IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE LAUREN GLASSMAN, : : Plaintiff/ : Counterclaim Defendant,: : vs. : : CROSSFIT, INC.

, a Delaware : corporation, and GREG GLASSMAN, : : Defendants/ : Counterclaim Plaintiffs.: - - -

Civil Action No. 7717-VCG

Chancery Court Chambers 34 The Circle Georgetown, Delaware Tuesday, October 23, 2012 4:00 p.m.

- - BEFORE: HON. SAM GLASSCOCK, III, VICE CHANCELLOR - - TELECONFERENCE-MOTION TO SET A SCHEDULE - - -----------------------------------------------------CHANCERY COURT REPORTERS 410 Federal Street Dover, Delaware 19901 (302) 739-3934

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APPEARANCES: (By telephone): PHILIP J. TRAINER, JR., ESQ. TONI-ANN PLATIA, ESQ. Ashby & Geddes, P.A. -andGRACE Y. PARK, ESQ. of the California bar Bergeson, LLP for Plaintiff/Counterclaim Defendant

RAYMOND J. DiCAMILLO, ESQ. KEVIN M. GALLAGHER, ESQ. Richards, Layton & Finger, P.A. -andBLAIR G. CONNELLY, ESQ. of the New York bar Latham & Watkins LLP for Defendant/Counterclaim Plaintiff BRIAN C. RALSTON, ESQ. J. MATTHEW BELGER, ESQ. Potter, Anderson & Corroon LLP -andANGELA L. DUNNING, ESQ. of the California bar Cooley LLP for Third Party Anthos Capital L.P. CURTIS S. MILLER, ESQ. Morris, Nichols, Arsht & Tunnell LLP -andSTEVEN A. LEVY, ESQ. of the Illinois bar Goldberg Kohn LTD. for Non-party WTAS, LLC - - -

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Honor. Honor. Honor. Sam Glasscock.

THE COURT:

Good afternoon.

This is

Who do I have on the line please? MR. TRAINER: Good afternoon, Your

For plaintiff, Lee Trainer and Toni-Ann Platia I also have on the line Grace Park

at Ashby & Geddes. from Bergeson, LLP.

THE COURT:

Thank you, Mr. Trainer. Good afternoon, Your Also on the

MR. DiCAMILLO:

For defendants, Ray DiCamillo.

line with me are Kevin Gallagher from my office and Blair Connelly of Latham & Watkins. THE COURT: Welcome all.

Do I have Mr. Ralston on the line? MR. RALSTON: You do, Your Honor. I

was just about to introduce myself and my colleague, Matt Belger from my firm on behalf of Anthos, and also with me on the line is Angela Dunning from Cooley. THE COURT: MS. DUNNING: All right. Welcome all.

Good afternoon, Your

THE COURT:

We have several motions

outstanding, but I think I'd like to start with Anthos' request for me to hold in abeyance enforcement of my order with respect to the motion to compel to CHANCERY COURT REPORTERS

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consider the common interest doctrine by Anthos.

I'll

hear from whoever is going to speak, Mr. Ralston, on behalf of Anthos. MR. MILLER: Your Honor, I am sorry to

interrupt, but just for the record, you have Curtis Miller and Steve Levy on the line as well. represent WTAS. THE COURT: up. MS. DUNNING: Angela Dunning from Cooley. I'll be arguing for Anthos. The request that we submitted to Your Honor last week really has narrowed down to 13 documents. We were able to look at the documents Your Honor, this is With your indulgence, Welcome. Glad you spoke We

withheld on privileged grounds by Miss Glassman, by plaintiff, where Anthos was involved in the communication, and there are really only 13 documents that we expect to assert privilege over in connection with our own production which is ongoing. Those 13 documents I think, and withholding of those 13 documents, is fully consistent with the very helpful order that the Court entered with respect to the motion to compel against plaintiff CHANCERY COURT REPORTERS

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insofar as we have restricted that request to only those documents that specifically entail discussion of common legal strategy with respect to the claims that defendants have filed both against plaintiffs in Delaware and against Anthos in California. As I think the Court knows, the breach of fiduciary duty claims against Miss Glassman are filed in Delaware. Aiding and abetting, those claims,

and a variety of other claims based on the provision of documents to Anthos, are what informs the claims in California. So they are really the flip side of

precisely the same claim. And there have been limited communications between counsel for Anthos and plaintiff with respect to how to defend against those claims in a way that preserves the common interest of both parties. And then there have been some

discussions of the parties' potential claims against defendants arising out of that litigation. Those kinds of issues are precisely what's referenced in the Court's decision when it said that even defendants concede that those sorts of documents are subject to the common interest doctrine. So it's really 13 documents, Your Honor. CHANCERY COURT REPORTERS

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THE COURT:

When will that issue, from

Anthos' point of view, be presented to the Court for decision? MS. DUNNING: Well, Your Honor, Anthos

filed its opposition to the motion to compel yesterday, so its briefing on this has been submitted. I don't know when defendants are planning to submit their reply, but I expect that will be this week, at which point it will be ready for decision by Your Honor. At the same time, Anthos is moving as quickly and diligently as possible to complete its own document review and to provide a privilege log to defendants, and we are hopeful and anticipate that that will be done within the next week, or by the end of the month. But it's a significant undertaking, and

we're doing the best we can on that. THE COURT: Let me ask you this. The

purchase agreement with Miss Glassman expires at the end of the year, correct, December 31st? MS. DUNNING: THE COURT: Yes, Your Honor. Is that a hard deadline,

or is that a deadline that could be amended? MS. DUNNING: At this point, Your

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Honor, it's a hard deadline.

The parties have that

deadline written into their agreement, and I certainly have no authority to suggest that it is subject to modification. I think everybody in the case, as I understand it, is working very hard to get these matters fully briefed and presented to the Court so it will be able to reach a decision before the end of the year. THE COURT: Thank you. Mr. DiCamillo, who is going to argue on behalf of Greg Glassman and the company? MR. DiCAMILLO: Your Honor, I will. All right. Fair enough.

Mr. Connelly may need to jump in to the extent necessary, but I'm going to take the lead. THE COURT: All right. With respect to

MR. DiCAMILLO:

Anthos' request that Your Honor's recent memorandum opinion be held in abeyance, we think that request should be denied. As Your Honor is well aware, we filed our motion to compel against plaintiff on August 31st. It is now October 23rd, and we still have not received CHANCERY COURT REPORTERS

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all the documents that we are entitled to. During the briefing on our motion to compel against plaintiff, Your Honor indicated that you wanted to hear argument on the motion to compel against Anthos at the same time. We asked Your Honor

not to do that, not to wait, and to consider our motion to compel against Miss Glassman first since the issue had been outstanding for so long and had been the subject of about five briefs and two arguments. Your Honor granted that request. Plaintiff did not oppose that request, and Anthos did not oppose that request. Anthos is no stranger to

this proceeding or any of the activities that are going on. During the discussions about the briefing, Anthos was well aware of the briefing schedule. Anthos was well aware of our requests and

our motion against Miss Glassman and it was considered first, and we attached some emails to my letter from last week indicating that they thought it was a good idea to wait and have Miss Glassman's motion heard first because that might be helpful in narrowing the issues with respect to the motion to compel against Anthos. CHANCERY COURT REPORTERS

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Plaintiff never asked that anything be held in abeyance. Your Honor ruled last week that we

were entitled to all of the documents that we had requested. no carveout. There was no exception to that. There was

There is no saying, "Well, if you only

withhold 13, you don't have to produce all of them." Your Honor ordered Miss Glassman to produce all of the documents that were at issue. has not done that. As Your Honor knows, we filed a motion for contempt, and that is not fully briefed yet, and I won't argue it, but the reality is they have not provided the documents that Your Honor required them to produce, and there is no reason that Your Honor's order should be held in abeyance. looking for another chance. Miss Glassman had plenty of opportunity to make any arguments that she wanted to in opposition to the motion to compel. She did, They are simply She

filing several briefs, making several arguments. Miss Glassman is now not happy with Your Honor's order, and Miss Glassman and Anthos are taking the opportunity to try to reargue the motion even though they say they are not going to. CHANCERY COURT REPORTERS

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The same with respect to Anthos. Anthos could have intervened at any time. Anthos

could have said, "No, I want to file my brief quickly, I want this heard all at the same time so that nobody is prejudiced." They didn't do that. They acquiesced

in our position that Miss Glassman's motion should be heard first. They all should have to live with the

consequences of that. As Your Honor is aware, there's also issues about -- we filed a motion to push this trial back essentially just a week which we think is really necessary. But we've got to get started on this case,

whether it's going to be tried on November 26th or December 3rd as we requested, and we're still waiting for documents from Miss Glassman. Anthos says they're working hard to get those documents, and I don't doubt that they are working hard, but they're saying that we're not going to get documents until the end of October. have a privilege log yet. is not fully brief. They filed their opposition yesterday. We intend to file a reply tomorrow. I don't know when We don't

The motion against Anthos

Your Honor would be available to hear it, but we still CHANCERY COURT REPORTERS

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don't have a log from them.

So I don't know that Your

Honor is going to be able to even consider that fully until we have that. So, for all those reasons, we think it's inappropriate that the order be held in abeyance, and we think Your Honor should deny that request and order Miss Glassman to produce the 13 documents that she's withholding. THE COURT: When will the rest of the

third-party briefing be finished, Mr. DiCamillo? MR. DiCAMILLO: I believe we can get

it all finished -- we're going to try to file as much as we can tomorrow. As Your Honor is aware, there's a

number of things outstanding, but I don't see any reason why everything can't be fully briefed this week. I'd ask Mr. Connelly to correct me if I'm wrong

about that. MR. CONNELLY: THE COURT: That is correct.

All right.

Mr. Miller, is that your understanding as well, that -- you'll have to fill me in on whether your response has been filed because I can't remember. MR. MILLER: you, Your Honor. CHANCERY COURT REPORTERS I'm sorry. I didn't hear

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Yes.

For the record, Curtis Miller

from Morris Nichols on behalf of WTAS. We did file our response to the motion to compel on the 18th, last Thursday. I think I

understood and heard Mr. DiCamillo say that they believe they're going to be filing a reply tomorrow, and at that point, I think it would be fully briefed, Your Honor. I can provide you with more background if

you'd like, but that's what I believe the schedule is. THE COURT: I think that's sufficient.

I'm looking for a date now, counsel, to set argument on those outstanding motions. I'm

assuming we're talking about the week of the 29th of October, is that correct? MR. DiCAMILLO: sense, Your Honor. MS. DUNNING: from Anthos' perspective. Your Honor, that's fine I think that makes

I do have a couple of

points I'd like to clarify if it would be helpful to Your Honor in terms of what Mr. DiCamillo said, but I'll wait until you're ready for that. THE COURT: I'm happy to listen to How about Tuesday

you, but let's get this scheduled. the 30th at 10:00.

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Your Honor.

MR. TRAINER: plaintiff, Your Honor. MR. DiCAMILLO:

That's fine for

Fine for defendants,

MR. MILLER: well, Your Honor. MS. DUNNING: THE COURT:

That works for WTAS as

And for Anthos. All right.

Now, you can go ahead and make whatever points you wish. MS. DUNNING: Thank you, Your Honor.

I guess I just want to respond to a few points very briefly. The first is the defendants

have stated absolutely zero harm that they would suffer by allowing plaintiff to withhold the 13 documents for a very limited additional period of time. These are documents, again, that they have

already conceded fall within the common interest privilege. On the flip side of that, you have Anthos' truly substantial rights and privileged communications over which its right to withhold is currently pending before the Court. I guess the only other point I wanted CHANCERY COURT REPORTERS

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to add, Your Honor, is Anthos did not acquiesce to the order. We were first alerted by defendants to their

motion to compel against Anthos on the 8th of October, after Your Honor had already heard the motion to compel as to Miss Glassman. The motion as to Anthos was filed in September, but we were never served with it until the 10th, and by that point, Your Honor had already held the final hearing and the decision was due only two days later. to intervene. So there was no opportunity at that point Nor had we had a chance to see the

documents that were at issue in order to express our views on that. So we moved quickly once we were alerted that all of these matters were proceeding, and I guess I just again want to reiterate we're talking about 13 documents over which Anthos expects to assert privilege. Those are the same documents in Anthos' possession, and in light of the last paragraph of Your Honor's decision in which, in our view, it was made very clear that the motion was not intended -that the decision was not intended to prejudice Anthos' argument in the motion to compel which CHANCERY COURT REPORTERS

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defendants asked to be briefed separately, that withholding those 13 documents is a really reasonable solution to allow all parties to have their fair day in court. THE COURT: All right. Is there any

objection on your part or on your client's part to moving this trial until the 5th and 6th of December? MS. DUNNING: Your Honor, for Anthos,

we'll make ourselves available whenever the parties and the Court decides that trial is appropriate. THE COURT: All right.

Mr. DiCamillo, does that suit you? MR. DiCAMILLO: Your Honor. THE COURT: We're going to move trial It suits defendants,

to Georgetown the 5th and 6th of December. Let me turn to the 13 documents. I

tried to make it clear in my opinion that I was not making a decision on those documents to which privilege might be asserted by Anthos. I don't think Miss Glassman has any basis to withhold the documents for her own purposes. However, I think it was appropriate that they be withheld. I tried to get counsel on the phone on the CHANCERY COURT REPORTERS

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Friday that the request was filed to tell you to withhold them and that I would consider them in due course. I was unable to do that. But I think it's

appropriate that those documents be withheld. I expect that Anthos should be in a position to make whatever arguments it's going to make on those when we get together next week to argue on the broader motions to compel. MS. DUNNING: THE COURT: issue. Is that right? Yes, Your Honor. So that takes care of that

I'm going to allow those 13 documents to be

withheld. I don't need any more briefing on the contempt motion because I don't find that the actions of Miss Glassman amounted to contempt. I have read

the opening papers, and I am convinced that whatever the failings of the motion practice and discovery practice in this case, they don't rise to sanctionable contempt. Is there anything else we can do here this afternoon? MR. DiCAMILLO: ask two questions please? THE COURT: Sure. Your Honor, can I just

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MR. DiCAMILLO:

Number one, the

argument next Tuesday, is that going to be on the phone or in person? THE COURT: On the phone. And the second,

MR. DiCAMILLO:

following up on your colloquy with Miss Dunning, are they going to be presenting all their arguments? Do I

take that to mean that we need to get a privilege log before then? THE COURT: Well, I would hope there

would be a privilege log created. Miss Dunning, are you going to be in a position to have a privilege log? MS. DUNNING: Your Honor, that is my I had said

hope; that we would be able to get it in.

the 31st, but we will do everything we can in our power to get it in by the 30th. My understanding, based on communications between the parties and what I have seen in terms of numbers, is that the number of documents Anthos, the third party has been looking at, substantially eclipses anything the parties have actually exchanged. So we're doing our best, and I will CHANCERY COURT REPORTERS

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make sure that we have whatever has been reviewed logged and provided to the other side by that point. I can't guarantee that there won't be some additional documents that are discovered and produced thereafter and some documents withheld on privilege. THE COURT: Do the best you can. My

ruling was with respect to the 13 documents. to make a decision on the 13 documents.

I expect

I'm going to

ask that those be provided to me in chambers beforehand, Miss Dunning. MS. DUNNING: THE COURT: issue out of the way. the motions to compel. Okay. I'm going to get that

We will do as much as we can on I am going to decide them as

quickly as I can in principle if I can't do it in specific. We'll work that out. But we're running very short of time, and this matter is going to go forward now in early December, and you're going to have a decision by the end of the year. So we're going to have to all

accommodate our schedules to that. MS. DUNNING: THE COURT: Understood. Thank you.

Anything else we can do this CHANCERY COURT REPORTERS

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afternoon? MR. TRAINER: Honor. Thank you. MR. DiCAMILLO: defendants, Your Honor. THE COURT: MS. DUNNING: Your Honor. MR. MILLER: Honor. THE COURT: I appreciate everyone's Nothing from us, Your All right. Thank you very much, Nothing from Not for plaintiff, Your

attention, and I look forward to talking to you very soon. Thank you very much.

(The teleconference concluded at 4:20 p.m.)

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CERTIFICATE

I, MAUREEN M. McCAFFERY, Official Court Reporter of the Chancery Court, State of Delaware, do hereby certify that the foregoing pages numbered 3 through 19 contain a true and correct transcription of the proceedings as stenographically reported by me at the teleconference in the above cause before the Vice Chancellor of the State of Delaware, on the date therein indicated. IN WITNESS WHEREOF, I have hereunto set my hand at Dover, this 25th day of October, 2012.

/s/Maureen M. McCaffery ---------------------------Maureen M. McCaffery Official Court Reporter of the Chancery Court State of Delaware

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