COURT OF CHANCERY OF THE STATE OF DELAWARE

J OSEPH R. S LIGHTS III V ICE C HANCELLOR 417 S. State Street Dover, Delaware 19901 Telephone: (302) 739

- 4397 Facsimile: (302) 739

- 6179

April 5 , 2016

Kevin M. Coen, Esquire Richard P. Rollo, Esquire Morris, Nichols, Arsht & Tunnell LLP Richards, Layton & Finger, P.A. 1201 North Market Street 920 North King Street Wilmington, DE 19801 Wilmington, DE 19801
Re: Wong v. USES Holding Corp. C.A. No. 11475

- VCS Date Submitted: March 11 , 2016
Dear Counsel:
Pursuant to Court of Chancery Rul e 59(f) , Plaintiffs Felix Wong and Gregory Johnson (“Plaintiffs”) ha ve moved for reargument of this Court ’ s February 26, 2016 letter opinion in which th e Court held that: (1) Plaintiffs were
entitled to recover “fees on fees” incurred on or after November 25, 2015, the date on which they submitted their undertakings to Defendant USES Holding Corp. (“USES”); and (2) the USES Bylaws did not require Plaintiffs to share in fees and costs billed by the Special Master in the administration of this advancementWong v. USES Holding Corp.

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lit igation. Plaintiffs seek reargument only with respect to the Court’s determination that they are not entitled to “fees on fees” incurred prior to the date on which they submitted their undertakings to USES. Fo r the reasons that follow,
the M otion is deni ed. The Court will deny a motion for reargument “unless the Court has overlooked a decision or principle of law that would have a controlling effect or the Court has misapprehended the law or the facts so that the outcome of the
decision would be affected .” 1 Where the motion mere ly rehash es arguments already made by the parties and considered by the Court when reaching the decision from which reargument is sought, the motion must be denied. 2

In seeking reargument, Plaintiffs a ssert that (1) the Court improperly
determined that 8 Del. C. § 145(e) and the USES Bylaws required Plaintiffs to submit an undertaking as a precondition to seeking a “fees on fees” recovery; (2) the Court incorrectly cited Un derbrink v. Warrior Energy Services Corp. , 2008

1 Stein v. Orloff

, 1985 WL 21136, at *2 (Del. Ch. Sept. 2 6 , 1985)

. 2 Se e Lewis v. Aronson , 1985 WL 21141, at *2 (Del. Ch. June 7, 1985)

.Wong v. USES Holding Corp.

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WL 2262316 (Del. Ch. May 30, 2008) for the proposition that a plaintiff must first submit an undertaking to perfect his right to recover fees incurred while prosecuting a claim for advancement wrongfully withheld by the corporation; 3 and (3) the Cou rt failed to consider that USES did not timely raise Plaintiffs’ delayed submission of their undertakings as a basis to oppose their request for “fees on
fees.” The record reflects that the parties addressed in their partial summary judgment briefing the extent to which Plaintiffs could recover “fees on fees” incurred prior to the submission of their undertakings to USES on November 25, 2015. Indeed, Plaintiffs expressly argued that the submission of undertakings to USES should have no bearing on the Cou rt’s analysis of their right to “fees on fees” under Section 145(e) of the DGCL or USES’s Bylaws. 4 Then, at oral argument, the Court expressed its concern that “all the boxes haven’t been

3 According to Plaintiffs, at best for USES, Underbrink would support the notion that it could refuse to make a payment of advanced fees until it received the undertakings from Plaintiffs. It could not, however, rely upon Underbrink to deny Plaintiffs their right to advancement altogether simply because the undertakings had not yet been sub mitted. Pls.’ Mot. for Rearg. a t 5

- 6. 4 Def.’s Br. i n Opp ’n to Pls.’ Mot. f or Partial Summ. J. at 19; Pls.’ Reply Br. in Supp. o f Thei r Mot. for Partial Summ. J. at 2

- 3.Wong v. USES Holding Corp.

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checked” to support Plaintiffs’ claim that USES had wrongfully refu sed to honor Plaintiffs’ advancement demand prior to November 25, 2015. 5 Plaintiffs attempted to address that concern with the same argument Plaintiffs now advance on reargument: that Plaintiffs are entitled to recover all “fees on fees” incurred from
the outset of their assertion of advancement rights because USES has consistently maintained that Plaintiffs had no right to advancement at all, regardless of whether Plaintiffs had submitted their undertakings vel non

. 6 The Court ultimately rejected
that ar gument. 7 Plaintiffs ’ effort to “rehash” the point on reargument cannot be
countenanced. 8 Even if I concluded that Plaintiffs were not restating arguments, I would be
hard

- pressed to find fault with the Court’s treatment of Plaintiffs’ “fees on fees”

c laim. Until Plaintiffs submitted their undertakings, USES would have been within its rights under Section 9.1(b) of its Bylaws and Section 145(e) of the DGCL to reject Plaintiffs’ claims for advancement on that ground alone. Fees incurred by

5 Tr. of Oral Arg. Pls.’ Mot. for Partial Summ. J. (“Oral Arg. Tr. ”) 19. 6 Pls.’ Mot. for Rearg. at 7. 7 Wong v. USES Hldg. Corp. , 2016 WL 769043, at *3 (Del. Ch. Feb. 26, 2016)

. 8 Lewis , 1985 WL 21141, at *2.Wong v. USES Holding Corp.

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Plaintiffs t o prosecute a claim that USES would have been justified in rejecting are
not recoverable as “fees on fees.” 9 Because I find no fault with the Court’s disposition of the “fees on fees” claim, I cannot accept Plaintiffs’ argument that the Court improperly interpreted
Underbrink

. Indeed, Underbrink fully supports the Court’s conclusion that USES had no obligation to advance funds, and could properly withhold advancement, until such time as the Plaintiffs delivered their mandated undertakings to the
corporat ion. 10 While it is true, as Plaintiffs observe, that the Court in Underbrink appears to have awarded “fees on fees” incurred prior to the delivery of the undertaking (as evidenced by the award of prejudgment interest on t hose fees), nothing in Underbrink suggests that the Court was asked to consider whether the

9 Mooney v. Echo Therapeutics, Inc. , 2015 WL 3413272, at *12 (Del. Ch. May 28, 2015) (holding that the c ourt will award “fees on fees when a plaintiff successfully shows an entitlement to advancement wrongfully withheld by the defendant corporation ”). 10 Underbrink , 2008 WL 2262316, at *13 (“Where a bylaw clearly creates a right to mandatory advancement, the right is enforceable upon satisfaction of the prerequisites, including the appropriate form of undertaking as specified in the bylaws.”).Wong v. USES Holding Corp.

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defendant was, under the B ylaws or as a matter of law, obliged to pay such fees. The issue simply was not addressed. Finally, Plaintiffs’ position that USES somehow waived its argument regarding the effect of Plaintiffs’ belated delivery of their undertakings on their claim for “fees on fees” does not comport with the record. USES advised Plaintiffs
that th ey were required to “deliver . . . necessary undertakings” in connection with
their demand for advancement at least as early as October 2, 2015, some seven weeks prior to the November 25 submission date. 11 Based on the foregoing, Plaintiffs’ Motion for Reargument must be denied.
IT IS SO ORDERED. Very truly yours, /s/ Joseph R. Slig hts III JRSIII/cap cc: Register in Chancery

- K

11 See Oral Arg. Tr. 26; Def.’s Br. in Opp’n to Pls.’ Mot. for Partial Summ. J. at 5.