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72 72 1 to come down and argue it there. 2 MR. HOLZMAN: With or without music, 3 Your Honor? 4 THE COURT: Actually, I think that my 5 M&A class -- I think they would find that a real kick 6 to come and -- you know, I've often thought of doing 7 that at Tulane. Having a real argument at Tulane one 8 year. So, I mean, if you really want to do it, if 9 you're really that chomping at the bit, we can do it 10 in Nashville. And I' l l go to the Bluebird Cafe later 11 that evening. You've got to love a city where they 12 have meat and three. You know what a meat and three 13 is? Meat and three sides. I like to have like three 14 meats and one side. Anyway, I could do -- although 15 next week is really busy. 16 What I'm concerned about, honestly 17 speaking, is this. Even if we're going to tee up the 18 motion to dismiss, the real question is: do you want 19 to amend or not? Because if you want to amend, I 20 think your friends, in fairness, should get a chance 21 to take a shot at what you're doing. Do we know? Is 22 there some forum problem? 23 MR. ANGIOLILLO: I don't believe 24 there's any forum problem with respect to Delaware. CHANCERY COURT REPORTERS

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