COURT OF CHANCERY

OF THE

SAM GLASSCOCK III

VICE CHANCELLOR

STATE OF DELAWARE COURT OF CHANCERY COURTHOUSE

34 THE CIRCLE

GEORGETOWN, DELAWARE 19947

May 13, 2020

Steven L. Caponi

Matthew B. Goeller

K&L GATES LLP

600 King Street, Suite 901

Wilmington, DE 19801

Kevin M. Gallagher

Angela Lam

Christian C.F. Roberts

Travis S. Hunter

Richard Rollo

RICHARDS, LAYTON & FINGER, P.A.

One Rodney Square

920 North King Street

Wilmington, Delaware 19801

RE: Laura Perryman, et al v. Stimwave Technologies Incorporated; 

2020-0079-SG; Motion for Reargument

Dear Counsel:

In this matter, Petitioners Laura and Gary Perryman are directors of 

Respondent corporation, Stimwave Technologies, Incorporated (“Stimwave”). 

Petitioner Laura Perryman is its former CEO. The Petitioners seek advancement for 

legal fees expended in an action brought against them by the Respondent.

1 This 

Letter Opinion resolves Stimwave’s Motion for Reargument of my bench decision 

1 The underlying action is Stimwave Technologies Incorporated v. Laura Tyler Perryman, et al, 

C.A. No. 2019-1003-SG. They also seek advancement for legal fees incurred responding to a civil 

investigation by the Department of Justice.
2

that it must advance fees pending a final determination of the Petitioners’ entitlement 

to advancement.

Petitioners Laura and Gary Perryman filed their Complaint for Advancement, 

along with a Motion to Expedite and request for Temporary Restraining Order 

(TRO) on February 11, 2020. On February 20, I granted the Motion to Expedite,

denied the TRO, and instructed the parties to proceed to a judgment on the pleadings. 

On April 1, 2020, from the bench, I denied the Petitioners’ Motion for Judgment on 

the Pleadings, but I considered the motion as a request for interim relief and granted 

an injunction requiring Stimwave to pay advancement while the parties litigated the 

issue of the Perrymans’ right to advancement. Stimwave filed this Motion for 

Reargument. I find that the Motion must be denied.

To succeed on a motion for reargument, the moving party must demonstrate 

that the Court overlooked a decision or principle of law that would have controlling 

effect, or show that the Court misapprehended the facts or the law such that the 

outcome of the decision would be different.2 Here, I ordered Stimwave to provide 

advancement while the parties resolve the issue of the validity of the underlying 

indemnification agreements. Stimwave argues that this ruling is in conflict with the 

2

See Doft & Co. v. Travelocity.com Inc., 2004 WL 1366994, at *1 (Del. Ch. June 10, 2004) (citing 

VGS, Inc. v. Castiel, 2003 WL 1794210, at *1 (Del. Ch. Mar. 27, 2003)).
3

fundamental precept that mandatory injunctive relief be ordered only after trial or 

on facts not legitimately in dispute.3

The facts of record are these. In April 2018, Stimwave’s board of directors 

(the “Board”) executed an Action by Unanimous Written Consent (the “Board 

Consent”).

4

 The Board Consent was dated April 20, 2018, but it was not signed by 

Stimwave’s directors until April 23, 2018.5 Among other things, the Board Consent 

approved a Form of Indemnification Agreement:

The Board deems it advisable, and in the best interests of the Company 

and its stockholders, to approve the form of indemnification agreement, 

in substantially the form attached hereto as Exhibit G (the “Form of 

Indemnification Agreement”) which may be entered into by the 

Company with each of the Company’s current and future directors and 

senior officers.6 

In the Board Consent, the Board further resolved that, 

subject to the approval of the stockholders, the Chief Executive Officer

is, authorized, directed and empowered to execute and deliver an 

indemnification agreement, in substantially the Form of 

Indemnification Agreement . . . to such individuals indicated in the 

foregoing resolutions.7

3 C & J Energy Servs., Inc. v. City of Miami Gen. Emps.’ & Sanitation Emps.’ Ret. Tr., 107 A.3d 

1049, 1071–73 (Del. 2014).

4 Resp’t Stimwave Technologies Incorporated’s Answer and Affirmative Defenses to Pet’rs’ 

Verified Pet. for Advancement and Indemnification, Ex. A, Action by Unanimous Written Consent 

of the Board of Directors of Stimwave Technologies Incorporated, D.I. 9 (“Board Consent”).

5

Id. at 1 (cover page dating Board Consent April 20, 2018), 8 (signature page with director 

signatures dated April 23, 2018).

6

Id. at 5.

7

Id.
4

From the face of the document, “such individuals indicated in the foregoing 

resolutions” refers to “each of the Company’s current and future directors and senior 

officers.”

8

 The stockholders approved the Form of Indemnification Agreement 

through an Action by Written Consent of the Stockholders (the “Stockholder 

Approval”).9 The approving stockholders signed the Stockholder Approval on dates 

ranging from April 21 to April 24, 2018.10 Laura Perryman signed the Stockholder 

Approval on April 21, 2018, one day after the Board Consent was dated but two days 

before she signed the Board Consent as a director.

11

The Stockholder Approval provides in the preamble to the “Approval of Form 

of Indemnification Agreement”:

the Board has approved a form of indemnification agreement to be 

entered into between the Company and each of the individuals 

designated for election to the Board, and which may be entered into, at 

the Board’s discretion, with any other current or future directors who 

8

Id. Stimwave argues “such individuals indicated in the foregoing resolutions” refers to the 

designation of Jeffrey Goldberg as an independent director in a prior section of the Board Consent;

my view is that the Petitioners’ interpretation is the more reasonable, but this matter will await 

resolution of the validity of the Perrymans’ indemnification agreements.

9 Resp’t Stimwave Technologies Incorporated’s Answer and Affirmative Defenses to Pet’rs’ 

Verified Pet. for Advancement and Indemnification, D.I. 9, Ex. B, Action by Written Consent of 

the Stockholders of Stimwave Technologies Incorporated (“Stockholder Approval”), at 3–4 (“That 

the form, terms and provisions of the Form of Indemnification Agreement, in substantially the 

form attached hereto as Exhibit B, be, and hereby are approved, adopted, authorized and confirmed

. . .”).

10 Id. at 5–69 (signature pages following Stockholder Approval dated from April 21 to April 24, 

2018).

11 See id. at 5; Board Consent, at 1, 8.
5

are nominated to the Board, and, at the Board’s discretion, with any 

senior officers of the Company. . .

12

The Stockholder Approval then resolves “[t]hat the form, terms and provisions of 

the Form of Indemnification Agreement . . . are approved, adopted, authorized and 

confirmed. . .”13 The Stockholder Approval further resolves:

[t]hat the appropriate officers of the Company are hereby authorized 

and empowered to execute and deliver an indemnification agreement, 

in substantially the Form of Indemnification Agreement, to each 

individual designated for election to the Board, and with any other 

current or future directors, and with any senior officers of the Company

. . . and delivery of such documents by such officer [is] conclusive 

evidence of the officer’s authorization hereunder and the approval by 

the Board thereof.14

12 Stockholder Approval, at 3. Stimwave argues that the inclusion of the language “at the Board’s 

discretion” in the preamble negates the authorization found in the Board Consent for Laura 

Perryman to enter into indemnification agreements on behalf of the Company. Resp’t’s Answering 

Br. in Opp’n to Pet’rs’ Mot. for J. on the Pleadings, D.I. 17 (“Respondent’s Answering Br.”), at 

8–9. This does not negate the fact that the stockholders approved the form of indemnification 

agreement. Again, these differences of interpretation await resolution of the validity of the 

Perrymans’ Indemnification Agreements.

13 Stockholder Approval, at 3.

14 Id.
6

The Form of Indemnification Agreement grants broad and unambiguous 

advancement rights.15 In addition, all relevant actions are brought against Laura and 

Gary Perryman as a result of their status as officers or directors of Stimwave.16

The Petitioners have submitted what on their face appear to be the relevant 

indemnification agreements (the “Indemnification Agreements”) that they were 

empowered to enter, as described above. Laura Perryman has executed an 

undertaking to repay, which would require her to repay the Respondent if her 

agreement is void, among other reasons.17 It is unclear from the record whether Gary 

Perryman has also submitted the required undertaking; this decision presumes he has 

done so, but his rights to advancement will not have ripened unless or until he has 

done so. The sole remaining issues are whether there are defects in the

Indemnification Agreements, rendering them void or unenforceable. The form of 

agreement approved by the directors and stockholders of Stimwave, as illustrated in 

15 See Pet’rs’ Opening Br. in Support of Mot. for J. on the Pleadings, D.I. 14 (“Petitioners’ Opening 

Br.), Ex. 3, § 5 (Laura Perryman’s Indemnification Agreement, based on the Form Indemnification 

Agreement, providing broad advancement rights). The Petitioners did not provide a copy of the 

Form Indemnification Agreement, but represented that “[a]n indemnification agreement in the 

form approved by the Board of Directors in the Board Consent and approved by the Stimwave 

stockholders in the Stockholder Consent was executed by Stimwave and Ms. Perryman.” 

Petitioners’ Opening Br., at 5.

16 See Petitioner’s Opening Br., at 7–10.

17 Petitioners’ Opening Br., Ex. 6 (Laura Perryman’s written request for advancement and 

undertaking to repay dated December 18, 2019).
7

the Perrymans’ Indemnification Agreements, provides for advancement of funds 

pending a determination of indemnification rights, where challenged:

Notwithstanding any other provision of this Agreement, the Company 

shall advance all Expenses incurred by or on behalf of Indemnitee in 

connection with any Proceeding by reason of Indemnitee’s Corporate 

Status within thirty (30) days after the receipt by the Company of a 

statement or statements from Indemnitee requesting such advance or 

advances from time to time, whether prior to or after final disposition 

of such Proceeding. Such statement . . . shall include or be preceded or 

accompanied by a written undertaking by or on behalf of Indemnitee to 

repay any Expenses advanced if it shall ultimately be determined that 

Indemnitee is not entitled to be indemnified against such Expenses. . . . 

For the avoidance of doubt, the Company shall advance Indemnitee all 

Expenses incurred by Indemnitee while the Company and Indemnitee 

are going through the process of determining Indemnitee’s entitlement 

to Indemnification (that is, the Company shall advance Expenses unless 

and until there is a final determination that Indemnitee is not entitled to 

indemnification).18

In light of the facts of record I ordered interim advancement pending 

resolution of this action. My reasoning in ordering preliminary injunctive relief is 

bolstered by the summary nature of, and the public policy undergirding,

advancement actions. This Court has long recognized that a delay in recognizing 

advancement rights may ultimately render those rights illusory. Such a delay would 

18 Petitioners’ Opening Br., Ex. 3, § 5 (Laura Perryman’s indemnification agreement); Petitioners’ 

Opening Br., Ex. 4, § 5 (Gary Perryman’s indemnification agreement); see also § 7(e) of the 

indemnification agreements (“The Company shall indemnify Indemnitee against any and all 

Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company 

of a written request therefore) advance, to the extent not prohibited by law, such expenses to 

Indemnitee, which are incurred by Indemnitee in connection with any action brought by 

Indemnitee for indemnification or advance of Expenses from the Company under this Agreement. 

. .”).
8

undermine the summary nature of the proceeding. Here, litigating a defense 

attacking the validity of a contract for advancement before providing advancement 

might leave the Petitioners unable to effectively vindicate their contractual 

advancement rights, assuming they exist, as well as to defend the underlying

substantive action and investigation, threatening imminent irreparable harm. 

Completing the injunctive relief analysis requires a balance of the equities. In that 

regard, I note that the Petitioners’ undertakings to repay give the Respondent a legal 

right to recovery, if the Indemnification Agreements prove unenforceable. The 

equities thus favor the Petitioners with respect to advanceable fees, going forward. 

With respect to fees incurred before the date of this Letter Opinion, given the unusual 

procedural posture of this matter, the nature of the Respondent’s defense that the 

Indemnification Agreements are void, and the fact that the forgoing defense will be 

addressed promptly, the interim relief ordered will not include previously-incurred 

fees otherwise subject to advancement, without prejudice to the Petitioners’ right to 

seek advancement of those amounts once the validity of the Indemnification 

Agreements is resolved.

Accordingly, I do not find an error of fact or law in my bench ruling providing 

for advancement pursuant to an undertaking to repay during the pendency of this

summary action. The Motion for Reargument is denied.
9

The parties should promptly provide a form of order consistent with my bench 

decision as clarified by this Letter Opinion. To the extent the foregoing requires an 

order to take effect, it is SO ORDERED.

Sincerely,

/s/ Sam Glasscock III

Sam Glasscock III