case 4:17-cv-03400-cw document 115-3 filed 05/09/18 page 2 ... · arindam banerjee and jogesh...

STIPULATION OF SETTLEMENT

CASE NO. 4:17-cv-3400-CW

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John T. Jasnoch (CA 281605) SCOTT+SCOTT ATTORNEYS AT LAW LLP 600 W. Broadway, Suite 3300 San Diego, CA 92101 Telephone: (619) 233-4565 Facsimile: (619) 233-0508 Email: [email protected] Attorneys for Lead Plaintiffs Banerjee & Harjai [Additional counsel on signature page.]

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

OAKLAND DIVISION

ARINDAM BANERJEE and JOGESH HARJAI, Individually and on Behalf of All Others Similarly Situated,

Plaintiffs, v.

AVINGER, INC., JEFFREY M. SOINSKI, MATTHEW B. FERGUSON, DONALD A. LUCAS, JOHN B. SIMPSON, JAMES B. McELWEE, JAMES G. CULLEN, THOMAS J. FOGARTY, CANACCORD GENUITY, INC., COWEN AND COMPANY, LLC, OPPENHEIMER & CO., BTIG LLC, and STEPHENS, INC.,

Defendants.

Case No. 17-cv-3400-CW

STIPULATION OF SETTLEMENT

EXECUTION COPYCase 4:17-cv-03400-CW Document 115-3 Filed 05/09/18 Page 2 of 38

2 STIPULATION OF SETTLEMENT


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This Stipulation of Settlement, dated May ___, 2018 (the “Stipulation”), is made and

entered into by and among: (i) Arindam Banerjee, Jogesh Harjai, Lindsay Grotewiel, and Todd

Vogel (“Federal Plaintiffs”), on behalf of themselves and each of the Class Members (as defined

herein), by and through their counsel of record in the above captioned Action (the “Federal

Action”); (ii) Billy Gonzalez (“State Plaintiff”), by and through his counsel of record in the State

Action (as defined herein); and (iii) the Defendants, consisting of: (a) Avinger, Inc. (“Avinger”

or the “Company”); (b) Avinger’s Chief Executive Officer Jeffrey M. Soinski, its Chief

Financial Officer Matthew B. Ferguson, and its former Chief Science Officer John B. Simpson

(collectively, the “Officer Defendants”); (c) current or former Avinger directors Donald A.

Lucas, James B. McElwee, James G. Cullen, and Thomas J. Fogarty (collectively, the “Director

Defendants”); and (d) Canaccord Genuity, Inc., Cowen & Company, LLC, Oppenheimer & Co.,

BTIG LLC, and Stephens Inc. (collectively, the “Underwriter Defendants”), by and through their

respective counsel of record in the Actions. The Stipulation is intended to fully, finally, and

forever resolve, discharge, and settle the Released Claims (as defined herein) as against all

Releasing Defendants (as defined herein), subject to the approval of the Court and the terms and

conditions set forth in this Stipulation.

WHEREAS, the Federal Action is a consolidated securities class action pending in the

United States District Court for the Northern District of California) (the “Federal Court”) against

all Defendants brought by Federal Plaintiffs individually and on behalf of those who purchased

or acquired Avinger common stock pursuant or traceable to Avinger’s initial public offering (the

“IPO”) on January 29, 2015 (for claims under the Securities Act of 1933 (the “1933 Act”), and

against Avinger and the Officer Defendants by Federal Plaintiffs individually and on behalf of all

persons or entities who purchased or otherwise acquired Avinger common stock from January

29, 2015 through April 10, 2017, inclusive (for claims under the Securities Exchange Act of

1934 (the “Exchange Act”)).

WHEREAS, the Federal Action was originally filed in the Superior Court for the State of

California, San Mateo County (the “State Court”) on May 22, 2017, under the caption Grotewiel

Case 4:17-cv-03400-CW Document 115-3 Filed 05/09/18 Page 3 of 38



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v. Avinger, Inc., et al, 17-CIV-02240 (Cal. Super., San Mateo Cty), but was thereafter removed

by Defendants to the Federal Court (together with two other similar actions against the same

Defendants, captioned Gonzalez v. Avinger, Inc., et al, 17-CIV-2284 and Olberding v. Avinger,

Inc., et al, 17-CIV-2307, that had also originally been filed in the State Court);

WHEREAS, the plaintiffs in the Gonzalez and Olberding actions thereafter filed motions

in the Federal Court to remand those actions back to the State Court, which the Federal Court

granted on July 21, 2017;

WHEREAS, plaintiff Kyle Olberding withdrew as a plaintiff in the State Court, and in

September 2017 the remaining plaintiff in the State Court, Billy Gonzalez (“State Plaintiff”),

filed an amended consolidated complaint asserting claims under Sections 11 and 15 of the 1933

Act against all Defendants in the surviving State Court action, Gonzalez v. Avinger, Inc., et al,

17-CIV-02284 (the “State Action”);

WHEREAS, in contrast to the plaintiffs in the Gonzalez and Olberding actions, the

plaintiff in the Grotewiel action (which had also been removed) did not seek remand to the State

Court, and thus proceedings in Grotewiel action (the “Federal Action”) continued in Federal

Court;

WHEREAS, on September 5, 2017, plaintiffs Arindam Banerjee and Jogesh Harjai filed

a motion in the Federal Court to be appointed “lead plaintiffs” in the Federal Action;

WHEREAS, by Order dated October 11, 2017, the Federal Court appointed plaintiffs

Arindam Banerjee and Jogesh Harjai (“Federal Lead Plaintiffs” or “Lead Plaintiffs”) as lead

plaintiffs in the Federal Action, and appointed Scott+Scott Attorneys at Law LLP as lead counsel

(“Lead Counsel” or “Federal Lead Counsel”) in the Federal Action;

WHEREAS, after October 11, 2017, the Federal Action thereafter proceeded in the

Federal Court under the revised caption Banerjee, et al. v. Avinger, Inc., et al, No. 17-cv-03400-

CW;

WHEREAS, on October 17, 2017, at the Initial Case Management Conference and in a

pre-trial order issued that same day, the Federal Court: (a) directed the parties in the Federal




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Action to continue to explore alternative dispute resolution by participating in either the Court’s

ADR Program or in a private mediation, and set an ADR conference date; (b) set a schedule for

filing amended claims and for briefing on any motions to dismiss; and (c) directed counsel for

the Federal Lead Plaintiffs “to contact [plaintiff Lindsay] Grotewiel[’s] attorneys to discuss

prosecution of this case” and to “[explore] coordination of the state and federal court actions.”

WHEREAS, consistent with the Federal Court’s October 17, 2017 Order, on October 31,

2017 the parties in the State Action filed a stipulation in the State Court stating that the State

Plaintiff’s counsel had agreed to work cooperatively with Federal Lead Counsel in the Federal

Action to prosecute claims against the Defendants;

WHEREAS, on November 21, 2017, and consistent with the Court’s October 17, 2017

Order, Federal Lead Plaintiffs and their counsel (together with Lindsay Grotewiel and Todd

Vogel as additional plaintiffs, and Grotewiel’s, Vogel’s and State Plaintiff’s counsel as

additional counsel), filed the Consolidated Class Action Complaint for Violations of the

Securities Laws (the “Consolidated Complaint”) in the Federal Action;

WHEREAS the Consolidated Complaint alleged that the offering documents for the IPO

contained material misstatements or omissions concerning Avinger’s business and its Pantheris

atherectomy product and further alleged, on behalf of investors who purchased Avinger common

stock pursuant or traceable to Avinger’s IPO, that as a result all Defendants had violated Section

11 of the 1933 Act and the Officer Defendants had violated Section 15 of the 1933 Act;

WHEREAS, following multiple telephone conferences with Ms. Tamara Lang of the

Federal Court’s ADR Program – and consistent with the Court’s October 17, 2017 Order – the

parties in both the Federal and the State Action agreed, with Ms. Lang’s assistance, to pursue

private mediation as an alternative dispute resolution mechanism;

WHEREAS, the parties thereafter agreed to a mediation under the auspices of a highly

experienced mediator of complex litigation and securities class actions, Robert M. Meyer, Esq.,

of JAMS (the “Mediator”);




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WHEREAS, on January 26, 2018, the Avinger Defendants (consisting of Avinger, the

Officer Directors and the Director Defendants) and the Underwriter Defendants filed motions to

dismiss the Consolidated Complaint;

WHEREAS, in the meantime, counsel for all Plaintiffs and for the Avinger Defendants

also simultaneously proceeded with the preparation and submission of opening mediation briefs,

accompanying exhibits, and reply mediation briefs, and thereafter participated in a full day,

arms-length private mediation session at JAMS’s offices in Los Angeles on February 8, 2018

under the auspices of the Mediator;

WHEREAS, the parties were unable to reach an agreement at the February 8, 2018

mediation session, but at the end of the mediation the Mediator made a mediator’s proposal to

settle all securities claims that were or could have been asserted in the Actions for $5 million in

cash;

WHEREAS, Federal Lead Plaintiffs subsequently filed an Amended Consolidated Class

Action Complaint for Violations of the Federal Securities Laws (the “Complaint”) on March 19,

2018 (the “Complaint”) that re-asserted the 1933 Act claims referenced above and added claims

that Avinger and the Officer Defendants defrauded investors who purchased Avinger common

stock from January 29, 2015 through April 10, 2017 inclusive (the “Class Period”) in violation of

Section 10(b) of the Exchange Act (and SEC Rule 10b-5 promulgated thereunder) by knowingly

or recklessly making materially false or misleading statements concerning Avinger’s business

and its Pantheris product that, in turn, caused the price of Avinger common stock to be

artificially inflated during the Class Period;

WHEREAS, after further post-mediation negotiations among the parties that continued to

be conducted largely through the Mediator, all parties were ultimately able to reach an agreement

(subject to approval by the Federal Court) to resolve both the Federal and State Actions

consistent with the Mediator’s earlier proposal to settle all claims for $5 million, and the parties

notified the Federal Court that they had reached a proposed settlement on March 23, 2018;




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WHEREAS, after taking into account the uncertainties and risks of further litigation,

especially in complex actions such as the Federal and State Actions, as well as the difficulties

and delays inherent in such litigation, Federal Plaintiffs and their counsel, joined by counsel for

the State Plaintiff in the State Action, believe that the settlement set forth herein is fair,

reasonable, and in the best interests of the Class Members (as defined herein);

WHEREAS, Defendants have denied and continue to deny each and all of the claims

alleged by the plaintiffs in the Actions, including all charges of wrongdoing or liability against

them arising out of any of the conduct, statements, acts or omissions alleged, or that could have

been alleged, in the Actions, but have nonetheless concluded that further litigation of the Actions

could be protracted and expensive, and, after also taking into account the uncertainties and risks

of further litigation, have therefore determined to fully and finally resolve both Actions in the

manner and upon the terms and conditions set forth herein;

NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among the

Federal Plaintiffs, the State Plaintiff and the Defendants, by and through their respective counsel

or attorneys of record, that the Actions (subject to the approval of the Federal Court) shall be

dismissed with prejudice as to all Defendants upon and subject to the terms and conditions of this

Stipulation, as set forth below:

I. DEFINITIONS

1. As used in this Stipulation, the following terms have the meanings specified

below. In the event of any inconsistency between any definitions set forth below and any

definitions set forth in any document attached as an exhibit to this Stipulation, the definition set

forth below shall control.

1.1 “Actions” means, collectively, the Federal Action and the State Action.

1.2 “Authorized Claimant” means any Class Member who, in accordance with

the terms of this Stipulation, is entitled to a distribution from the Settlement Fund pursuant to

any Plan of Allocation or any order of the Court.

1.3 “Avinger” (or “the Company”) means Avinger, Inc.




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1.4 “Claims Administrator” means KCC Class Action Services, or such other

claims administration firm as may be approved by Federal Lead Counsel and the Federal Court,

which shall administer the Settlement.

1.5 “Class” means all Persons who purchased or otherwise acquired the

common stock of Avinger during the period from January 29, 2015 through April 10, 2017,

inclusive, and were damaged thereby. Excluded from the Class are Defendants; their respective

parents, successors or assigns; the members of the immediate families of the Individual

Defendants; the past and current executive officers and directors of Avinger and the Underwriter

Defendants; the legal representatives, heirs, successors, or assigns of any excluded Person; and

any entity in which any of the above excluded Persons have or had a majority ownership interest.

Also excluded will be any Person that validly requests exclusion from the Class in accordance

with the procedures to be established or approved by the Court in connection with the approval

of this Stipulation and the Settlement.

1.6 “Class Member” means a Person who falls within the definition of the

Class as set forth above.

1.7 “Court” (or “Federal Court”) means the United States District Court for

the Northern District of California.

1.8 “Defendants” means and includes (a) Avinger; (b) Avinger’s Chief

Executive Officer Jeffrey M. Soinski, its Chief Financial Officer Matthew B. Ferguson and its

former Chief Science Officer John B. Simpson (collectively, the “Officer Defendants”); (c)

current or former Avinger directors Donald A. Lucas, James B. McElwee, James G. Cullen, and

Thomas J. Fogarty (collectively, the “Director Defendants”); and (d) Canaccord Genuity, Inc,

Cowen & Company, LLC, Oppenheimer & Co., BTIG LLC, and Stephens Inc. (collectively, the

“Underwriter Defendants”).

1.9 The “Effective Date” means the date by which all of the events and

conditions specified in ¶46 below have been met and have occurred.




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1.10 “Escrow Account” means the segregated and separate escrow account to

be established with the Escrow Agent, into which the Settlement Amount will be deposited for

the benefit of Class Members.

1.11 “Escrow Agent” means Huntington National Bank or its successor.

1.12 “Federal Action” means the action captioned Banerjee, et. al, v. Avinger,

Inc., et al, Case No. 17-cv-03400-CW (N.D. Cal.).

1.13 “Federal Counsel” means the law firms of Scott + Scott Attorneys at Law

LLP, Glancy Prongay & Murray LLP, and Bottini & Bottini, Inc.

1.14 “Federal Plaintiffs” means Arindam Banerjee, Jogesh Harjai, Lindsay

Grotewiel and Todd Vogel.

1.15 “Fee and Expense Application” and “Fee and Expense Award” have the

meanings given to those terms below in ¶39 and ¶28(c), respectively.

1.16 “Final” means, with respect to any order or judgment of a court, including

without limitation the Court’s Judgment and order of dismissal, that such judgment or order

represents a final and binding determination of all issues within its scope and is not subject to

further review on appeal or otherwise. Without limitation, an order becomes “Final” when the

last of the following has occurred: (a) the expiration of the time to file a motion to reconsider,

alter, or amend the judgment or order without any such motion having been filed; (b) the time in

which to appeal the judgment or order has passed without any appeal having been taken; and

(c) if a motion to reconsider, alter, or amend is filed or if an appeal is taken, immediately after

the determination of that motion or appeal so that it is no longer subject to any further judicial

review or appeal whatsoever, whether by reason of affirmance by a court of last resort, lapse of

time, voluntary dismissal of an appeal or otherwise in such a manner as to permit the

consummation of the settlement substantially in accordance with the terms and conditions of this

Stipulation. For purposes of this paragraph, an “appeal” shall include any petition for a writ of

certiorari or other writ that may be filed in connection with approval or disapproval of this

settlement, but shall not include any appeal which concerns only the issue of attorneys’ fees and




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expenses, the Plan of Allocation of the Net Settlement Fund (as those terms are defined below),

or the procedures for determining or approving Authorized Claimants’ recognized claims. Any

proceeding or order, or any appeal or petition for a writ of certiorari pertaining solely to any plan

of allocation, Fee and Expense Application or application for an award to any Plaintiff for that

Plaintiff’s time and expenses incurred in connection with their representation of the Class, shall

not in any way delay or preclude the Judgment from becoming Final.

1.17 “Judgment” means the Judgment to be rendered by the Court, substantially

in the form attached hereto as Exhibit B.

1.18 “Lead Counsel” or “Federal Lead Counsel” means Scott + Scott Attorneys

at Law LLP.

1.19 “Net Settlement Fund” means the Settlement Fund less any attorneys’ fees

and expenses (and less any award to any plaintiff for their time and expenses incurred in

connection with their representation of the Class) provided for herein or approved by the Court,

and less Notice and Administration Expenses, Taxes and Tax Expenses, and any other Court-

approved deductions.

1.20 “Notice” means the Notice of Proposed Settlement of Class Action, which,

subject to approval of the Court, shall be substantially in the form attached hereto as Exhibit A-1.

1.21 “Notice and Administration Expenses” means the reasonable costs and

expenses incurred in connection with locating Class Members, providing notice to Class

Members, soliciting the submission of proofs of claims, assisting with the submission of proofs

of claims, processing Proof of Claim and Release forms, administering and distributing the Net

Settlement Fund to Authorized Claimants, and paying escrow fees and costs, if any.

1.22 “Person” means an individual, corporation, limited liability corporation,

professional corporation, partnership, limited partnership, limited liability partnership,

association, joint stock company, joint venture, estate, legal representative, trust, unincorporated

association, government or any political subdivision or agency thereof, and any business or legal

entity, and including any of their heirs, successors, representatives, or assigns.




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1.23 “Plaintiffs” refers collectively to Federal Plaintiffs and the State Plaintiff.

1.24 “Plaintiffs’ Counsel” refers collectively to Federal Counsel and State

Counsel.

1.25 “Plan of Allocation” means a plan or formula of allocation of the Net

Settlement Fund pursuant to which the Net Settlement Fund shall be distributed to Authorized

Claimants. Any Plan of Allocation is not part of the Stipulation, and neither Defendants nor their

Related Parties shall have any responsibility or liability with respect thereto. Any order or

proceeding relating to the Plan of Allocation shall not operate to terminate or cancel this

Stipulation or affect the finality of the Judgment.

1.26 “Preliminary Approval Order” means the Order Preliminarily Approving

Settlement and Providing for Notice as approved by the Court, substantially in the form attached

hereto as Exhibit A.

1.27 “Proof of Claim and Release” (or “Proof of Claim and Release form” or

“Claim Form”) means a proof of claim and release which, subject to approval of the Court, shall

be substantially in the form attached hereto as Exhibit A-2.

1.28 “Related Parties” means, as applicable, each of a Person’s respective past

or present parents, subsidiaries, divisions, general partners, limited partners, principals,

controlling shareholders, joint ventures, members, officers, directors, managers, managing

directors, employees, contractors, consultants, auditors, accountants, auditors, financial advisors,

professional advisors, investment bankers, legal representatives, insurers, trustees, trustors,

agents, attorneys, professionals, representatives, predecessors, successors, assigns, heirs,

executors, and administrators, in their capacities as such, and any entity in which any such

Person has a controlling interest.

1.29 “Released Defendants’ Claims” means all claims (including, but not

limited to “Unknown Claims” as defined in ¶1.43 herein), demands, losses, rights, and causes of

action of any nature whatsoever by the Released Defendants’ Parties or any of them against

Plaintiffs, members of the Class, or Plaintiffs’ Lead Counsel, State Counsel or other or additional




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Plaintiffs’ Counsel, which arise out of or relate in any way to the institution, prosecution,

assertion, settlement, or resolution of either of the Actions (except for claims to enforce the

settlement).

1.30 “Released Defendants’ Parties” means (i) each Defendant, (ii) each of

their respective immediate family members (for individuals) and each of their direct or indirect

parent entities, subsidiaries, related entities and affiliates, any trust of which any individual

defendant is the settler or which is for the benefit of any Defendant and/or member(s) of his or

his family, and (iii) for any of the persons or entities listed in parts (i) or (ii), their respective past

and present general partners, limited partners, principals, shareholders, joint ventures, members,

officers, directors, managers, managing directors, supervisors, employees, contractors,

consultants, auditors, accountants, financial advisors, professional advisors, investment bankers,

representatives, insurers, trustees, trustors, agents, attorneys, professionals, predecessors,

successors, assigns, heirs, executors, administrators, and any controlling person thereof, in their

capacities as such, and any entity in which a Defendant has a controlling interest.

1.31 “Released Claims” means all claims (including but not limited to

Unknown Claims as defined in ¶1.43 herein), demands, losses, rights and causes of action of any

nature whatsoever, that have been or could have asserted in either of the Actions or could in

future be asserted in any forum, whether foreign or domestic, whether arising under federal,

state, common, or foreign law, by Federal Plaintiffs, State Plaintiff, or any other Class Member,

or their successors, assigns, executors, administrators, representatives, attorneys and agents, in

their capacities as such, whether brought directly or indirectly against any of the Released

Defendants’ Parties, that (a) arise out of, are based upon, or relate in any way to any of the

allegations, acts, transactions, facts, events, matters, occurrences, statements, representations or

omissions involved, set forth, alleged or referred to, in either of the Actions, or which could have

been alleged in the Actions; and (b) arise out of, are based upon, or relate to the purchase or

acquisition of any shares of Avinger common stock during the Class Period. Notwithstanding

the foregoing, “Released Claims” does not, however, include claims to enforce the settlement.




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1.32 “Released Plaintiffs’ Parties” means (i) Federal Plaintiffs, State Plaintiff

and the members of the Class, and (ii) each of their respective family members, and their

respective general partners, limited partners, principals, shareholders, joint ventures, members,

officers, directors, managers, managing directors, supervisors, employees, contractors,

consultants, auditors, accountants, financial advisors, professional advisors, investment bankers,



capacities as such.

1.33 “Settlement Amount” means Five Million Dollars ($5,000,000.00) in cash

to be paid to the Escrow Agent by wire transfer as provided in ¶2 of this Stipulation.

1.34 “Settlement Fund” means the Settlement Amount plus all interest thereon

and accretions thereto, and which may be reduced by payments or deductions as provided herein

or by Court order.

1.35 “Settlement Hearing” means the hearing to be held by the Court to

determine whether the proposed settlement is fair, reasonable, and adequate and should be

approved.

1.36 “Settling Parties” means, collectively, Federal Plaintiffs, State Plaintiff,

and all Defendants.

1.37 “State Counsel” means the law firm of Glancy Prongay & Murray LLP.

1.38 “State Court” means the Superior Court of the State of California, County

of San Mateo.

1.39 “State Plaintiff” means Billy Gonzalez, the named plaintiff in the State

Action.

1.40 “State Action” means the action captioned Gonzalez v. Avinger, Inc., et

al., No. 17-CIV-02284 (Cal. Super., San Mateo Cty), pending in the State Court.




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1.41 “Summary Notice” means the Summary Notice, to be published and

disseminated as provided in the Preliminary Approval Order, which, subject to approval of the

Court, shall be substantially in the form attached hereto as Exhibit A-3.

1.42 “Tax” or “Taxes” mean any and all taxes, fees, levies, duties, tariffs,

imposts, and other charges of any kind (together with any and all interest, penalties, additions to

tax and additional amounts imposed with respect thereto) imposed by any governmental

authority, including those referenced in ¶14(c) below.

1.43 “Unknown Claims” means any and all Released Claims of every nature

and description against the Released Defendants’ Parties which any Plaintiff or any member of

the Class or their Related Parties does not know or suspect to exist in his, her or its favor at the

time of their release of the Released Claims, and any and all Released Defendants’ Claims of

every nature and description against the Released Plaintiffs’ Parties which any Defendant or any

of their Related Parties does not know or suspect to exist in his, her or its favor at the time of

their release of the Released Defendants’ Claims, and including without limitation those which,

if known by such Plaintiff, member of the Class or Related Party, might have affected his, her or

its decision(s) with respect to the settlement or the releases. With respect to any and all Released

Claims and Released Defendants’ Claims, the Parties hereto stipulate and agree that, upon the

Effective Date (as defined herein), each Plaintiff and each Defendant shall expressly waive, and

each of the members of the Class shall be deemed to have waived, and by operation of the

judgment shall have waived, any and all provisions, rights, and benefits conferred by any law of

any state or territory of the United States, or principle of common law, which is similar,

comparable, or equivalent to Cal. Civ. Code §1542, which provides:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

Settling Parties and Class Members, or their Related Parties, may hereafter discover facts in

addition to, or different from, those which he, she, or it now knows or believes to be true with

respect to the subject matter of the Released Claims or the Released Defendants’ Claims, but




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Settling Parties shall expressly settle and release, and each Class Member, upon the Effective

Date, shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and

forever settled and released any and all Released Claims and Released Defendants Claims,

known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not

concealed or hidden, which now exist, or heretofore have existed, upon any theory of law or

equity now existing or coming into existence in the future, including, but not limited to, conduct

which is negligent, reckless, intentional, with or without malice, or a breach of any duty, law,

rule, or regulation, without regard to the subsequent discovery or existence of such different or

additional facts. Settling Parties acknowledge, and Class Members shall be deemed by operation

of the Judgment to have acknowledged, that the foregoing waiver was separately bargained for

and a key element of the Settlement of which this release is a part.

II. THE SETTLEMENT AMOUNT

2. Of the $5,000,000 Settlement Amount, Avinger and its undersigned counsel,

Wilson Sonsini Goodrich & Rosati (a professional corporation) (“WSGR”) represent and warrant

that: (a) as of March 21, 2018, Avinger has already paid $1,760,000, for the benefit of the Class,

into a trust account (the “WSGR IOLA”) maintained by WSGR; and that (b) said $1,760,000

remains on deposit in the WSGR IOLA as of the execution of this Stipulation, and will remain

on deposit in the WSGR IOLA until such amount is either transferred to the Escrow Agent or

until this Stipulation is terminated or otherwise fails to become Effective in accordance with the

Stipulation’s terms. Within 30 calendar days after the entry of the Preliminary Approval Order,

Avinger will pay, or cause to be paid, the entirety of the Settlement Amount on behalf of

Defendants into the Escrow Account in accordance with the instructions to be provided by the

Escrow Agent, as set forth below:

(a) Avinger (or WSGR, on Avinger’s behalf) shall cause that portion of the

$5,000,000 Settlement Amount that it has already paid into the WSGR IOLA for the benefit of

the Class ($1,760,000), to be transferred from the WSGR IOLA by wire to the Escrow Account




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maintained by the Escrow Agent, in accordance with the wire instructions to be provided by the

Escrow Agent.

(b) Of the $5,000,000 Settlement Amount, Avinger shall pay or cause to be

paid the remaining $3,240,000, for the benefit of the Class, into the Escrow Account within 30

calendar days of the entry of the Preliminary Approval Order, in accordance with the wire or

other payment instructions to be provided by the Escrow Agent.

This settlement is made on a non-recapture basis, i.e., it is not a claims-made settlement. If the

settlement embodied by this Stipulation is finally approved and the Effective Date occurs,

Avinger and/or its insurers shall have no ability to get back any of the settlement monies.

3. Within five 5 days of entry of the Preliminary Approval Order, the Escrow Agent

will furnish to Avinger’s counsel (WSGR) adequate payment instructions consisting of wire

transfer and other payment instructions and a completed IRS Form W-9 for the Settlement Fund,

including an address and tax ID number.

4. If the entire Settlement Amount is not timely paid to the Escrow Agent, Lead

Plaintiffs may terminate the settlement but only if: (a) Federal Lead Counsel has notified

Defendants’ counsel in writing of Federal Lead Counsel’s intention to terminate the settlement;

and (b) the entire Settlement Amount is not transferred to the Escrow Agent within 10 calendar

days after Federal Lead Counsel have provided such written notice. Failure by Federal Counsel

and/or the Escrow Agent to timely furnish adequate payment instructions to Avinger pursuant to

¶2 shall not be a basis for termination under this section, and any delay in providing such

instructions shall extend the period in which the Settlement Amount will be paid under ¶2 by an

equivalent number of days.

5. Upon receipt, the Escrow Agent shall deposit the Settlement Amount plus any

accrued interest thereon into a segregated Escrow Account maintained by the Escrow Agent.

6. Other than the obligation of Avinger to cause the payment of the Settlement

Amount pursuant to ¶2, the Defendants shall have no obligation to make any other payments into

the Escrow Account or to any Class Member or to any Plaintiffs’ Counsel pursuant to this




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Stipulation. The Settlement Amount includes all attorneys’ fees and costs, any court-approved

award to any plaintiff, and all costs associated with providing notice to the Class and

administering the settlement fund and the settlement claims process.

III. THE ESCROW AGENT

7. The Escrow Agent shall invest the Settlement Amount deposited into the Escrow

Account pursuant to ¶2 hereof in United States Agency or Treasury Securities or other

instruments backed by the Full Faith & Credit of the United States Government or an Agency

thereof, or fully insured by the United States Government or an Agency thereof, and shall

reinvest the proceeds of these instruments as they mature in similar instruments at their then-

current market rates. All risks related to the investment of the Settlement Fund in accordance

with the investment guidelines set forth in this paragraph shall be borne by the Settlement Fund,

and the Released Defendants shall have no responsibility for, interest in, or liability whatsoever

with respect to investment decisions or the actions of the Escrow Agent, or any transactions

executed by the Escrow Agent.

8. The Escrow Agent shall permit Lead Counsel or the Claims Administrator to

withdraw from the Escrow Account the reasonable and necessary costs of administration, notice

to Class Members, and relevant Taxes without further order of the Court as set forth in ¶12

below. Other than amounts disbursed for providing notice to the Class, customary

administration costs, Taxes and Tax Expenses, and for paying the Fee and Expense Award

(subject to ¶39), the Settlement Fund shall not be distributed until after the occurrence of the

Effective Date.

9. Subject to further order(s) and/or directions as may be made by the Court, or as

provided in the Stipulation, the Escrow Agent is authorized to execute such transactions as are

consistent with the terms of the Stipulation. The Released Defendants shall have no

responsibility for, interest in, or liability whatsoever with respect to the actions of the Escrow

Agent, or any transaction executed by the Escrow Agent in its capacity as such.




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10. All funds held by the Escrow Agent shall be deemed and considered to be in

custodia legis of the Court, and shall remain subject to the jurisdiction of the Court, until such

time as such funds shall be distributed pursuant to the Stipulation and/or further order(s) of the

Court.

11. Upon the occurrence of the Effective Date, no Defendant, or any other person or

entity who or which paid any portion of the Settlement Amount, shall have any right to the return

of the Settlement Fund or any portion thereof for any reason whatsoever (including, without

limitation, the number of Proof of Claim and Release forms submitted, the collective amount of

recognized claims of Authorized Claimants, the percentage of recovery of losses, or the amounts

to be paid to Authorized Claimants from the Net Settlement Fund), except as set forth in ¶50

below.

IV. PAYMENT FOR AND RESPONSIBILITY FOR NOTICE

12. Prior to the Effective Date, and without further order of the Court, up to $300,000

of the Settlement Fund may be used by Federal Lead Counsel to pay reasonable Notice and

Administration Expenses actually incurred. After the Effective Date, Federal Lead Counsel may

cause the Escrow Agent to pay any further reasonable Notice and Administration Expenses from

the Settlement Fund without further order of the Court.

13. Dissemination of the Notice and Summary Notice to Class Members in

accordance with this Stipulation and as ordered by the Court shall be solely the responsibility of

Plaintiffs’ Counsel and/or the Claims Administrator. Class Members shall have no recourse as to

the Released Defendants with respect to any claims they may have that arise from any failure of

the notice process.

V. TAXES

14. (a) The Settling Parties and the Escrow Agent shall treat the Settlement Fund

as being at all times a “qualified settlement fund” for purposes of §468B of the Internal Revenue

Code of 1986, as amended, and the Treasury Regulations promulgated thereunder. In addition,

the Escrow Agent shall timely make such elections as necessary or advisable to carry out the




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provisions of this paragraph, including, without limitation, the “relation-back election” (as

defined in Treas. Reg. §1.468B-1) back to the earliest permitted date. Such elections shall be

made in compliance with the procedures and requirements contained in such regulations. It shall

be the responsibility of the Escrow Agent to timely and properly prepare and deliver the

necessary documentation for signature by all necessary parties, and thereafter to cause the

appropriate filing to occur.

(b) For the purposes of §468B of the Internal Revenue Code of 1986, as

amended, and the Treasury Regulations promulgated thereunder, the “administrator” shall be the

Escrow Agent as that term is used in Treas. Reg. §1.468B-2. As administrator, the Escrow

Agent shall timely and properly file all informational and other tax returns necessary or advisable

with respect to the Settlement Fund (including, without limitation, the returns described in Treas.

Reg. §1.468B-2(k)). Such returns (as well as the election described in ¶14(a)) shall be consistent

with this paragraph and in all events shall reflect that all Taxes (including any estimated Taxes,

interest or penalties) on the income earned by the Settlement Fund shall be paid out of the

Settlement Fund as provided in ¶14(c) hereof.

(c) All (i) Taxes (including any estimated Taxes, interest or penalties) arising

with respect to the income earned by the Settlement Fund, including without limitation any

Taxes or tax detriments that may be imposed upon the Released Defendants or their counsel with

respect to any income earned by the Settlement Fund for any period during which the Settlement

Fund does not qualify as a “qualified settlement fund” for federal or state income tax purposes,

and (ii) expenses and costs incurred in connection with the operation and implementation of this

¶14 (including, without limitation, expenses of tax attorneys and/or accountants and mailing and

distribution costs and expenses relating to filing (or failing to file) the returns described in this

¶14) (“Tax Expenses”), shall be paid out of the Settlement Fund; in all events the Released

Defendants and their counsel shall have no liability or responsibility for the Taxes or the Tax

Expenses. Further, Taxes and Tax Expenses shall be treated as, and considered to be, a cost of

administration of the Settlement Fund and shall be timely paid by the Escrow Agent out of the




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Settlement Fund without prior order from the Court and the Escrow Agent shall be authorized

(notwithstanding anything herein to the contrary) to withhold from distribution to Authorized

Claimants any funds necessary to pay such amounts, including the establishment of adequate

reserves for any Taxes and Tax Expenses (as well as any amounts that may be required to be

withheld under Treas. Reg. §1.468B-2(l)(2)); and neither the Released Defendants nor their

counsel are responsible nor shall they have any liability for any Taxes or Tax Expenses. The

parties hereto agree to cooperate with the Escrow Agent, each other, and their tax attorneys and

accountants to the extent reasonably necessary to carry out the provisions of this ¶14.

VI. PRELIMINARY APPROVAL ORDER AND SETTLEMENT HEARING

15. Promptly after execution of the Stipulation, Federal Lead Plaintiffs shall submit

the Stipulation together with its Exhibits to the Court and shall apply for entry of the Preliminary

Approval Order, substantially in the form of Exhibit A attached hereto, requesting, inter alia: (a)

the preliminary approval of the settlement as set forth in this Stipulation; (b) the setting of

deadlines for the mailing of the Notice and dissemination of the Summary Notice; (c) the setting

of deadlines for Class Members to submit Proofs of Claim, requests for exclusion from the Class

(“opt-out” requests), or objections to the proposed settlement, Plan of Allocation and/or the Fee

and Expense Application; (d) setting the date for the Settlement Hearing; (e) approval of the

Claims Administrator; and (f) approval of the form and content of the Notice, the Proof of Claim

and Release, and the Summary Notice, respectively, substantially in the forms of Exhibits A-1,

A-2, and A-3 attached hereto.

16. Any Class Member who wishes to opt out of the Settlement must submit a timely

written request for exclusion (including any required documentation) on or before the opt out

date, in accordance with the Court’s Preliminary Approval Order and the Notice (a “Request for

Exclusion”). Group opt-outs, including “mass” or “class” opt outs, are not permitted. Any Class

Member who does not submit a timely written request for exclusion will be bound by all Court

proceedings, orders and judgments, whether or not he, she, or it timely submits a Proof of Claim

and Release.




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17. Any Class Member who wishes to object to the fairness, reasonableness or

adequacy of this settlement or to any aspect of the Fee and Expense Application must do so in

the manner specified and within the deadlines specified in the Preliminary Approval Order and

the Notice.

18. As part of the motion for preliminary approval, Federal Lead Plaintiffs shall

request that the Court hold the Settlement Hearing, on a date to occur after notice to Class

Members has been given, for the purposes of considering whether to approve the proposed

settlement as set forth herein, the proposed Plan of Allocation, and any Fee and Expense

Application.

VII. DISMISSAL OF STATE ACTION

19. Within one week of the Federal Lead Plaintiffs’ filing of a motion seeking a

Preliminary Approval Order as referenced in ¶15, State Plaintiff will file a notice of settlement

with the State Court, attaching a copy of the Federal Lead Plaintiffs’ filing, and notifying the

State Court that he will seek dismissal of the State Action with prejudice after the Court enters

the Preliminary Approval Order as contemplated by this Stipulation.

20. Within one week of entry of the Preliminary Approval Order, the State Plaintiff

will request an order from the State Court to dismiss the State Action with prejudice, and to stay

further proceedings in the State Court except as may be necessary or appropriate to facilitate

consummation of this settlement. The State Lead Counsel will request that dismissal occur upon

entry of Judgment, and that the dismissal order become Final upon the Judgment becoming

Final. All parties agree to cooperate regarding any additional steps as may be necessary or

appropriate to modify the proposed forms of Notice to include any additional notice information

that may be requested or required by the State Court under California Rule of Court 3.770(c).

Any additional incremental costs of notice that may be required by the State Court shall be

deemed costs of notice in this action, and shall be payable from the Settlement Fund.

21. State Plaintiff and State Counsel will notify the State Court within one 1 week of

the entry of Judgment.




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22. State Plaintiff and State Counsel will notify the State Court within one 1 week of

the Judgment becoming Final.

VIII. MUTUAL RELEASES

23. The Proof of Claim and Release to be executed by Federal Plaintiffs, State

Plaintiff and Class Members shall release all Released Claims against the Released Defendants’

Parties, and shall be substantially in the form contained in Exhibit A-2 attached hereto.

24. Upon the Effective Date, Federal Plaintiffs, State Plaintiff, the Class Members

and each of their Related Parties, to the maximum extent permitted by law, shall be deemed to

have and by operation of the Judgment shall have fully, finally and forever released, relinquished

and discharged all Released Claims against the Released Defendants’ Parties. Upon the

Effective Date, Plaintiffs and each of their Related Parties will similarly be forever barred and

enjoined from commencing, instituting, prosecuting or continuing to prosecute any action or

other proceeding in any court of law or equity, arbitration tribunal or administrative forum that

asserts the Released Claims against any of the Released Defendants’ Parties. In exchange for the

mutual releases and other consideration set forth herein, including full payment of the Settlement

Amount, Federal Plaintiffs and State Plaintiff will dismiss with prejudice the Defendants from

the Actions as set forth herein. This release includes both known claims and Unknown Claims,

and shall include the discharge and release, to the maximum extent permitted by law, of all

claims for contribution, equitable indemnification, or subrogation, including but not limited to

the contribution bar as set forth in Section 201(a)(7)(A)(i) & (ii) of the Private Securities

Litigation Reform Act of 1995 (15 U.S.C. § 78u-4(f)(7)(A)(i)-(ii)).

25. Upon the Effective Date, each of the Defendants and each of their Related Parties,

to the maximum extent permitted by law, shall be deemed to have and by operation of the

Judgment shall have fully, finally, and forever released, relinquished and discharged the

Released Plaintiffs’ Parties, the Class Members, and all Federal Counsel and State Counsel, from

all claims (including Unknown Claims), whether arising under federal, state, common or foreign

law, that arise out of or relate in any way to the institution, prosecution, assertion, settlement or




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resolution of the Actions, except for claims relating to the enforcement of the settlement. Upon

the Effective Date, Defendants and each of their Related Parties will similarly be forever barred

and enjoined from commencing, instituting, prosecuting or continuing to prosecute any action or

other proceeding in any court of law or equity, arbitration tribunal, or administrative forum,

asserting the Released Defendants’ Claims against any of the Released Plaintiffs’ Parties and

Class Members, and any Federal Counsel or State Counsel.

26. The Settling Parties agree that the Court shall retain exclusive and continuing

jurisdiction over the Settling Parties and the Class Members to interpret and enforce the terms,

conditions, and obligations under this Stipulation.

IX. ADMINISTRATION AND CALCULATION OF CLAIMS, FINAL AWARDS AND SUPERVISION AND DISTRIBUTION OF THE SETTLEMENT FUND

27. The Claims Administrator, subject to such supervision and direction of the Court

as may be necessary or as circumstances may require, shall administer and calculate the claims

submitted by Class Members and shall oversee distribution of the Net Settlement Fund to

Authorized Claimants.

28. The Court shall have and retain exclusive jurisdiction over the Settlement Fund,

which shall be applied as follows:

(a) to pay all Notice and Administration Expenses;

(b) to pay any Taxes and Tax Expenses described in ¶14 hereof;

(c) to pay attorneys’ fees and expenses of Plaintiffs’ Counsel (the “Fee and

Expense Award”), including any award to any Plaintiff for that Plaintiffs’ time and expenses

directly related to their representation of the Class, if and to the extent allowed by the Court; and

(d) after the Effective Date, to distribute the Net Settlement Fund to

Authorized Claimants as allowed by the Stipulation, the Plan of Allocation, or the Court.

29. Following the Effective Date, the Net Settlement Fund shall be distributed to

Authorized Claimants in accordance with the terms of the Stipulation (including ¶¶30-34 below),

and the Plan of Allocation.




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30. Within 120 days after the mailing of the Notice or such other time as may be set

by the Court, each Person claiming to be an Authorized Claimant shall be required to submit to

the Claims Administrator a completed Proof of Claim and Release, substantially in the form of

Exhibit A-2 attached hereto, signed under penalty of perjury and supported by such documents

as are specified in the Proof of Claim and Release.

31. Except as otherwise ordered by the Court, all Class Members who fail to timely

submit a valid Proof of Claim and Release within such period, or such other period as may be

ordered by the Court, or otherwise allowed, shall be forever barred from receiving any payments

pursuant to the Stipulation and the settlement set forth herein, but will in all other respects be

subject to and bound by the provisions of the Stipulation, the releases contained herein, and the

Judgment. Notwithstanding the foregoing, Federal Lead Counsel shall have the discretion (but

not an obligation) to instruct the Claims Administrator to accept late-submitted claims for

processing by the Claims Administrator so long as the distribution of the Net Settlement Fund to

Authorized Claimants is not materially delayed thereby. Federal Lead Counsel shall also have

the right, but not the obligation, to advise the Claims Administrator to waive what Federal Lead

Counsel deem to be de minimis or formal or technical defects in any Proof of Claim and Release

submitted.

32. Proofs of Claim and Release that do not meet the submission requirements may

be rejected. Prior to rejecting a Proof of Claim and Release in whole or in part, the Claims

Administrator shall attempt to communicate with the claimant in writing to give the claimant the

chance to remedy any curable deficiencies in the Proof of Claim and Release submitted. The

Claims Administrator shall notify, in a timely fashion and in writing, all claimants whose claims

the Claims Administrator proposes to reject in whole or in part for curable deficiencies, setting

forth the reasons therefor, and shall indicate in such notice that the claimant whose claim is to be

rejected has the right to a review by the Court if the claimant so desires and complies with the

requirements of ¶33 below.




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33. If any claimant whose timely claim has been rejected in whole or in part for

curable deficiency desires to contest such rejection, the claimant must, within 20 calendar days

after the date of mailing of the notice of the rejection of the claim required in ¶32 above, or a

lesser period of time if the claim was untimely, serve upon the Claims Administrator a notice and

statement of reasons indicating the claimant’s grounds for contesting the rejection along with any

supporting documentation, and requesting a review thereof by the Court.

34. The Net Settlement Fund shall be distributed to the Authorized Claimants

substantially in accordance with the Plan of Allocation set forth in the Notice and approved by

the Court. If there is any balance remaining in the Net Settlement Fund after six months after the

date of the initial distribution of the Net Settlement Fund, Federal Lead Counsel shall, if feasible,

after payment of any outstanding administrative fees or expenses, reallocate (which reallocation

may occur on multiple occasions) such balance among Authorized Claimants in an equitable and

economic fashion. Thereafter, any balance which still remains in the Net Settlement Fund shall

be donated to Legal Services of Northern California, a §501(c)(3) non-profit organization, or to

another 501(c)(3) non-profit organization that is unaffiliated with any Plaintiffs Counsel and

approved by the Court.

35. Neither the Released Defendants’ Parties nor their counsel shall have any

responsibility for, interest in, or liability whatsoever with respect to: (i) any act, omission, or

determination by Federal or State Counsel, the Escrow Agent, or the Claims Administrator, or

any of their respective designees or agents, in connection with the administration of the

settlement or otherwise; (ii) the management, investment, or distribution of the Settlement Fund;

(iii) the Plan of Allocation; (iv) the determination, administration, or calculation of claims to be

paid from the Settlement Fund; or (v) the payment or withholding of Taxes or Tax Expenses, or

any expenses or losses incurred in connection therewith.

36. No Person shall have any claim against Federal Plaintiffs, State Plaintiff, any of

their counsel, or the Claims Administrator, based on determinations or distributions made




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substantially in accordance with this Stipulation and the settlement contained herein, the Plan of

Allocation, or further order(s) of the Court.

37. The Settling Parties agree that any proposed Plan of Allocation of the Net

Settlement Fund, including any adjustments made to any Authorized Claimant’s claim pursuant

thereto, is not a part of the Stipulation and is to be considered by the Court separately from the

Court’s consideration of the fairness, reasonableness, and adequacy of the settlement set forth in

the Stipulation, and any order or proceeding relating to the Plan of Allocation shall not operate to

terminate or cancel the Stipulation or affect the finality of the Court’s Judgment approving the

Stipulation and the settlement set forth therein, or any other orders entered pursuant to the

Stipulation.

X. CAFA NOTICES AND PROVISION OF TRANSFER AGENT RECORDS

38. Within 10 business days following the Court’s entry of the Preliminary Approval

Order, Avinger or its counsel, on behalf of the Defendants and at Avinger’s expense, shall cause

to be served upon the appropriate State official of each State and the Attorney General of the

United States a Class Action Fairness Act Notice (“CAFA Notice”) pursuant to 28 U.S.C.

§1715(b). Avinger or its counsel shall promptly give notice to Federal Lead Counsel when it has

completed serving the CAFA Notice. In addition, within 20 business days following execution

of this Stipulation, Avinger shall at its own expense make available, or cause to made available,

to the Claims Administrator the last known addresses of potential Class members (including

nominees who hold on behalf of potential Class members), or other identifying information, that

is available from the books and records regularly maintained by Avinger’s transfer agent for the

purpose of identifying and giving notice to the Class.

XI. PLAINTIFFS’ COUNSEL’S ATTORNEYS’ FEES AND EXPENSES

39. Plaintiffs’ Counsel may submit an application or applications (the “Fee and

Expense Application”) to the Court for distributions from the Settlement Fund for: (a) an award

of attorneys’ fees; (b) reimbursement of expenses, costs or charges incurred by Plaintiffs’

Counsel in connection with prosecuting the Actions; and (c) any interest on such attorneys’ fees




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and expenses at the same rate and for the same periods as earned by the Settlement Fund (until

paid) as may be awarded by the Court. In addition, as part of or in conjunction with such an

application, Plaintiffs’ Counsel may also submit an application on behalf of one or more

Plaintiffs for a monetary award for such Plaintiffs’ time and expenses directly related to their

representation of the Class.

40. Any award of attorneys’ fees and expenses awarded by the Court shall be paid

from the Settlement Fund, as ordered, immediately after the Court enters the Judgment and an

order awarding such fees and expenses. Federal Lead Counsel may thereafter allocate the award

of attorneys’ fees among the other Plaintiffs’ Counsel in a manner in which it in good faith

believes reflects the contributions of such counsel to the initiation, prosecution, and resolution of

the Actions.

41. In the event that the Effective Date does not occur, or the Judgment or the order

granting (in whole or in part) the Fee and Expense Award is reversed or modified, or this

Stipulation is canceled or terminated for any other reason and such reversal, modification,

cancellation, or termination becomes Final and not subject to review, then, to the extent that the

Fee and Expense Award has been paid, each Plaintiffs’ Counsel shall, within 10 business days

from receiving notice from Avinger’s counsel or from a court of appropriate jurisdiction, refund

to the Settlement Fund such fees and expenses previously paid to it from the Settlement Fund

plus interest thereon at the same rate as earned on the Settlement Fund in an amount consistent

with such reversal or modification. Each refund required pursuant to this paragraph shall be the

several obligation of the relevant Federal or State Counsel.

42. The procedure for and the allowance or disallowance by the Court of any

applications by any Plaintiff’s Counsel for attorneys’ fees and expenses (or by any Plaintiff for

an award for their time and expenses directly related to their representation of the Class) to be

paid out of the Settlement Fund, are not part of the settlement set forth in this Stipulation, and are

to be considered by the Court separately from the Court’s consideration of the fairness,

reasonableness and adequacy of the settlement set forth in the Stipulation, and any order or




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proceeding relating to the Fee and Expense Application, including any application for an award

by any Plaintiff, or any appeal from any order relating thereto or reversal or modification thereof,

shall not operate to terminate or cancel the Stipulation, or affect or delay the finality of the

Judgment approving the Stipulation and the settlement of the Actions set forth therein.

43. Any attorneys’ fees and/or expenses and/or Plaintiff’s awards shall be paid solely

from the Settlement Fund immediately upon award, subject to judicial approval, notwithstanding

the existence of any timely filed objections thereto, or potential for appeal or collateral attack on

the settlement or any part thereof, subject to Lead Counsel’s obligation to make appropriate

refunds or repayments to the settlement fund (including any interest earned on such amounts) if

and when, as a result of any appeal or otherwise, the fee or expense award is lowered or the

settlement does not become effective.

Defendants and their Related Parties shall have no responsibility for, and no liability whatsoever with respect to, any payment to any Plaintiffs’ Counsel from the Settlement Fund, or the allocation among Plaintiffs’ Counsel and/or any other person who may assert some claim thereto of any Fee and Expense Award approved by the Court.

XII. CONDITIONS OF SETTLEMENT, EFFECT OF DISAPPROVAL, CANCELLATION OR TERMINATION

44. In the event that the Stipulation is not approved or the Stipulation is terminated,

canceled, or fails to become effective for any reason, the Settlement Fund (including accrued

interest), less Notice and Administration Expenses or Taxes or Tax Expenses paid, incurred, or

due and owing in connection with the settlement provided for herein, shall be refunded pursuant

to written instructions from counsel for Avinger in accordance with ¶50 herein.

45. The Effective Date of the Stipulation shall occur on the first date when each of the

following events or conditions has occurred:

(a) the Settlement Amount has been deposited into the Escrow Account;

(b) the Court has entered the Preliminary Approval Order, substantially in the

form of Exhibit A hereof;

(c) the Court has entered the Judgment, or a judgment substantially in the

form of Exhibit B attached hereto;




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(d) Defendants have not exercised their option to terminate the Stipulation

pursuant to ¶49 hereof; and

(e) the Judgment has become Final, as defined in ¶1.16 hereof; and

(f) the State Court’s order dismissing the State Action with prejudice has

become Final.

46. Upon the Effective Date, any and all remaining interest or right of the Defendants

in or to the Settlement Fund, if any, shall be absolutely and forever extinguished.

47. If the events or conditions specified in ¶46 hereof are not met, then the Stipulation

shall be canceled and terminated subject to ¶50 hereof, unless Federal Lead Counsel and counsel

for Avinger mutually agree in writing to proceed with the Stipulation.

48. If Persons who would otherwise be Class Members have timely requested

exclusion from this settlement in accordance with the Notice, Defendant Avinger shall have the

option to terminate the settlement in the event that Class Members with recognized claims in an

amount equal to or larger than a certain percentage of the Class’s total recognized claims under

the Plan of Allocation exclude themselves from this settlement, as set forth in a separate

agreement (the “Supplemental Agreement”) executed between Federal Lead Plaintiffs, State

Plaintiff and Defendants, by and through their counsel. Lead Counsel shall, however, have an

opportunity to seek retraction of any Request for Exclusion until the deadline for such retractions

as set forth in the Notice or Preliminary Approval Order. The Supplemental Agreement will not

be filed with the Court unless a dispute arises as to its terms, or as otherwise ordered by the

Court, nor shall the Supplemental Agreement otherwise be disclosed unless ordered by the

Court. If the Court requires that the Supplemental Agreement be filed, the parties shall request

that it be filed under seal or redacted.

49. Unless otherwise ordered by the Court, in the event the Stipulation is terminated

or canceled, or does not become effective for any reason, within 14 business days after written

notification of such event is sent by counsel for Avinger or Federal Lead Plaintiffs to the Escrow

Agent, the Escrow Agent shall refund the Settlement Fund (including accrued interest), less




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expenses which have either been disbursed or are chargeable to the Settlement Fund pursuant to

¶¶12 or 14 hereof, pursuant to written instructions from Avinger’s counsel. The Escrow Agent

or its designee shall apply for any tax refund owed on the Settlement Amount and pay the

proceeds, after deduction of any fees or expenses incurred in connection with such application(s)

for refund, pursuant to written instructions from Avinger’s counsel.

50. In the event that the Stipulation is not approved by the Court or the settlement set

forth in the Stipulation is terminated or fails to become effective in accordance with its terms, the

Settling Parties shall be restored to their respective positions in the Actions as of March 23,

2018. In such event, the terms and provisions of the Stipulation, with the exception of ¶¶1.1-

1.43, 12-14, 41, 45, 49, 50, 51, 52, 53 and 60 hereof, shall be null and void, have no further force

and effect, and shall not be used in the State or Federal Actions or in any other proceeding for

any purpose, and any judgment or order entered by the Court in accordance with the terms of the

Stipulation shall be treated as vacated, nunc pro tunc, and shall not be used in the Actions or in

any other proceeding for any purpose. No order of the Court or modification or reversal on

appeal of any order of the Court concerning the Plan of Allocation or the amount of any service

award, or any attorneys’ fees, costs, expenses and interest awarded by the Court to any plaintiff’s

counsel shall operate to terminate or cancel this Stipulation or constitute grounds for cancellation

or termination of the Stipulation.

51. If the Effective Date does not occur, or if the Stipulation is terminated pursuant to

its terms, neither Plaintiffs nor any of their counsel shall have any obligation to repay any

amounts disbursed pursuant to ¶¶12 or 14. In addition, any expenses already incurred pursuant

to ¶¶12 or 14 hereof at the time of such termination or cancellation but which have not been paid,

shall be paid by the Escrow Agent in accordance with the terms of the Stipulation prior to the

balance being refunded in accordance with ¶50 hereof.

52. Avinger warrants and represents that it is not “insolvent” within the meaning of

11 U.S.C. §101(32) as of the time the Stipulation is executed and will not be as of the time the

payments of the Settlement Amount are actually (or have been) transferred or made as reflected




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in the Stipulation. This representation is made by Avinger and not by Avinger’s counsel. In the

event of a final order of a court of competent jurisdiction, not subject to any further proceedings,

determining the transfer of the Settlement Amount to the Settlement Fund, or any portion

thereof, by Avinger to be a voidable preference, voidable transfer, fraudulent transfer, or similar

transaction under Title 11 of the United States Code (Bankruptcy), or applicable state law, and

any portion thereof is required to be refunded, then the Settling Parties shall jointly move the

Court to vacate and set aside the release given and the Judgment entered in favor of the

Defendants, the Settling Parties shall be restored to their litigation positions as of March 23,

2018, and the Settlement Fund shall be promptly returned.

XIII. MISCELLANEOUS PROVISIONS

53. The Settling Parties: (a) acknowledge that it is their intent to consummate this

Stipulation; and (b) agree to cooperate to the extent reasonably necessary to effectuate and

implement all terms and conditions of the Stipulation and to exercise their best efforts to

accomplish the foregoing terms and conditions of the Stipulation.

54. The Parties and their respective counsel agree that they will act in good faith and

will not engage in any conduct that could frustrate the purpose of this Stipulation. The State

Plaintiff agrees that he will cooperate in obtaining dismissal of the State Action with prejudice

pursuant to ¶¶19-22. The Settling Parties and their respective counsel will not make any public

statement that disparages the Settlement.

55. Defendants have denied, and continue to deny, each and all of the claims and

contentions alleged by Plaintiffs in the Actions. The Defendants expressly have denied, and

continue to deny, all charges of wrongdoing or liability against them arising out of any of the

conduct, statements, acts or omissions alleged, or that could have been alleged, in the Actions.

Defendants also have denied, and continue to deny, inter alia, the allegations that any Plaintiff or

Class Members have suffered damage, or were otherwise harmed by the conduct alleged in either

of the Actions. Each Defendant asserts, and continues to assert, that any challenged statements

attributed to him or it, including the registration statement issued in connection with Avinger’s




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IPO, contained no material misstatements or omissions. Defendants have asserted, and continue

to assert, that, at all times, they acted in good faith and in a manner reasonably believed to be in

accordance with all applicable rules, regulations, and laws.

56. Each Defendant reserves all defenses to any claims that may be filed by any opt-

outs.

57. The determination of the terms and conditions contained herein and the drafting

of the provisions of this Stipulation have been by mutual understanding after negotiation, with

consideration by, and participation of, the Settling Parties and their counsel. This Stipulation

shall not be construed against any Settling Party on the basis that it was the drafter or

participated in the drafting. Any statute or rule of construction that ambiguities are to be

resolved against the drafting party shall not be employed in the implementation of this

Stipulation and the Settling Parties agree that the drafting of this Stipulation has been a mutual

undertaking.

58. The Settling Parties intend this settlement to be a final and complete resolution of

all disputes and claims between them with respect to the Actions. The settlement resolves claims

which are contested and shall not be deemed an admission by any Settling Party as to the merits

of any claim or defense. The Settling Parties agree that, and the Final Judgment will contain a

finding that, during the course of the Actions, the parties and their respective counsel at all times

complied with the requirements of Federal Rule of Civil Procedure 11, California Code of Civil

Procedure §128.7, and all other comparable laws, rules, and regulations. The Settling Parties

agree that the Settlement Amount and the other terms of the settlement were negotiated in good

faith by the Settling Parties, and reflect a settlement that was reached voluntarily after

consultation with competent legal counsel. Defendants and Federal Plaintiffs agree that they will

not assert that the other (or their counsel) failed to act in good faith with respect to the Federal

Action. Defendants and State Plaintiff agree that they will not assert that the other (or their

counsel) failed to act in good faith with respect to the State Action.




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59. Neither this Stipulation nor the settlement contained herein, nor any act performed

or document executed pursuant to or in furtherance of the Stipulation or the settlement: (a) is or

may be deemed to be or may be used as an admission of, or evidence of, the validity of any

Released Claim, the truth of any of the allegations in the Actions of any wrongdoing, fault, or

liability of the Defendants or Released Defendants’ Parties, or that Federal Plaintiffs or State

Plaintiff or any Class Members have suffered any damages, harm, or loss; or (b) is or may be

deemed to be or may be used as an admission of, or evidence of, any fault or omission of any of

the Defendants or their respective Related Parties in any civil, criminal, or administrative

proceeding in any court, administrative agency, or other tribunal. Neither this Stipulation nor the

Settlement, nor any act performed or document executed pursuant to or in furtherance of this

Stipulation or the Settlement shall be admissible in any proceeding for any purpose, except to

enforce the terms of the Settlement, except that the Defendants and Released Defendants’ Parties

may file the Stipulation and/or the Judgment in any action that may be brought against them in

order to support a defense or counterclaim based on principles of res judicata, collateral

estoppel, release, good faith settlement, judgment bar or reduction, or any other theory of claim

preclusion or issue preclusion or similar defense or counterclaim.

60. All of the Exhibits to the Stipulation are material and integral parts hereof and are

fully incorporated herein by this reference.

61. The Stipulation may be amended or modified only by a written instrument signed

by or on behalf of all Settling Parties or their respective successors-in-interest.

62. The Stipulation and the Exhibits attached hereto and the Supplemental Agreement

constitute the entire agreement among the parties hereto, and no representations, warranties or

inducements have been made to any party concerning the Stipulation or its Exhibits other than

the representations, warranties, and covenants contained and memorialized in such documents.

Except as otherwise provided herein, each party shall bear its own costs and expenses.

63. Each counsel or other Person executing the Stipulation or any of its Exhibits on

behalf of any party hereto hereby warrants that they have full authority to do so.


1 64. The Stipulation may be executed in one or more counterparts. All executed

2 counterparts and each of them shall be deemed to be one and the same instrument. A complete

3 set of executed counterparts shall be filed with the Court. The Settling Parties agree that

4 facsimile or scanned signatures shall have the same force and effect as original signatures.

5 65. The Stipulation shall be binding upon, and inure to the benefit of, the successors

6 and assigns of the parties hereto, including any corporation or other entity into or with which any

7 party merges, consolidates, or reorganizes or has merged, consolidated, or reorganized.

8 66. The Court shall retain jurisdiction with respect to implementation and

9 enforcement of the terms of the Stipulation, and all Settling Parties submit to the jurisdiction of

10 the Court for purposes of implementing and enforcing the settlement embodied in the Stipulation

11 and matters related to the settlement.

12 67. Pending approval of the Court of the Stipulation and its Exhibits, all non-

13 settlement related proceedings in both the Federal and State Actions shall continue to be stayed,

14 and all Class Members shall be barred and enjoined from prosecuting any of the Released Claims

15 against any of the Released Defendants' Parties.

16 68. This Stipulation and the Exhibits hereto shall be considered to have been

17 negotiated, executed and delivered, and to be wholly performed, in the State of California, and

18 the rights and obligations of the parties to the Stipulation shall be construed and enforced in

19 accordance with, and governed by, the internal, substantive laws of the State of California

20 without giving effect to that State's choice-of-law principles.

21 IN WI1NESS WHEREOF, the parties hereto have caused the Stipulation to be executed,

22 by their duly authorized attorneys, dated as of May 9, 2018.

23 Dated: May 9, 2018

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SCOTT+SCOTT ATTORNEYS AT LAW LLP

~~;z=~---John T. Jasnoch (CA 281605) 600 W. Broadway, Suite 3300 San Diego, CA 92101 Telephone: (619) 233-4565 Facsimile: (619) 233-0508




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16 Dated: May 9, 2018

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26 Dated: May 9, 20 18

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--====-jj asnoch@scott -scott. com

11 SCOTT +SCOTT ATTORNEYS AT LAW LLP William C. Fredericks (pro hac vice) Sean T. Masson The Helmsley Building 230 Park Avenue, 17th Floor New York, NY 10169-1820 Telephone: (212) 223-6444 Facsimile: (212) 223-6334 [email protected] [email protected]

Lead Counsel for Plaintiffs and the Proposed Class

BOTTINI & BOTTINI, INC. Francis A. Bottini, Jr. Albert Y. Chang Yury A. Kolesnikov 7817 Ivanhoe A venue, Suite 102 La Jolla, California 92037 Telephone: (858) 914-2001 Facsimile: (858) 914-2002 fbottini@bottinilaw .com

Additional Counsel for Federal Plaintiffs

GLANCY PRONGA Y & MURRAY LLP

Lionel Glancy Robert V. Prongay Joseph Cohen Ex Kano S. Sams II 1925 Century Park East, Suite 21 00 Los Angeles, CA 90067 Telephone: (310) 201-9150 Facsimile: (310) 201-9160 [email protected] [email protected]

Counsel for State Plaintiff and Additional Counsel for Federal Plaintiffs

WILSON SONSINI GOODRICH & ROSATI Professional Corporation




[email protected]

SCOTT+SCOTT ATTORNEYS AT LAW LLP William C. Fredericks (pro hac vice) Sean T. Masson The Helmsley Building 230 Park Avenue, 17th Floor New York, NY 10169-1820 Telephone: (212) 223-6444 Facsimile: (~12) 223-6334 wfredericks@scott -scott. com [email protected]

Lead Counsel for Plaintiffs and the Proposed Class

BOTTINI & BOTTINI, INC. Francis A. Bottini, Jr. AlbertY. Chang Yury A. Kolesnikov 7817 Ivanhoe Avenue, Suite 102 La Jolla, California 92037 Telephone: (858) 914-2001 Facsimile: (858) 914-2002 [email protected]

Additional Counsel for Federal Plaintiffs

GLANCY PRONGAY & MURRAY LLP

Robert V. Prongay Joseph Cohen Ex Kano S. Sams II 1925 Century Park East, Suite 2100 Los Angeles, CA 90067 Telephone: (310) 201-9150 Facsimile: (310) 201-9160 [email protected] [email protected]

Counsel for State Plaintiff and Additional Counsel for Federal Plaintiffs

WILSON SONSINI GOODRICH & ROSATI Professional Corporation



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Ignacio E. S ceda Doru Gavril Elizabeth R. Gavin Liles H. Repp 650 Page Mill Road Palo Alto. CA 94304-1 050 Telephone: (650) 493-9300 facsin1ile: ( 650) 493-6811 isalceda@~\vsgr.com

[email protected] [email protected] lrepp(~wsgr.com

A trorneys for D(iendanr . ..,· .i \'inger, Inc., .h::[JI··ey kf. Soinski, John B. Simpson. ;\lattheH· B. Ferguson, Donald .-1. Lucas, James B. J\1cEh1 ·ee. James G. Cullen. and Tho/Jlas .!. Fogarty


CASE NO. -1-: 17 -C\'-3400-CW


Dated: May 9, 2018

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John : ~ - er~ Ill Han on

60 a eet Boston, MA 021 09 Telephone: (617) 526-6730 Facsimile: (617) 526-5000 [email protected] [email protected]

Michael A. Mugmon WILMER CUTLER PICKERING HALE ANDDORRLLP 950 Page Mill Road Palo Alto, CA 94304 Telephone: (650) 858-6000 Facsimile: (650) 858-6100 [email protected]

Attorneys for Defendants Canaccord Genuity, Inc., Cowen and Company, LLC, Oppenheimer & Co., BTIG, LLC, and Stephens Inc.


CASE NO. 4: 17-cv-3400-CW


EXHIBIT A


[PROP.] ORDER PRELIMINARILY APPROVING SETTLEMENT & PROVIDING FOR ISSUANCE OF NOTICE


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EXHIBIT A


OAKLAND DIVISION


Plaintiffs, v.


Defendants.


[PROPOSED] ORDER PRELIMINARILY APPROVING SETTLEMENT AND PROVIDING FOR NOTICE OF PROPOSED SETTLEMENT


2 [PROP] ORDER PRELIMINARILY APPROVING SETTLEMENT & PROVIDING FOR ISSUANCE OF NOTICE


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WHEREAS, a class action is pending before the Court entitled Banerjee, et al. v.

Avinger, Inc., et al, No. 17-cv-03400-CW, United States District Court for the Northern District

of California (“Federal Action”) and there is an action captioned Gonzalez v. Avinger, Inc., et al.,

No. 17-CIV-02284, pending in California Superior Court for the County of San Mateo (“State

Action”) (collectively, the “Actions”);

WHEREAS, the Court has received the Stipulation of Settlement dated May 9, 2018 (the

“Stipulation”),1 which has been entered into by the Plaintiffs and the Defendants, and the Court

has reviewed the Stipulation, together with the Exhibits annexed thereto, which sets forth the

terms and conditions for a proposed settlement and dismissal with prejudice of the Actions, upon

the terms and conditions set forth therein;

WHEREAS, the Settling Parties, in accordance with the Stipulation of Settlement, have

made an application pursuant to Federal Rule of Civil Procedure 23(e) for an order preliminarily

approving the settlement of the Federal Action, and the Court having read and considered the

Stipulation of Settlement and the Exhibits annexed thereto;

NOW, THEREFORE, IT IS HEREBY ORDERED:

1. Preliminary Approval of the Settlement. The Court does hereby preliminarily

approve the Stipulation and the Settlement set forth therein, subject to further consideration at

the Settlement Hearing described below. The Court further finds that: (a) the Stipulation resulted

from arm’s-length negotiations; and (b) the Settlement is sufficiently fair, reasonable and

adequate as to the Class Members to warrant providing notice of the Settlement to Class

Members and holding a Settlement Hearing.

2. Settlement Hearing. The Settlement Hearing shall be held before this Court on

___________ _____, 2018, at ___:___ __.m. [proposed: approximately 100 days from the

Notice Date as defined in ¶8(b)], to determine whether the proposed Settlement on the terms and

conditions provided for in the Stipulation is fair, reasonable and adequate to the Class and should 1 For purposes of this Order, the Court adopts all defined terms as set forth in the Stipulation, and the terms used herein shall have the same meaning as in the Stipulation.




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be approved by the Court; whether the Judgment as provided in the Stipulation should be entered

herein; whether the proposed Plan of Allocation should be approved; whether to approve the

Plaintiffs’ application for their reasonable time and expenses (including lost wages) directly

relating to their representation of the Class; and to determine the amount of fees and expenses

that should be awarded to Plaintiffs’ Counsel.

3. The Court may adjourn the Settlement Hearing without further notice to Members

of the Class, and may approve the proposed Settlement with such modifications as the Settling

Parties may agree to, if appropriate, without further notice to the Class.

4. Class Certification for Settlement Purposes. Pursuant to Rule 23 of the Federal

Rules of Civil Procedure, the Court preliminarily certifies, solely for the purposes of effectuating

the Settlement, a Class consisting of all Persons who purchased or otherwise acquired the

publicly traded common stock of Avinger, Inc. (“Avinger” or the “Company”) between January

29, 2015 and April 10, 2017, inclusive, and were damaged thereby. Excluded from the Class

shall be the Defendants; their respective immediate family members, parents, successors or

assigns; the past and current officers and directors of Avinger and the Underwriter Defendants,

the legal representatives, heirs, successors and assigns of any excluded Person; and any entity in

which any of the above excluded Persons have or had a majority ownership interest. Also

excluded will be any Person that validly requests exclusion for the Class in accordance with the

procedures set forth below in this Order.

5. Class Findings. In preliminarily certifying the Class, the Court preliminarily

finds that the Class satisfies the requirements of Rules 23(a) and (b)(3) of the Federal Rules of

Civil Procedure in that: (a) the number of Class Members is so numerous that joinder of all

members thereof is impracticable; (b) there are questions of law and fact common to the Class;

(c) the claims of the proposed Class Representatives (the named Federal Plaintiffs) are typical of

the claims of the Class they represent; (d) the proposed Class Representatives have, and will

continue to, fairly and adequately represent the interests of the Class; (e) the questions of law and

fact common to the members of the Class predominate over any questions affecting only




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individual members of the Class; and (f) a class action is superior to other available methods for

the fair and efficient adjudication of the controversy.

6. CAFA Notice. Defendants are required to serve upon the appropriate state

official of each state in which a Class Member resides and the Attorney General of the United

States a notice of the proposed Settlement in compliance with the requirements of the Class

Action Fairness Act, 28 U.S.C. §1715 et seq. (“CAFA”) no later than 10 calendar days following

the entry of this Order. Defendants are solely responsible for the costs of the CAFA notice and

administering the CAFA notice. At least seven calendar days before the Settlement Hearing,

Defendants shall cause to be served on Lead Counsel and filed with the Court proof, by affidavit

or declaration, regarding compliance with the CAFA notice.

7. Approval of Form and Content of the Notice. The Court approves, as to form

and content: (a) the Notice of Proposed Settlement of Class Action, Motion for Attorneys’ Fees

and Settlement Fairness Hearing (the “Notice”); (b) the Proof of Claim and Release form; and

(c), the Summary Notice, respectively, which are annexed as Exhibits A-1, A-2 and A-3,

respectively, to the Stipulation. The Court further finds that the mailing and distribution of the

Notice and publishing of the Summary Notice substantially in the manner and form set forth in

this Order meet the requirements of Federal Rule of Civil Procedure 23, 15 U.S.C. §78u-4 and

Due Process, is the best notice practicable under the circumstances, and shall constitute due and

sufficient notice to all Persons entitled thereto.

8. Retention of Claims Administrator and Manner of Giving Notice. The Court

appoints KCC Class Action Services (the “Claims Administrator”) to supervise and administer

the notice procedure as well as the processing of claims as more fully set forth below:

(a) within 10 days of the date of entry of this Order, Avinger shall, at its own

cost, provide to the Claims Administrator, in an electronic format acceptable to the

Claims Administrator, its shareholder lists (consisting of names and addresses) of the

holders of Avinger common stock during the Class Period;




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(b) not later than 20 days after the date of entry of this Order (the “Notice

Date”), the Claims Administrator shall cause a copy of the Notice and the Proof of Claim

and Release (the “Notice Packet”), substantially in the forms annexed as Exhibits A-1

and A-2 to the Stipulation of Settlement and this Order, to be mailed by first class mail to

all Class Members who can be identified with reasonable effort;

(c) contemporaneously with the mailing of the Notice Packet, the Claims

Administrator shall cause the Stipulation and its Exhibits and a copy of the Notice to be

posted on a website to be developed for the Settlement, from which copies of the Notice

Packet can be downloaded;

(d) not later than 10 days after the Notice Date, the Claims Administrator

shall cause the Summary Notice, substantially in the form attached hereto as Exhibit A-3

to the Stipulation and this Order, to be published once in Investors Business Daily, and to

be transmitted once over the PR Newswire; and

(e) Not later than seven days before the Settlement Hearing, Lead Counsel

shall cause to be filed with the Court proof, by affidavit or declaration, of such mailing,

publishing and posting.

9. Nominee Procedures. Nominees who purchased or acquired Avinger’s common

stock between January 29, 2015 and April 10, 2017, inclusive, are hereby directed to send the

Notice and the Proof of Claim and Release to all beneficial owners of such common stock within

20 days after receipt thereof, or to send a list of the names and addresses of such beneficial

owners to the Claims Administrator within 20 days of receipt thereof, in which event the Claims

Administrator shall promptly mail the Notice and the Proof of Claim and Release to such

beneficial owners. Lead Counsel shall, if requested, reimburse out of the Settlement Fund banks,

brokerage houses, or other nominees solely for their reasonable out-of-pocket expenses incurred

in providing the Notice to beneficial owners who are Class Members, which expenses would not

have been incurred except for the sending of such Notice, subject to further order of this Court

with respect to any dispute concerning such reimbursement.




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10. Participation in Settlement. Class Members (other than those Persons who may

timely and validly request exclusion from the Class) who wish to participate in the settlement

must complete and submit, or cause to be completed and submitted, a Proof of Claim and

Release form in accordance with the instructions contained therein. Unless the Court orders

otherwise, all Proof of Claim and Release forms must be postmarked no later than 120 calendar

days after the Notice Date. Notwithstanding the foregoing, Lead Counsel may, at its discretion,

accept for processing late Claims provided such acceptance does not delay the distribution of the

Net Settlement Fund to the Class. By submitting a Proof of Claim and Release, a Person shall be

deemed to have submitted to the jurisdiction of the Court with respect to his, her or its claim and

the subject matter of the Settlement.

11. Each Proof of Claim and Release Form submitted must satisfy the following

conditions: (a) it must be properly completed, signed and submitted in a timely manner in

accordance with the provisions of the preceding paragraph; (b) it must be accompanied by

adequate supporting documentation for the transactions and holdings reported therein, in the

form of broker confirmation slips, broker account statements, an authorized statement from the

broker containing the transactional and holding information found in a broker confirmation slip

or account statement, or such other documentation as is deemed adequate by Lead Counsel or the

Claims Administrator; (c) if the Person executing the Proof of Claim and Release Form is acting

in a representative capacity, a certification of his, her or its current authority to act on behalf of

the Claimant must be included in the Proof of Claim and Release Form to the satisfaction of

Lead Counsel or the Claims Administrator; and (d) the Proof of Claim and Release Form must be

complete and contain no material deletions or modifications of any of the printed matter

contained therein and must be signed under penalty of perjury.

12. Any Class Member that does not timely and validly submit a Proof of Claim and

Release form or whose claim is not otherwise approved by the Court: (a) shall be deemed to have

waived his, her or its right to share in the Net Settlement Fund; (b) shall be forever barred from

participating in any distributions therefrom; (c) shall be bound by the provisions of the




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Stipulation and the Settlement and all proceedings, determinations, orders, and judgments in the

Litigation relating thereto, including, without limitation, the Judgment, and the releases provided

for therein, whether favorable or unfavorable to the Class; and (d) will be barred from

commencing, maintaining, or prosecuting any of the Released Plaintiffs’ Claims against each and

all of the Released Defendants’ Parties, as more fully described in the Stipulation and Notice.

Notwithstanding the foregoing, late Proof of Claim and Release Forms may be accepted for

processing as set forth in ¶10 above.

13. Procedures for Class Members to Exclude Themselves from the Class. Any

Person falling within the definition of the Class may, upon request, be excluded from the Class.

Unless otherwise ordered by the Court, for the request for exclusion to be valid, any such Person

must submit to the Claims Administrator a request for exclusion (“Request for Exclusion”) in

writing within the time and in the manner and form set forth in the Notice, which shall provide

that (a) any such Request for Exclusion must be mailed or delivered such that it is received no

later than 21 calendar days prior to the Settlement Hearing, to Avinger Securities Litigation,

EXCLUSIONS, c/o KCC Class Action Services, 3301 Kerner Blvd., San Rafael, CA 94901; and

(b) any Request for Exclusion must (i) state the name, address, and telephone number of the

Person requesting exclusion (and in the case of entities, the name and telephone number of the

appropriate contact person); (ii) state that the Person “requests to be excluded from the Class in

the Avinger securities litigation, Case No. 17-CV-3400-CW”; (c) state the number of shares of

Avinger common stock that such Person purchased and sold during the Class Period, including

the dates of purchase or sale, the number of shares purchased and/or sold, and the price paid or

received per share for each such purchase or sale; and (d) be signed by the Person requesting

exclusion or an authorized representative. A Person that requests exclusion from the Class must

also include copies of documents sufficient to show the number of shares of Avinger common

stock he, she or it purchased and sold during the Class Period, including the dates of purchase or

sale, the number of shares purchased and/or sold, and the price paid or received per share for

each such purchase or sale. A Request for Exclusion shall not be effective or valid unless it




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provides all the information required under this paragraph and is received within the time stated

above, or is otherwise accepted by the Court.

14. All Persons who submit valid and timely Requests for Exclusion in the manner set

forth in the preceding paragraph shall have no rights under the Settlement, shall not share in the

distribution of the Net Settlement Fund, and shall not be bound by the Settlement or the

Judgment entered in this Litigation.

15. All Members of the Class (other than those Persons or entities who shall timely

and validly request exclusion from the Class) shall be bound by all determinations and judgments

in the Action concerning the settlement, whether favorable or unfavorable to the Class.

16. Appearance and Objections at Settlement Hearing. Any Member of the Class

who does not request exclusion from the Class may enter an appearance in this Action, at his, her

or its own expense, individually or through counsel of his, her or its own choice. If they do not

enter an appearance, Lead Counsel will represent them.

17. Any Member of the Class (other than those Persons or entities who timely and

validly request exclusion from the Class) may appear and show cause, if he, she, or it has any

reason why the proposed settlement of the Action should or should not be approved as fair,

reasonable, and adequate, why a Judgment should or should not be entered thereon, why the Plan

of Allocation should or should not be approved, why attorneys’ fees and expenses should or

should not be awarded to Plaintiffs’ Counsel, or why any of the proposed Class Representatives

should or should not be granted an award for their reasonable time and expenses incurred in

representing the members of the Class. A Class Member or other Person who wishes to object to

the approval of the terms and conditions of the proposed Settlement, the proposed Plan of

Allocation, or any aspect of Plaintiffs’ or Plaintiffs’ Counsel’s Fee and Expense Application

must (a) file a written objection (together with any papers or briefs in support of their objection)

with the Clerk of the United States District Court for the Northern District of California no later

than 21 calendar days before the Settlement Hearing, and must also (b) serve copies of such

objection (and any supporting papers) on Lead Counsel and Avinger’s Counsel at the address set




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forth below (and in the Notice) such that they are received no later than 21 calendar days before

the Settlement Hearing.

Lead Counsel Avinger’s Counsel Scott + Scott Attorneys at Law LLP Wilson Sonsini Goodrich & Rosati Attn: William C. Fredericks, Esq. Attn: Ignacio E. Salceda, Esq. The Helmsley Building 650 Page Mill Road 230 Park Avenue, 17th Floor Palo Alto, CA 94304-1050 New York, NY 10169-1820

18. Any objections, filings and other submissions by an objecting Class Member: (a)

must state the name, address, and telephone number of the Person making the objection (and in

the case of entities, the name and telephone number of the appropriate contact person); (b) must

contain a statement of the Class Member’s objection or objections, and the specific reasons for

each objection, including any legal and evidentiary support the objector wishes to bring to the

Court’s attention; (c) must include copies of documents sufficient to prove the objector’s

membership in the Class, including documents showing the number of shares of Avinger

common stock that the objector purchased and sold during the Class Period, including the dates

of purchase or sale, the number of shares purchased and/or sold, and the price paid or received

per share for each such purchase or sale; and (d) must be signed by the objector or an authorized

representative. Objectors who enter an appearance and desire to present evidence at the

Settlement Hearing in support of their objection must include in their written objection or notice

of appearance the identify of any witnesses they may call to testify and any exhibits they intend

to introduce at the Settlement Hearing.

19. Any Member of the Class who does not make his, her, or its objection in the

manner set forth above shall be deemed to have waived such objection and shall forever be

foreclosed from making any such objection, unless otherwise ordered by the Court.

20. Stay and Temporary Injunction. Pending final determination by the Court as to

whether the Settlement, as set forth in the Stipulation, is fair, reasonable, and adequate and

should be finally approved, and whether the Judgment dismissing the Action with prejudice

should be approved, no Class Member, either directly, representatively or in any other capacity,




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shall assert, commence, or prosecute against any of the Defendants or the Released Defendants’

Parties, any of the Released Claims in this Action, or in any other proceeding or forum. Pending

the Settlement Hearing, the Court also stays all further proceedings in this Action, other than

proceedings necessary to carry out or enforce the terms and conditions of the Stipulation.

21. Settlement Administration Fees and Expenses. All reasonable expenses

incurred in identifying and notifying Class Members, as well as administering the Settlement

Fund, shall be paid as set forth in the Stipulation in an amount up to $300,000 without further

order of the Court. In the event the Settlement is not approved by the Court, or otherwise fails to

become effective, neither the Plaintiffs nor Lead Counsel shall have any obligation to repay any

amounts actually and properly disbursed from the Settlement Fund.

22. Settlement Fund. All funds held by the Escrow Agent shall be deemed and

considered to be in custodia legis of the Court, and shall remain subject to the jurisdiction of the

Court, until such time as such funds shall be distributed pursuant to the Stipulation or further

order(s) of the Court.

23. Taxes. Lead Counsel is authorized and directed to prepare any tax returns and

any other tax reporting form for or in respect to the Settlement Fund, to pay from the Settlement

Fund any Taxes owed with respect to the Settlement Fund, and to otherwise perform all

obligations with respect to Taxes and any reporting or filings in respect thereof without further

order of the Court in a manner consistent with the provisions of the Settlement.

24. Supporting Papers. All papers in support of the settlement, the proposed Plan of

Allocation, Plaintiffs’ Counsel’s Fee and Expense Application, and the Class Representatives’

application for an award for their time and expenses incurred in representing the Class shall be

filed and served not later than 35 calendar days prior to the Settlement Hearing; and reply papers,

if any, in further support of the Settlement, the proposed Plan of Allocation, the Fee and Expense

Application and any application for an award to the Class Representatives shall be filed and

served no later than seven calendar days prior to the Settlement Hearing.




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25. Defendants are responsible for funding the Settlement Amount as set forth in the

Stipulation; however, neither the Defendants nor any of the Released Defendants’ Parties shall

have any responsibility for or liability with respect to any Plan of Allocation, Plaintiffs’

Counsel’s Fee and Expense Application, or the Class Representatives’ application for an award

for their time and expenses incurred in representing the Class, and such matters will be

considered separately from the fairness, reasonableness and adequacy of the Settlement.

26. At or after the Settlement Hearing, the Court shall determine whether the Plan of

Allocation proposed by Plaintiffs and any Fee and Expense Application (including the Class

Representatives’ application for an award for their time and expenses incurred in representing

the Class) shall be approved.

27. Use of this Order. This Order, the Stipulation, any of its terms or provisions, any

of the negotiations, proceedings or agreements relating to the Stipulation, and all acts performed

or documents executed pursuant to or in furtherance of the Stipulation or the Settlement: (a)

shall not be construed as an admission or concession by the Defendants of the truth of any of the

allegations in the Actions, or of any liability, fault, or wrongdoing of any kind; and (b) shall not

be construed as, or deemed to be evidence of or an admission or concession that Plaintiffs or any

Class Members have suffered any damages, harm, or loss.

28. Termination or Non-occurrence of Effective Date. In the event that the

Settlement does not become effective or is terminated in accordance with the terms of the

Stipulation of Settlement or the Effective Date does not occur, or in the event that the Settlement

Fund, or any portion thereof, is returned to the Defendants, then this Order shall be rendered null

and void to the extent provided by, and in accordance with, the Stipulation and shall be vacated

and, in such event, all orders entered and Releases delivered in connection herewith shall be null

and void to the extent provided by and in accordance with the Stipulation of Settlement.

29. Retention of Jurisdiction. The Court reserves the right to adjourn the date of the

Settlement Hearing without further notice to the Members of the Class, and retains jurisdiction to

consider all further applications arising out of or connected with the Settlement.




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DATED: ________________, 2018 _______________________________ The Honorable Claudia Wilken Senior United States District Judge


EXHIBIT A-1


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1 NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION

Case No. 4:17-cv-03400-CW

EXHIBIT A-1 TO STIPULATION OF SETTLEMENT

Dear Recipient:

You have been identified as a potential class member in a securities class action involving

Avinger, Inc. (“Avinger” or the “Company”) captioned Banerjee et al. v. Avinger, Inc., et al.,

Civil Action No. 4:17-cv-03400-CW (the “Action”). Enclosed is a Notice about the settlement of

this action. If you purchased or acquired Avinger common stock between January 29, 2015 and

April 10, 2017, inclusive, you could receive a payment from this settlement.

A federal court authorized the accompanying Notice. This is not a solicitation from a

lawyer. Your legal rights will be affected whether you act or do not act. Important facts are

highlighted below, and are further explained in the accompanying Notice, which you should read

carefully.

Relevant Security and Time Period: Avinger, Inc. common stock (stock symbol:

AVGR) purchased or acquired between January 29, 2015 and April 10, 2017, inclusive (the

“Class Period”).

Settlement Amount: $5,000,000 in cash. Your individual recovery will depend on the

number of shares of Avinger common stock you (and other Class Members who file valid claims)

purchased and sold, and the prices at which and dates on which you (and the other Class Members

who file valid claims), purchased and sold those shares. Based upon information currently

available to Plaintiffs and the analysis performed by their damages consultant, it is estimated that

if class members submit claims for 100% of the common stock eligible for distribution, the

estimated average distribution per share of common stock will be approximately $0.18 per share

before deduction of Court-approved fees, expenses, plaintiff incentive awards, and costs of notice

and claims administration. Historically, actual claims rates are less than 100%, which will result

in a higher distribution per share.

Reasons for Settlement: Plaintiffs’ and Plaintiffs Counsel’s principal reason for entering

into the Settlement is that it provides the Class with a significant benefit now, without the risks or

delays inherent in continued litigation. The $5.0 million all-cash benefit under the Settlement


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must be considered against the real risk that a smaller recovery – or no recovery at all – might be

achieved only after years of further uncertain and expensive litigation, including fact and expert

discovery, disputed motions to dismiss and to certify a class, resolution of summary judgment

motions, a contested trial and likely appeals. See also Notice at § 5 below (“Why is There a

Settlement?”). Defendants, who have denied and continue to deny all allegations of liability, fault

or wrongdoing whatsoever, have stated that their principal reason for entering into the Settlement

is to eliminate the uncertainty, risk, costs and burdens inherent in litigation, especially in complex

cases like this Action. Defendants have also stated that they believe that further litigation could

be protracted and distracting.

Nature of Claims Asserted:

Plaintiffs allege: that Defendants violated Section 11 of the Securities Act of 1933 and

Section 10(b) of the Securities Exchange Act of 1934 by making material misstatements and

omissions concerning Avinger’s business and the testing and design of its Pantheris atherectomy

product in connection with Avinger’s January 30, 2015 Initial Public Offering (“IPO”) and

thereafter; that the claimed misrepresentations and omissions caused the price of Avinger

common stock to be artificially inflated during the Class Period; and that Class Members suffered

damages when the truth about the Pantheris product was ultimately revealed to the market.

Defendants have denied and continue to deny all allegations of liability, and contend: that

all of Avinger’s statements regarding its business and Pantheris product were accurate when

made; that Avinger’s product testing procedures were at all times appropriate; that Pantheris met

federal Food and Drug Administration (“FDA”) requirements; and that Defendants would have

advanced multiple additional defenses to the claims asserted had the case proceeded. See also

Notice at § 2 below (“What is this lawsuit about?”).

If the Case Had Not Settled: The claims asserted involve numerous complex legal and

factual issues, many of which would require expert testimony. The issues on which the Parties

disagree are many, but include (1) whether the Defendants made any materially false or

misleading statements in violation of the federal securities laws; (2) whether the Defendants have


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defenses to the claims at issue, including the defenses that their allegedly actionable statements

were protected from liability as “forward-looking” statements or as non-actionable statements of

opinion; (3) the extent (if any) that the alleged misrepresentations and omissions affected the

trading price of Avinger common stock during the Class Period; and (4) the appropriate economic

model for determining whether, and the extent to which (if at all), purchasers of Avinger common

stock suffered damages that could be recovered at trial. The benefits of the Settlement should

therefore be compared to the risk of no recovery after contested dispositive motions, disputed

class certification proceedings, trial, and likely appeals. In sum, absent a settlement, further

prosecution of the Action would involve significant risks and likely years of further litigation,

with no assurance of obtaining any recovery.

Statement of Attorneys’ Fees and Expenses Sought. Lead Counsel will apply to the

Court for an award of attorneys’ fees for all Plaintiffs’ Counsel of up to thirty percent (30%) of

the Settlement Amount, plus interest earned at the same rate as earned by the Settlement

Fund, and for litigation expenses not to exceed $150,000. Since the Action’s inception,

Plaintiffs’ Counsel have expended considerable time and effort in investigating the relevant

facts and litigating the case on a wholly contingent basis and have advanced the expenses of

the Action in the expectation that, if they were successful in obtaining a recovery for the

Settlement Class, they would be paid from such recovery. In addition, the Class

Representatives will apply for awards for their reasonable time and expenses in representing

the Class in an amount not to exceed $9,000 in the aggregate. The requested attorneys’ fees

and expense awards, if granted in full, would amount to an average cost of approximately

$0.06 per allegedly damaged share of Avinger common stock.

Dismissal and Releases: If the proposed Settlement is approved, the Court will enter a

Final Judgment and Order of Dismissal with Prejudice (the “Judgment”). The Judgment will

dismiss the Released Plaintiffs’ Claims with prejudice as to the Released Defendant Parties

(which include each of the Defendants and their respective parents, subsidiaries, employees,

directors and officers). The Judgment will also provide that all Class Members shall be deemed


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to have released and forever discharged all Released Plaintiffs Claims (to the extent Class

Members have such claims) against all Released Defendant Persons. The terms of the releases,

including the meaning of the term “Released Claims,” are set forth in the attached Notice.

Important Dates and Deadlines:

○ Deadline for Submitting Claim Form: must be postmarked by ________, 2018 [120

days after Notice Date]

○ Deadline for Filing Any Objections: must be received by ________, 2018 [21 days

before Settlement Hearing]

○ Deadline for Requesting Exclusion from the Class : must be received by [21 days bef.

Settl. Hrg] _______, 2018

○ Date of Court Hearing on Fairness of Settlement: _______________, 2018

More Information: You may contact the Claims Administrator, KCC Class Action

Services, toll-free at 1-866-674-1729, by email at [email protected], or by

visiting www.AvingerSecuritiesLitigation.com. You may also contact representatives of counsel

for the Plaintiff Class c/o William C. Fredericks, SCOTT+SCOTT ATTORNEYS AT LAW LLP,

230 Park Avenue, 17th Floor, New York, NY 10169-1820, tel. 1-800-404-7770, email:

[email protected].

Please Do Not Call the Court or Defendants with Questions About the Settlement.


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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA ARINDAM BANERJEE, et al., individually and on behalf of all others similarly situated,

Plaintiffs,

v AVINGER, INC., et al.,

Defendants.

Case No. 4:17-cv-3400-CW NOTICE OF (I) PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENT; (II) SETTLEMENT FAIRNESS HEARING; AND (III) MOTION FOR AWARD OF ATTORNEYS’ FEES AND REIMBURSEMENT OF EXPENSES


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TO: ALL PERSONS WHO PURCHASED THE COMMON STOCK OF AVINGER, INC.

(“AVINGER” OR THE “COMPANY”) (ticker symbol: “AVGR”) DURING THE

PERIOD FROM JANUARY 29, 2015 THROUGH AND INCLUDING APRIL 10,

2017 (THE “CLASS PERIOD”) AND WERE DAMAGED THEREBY

A FEDERAL COURT AUTHORIZED THIS NOTICE. THIS IS NOT A SOLICITATION

FROM A LAWYER.

PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR

RIGHTS MAY BE AFFECTED BY PROCEEDINGS IN THIS ACTION. PLEASE

NOTE THAT IF YOU ARE A CLASS MEMBER, YOU MAY BE ENTITLED TO

SHARE IN THE PROCEEDS OF THE SETTLEMENT DESCRIBED IN THIS NOTICE.

TO CLAIM YOUR SHARE OF THE SETTLEMENT PROCEEDS, YOU MUST

SUBMIT A VALID PROOF OF CLAIM AND RELEASE FORM (“CLAIM FORM”)

POSTMARKED ON OR BEFORE __________, 2018.

The purpose of this Notice is to inform you of (i) the pendency of this class action (the

“Action”), (ii) the proposed $5,000,000 settlement (the “Settlement”) of the Action reached

between (a) Plaintiffs (including Lead Plaintiffs Arindam Banerjee and Jogesh Harjai); and (b)

Defendants (consisting of Avinger; current or former Avinger officers Jeffrey M. Soinski,

Matthew B. Ferguson, and John B. Simpson (the “Officer Defendants”); current or former Avinger

directors Donald A. Lucas, James B. McElwee, James G. Cullen, and Thomas J. Fogarty (the

“Director Defendants”); and Canaccord Genuity Inc., Cowen and Company, LLC, Oppenheimer &

Co. Inc., BTIG, LLC, and Stephens Inc. (the “Underwriter Defendants”)); and (iii) a hearing to be

held by the Court to consider the fairness, reasonableness, and adequacy of the Settlement,

proposed Plan of Allocation, Plaintiffs’ Counsel’s application for fees, costs, and expenses, and

Plaintiffs’ application for an award for their reasonable time and expenses in representing the


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Settlement Class. This Notice also describes what rights you have and what steps you may take in

relation to the Settlement and this Action.1

YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT

SUBMIT A CLAIM FORM The only way to be eligible to receive a payment from the Settlement. Unless otherwise extended by the Court, Claim Forms must be postmarked on or before [120 days after Notice Date]___________, 2018.

EXCLUDE YOURSELF Get no payment. This is the only option that potentially allows you to ever be part of another lawsuit against the Defendants or any other Released Defendant Parties based on the matters being resolved by this Settlement. Unless otherwise extended by the Court, exclusions must be received on or before [21 days before Settlement Hearing] ______, 2018.

OBJECT Write to the Court about why you do not like the Settlement, Plan of Allocation, and/or request for attorneys’ fees and expenses. You will still be a member of the Class. Unless otherwise extended by the Court, objections must be received by the Court and counsel for the Parties on or before [21 days before Settlement Hearing]_______ 2018.

GO TO THE HEARING ON ________, 2018 at 2:30pm PT

Ask to speak in Court about the fairness of the Settlement.Unless otherwise permitted by the Court, requests to speak must be received by the Court and counsel for the Parties on or before [21 days before Settlement Hearing]______, 2018.

DO NOTHING Receive no payment. You will, however, still be a member of the Class, which means that you give up your right to ever be part of any other lawsuit against the Defendants or any other Released Defendant Parties about the legal claims being resolved by this Settlement, and that you will be bound by any judgments or orders entered by the Court in the Action.

You may submit a claim or object, or do both, or do nothing. However, if you timely

exclude yourself, that is the only thing you can do: you may not object in writing, you may not

appear at the Court Hearing on Fairness of Settlement to state any objections, and you may not

submit a claim. The federal Court presiding over this case must decide whether to approve the

Settlement. Payments will be made only if the Court approves the Settlement, and only after

resolution of any appeals and the review and processing of all Claim Forms. Please be patient.

Please Do Not Call the Court or Defendants with Questions About the Settlement.

1 All capitalized terms used in this Notice that are not otherwise defined herein have the meanings provided in the Stipulation of Settlement dated May 9, 2018 (the “Stipulation”), copies available at www.AvingerSecuritiesLitigation.com.


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SUMMARY OF THIS NOTICE

BASIC INFORMATION

1. Why did I get this Notice?

2. What is this Lawsuit about?

3. How do I know if I Am Part of the Settlement?

4. What if I Am Still Unsure If I Am Included?

THE SETTLEMENT

5. Why is There a Settlement?

6. What Does the Settlement Provide?

7. How Much Will My Payment Be?

8. What Is the Proposed Plan of Allocation?

HOW TO OBTAIN A PAYMENT – SUBMITTING A CLAIM FORM

9. How Can I Obtain a Payment?

10. When Will I Receive My Payment?

11. What Am I Giving Up To Receive A Payment?

EXCLUDING YOURSELF FROM THE CLASS ACTION SETTLEMENT

12. How Do I Exclude Myself (“Opt Out”) Of The Class?

13. If I Do Not Exclude Myself, Can I Sue The Defendants For The Same Thing Later?

14. If I Exclude Myself, Can I Receive Money From The Settlement?

THE LAWYERS REPRESENTING YOU

15. Do I Have A Lawyer In The Case?

16. How Will The Lawyers Be Paid?

OBJECTING TO THE SETTLEMENT

17. How Do I Tell The Court If I Do Not Like The Settlement?

THE COURT’S SETTLEMENT (OR “FINAL APPROVAL”) HEARING

18. When And Where Will The Court Decide Whether To Approve The Settlement?

19. Do I Have To Come To The Hearing?


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20. May I Speak At The Hearing?

IF YOU DO NOTHING

21. What Happens If I Do Nothing?

ADDITIONAL INFORMATION

22. How Can I Get More Information?

PROPOSED PLAN OF ALLOCATION

SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES

BASIC INFORMATION

1. Why Did I Get This Notice?

The Court has directed that this Notice be sent to you because you or someone in your

family may have purchased or acquired Avinger common stock during the Class Period of January

29, 2015 through April 10, 2017. The Court has directed us to send you this Notice because, as a

potential Class Member, you have a right to know about the proposed Settlement and all of your

options before the Court decides whether to approve the Settlement. If the Court approves the

Settlement and proposed Plan of Allocation (or some other plan of allocation), and after any

objections or appeals are resolved, the Court-appointed Claims Administrator, KCC Class Action

Services, will make payments to Authorized Claimants who timely submit valid claims in the

manner described below.

The purpose of this Notice is to inform you of the existence of this Action, the terms of the

proposed Settlement, and to describe how you might be affected, and how, if you wish to do so,

you can exclude yourself from the Class or object to the proposed Settlement, Plan of Allocation,

and Plaintiffs’ Counsel’s application for attorneys’ fees and expenses. It is also being sent to

inform you of a hearing (the “Settlement Hearing”) to be held by the Court to consider the fairness,

reasonableness and adequacy of the Settlement, proposed Plan of Allocation, and Plaintiffs’

Counsel’s application for attorneys’ fees and reimbursement of litigation expenses. See § __

below for more details about the Settlement Hearing.


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The Court in charge of this Action is the U.S. District Court for the Northern District of

California (the “Court”).2 The issuance of this Notice is not an expression of any opinion by the

Court concerning the merits of any claim or defenses in the Action, and the Court still has to

decide whether to approve the Settlement.

2. What Is This Lawsuit About?

Defendant Avinger is a commercial-stage medical device company that designs,

manufactures, and sells image-guided, catheter-based systems used by physicians to treat patients

with peripheral artery disease (“PAD”). The Company conducted its IPO on January 29, 2015.

Following the IPO, Avinger common stock traded on the NASDAQ stock exchange under the

ticker symbol “AVGR.”

The registration statement and prospectus (the “Offering Documents”) for the IPO stated

that Avinger’s mission was to improve the treatment of vascular disease through the introduction

of products based on its “lumivascular platform,” which the Offering Documents described as “the

only technology that offers real-time visualization of the inside of the artery during PAD

treatment.” The Offering Documents further referenced the ability of Avinger’s products to

“significantly improve patient outcomes by providing physicians with a clearer picture of the

artery using radiation-free image guidance during treatment, enabling them to better differentiate

between [arterial] plaque and healthy arterial structures,” and to thereby avoid, or significantly

reduce, the kinds of arterial damage or other complications (such as restenosis) associated with

other forms of PAD treatment.

Plaintiffs allege that at the time of the January 2015 IPO and during the Class Period,

Avinger’s stock price was artificially inflated as a result of the above statements, as well as other

misleading or incomplete statements. In particular, Plaintiffs allege that, beginning with the IPO

and through the rest of the Class Period, Avinger failed to adequately disclose that its Pantheris

2 “The Court” is also sometimes referred to in this notice as “this Court” or the “(federal) Court” to distinguish it from the California state court (the “State Court”), where a related securities action that is also covered by the Settlement is pending). See §2 below.


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product suffered from significant product defect and reliability issues. Plaintiffs further contend

that even when Avinger and the Officer Defendants did disclose information about Pantheris’

product reliability issues, those Defendants knowingly or recklessly failed to adequately disclose

the full extent of such problems, and that Plaintiffs and Class Members suffered damages as a

result of the alleged inflation.

Defendants have denied and continue to deny all allegations of liability. Defendants

maintain that the statements made in the IPO Offering Documents regarding the state of the

development of Avinger’s Pantheris product as of the January 2015 IPO were accurate when made,

and that they were not liable for failing to anticipate that a later version of the Pantheris, which was

not commercially launched until more than a year after the IPO, would experience disappointing

sales in 2016. Defendants further argued that their product testing procedures were appropriate,

that the Pantheris product satisfied FDA requirements, and that any alleged defects in the Pantheris

were adequately disclosed and promptly addressed in good faith. See also § 5 below (“Why Is

There a Settlement?”).

This Action was originally filed in the Superior Court for the State of California, San

Mateo County (the “State Court”) on May 22, 2017, under the caption Grotewiel v. Avinger, Inc.,

et al, 17-CIV-02240 (Cal. Super., San Mateo Cty.), but was thereafter removed by Defendants to

the federal Court (the “Court”) (together with another action against the same Defendants,

captioned Gonzalez v. Avinger, Inc., et al, 17-CIV-2284, that had also originally been filed in the

State Court). The Gonzalez action (the “State Action”) was thereafter remanded back to the State

Court on July 21, 2017.

In contrast to the Gonzalez action, plaintiff in the Grotewiel action did not seek remand to

the State Court, and proceedings in the Grotewiel action therefore continued in the (federal) Court.

By Order dated October 11, 2017, the (federal) Court appointed plaintiffs Arindam Banerjee and

Jogesh Harjai (“Lead Plaintiffs”) as lead plaintiffs in the Grotewiel action, and appointed

Scott+Scott Attorneys at Law LLP as lead counsel (“Lead Counsel”). After October 11, 2017, this


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Action (which was previously known as the Grotewiel action) continued to proceed in this Court

under the revised caption Banerjee, et al. v. Avinger, Inc., et al, No. 17-cv-03400-CW.

On October 17, 2017, at a case management conference and in a pre-trial order issued that

same day, the Court: (a) directed the parties in this Action to explore alternative dispute resolution

by participating in either the Court’s Alternative Dispute Resolution (“ADR”) Program or in a

private mediation, (b) set an ADR conference date; (c) set a schedule for filing amended claims

and for briefing on any motions to dismiss; and (d) directed Lead Plaintiffs to “[explore]

coordination of the state and federal court actions.”

On November 21, 2017, and consistent with the Court’s October 17, 2017 Order, Lead

Plaintiffs and their counsel (together with Lindsay Grotewiel and Todd Vogel as additional

plaintiffs, and Grotewiel’s, Vogel’s and State Plaintiff’s counsel as additional counsel), filed the

Consolidated Class Action Complaint for Violations of the Securities Laws (the “Consolidated

Complaint) in this Action. The Consolidated Complaint alleged that the offering documents for

the IPO contained material misstatements or omissions concerning Avinger’s business and its

Pantheris product and further alleged, on behalf of investors who purchased Avinger common

stock pursuant or traceable to Avinger’s IPO, that as a result all Defendants had violated Section

11 of the 1933 Act and the Officer Defendants had violated Section 15 of the 1933 Act.

In December 2017, and consistent with the Court’s October 17, 2017 Order, the parties in

both this (federal) Action and the State Action agreed to a mediation under the auspices of a highly

experienced mediator of complex litigation and securities class actions, Robert M. Meyer, Esq., of

JAMS (the “Mediator”).

On January 26, 2018, the Avinger Defendants (consisting of Avinger, the Officer Directors

and the Director Defendants) and the Underwriter Defendants filed motions to dismiss the

Consolidated Complaint.

In the meantime, counsel for all Plaintiffs and the Avinger Defendants also simultaneously

proceeded with the preparation and submission of opening mediation briefs, accompanying

exhibits, and reply mediation briefs, and thereafter participated in a full day, arms-length private


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mediation session on February 8, 2018 under the auspices of the Mediator. Although the parties

were unable to reach an agreement at the February 8, 2018 mediation session, at the end of the

mediation the Mediator made a mediator’s proposal to settle all securities claims that were or could

have been asserted in either of the Actions for $5 million in cash.

Lead Plaintiffs subsequently filed an Amended Consolidated Class Action Complaint for

Violations of the Federal Securities Laws (the “Complaint”) in this Court on March 19, 2018 (the

“Complaint”) that re-asserted the 1933 Act claims referenced above and added claims that Avinger

and the Officer Defendants defrauded investors who purchased Avinger common stock from

January 29, 2015 through April 10, 2017 in violation of Section 10(b) of the Exchange Act by

knowingly or recklessly making materially false or misleading statements concerning Avinger’s

business and its Pantheris product that, in turn, caused the price of Avinger common stock to be

artificially inflated during the Class Period.

After further post-mediation negotiations among the parties that continued to be conducted

largely through the Mediator, all parties were ultimately able to reach an agreement (subject to

approval by the (federal) Court) to resolve both this Action and the State Action consistent with

the Mediator’s earlier proposal to settle all claims for $5 million. The parties notified the Court

that they had reached a proposed settlement on March 23, 2018, and signed the Stipulation of

Stipulation on May 9, 2018.

Under the terms of the Stipulation of Settlement, in the interests of administrative

efficiency and minimizing costs, the securities claims asserted in the State Action (all of which

were also asserted in this Action) will be released and settled as part of the settlement of this

(federal) Action. No separate notice will be issued in the State Action, and if the proposed

Settlement in this Action is approved and becomes effective, the State Action will be dismissed.

WHO IS IN THE SETTLEMENT

3. How Do I Know If I Am A Member Of The Settlement Class?

If you are a member of the Class you are subject to the Settlement, unless you timely

request to be excluded. The Class consists of:


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All persons or entities who purchased or otherwise acquired the publicly traded common

stock of Avinger between January 29, 2015 through April 10, 2017, inclusive, and were

damaged thereby.

Excluded from the Class are: Defendants; their respective immediate family members, parents,

successors or assigns; the past and current executive officers and directors of Avinger and the

Underwriter Defendants; the legal representatives, heirs, successors and assigns of any excluded

Person; and any entity in which any of the above excluded Persons have or had a majority

ownership interest.

4. What If I Am Still Not Sure If I Am Included?

If you are still not sure whether you are included in the Class, you can ask for free help.

You can call the Claims Administrator at 866-674-1729, or you can fill out and return the Claim

Form described at § 8 to see if you qualify, or go to www.AvingerSecuritiesLitigation.com for

more information.

THE SETTLEMENT AND WHAT YOU MAY GET

5. Why Is There a Settlement?

The Court did not decide in favor of the Plaintiffs or the Defendants. Instead, both sides

agreed to a Settlement. If approved, the Settlement will avoid the cost and uncertainties of further

litigation, dispositive pre-trial motions, trial, and likely appeals, while allowing eligible Class

Members who submit valid Claim Forms to receive compensation.

Plaintiffs and their counsel believe that the claims asserted against Defendants have merit.

They recognize, however, that continuing the litigation through trial and likely appeals would be

expensive and likely take several additional years to resolve, and would involve the very

substantial risk that Plaintiffs would be unable to establish that Defendants were liable, or that

Defendants (even if they were liable) had caused the Class to suffer legally recoverable damages.

For example, Defendants argued that their statements in the Offering Documents regarding the

state of the development of Avinger’s Pantheris product as of the January 2015 IPO were accurate


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when made, and that they were not liable for failing to anticipate that a later version of the

Pantheris, which was not commercially launched until more than a year after the IPO, would

experience disappointing sales in 2016. Defendants further argued that their product testing

procedures were appropriate, that the Pantheris product satisfied federal Food and Drug

Administration (“FDA”) requirements, and that any alleged defects in the Pantheris were

adequately disclosed and promptly addressed in good faith. The Defendants who allegedly

violated the Exchange Act would also contend that they did not act with intent to defraud (as

required under that Act), citing, among other things, their Class Period disclosures regarding the

feedback they received from customers after Pantheris’ commercial launch in 2016, the lack of an

obvious motive to commit fraud in the form of unusually large insider stock sales, and the lack of

allegations by any government regulators of any fraudulent conduct. Finally, Defendants argued

that none of the alleged misstatements or omissions caused any Class Members to suffer any

damages, on the grounds that the “corrective disclosures” that caused Avinger’s stock price to

decline did not relate to Defendants’ alleged misstatements (and that, at worst for Defendants, their

liability would be limited to just a fraction of the market losses suffered on just one of the alleged

“corrective disclosure” dates). To obtain any recovery, Plaintiffs would have also had to prevail at

several stages, including at class certification, at summary judgment and at trial – and even if they

prevailed at those stages Plaintiffs would still face the risk of prevailing on the appeals that would

likely follow any successful result at trial. Further prosecution of the Action would therefore

involve significant risks and likely years of further litigation.

6. What does the Settlement provide?

The Settlement will result in a fund of $5 million in cash, in exchange for a release of the

Released Plaintiffs’ Claims (defined below) and the dismissal of the Action (and the related State

Action). The balance of this fund, after making deductions for the payment of taxes, Court-

approved attorneys’ fees and expenses, plaintiff service awards and the costs of claims

administration (including the costs of printing and mailing this Notice and publication notice by

newspaper notice) (the “Net Settlement Fund”), will be distributed pro rata in accord with a Court-


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approved Plan of Allocation to those Class Members who submit valid Claim Forms. The

proposed Plan of Allocation, which is subject to approval by Court, is described in more detail at

the end of this Notice.

7. How Much Will My Payment Be?

Your share of the Net Settlement Fund will depend on the number of valid claim forms

that Class Members send in, the number of common shares of the Company’s stock you purchased

or acquired during the relevant period, and the timing of your purchases and sales. You will not

receive a payment, however, if your proportionate share of the Net Settlement Fund is less than

$10.00.

You can calculate your Recognized Claim in accordance with the formula shown below in

the Plan of Allocation. The payment you receive will reflect your Recognized Claim in relation to

the Recognized Claims of all persons submitting valid Claim Forms. Because the total of all

recognized claims is expected to exceed the amount of the Net Settlement Fund, your Recognized

Claim is not the amount of the payment that you can expect, but is used to determine how the Net

Settlement Fund is allocated among all persons submitting claims.

HOW TO OBTAIN A PAYMENT – SUBMITTING A CLAIM FORM

8. How Can I Get a Payment?

To be eligible for a payment from the proceeds of the Settlement, you must be an eligible

Class Member and must submit a valid Claim Form. A Claim Form is enclosed with this Notice.

You may also download a Claim Form from www.AvingerSecuritiesLitigation.com, or request one

from the Claims Administrator by calling 1-800- _______toll free. Please read the Claim Form

instructions carefully, provide all required information, include copies of the required supporting

documents, sign the form, and mail it so that it is postmarked no later than __________, 2018.

9. When Will I Receive My Payment?

The Court will hold its Settlement Hearing on __________, 2018 to decide whether to

approve the Settlement and Plan of Allocation. If the Court approves the Settlement and Plan of


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Allocation, there may be appeals. It is always uncertain when appeals will be resolved, and

resolving them can take time, perhaps more than a year. Even if no appeals are filed, it also takes

time for the Claims Administrator to process all Claim Forms and make payments. Please be

patient.

10. What Am I Giving Up To Get a Payment or To Stay in the Class?

Unless you timely and validity exclude yourself from the Class by the __________, 2018

deadline (see §§ 11-13 below), if you fit within the definition of the Class you will continue to be a

Class Member, and that means that you cannot sue, continue to sue, or be part of any other lawsuit

that brings any of the Released Claims (including the claims asserted in this Action) against any of

the Defendants or the other Released Defendant Parties. It also means that all of the Court’s orders

will apply to you and legally bind you. If you remain a Class Member, and if the Settlement is

approved, you and each of your “Related Parties” (as defined below) will give up all “Released

Claims” (as defined below), including “Unknown Claims” (as defined below), against the

“Released Defendant Persons” (as defined below):

“Released Claims” means all claims (including Unknown Claims as defined below),

demands, losses, rights and causes of action of any nature whatsoever, that have been or

could have asserted in either this Action or the State Action (the “Actions”) or could in

future be asserted in any forum, whether foreign or domestic, whether arising under

federal, state, common, or foreign law, by Plaintiffs or any other Class Member, or their

successors, assigns, executors, administrators, representatives, attorneys and agents, in their

capacities as such, whether brought directly or indirectly against any of the Released

Defendants’ Parties, that (a) arise out of, are based upon, or relate in any way to any of the

allegations, acts, transactions, facts, events, matters, occurrences, statements,

representations or omissions involved, set forth, alleged or referred to, in either of the

Actions, or which could have been alleged in the Actions; and (b) arise out of, are based

upon, or relate to the purchase or acquisition of any shares of Avinger common stock


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during the Class Period. Notwithstanding the foregoing, “Released Claims” does not,

however, include claims to enforce the settlement.

“Released Defendant Parties” means (i) each Defendant, (ii) each of their respective

immediate family members (for individuals) and each of their direct or indirect parent

entities, subsidiaries, related entities and affiliates, any trust of which any individual

defendant is the settler or which is for the benefit of any Defendant and/or member(s) of his

or his family, and (iii) for any of the persons or entities listed in parts (i) or (ii), their

respective past and present general partners, limited partners, principals, shareholders, joint

ventures, members, officers, directors, managers, managing directors, supervisors,

employees, contractors, consultants, auditors, accountants, financial advisors, professional

advisors, investment bankers, representatives, insurers, trustees, trustors, agents, attorneys,

professionals, predecessors, successors, assigns, heirs, executors, administrators, and any

controlling person thereof, in their capacities as such, and any entity in which a Defendant

has a controlling interest

“Related Parties” means each of a person or entity’s respective past or present parents,

subsidiaries, divisions, general partners, limited partners, principals, controlling

shareholders, joint ventures, members, officers, directors, managers, managing directors,

employees, contractors, consultants, auditors, accountants, auditors, financial advisors,

professional advisors, investment bankers, legal representatives, insurers, trustees, trustors,

agents, attorneys, professionals, representatives, predecessors, successors, assigns, heirs,

executors, and administrators, in their capacities as such, and any entity in which any such

Person has a controlling interest.

“Unknown Claims” means any and all Released Claims of every nature and description

against the Released Defendants’ Parties which any Plaintiff or any member of the Class or

their Related Parties does not know or suspect to exist in his, her or its favor at the time of

their release of the Released Claims, and any and all Released Defendants’ Claims of every

nature and description against the Released Plaintiffs’ Parties which any Defendant or any


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of their Related Parties does not know or suspect to exist in his, her or its favor at the time

of their release of the Released Defendants’ Claims, and including without limitation those

which, if known by such Plaintiff, member of the Class or Related Party, might have

affected his, her or its decision(s) with respect to the settlement or the releases. With

respect to any and all Released Claims and Released Defendants’ Claims, the Settling

Parties (Defendants and Plaintiffs) hereto stipulate and agree that, upon the Effective Date

(as defined herein), each Plaintiff and each Defendant shall expressly waive, and each of

the members of the Class shall be deemed to have waived, and by operation of the

judgment shall have waived, any and all provisions, rights, and benefits conferred by any

law of any state or territory of the United States, or principle of common law, which is

similar, comparable, or equivalent to Cal. Civ. Code §1542, which provides:


The Settling Parties and Class Members, or their Related Parties, may hereafter discover

facts in addition to, or different from, those which he, she, or it now knows or believes to

be true with respect to the subject matter of the Released Claims or the Released

Defendants’ Claims, but Settling Parties shall expressly settle and release, and each Class

Member, upon the Effective Date, shall be deemed to have, and by operation of the

Judgment shall have, fully, finally, and forever settled and released any and all Released

Claims and Released Defendants Claims, known or unknown, suspected or unsuspected,

contingent or non-contingent, whether or not concealed or hidden, which now exist, or

heretofore have existed, upon any theory of law or equity now existing or coming into

existence in the future, including, but not limited to, conduct which is negligent, reckless,

intentional, with or without malice, or a breach of any duty, law, rule, or regulation,

without regard to the subsequent discovery or existence of such different or additional

facts. The Settling Parties acknowledge, and Class Members shall be deemed by operation


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of the Judgment to have acknowledged, that the foregoing waiver was separately bargained

for and a key element of the Settlement.

In addition, if the Settlement is approved, each of the Defendants and each of their Related Parties

will give up all “Released Defendants’ Claims” against Class Members and the other Released

Plaintiffs’ Parties (as defined below)

“Released Defendants’ Claims” means all claims (including Unknown Claims), demands,

losses, rights, and causes of action of any nature whatsoever by the Released Defendants’

Parties or any of them against Plaintiffs, members of the Class, or Plaintiffs’ Lead Counsel,

State Counsel or other or additional Plaintiffs’ Counsel, which arise out of or relate in any

way to the institution, prosecution, assertion, settlement, or resolution of either of the

Actions (except for claims to enforce the settlement).

“Released Plaintiffs Parties” means (i) Plaintiffs and the members of the Class, and (ii)

each of their respective family members, and their respective general partners, limited

partners, principals, shareholders, joint ventures, members, officers, directors, managers,

managing directors, supervisors, employees, contractors, consultants, auditors, accountants,

financial advisors, professional advisors, investment bankers, representatives, insurers,

trustees, trustors, agents, attorneys, professionals, predecessors, successors, assigns, heirs,

executors, administrators, and any controlling person thereof, in their capacities as such

EXCLUDING YOURSELF FROM THE CLASS ACTION SETTLEMENT

If you do not want a payment from the Settlement and want to keep the right to sue

on your own the Defendants or the other Released Defendant Parties to recover anything on the

claims being released by the Settlement, then you must take steps to remove yourself from the

Class. This process is called excluding yourself from the Class – and is sometimes referred to as

“opting out.”

11. How Do I Exclude Myself (“Opt-Out”) From the Class and the Proposed Settlement?


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To exclude yourself from the Class and the Settlement, you must send a letter by First

Class Mail stating that you “request to be excluded from the Banerjee v. Avinger, Inc. litigation.”

To be valid, your request must include your name, address, telephone number,your signature, the

number of shares of Avinger common stock that you purchased and/or sold during the Class Period

(i.e. between January 29, 2015 and April 10, 2017 inclusive), together with the number of shares,

dates, and prices for each such purchase or sale transaction. A Person that requests exclusion from

the Class must also include copies of documents sufficient to show the number of shares of

Avinger common stock he, she or it purchased and sold during the Class Period, including the

dates of purchase or sale, the number of shares purchased and/or sold, and the price paid or

received per share for each such purchase or sale. Unless the deadline is otherwise extended by

the Court, you must mail your exclusion request so that it is received no later than __________,

2018 to the following: Avinger Securities Litigation

EXCLUSIONS c/o KCC Class Action Services

3301 Kerner Blvd. San Rafael, CA 94901

Unless these requirements are otherwise altered by the Court, your exclusion request must comply

with the above requirements in order to be valid. Please note that you cannot exclude yourself on

the phone or by e-mail. If you ask to be excluded, you will not be eligible to receive any payment

from the Settlement, and you cannot object to the class action Settlement. You will not be legally

bound by anything that happens in this Action, and you may be able to sue on your own the

Defendants and the other Released Defendant Parties on the Released Plaintiffs’ Claims in the

future.

12. If I Do Not Exclude Myself, Can I Sue the Defendants and the Other Released Defendant Parties For the Same Thing Later?

No. Unless you exclude yourself from the Class, you give up any right to sue the

Defendants or the other Released Defendant Parties on any and all Released Plaintiffs’ Claims. If

you have a pending lawsuit against any of the Released Defendant Parties, speak to your lawyer in


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that case immediately, as you may need to exclude yourself from this Action to continue your own

lawsuit. Remember, the exclusion deadline is __________, 2018.

13. If I Exclude Myself, Can I Get Money From the Proposed Settlement?

No. If you exclude yourself, do not send in a Claim Form.

THE LAWYERS REPRESENTING YOU

14. Do I Have a Lawyer in this Case?

The Court appointed the law firm of Scott + Scott Attorneys at Law LLP to represent you

and other Class Members. These lawyers are called Lead Counsel. You will not be personally

liable for the fees and expenses incurred by these lawyers. If you want to be represented by your

own lawyer, you may hire one at your own expense.

15. How Will the Lawyers Be Paid?

Lead Counsel and the other Plaintiffs’ Counsel will ask the Court for an award of

attorneys’ fees of up to 30% of the Settlement Fund and for reimbursement of expenses up to

$150,000 in connection with litigating the claims asserted in this Action. The individual Plaintiffs

will also request an award for their reasonable time and expenses incurred in representing the

Class, in an aggregate amount not to exceed $9,000. Such sums as may be approved by the Court

will be paid from the Settlement Fund. Class Members are not personally liable for any such fees,

awards or expenses.

The attorneys’ fees and expenses requested will be the only payment to Lead Counsel and

the other Plaintiffs’ Counsel for their efforts in achieving this Settlement and for their risk in

undertaking this representation on a wholly-contingent basis. To date, none of Plaintiffs’ Counsel

have been paid anything for their services in conducting this Litigation on behalf of the Plaintiffs

and the Class, nor for their expenses. Plaintiffs’ Counsel collectively have expended more than

___ hours of attorney time to date in connection with this matter and will ask the Court for

reimbursement of actual expenses in an amount not to exceed $______.


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Lead Counsel will file a motion with the Court in support of Plaintiffs’ Counsels’ request

for attorneys’ fees and expenses not later than 35 days prior to the Settlement Hearing, which will

be posted on the settlement website. The motion will argue that the requested fees are well within

the range of fees awarded to class counsel in other cases of this type. The Court will decide what

Plaintiffs’ Counsel should receive from the Settlement Fund for fees and expenses, and may award

less than what is requested.

OBJECTING TO THE SETTLEMENT

You can tell the Court that you do not agree with the Settlement or any part of it.

16. How Do I Tell the Court That I Object to the Proposed Settlement?

If you are a Class Member, you can object to the proposed Settlement, the proposed

Plan of Allocation, Plaintiffs’ Counsel’s request for attorney’s fees and reimbursement of

expenses, and/or Plaintiffs’ application for an award for their time and expenses. You can

write to the Court setting out your objection. The Court will consider your views. To

comment or object, you must send a signed letter saying that you wish to comment on or

object to the proposed Settlement in Banerjee v. Avinger, Inc, Case No. 4:17-cv-03400-CW.

Include your name, address, telephone number and your signature, and set forth the date(s),

price(s), and number(s) of shares of Avinger common stock you purchased and sold during the

Class Period, and state your comments or the reasons why you object to the proposed

Settlement, Plan of Allocation and/or any application for attorneys’ fees, expenses or service

awards. Unless otherwise permitted by the Court, your comments or objection must be mailed

or delivered to each of the following addresses such that it is received no later than [21 days

before the Settlement Hearing]____________, 2018:

THE COURT PLAINTIFFS’ LEAD COUNSEL DEFENSE COUNSEL

Clerk of the Court U.S. District Court for theNorthern District of Calif.1301 Clay St., Suite 400S Oakland, CA 94612

William C. Fredericks SCOTT+SCOTT ATTYS ATLAW The Helmsley Building 230 Park Avenue, 17th Floor New York, NY 10169-1820

Ignacio Salceda Wilson Sonsini Goodrich &Rosati 650 Page Mill Road Palo Alto, CA 94304


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The motions in support of the Settlement and the request for attorneys’ fees will be filed no later

than _____________, 2018, and will be available on the Settlement website at

www.AvingerSecurities Litigation.com.

17. What is the difference between objecting and excluding?

Objecting is simply telling the Court that you do not like something about the

Settlement. You can object only if you stay in the Class. If you object, but the Court approves

the Settlement, you will be bound by the Settlement’s terms in the same way as Class Members

who do not object.

Excluding yourself is telling the Court that you do not want to be paid and do not want

to release any claims you think you may have against Defendants and the other Released

Defendant Parties. If you exclude yourself, you cannot object to the Settlement because it

will no longer affect you.

THE COURT’S SETTLEMENT HEARING

The Court will hold a hearing to decide whether to approve the Settlement. You may

attend and you may ask to speak, but you do not have to.

18. When and Where Will the Court Decide Whether to Approve the Settlement?

The Court will hold a Settlement Hearing on __________, 2018, at __:__.m. PT, before

The Honorable Claudia Wilken, at the United States District Court for the Northern District of

California, Oakland Courthouse, 1301 Clay Street, Oakland, CA, 94612. At this hearing, the

Court will consider whether the Settlement is fair, reasonable and adequate. If there are objections,

the Court will consider them, even if you do not ask to speak at the hearing. The Court will also

consider how much to pay to Plaintiffs’ Counsel and whether the Plan of Allocation is fair,

reasonable and adequate. The Court may decide these issues at the hearing or take them under

consideration for a later decision. You should be aware that the court may change the date and

time of the Settlement Hearing without another notice being sent to you. If you want to attend the

hearing, you should check with Lead Counsel or the Settlement website,


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www.AvingerSecuritiesLitigation.com, beforehand to be sure that the date and/or time has not

changed.

19. Do I Have to Come to the Hearing?

No. Lead Counsel will answer questions the Court may have. But, you are welcome to

come at your own expense. If you send an objection, you do not have to come to Court to talk

about it. As long as you mailed your written objection on time, the Court will consider it. You

may also send your own lawyer to attend (at your own expense), but it is not necessary. Class

Members do not need to appear at the hearing or take any other action to indicate their approval.

20. May I Speak at the Hearing?

You may ask the Court for permission to speak at the Settlement Hearing. To do so, you

must send a letter saying that it is your “intention to appear in Banerjee, et al. v. Avinger, Inc., et

al, No. 17-cv-03400-CW.” Be sure to include your name, address, telephone number, your

signature, the number of shares of the Company’s common stock purchased and/or sold during the

Class Period (i.e. from January 29, 2015 through April 10, 2017, inclusive), and be sure to also

include copies of documents that show your purchases or sales of Avinger common stock during

the Class Period. Persons who intend to object to the Settlement, the Plan of Allocation, any

award of attorneys’ fees and expense to Plaintiffs’ Counsel, and/or any award to Plaintiffs for their

time and expenses representing the Class, and who desire to present evidence at the Settlement

Hearing, must include in their written objections the identity of any witnesses they may call to

testify and copies of any exhibits they intend to introduce into evidence at the Settlement Hearing.

Your notice of intention to appear must be sent to the Clerk of the Court, Lead Plaintiffs’ Counsel

designee and the Defendants’ Counsel designee at each of the three addresses listed in question 18

so that it is received no later than _________, 2018.

IF YOU DO NOTHING

21. What happens if I do nothing?


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If you do nothing, all of your Released Plaintiffs’ Claims against the Released Defendant

Parties will be released, and you will also not receive any money from the Settlement because it is

necessary to submit a valid and timely Claim Form to be eligible for a payment.

GETTING MORE INFORMATION

22. How Can I Get More Information?

This Notice summarizes the proposed Settlement. For even more detailed information

concerning the matters involved in this litigation, you can also obtain answers to common

questions regarding the proposed Settlement by contacting the Claims Administrator toll-free

at 866-674-1729. Reference is also made to the Stipulation (which sets forth all the terms of

the proposed Settlement), to the pleadings in support of the Settlement, to the Orders entered

by the Court, and to the other settlement-related papers filed in the Action, which are posted on

the Settlement website at www.AvingerSecuritiesLitigation.com, and which may be inspected

at the Office of the Clerk of the U.S. District Court for the Northern District of California, U.S.

Courthouse, 1301 Clay Street, Suite 400S, Oakland, CA 94612, during regular business hours.

For a fee, all papers filed in this Action are also available at www.pacer.gov. You may also

contact a representative of Plaintiffs’ Lead Counsel with any questions at: Scott+Scott

Attorneys at Law LLP, attn. William C. Fredericks, The Helmsley Building, 230 Park Avenue,

17th Floor, New York, NY 10169-1820, tel: 1-800-404-7770, email [email protected].

PLEASE DO NOT CALL OR WRITE THE COURT, DEFENDANTS OR THEIR COUNSEL REGARDING THIS NOTICE.

PROPOSED PLAN OF ALLOCATION OF NET SETTLEMENT FUND AMONG CLASS MEMBERS

The Net Settlement Fund, subject to approval by the Court, shall be distributed to Class

Members who timely submit valid Claim Forms (“Authorized Claimants”) pursuant to the

proposed Plan of Allocation set forth below.


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A. Calculation of Recognized Losses on Purchases of Avinger Common Stock in

Avinger’s IPO Through and Including May 5, 2016

Publicly tradable shares of common stock of Avinger, Inc. (“Avinger”) purchased in the

initial public offering dated January 29, 2015 or purchased between January 30, 2015 and May 5,

2016 inclusive are potentially eligible for damages under the Securities Act of 1933 (the “1933

Act Eligible Shares”) based on their Recognized Losses (as a percentage of the Aggregate

Recognized claims of all Authorized Claimants), as set forth at ¶¶ (1)-(3) below. The total number

of 1933 Act Eligible Shares is estimated to be no more than 6.9 million. Persons that sold such

1933 Act Eligible Shares on or before July 12, 2016 shall not be credited with any Recognized

Losses due to loss-limitation rules, as such shares would have been sold prior to the first corrective

disclosure date (July 12, 2016) alleged in the Complaint. In addition, no shares purchased after

May 5, 2016 (the date that Avinger published its financial statements covering the first quarter of

2016) shall be deemed to be 1933 Act Eligible Shares, as §11(a) of the 1933 Act would require

individualized proof of each such purchaser’s actual reliance on the allegedly defective portions of

the January 2015 Offering Documents (for the reason that, here, an “earnings statement covering a

period of at least twelve months beginning after the effective date of the registration statement”

within the meaning of §11(a) became available after the close of business on May 5, 2016).

(1) For each 1933 Act Eligible Share purchased on or before September 4, 2015, the

Recognized Loss for each such share shall be based on the date of sale as set forth in

the following Table A:

Table A: Recognized Losses on 1933 Act Eligible Shares Based on Date of Sale3

3 Except for the relative stock price declines on July 13 and 14, 2016, Recognized Loss associated with the other disclosure events alleged in the Complaint were discounted or weighted to reflect the consulting expert’s assessment of the probable portion of each identified stock price decline reasonably attributable to the allegations in the Complaint.

Period Begin Date End Date Recognized Loss (per share)

1 January 29, 2015 July 12, 2016 $ 0.00 2 July 13, 2016 July 13, 2016 $ 4.53 3 July 14, 2016 July 31, 2016 $ 4.95


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(2) For each 1933 Act Eligible Share purchased on or between September 5, 2015, and

November 24, 2015, the Recognized Loss for each such share shall be 50% of the

recognized loss amount based on the date of sale, as set forth in Table A.4

(3) For each 1933 Act Eligible Share purchased on or between November 25, 2015, and

May 5, 2016, the Recognized Loss for each such share shall be 30% of the recognized

loss amount based on the date of sale as set forth in Table A.5

B. Calculation of Recognized Losses on Purchases of Avinger, Inc. Common Shares on or between May 6, 2016 and April 10, 2017

In addition, publicly tradable shares of Avinger common stock purchased on or between

May 6, 2016 and April 10, 2017 and held until at least the close of trading on March 2, 2016, shall

be entitled to damages under the Securities Exchange Act of 1934 (“1934 Act Eligible Shares”)

based on their Recognized Losses (as a percentage of the Aggregate Recognized claims of all

Authorized Claimants), as set forth below at ¶ (4). The total net number of 1934 Act Eligible

Shares is estimated to be no more than 20.6 million.

(4) For each 1934 Eligible Share purchased on or after May 6, 2016, the Recognized Loss for

each such share shall be 20%6 of the lesser of: (a) the Recognized Loss based on the

4 The lesser weight reflects a discount based on counsel’s assessment of the uncertainty and potential difficulties of establishing tracing such shares to the IPO (i.e, of showing that such shares had been issued in the IPO, as opposed to being non-IPO shares that entered the market after September 5, 2015) 5 The lesser weight reflects a discount based on counsel’s assessment of the further uncertainty and difficulties of establishing tracing such shares to the IPO. 6 The lesser weight reflects a discount based on counsel’s assessment that claims under the 1934 Act are materially more difficult to prove than claims under the 1933 Act, given that the 1934 Act claims alleged here (unlike the 1933 Act claims) would have required Lead Plaintiffs to also affirmatively prove, among other things, that: (a) the Avinger Defendants acted with scienter (i.e acted with intent to defraud, or with deliberate recklessness); (b) Avinger shares traded on an efficient market; and (c) that the allegedly false or misleading statements caused the losses alleged; while also taking into account that (d) Item 303 of SEC Regulation S-K is not available in the Ninth Circuit as a basis for imposing liability for material omissions under the 1934 Act.

4 August 1, 2016 January 5, 2017 $ 5.07 5 January 6, 2017 March 6, 2017 $ 5.23 6 March 7, 2017 April 10, 2017 $ 5.37 7 April 11, 2017 until current date $ 5.72


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difference (if a positive number) between the Recognized Loss for the Period covering the

date of sale as set forth in Table A minus the Recognized Loss for the Period covering the

date of purchase as set forth in Table A above; or (b) the purchase price (excluding fees

and commissions) minus (i) the sale price (excluding fees and commissions) if sold on or

prior to April 10, 2017 or (ii) $0.60 if such shares were held through the close of trading

April 10, 2017.

Note: Although Class Members also have claims under the 1934 Act with respect to Avinger

shares that they purchased prior to May 6, 2016, under the Plan of Allocation the value of the

claims associated with such shares is already taken into account when treating such shares as

“1933 Act Eligible Shares” under §A above.

C. Additional Provisions

For Class Members who made multiple purchases, acquisitions, or sales during the Class

Period, the First-In, First-Out (“FIFO”) method will be applied to such purchases, acquisitions,

and sales for purposes of calculating a claim. Under the FIFO method, sales of Avinger common

stock during the Class Period will be matched, in chronological order, starting with shares of

common stock purchased in the IPO. The remaining sales of common stock during the Class

Period will then be matched, in chronological order, against common stock purchased or acquired

during the balance of the Class Period.

The date of purchase or sale is the “contract” or “trade” date as distinguished from the

“settlement” date. All purchase, acquisition, and sale prices shall exclude any fees and

commissions. The receipt or grant by gift, devise, or operation of law of Avinger common stock

during the Class Period shall not be deemed a purchase or sale of Avinger common stock for the

calculation of a claimant’s Recognized Claim, nor shall it be deemed an assignment of any claim

relating to the purchase of such shares unless specifically provided in the instrument of gift or

assignment.

Gains on short sales of Avinger (if any) made on or between January 29, 2015, and April

10, 2017, will be used to offset losses. The date of covering a “short sale” is deemed to be the date


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of purchase of the Avinger common stock. The date of a “short sale” is deemed to be the date of

sale of the Avinger common stock. Under the Plan of Allocation, however, the Recognized Loss

on “short sales” is zero.

Option contracts are not securities eligible to participate in the Settlement. With respect to

Avinger common stock purchased or sold through the exercise of an option, the purchase/sale date

of the Avinger common stock is the exercise date of the option and the purchase/sale price of the

Avinger common stock is the exercise price of the option.

D. Allocation of Net Settlement Proceeds Based on Recognized Losses

A Claimant’s “Recognized Claim” under the Plan of Allocation shall be (a) the sum of his,

her or its Recognized Loss or gain amounts for their 1933 Act Eligible Shares, plus (b) the sum of

his, her, or its Recognized Loss or gain amounts for their 1934 Act Eligible Shares, as determined

in accordance with §§ A-C above.

The Net Settlement Fund will be distributed to Authorized Claimants on a pro rata basis

based on the relative size of their Recognized Claims. Specifically, a “Distribution Amount” will

be calculated for each Authorized Claimant, which shall be the Authorized Claimant’s Recognized

Claim divided by the aggregate Recognized Claims of all Authorized Claimants, multiplied by the

total amount in the Net Settlement Fund. If any Authorized Claimant’s Distribution Amount

calculates to less than $10.00, it will not be included in the calculation and no distribution will be

made to such Authorized Claimant.

A Class Member will be eligible to receive a distribution from the Net Settlement Fund

only if a Class Member had a net overall loss, after all profits from transactions in all Avinger

common stock described above during the Class Period are subtracted from all losses. To the

extent a Claimant had a market gain with respect to his, her, or its overall transactions in Avinger

common stock during the Class Period, the value of the Claimant’s Recognized Claim shall be

zero. Such Claimants shall in any event be bound by the Settlement. To the extent that a

Claimant suffered an overall market loss with respect to his, her, or its overall transactions in

Avinger common stock during the Class Period, but that market loss was less than the total


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Recognized Claim calculated above, then the Claimant’s Recognized Claim shall be limited to the

amount of the actual market loss.

For purposes of determining whether a Claimant had a market gain with respect to his, her,

or its overall transactions in Avinger common stock during the Class Period or suffered a market

loss, the Claims Administrator shall determine the difference between (i) the “Total Purchase

Amount”7 and (ii) the sum of the “Total Sales Proceeds”8 (for shares sold during the Class Period)

and (for shares not sold but still held as of the end of the Class Period) the “Holding Value.”9

This difference shall be deemed a Claimant’s market gain or loss with respect to his, her, or its

overall transactions in Avinger common stock during the Class Period.

The Net Settlement Fund will not be distributed unless and until the Court has approved

the Settlement and a plan of allocation, and the time for any petition for rehearing, appeal or

review, whether by certiorari or otherwise, has expired. Approval of the Settlement is separate

from approval of a plan of allocation. Any determination with respect to a plan of allocation will

not affect the Settlement, if approved.

Each Claimant shall be deemed to have submitted to the jurisdiction of the Court with

respect to his, her, or its Claim Form. Payment pursuant to the Plan of Allocation set forth above

shall be conclusive against all Authorized Claimants.

You should contact the Claims Administrator or Lead Counsel if you disagree with any

determinations that may be made by the Claims Administrator regarding your Claim Form. If you

are unsatisfied with the determinations, you may ask the Court, which retains jurisdiction over all

7 The “Total Purchase Amount” is the total amount the Claimant paid (excluding commissions and other charges) for Avinger common stock purchased or acquired during the Class Period.

8 The Claims Administrator shall match any sales of Avinger common stock during the Class Period, first against the Claimant’s opening position in Avinger common stock (the proceeds of those sales will not be considered for purposes of calculating market gains or losses). The total amount received (excluding commissions and other charges) for the remaining sales of Avinger common stock sold during the Class Period shall be the “Total Sales Proceeds.” 9 The Claims Administrator shall ascribe a value of $0.60 per share for Avinger common stock purchased or acquired during the Class Period and still held as of the close of trading on April 10, 2017, and the resulting total value of such shares using that per share value shall be the “Holding Value.”


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Class Members and the claims administration process, to decide the issue by submitting a written

request. Distributions will be made to Authorized Claimants after all claims have been processed

and after the Court has finally approved the Settlement.

SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES

The Court has ordered that if you held any Avinger common stock purchased or

acquired between January 29, 2015 through April 10, 2017, inclusive, as nominee for a beneficial

owner, then, within twenty (20) days after you receive this Notice, you must either: (1) send a copy

of this Notice and Claim Form (“the Notice Package”) by first class mail to all such beneficial

owners; or (2) provide a list of the names and addresses of such beneficial owners to the Claims

Administrator. If you choose to mail the Notice Package yourself, you may obtain from the

Claims Administrator (without cost to you) as many additional copies of these documents as you

will need to complete the mailing. Regardless of whether you choose to complete the mailing

yourself or elect to have the mailing performed for you, you may obtain reimbursement for

reasonable administrative costs actually incurred in connection with forwarding the Notice

Package that would not have been incurred but for the obligation to forward it, upon submission of

appropriate documentation to the Claims Administrator and subject to approval by the Court. All

communications concerning the foregoing should be directed to the Claims Administrator by email

to [email protected] or by mail to:

Avinger Securities Litigation c/o KCC Class Action Services

P.O. Box 404064 Louisville, KY 40233-4064

www.AvingerSecuritiesLitigation.com Dated: ___________, 2018 BY ORDER OF THE UNITED STATES DISTRICT

COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA


EXHIBIT A-2


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PROOF OF CLAIM AND RELEASE


EXHIBIT A-2 TO STIP. OF SETTLEMENT

John T. Jasnoch (CA 281605) SCOTT+SCOTT ATTORNEYS AT LAW LLP 600 W. Broadway, Suite 3300 San Diego, CA 92101 Telephone: (619) 233-4565 Facsimile: (619) 233-0508 Email: [email protected] Attorneys for Lead Plaintiffs Banerjee & Harjai


OAKLAND DIVISION


Plaintiffs, v.


Defendants.


PROOF OF CLAIM AND RELEASE (“CLAIM FORM”)


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2 PROOF OF CLAIM AND RELEASE


I. IMPORTANT INFORMATION

1. To recover as a Member of the Class based on your claims in the above-captioned

action (the “Action”) you must complete and, on page ___ hereof, sign this Proof of Claim and

Release. If you fail to file a timely and properly addressed Proof of Claim and Release, your

claim may be rejected and you may be precluded from any recovery from the Net Settlement

Fund created in connection with the proposed settlement of the Action.

2. Submission of this Proof of Claim and Release, however, does not assure that you

will share in the proceeds of settlement in the Action.

3. YOU MUST MAIL YOUR COMPLETED AND SIGNED PROOF OF CLAIM

AND RELEASE POSTMARKED ON OR BEFORE ________ __, 2018, ADDRESSED TO

THE CLAIMS ADMINISTRATOR AT THE ADDRESS SET FORTH ON PAGE __ BELOW

4. If you are NOT a Class Member, as defined in the Notice of Proposed Settlement

of Class Action (“Notice”), do NOT submit a Proof of Claim and Release form. In general, you

will potentially qualify as a class member only if you purchased shares of Avinger common

stock (ticker symbol: “AVGR”) during the period from January 29, 2015 (beginning with

Avinger’s initial public offering (the “IPO”) through and including April 10, 2017 (the “Class

Period”).

5. If you are a Class Member, you will be bound by the terms of any judgment

entered in the Action, WHETHER OR NOT YOU SUBMIT A PROOF OF CLAIM, unless you

file a request for exclusion as explained in the Notice.

II. DEFINITIONS

1. “Defendants” means, collectively, Avinger, Inc., Jeffrey M. Soinski, Matthew B.

Ferguson, John B. Simpson, Donald A. Lucas, James B. McElwee, James G. Cullen, Thomas J.

Fogarty, Canaccord Genuity, Inc., Cowen & Company, LLC, Oppenheimer & Co., BTIG LLC,

and Stephens Inc.

2. “Released Claims” means all claims (including Unknown Claims as defined

below), demands, losses, rights and causes of action of any nature whatsoever, that have been or

could have asserted in either this Action or the State Action (the “Actions”) or could in future be


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asserted in any forum, whether foreign or domestic, whether arising under federal, state,

common, or foreign law, by Plaintiffs or any other Class Member, or their successors, assigns,

executors, administrators, representatives, attorneys and agents, in their capacities as such,

whether brought directly or indirectly against any of the Released Defendants’ Parties, that (a)

arise out of, are based upon, or relate in any way to any of the allegations, acts, transactions,

facts, events, matters, occurrences, statements, representations or omissions involved, set forth,

alleged or referred to, in either of the Actions, or which could have been alleged in the Actions;

and (b) arise out of, are based upon, or relate to the purchase or acquisition of any shares of

Avinger common stock during the Class Period. Notwithstanding the foregoing, “Released

Claims” does not, however, include claims to enforce the settlement.

3. “Unknown Claims” means any and all Released Claims of every nature and

description against the Released Defendants’ Parties which any Plaintiff or any member of the

Class or their Related Parties does not know or suspect to exist in his, her or its favor at the time

of their release of the Released Claims, and any and all Released Defendants’ Claims of every

nature and description against the Released Plaintiffs’ Parties which any Defendant or any of

their Related Parties does not know or suspect to exist in his, her or its favor at the time of their

release of the Released Defendants’ Claims, and including without limitation those which, if

known by such Plaintiff, member of the Class or Related Party, might have affected his, her or its

decision(s) with respect to the settlement or the releases. With respect to any and all Released

Claims and Released Defendants’ Claims, the Settling Parties (Defendants and Plaintiffs) hereto

stipulate and agree that, upon the Effective Date (as defined herein), each Plaintiff and each

Defendant shall expressly waive, and each of the members of the Class shall be deemed to have

waived, and by operation of the judgment shall have waived, any and all provisions, rights, and

benefits conferred by any law of any state or territory of the United States, or principle of

common law, which is similar, comparable, or equivalent to Cal. Civ. Code §1542, which

provides:



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4. The Settling Parties and Class Members, or their Related Parties, may hereafter

discover facts in addition to, or different from, those which he, she, or it now knows or believes

to be true with respect to the subject matter of the Released Claims or the Released Defendants’

Claims, but Settling Parties shall expressly settle and release, and each Class Member, upon the

Effective Date, shall be deemed to have, and by operation of the Judgment shall have, fully,

finally, and forever settled and released any and all Released Claims and Released Defendants

Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or

not concealed or hidden, which now exist, or heretofore have existed, upon any theory of law or

equity now existing or coming into existence in the future, including, but not limited to, conduct

which is negligent, reckless, intentional, with or without malice, or a breach of any duty, law,

rule, or regulation, without regard to the subsequent discovery or existence of such different or

additional facts. The Settling Parties acknowledge, and Class Members shall be deemed by

operation of the Judgment to have acknowledged, that the foregoing waiver was separately

bargained for and a key element of the Settlement.

5. “Released Defendants’ Parties” means (i) each Defendant, (ii) each of their

respective immediate family members (for individuals) and each of their direct or indirect parent

entities, subsidiaries, related entities and affiliates, any trust of which any individual defendant is

the settler or which is for the benefit of any Defendant and/or member(s) of his or his family, and

(iii) for any of the persons or entities listed in parts (i) or (ii), their respective past and present

general partners, limited partners, principals, shareholders, joint ventures, members, officers,

directors, managers, managing directors, supervisors, employees, contractors, consultants,

auditors, accountants, financial advisors, professional advisors, investment bankers,




6. All capitalized terms not otherwise defined herein shall have the meanings set

forth in the Stipulation and Agreement of Settlement dated May 9, 2018 (the “Stipulation”) and

the exhibits thereto.


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III. INSTRUCTIONS

7. Use Part A of this form entitled “Claimant Information” to identify each

purchaser of Avinger common shares that are the subject of this claim. THIS CLAIM MUST

BE FILED BY THE ACTUAL BENEFICIAL OWNER(S) OR THE LEGAL

REPRESENTATIVE OF SUCH PURCHASERS.

8. All joint purchasers must sign this claim. Executors, administrators, guardians,

conservators, and trustees must complete and sign this claim on behalf of Persons represented by

them and their authority must accompany this claim and their titles or capacities must be stated.

The last four digits of the Social Security (or taxpayer identification) number and telephone

number of the beneficial owner may be used in verifying the claim. Failure to provide the

foregoing information could delay verification of your claim or result in rejection of the claim.

9. Use Part B of this form entitled “Schedule of Transactions in Avinger Common

Stock” to supply all required details of your transaction(s) in Avinger common shares, including

transactions relating to any short positions you may have taken with respect to Avinger common

stock. If you need more space or additional schedules, attach separate sheets (or make additional

copies of the transaction schedule at §IV, Part B below) giving all the required transaction

information in substantially the same form. Print the beneficial owner’s name, and the last four

digits of their Social Security or Taxpayer Identification number (see ¶2 above), on each

additional sheet (if any).

10. On the schedules, provide all of the required information with respect to all of the

following: (a) your net position in Avinger common shares as of the close of trading on January

29, 2015 (immediately before the IPO); (b) the number of Avinger common shares you

purchased in Avinger’s January 29, 2015 Offering at the initial offering price of $13.00 per

share; (c) each and every post-IPO purchase of Avinger common shares purchased from January

30, 2015 through and including April 10, 2017; (d) each and every sale of Avinger common

shares sold during the period from January 29, 2015 through and including April 10, 2017; and

(e) your net position in Avinger common shares (if any) as of the close of trading on April 10,

2017. Failure to report all required information for all of your transactions in shares of Avinger


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common stock (including short positions) may result in the rejection of your claim. List each

transaction separately and in chronological order, by trade date, beginning with the earliest. You

must accurately provide the month, day, and year of each transaction you list.

11. Attach copies of trade confirmations, relevant portions of brokerage statements or

other documentation of your transactions in Avinger common shares (including short positions)

to your completed claim form. Failure to provide this documentation could delay verification of

your claim or result in rejection of your claim.

12. The above requests are designed to provide the minimum amount of information

necessary to process the simplest claims. The Claims Administrator may request additional

information as required to efficiently and reliably calculate the amount of claim. In some cases

where the Claims Administrator cannot perform the calculation accurately or at a reasonable cost

to the Class with the information provided, the Claims Administrator may condition acceptance

of the claim upon the production of additional information and/or the hiring of an accounting

expert at the claimant’s cost.

13. NOTICE REGARDING ELECTRONIC FILES: Certain claimants with large

numbers of transactions may request, or may be requested, to submit information regarding their

transactions in electronic files. All claimants MUST submit a manually signed paper Claim

Form whether or not they also submit electronic copies. If you wish to file your claim

electronically, you must visit the settlement website at www.AvingerSecuritiesLitigation.com to

obtain the required file layout. No electronic files will be considered to have been properly

submitted unless the Claims Administrator issues to the claimant a written acknowledgment of

receipt and acceptance of electronically submitted data.


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IV. PROOF OF CLAIM AND RELEASE FORM

■ PART A – CLAIMANT INFORMATION

Last Name (Beneficial Owner) First Name (Beneficial Owner)

Last Name (Co-Beneficial owner or Joint Claimant, if any) First Name

Company/Other Entity (If Claimant is not an individual) Contact Person (if Claimant is not an individual)

Account Number (if Claimant is not an individual)

Address Line 1

Address Line 2 (if needed)

City State Zip Code

Foreign Province (if applicable) Country (if not U.S.A.) Foreign Zip Code (if any)

Telephone Number (Day) Telephone Number (Night)

Last four digits of Beneficial Owner’s Employer Identification Number or Social Security Number (Taxpayer ID Number)1

Email address

1 The last four digits of the taxpayer identification number (TIN), consisting of a valid Social Security number (SSN) for individuals or employer identification number (EIN) for business entities, trusts, estates, etc., and telephone number of the beneficial owner(s) may be used in verifying this claim.


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■ PART B: SCHEDULE OF TRANSACTIONS IN AVINGER COMMON STOCK

Failure to provide proof of all purchases, sales, and closing positions will impede proper processing of your claim. Please include copies of proper documentation with your Proof of Claim as described in the “Instructions” section above.

(1) BEGINNING NET POSITION:

State the net total number of shares of Avinger common stock owned as of 4:00 pm ET on January 29, 2015 (immediately before Avinger’s IPO), long or short (if a net short position, enter a negative value): ____________________________

IF NONE, CHECK HERE ○

(2) PURCHASES:

Separately list each post-IPO purchase of Avinger common shares beginning with the January 29, 2015 IPO through and including April 10, 2017 (must be documented)


Date(s) of Purchase(s) (list chronologically) (month/day/year)

Number of Shares Purchased

Purchase Price per Share (exclude

commissions, taxes & fees)

Proof of Purchase enclosed?

___/___/______

__________________

$_____________ ○Yes ○No

___/___/______

__________________

$_____________ ○Yes ○No

___/___/______

__________________

$_____________ ○Yes ○No

(3) SALES:

Separately list each sale of Avinger common shares (including short sales, if any) during the period from January 29, 2015 through and including April 10, 2017 (must be documented).


Date(s) of Sale(s) (List

Chronologically) (Month/Day/Year)

Number of shares Sold

Sale Price per Share (exclude

commissions, taxes & fees)

Proof of sale enclosed?

___/___/______

__________________

$_____________ ○Yes ○No

___/___/______

__________________

$_____________ ○Yes ○No

___/___/______

__________________

$_____________ ○Yes ○No


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(4) ENDING NET POSITION:

State your net position (in shares) in Avinger common stock owned as of the close of trading on April 10, 2017 (if other than zero, must be documented; if a net short position, enter a negative value;): __________________


IF YOU REQUIRE ADDITIONAL SPACE, ATTACH COMPLETED EXTRA SCHEDULES IN THE SAME FORMAT AS ABOVE (OR COPY OR DOWNLOAD, AND

COMPLETE, ADDITIONAL COPIES OF THE ABOVE “SCHEDULE OF TRANSACTIONS IN AVINGER COMMON STOCK”). PRINT THE BENEFICIAL OWNER’S FULL NAME AND THE LAST FOUR DIGITS OF THEIR TAXPAYER

IDENTIFICATION NUMBER ON EACH ADDITIONAL PAGE

YOU MUST ALSO READ AND SIGN THE RELEASE and CERTIFICATION AT PAGE __ BELOW

■ PART C: RELEASE OF CLAIMS, CERTIFICATION AND SIGNATURE

A. I (we) hereby acknowledge full and complete satisfaction of, and do hereby fully, finally, and forever waive, release, discharge, and dismiss each and every one of the Released Defendants’ Parties with respect to any and all of the Released Claims; and

B. I (we) hereby acknowledge that as of the Effective Date, I (we): (i) shall be deemed to have, and shall have, fully, finally, and forever waived, released, relinquished, and discharged all Released Claims against the Released Defendants’ Parties; and (ii) shall forever be enjoined from prosecuting any Released Claims against any of the Released Defendants’ Parties.

By signing and submitting this Proof of Claim, the claimant(s) or the person(s) who represents the claimant(s) certifies, as follows:

1. that I (we) have read and understand the contents of the Notice, the Plan of Allocation and the Proof of Claim, including the releases provided for in items A and B immediately above;

2. that the claimant(s) is a (are) Class Member(s), as defined in the Notice, and is (are) not excluded from the Class;

3. that the claimant has not submitted a request for exclusion from the Class;

4. that I (we) purchased and own(ed) the Avinger common shares identified in this Proof of Claim and have not assigned my (our) claims against the Released Defendants’ Parties to another, or that, in signing and submitting this Proof of Claim, I (we) have the authority to act on behalf of the owner(s) thereof;

5. that the claimant has not submitted any other claim covering the same purchases or acquisitions of Avinger common shares and knows of no other person having done so on his/her/its behalf;

6. that the claimant submits to the jurisdiction of the Court with respect to his/her/its claim and for purposes of enforcing the releases set forth herein;


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7. that I (we) agree to furnish such additional information with respect to this Proof of Claim as the Claims Administrator or the Court may require;

8. that the claimant waives the right to trial by jury, to the extent it exists, and agrees to the Court’s summary disposition of the determination of the validity or amount of the claim made by this Proof of Claim;

9. that I (we) acknowledge that the claimant will be bound by and subject to the terms of any judgment that may be entered in the Action; and

10. that the claimant is NOT subject to backup withholding under the provisions of Section 3406(a)(1)(C) of the Internal Revenue Code because: (a) the claimant is exempt from backup withholding; or (b) the claimant has not been notified by the IRS that he/she/it is subject to backup withholding as a result of a failure to report all interest or dividends; or (c) the IRS has notified the claimant that he/she/it is no longer subject to backup withholding. If the IRS has notified the claimant that it is subject to backup withholding, please strike out the language in the preceding sentence indicating that the claim is not subject to backup withholding.

UNDER PENALTIES OF PERJURY, I (WE) CERTIFY THAT ALL INFORMATION PROVIDED BY ME (US) ON THIS FORM IS TRUE, CORRECT, AND COMPLETE, AND THAT THE DOCUMENTS SUBMITTED HEREWITH ARE TRUE AND CORRECT COPIES OF WHAT THEY PURPORT TO BE.

__________________________________________ _________________________ Signature of Claimant Date __________________________________________ Print Name of Claimant __________________________________________ __________________________ Signature of Joint Claimant, if any Date __________________________________________ Print Name of Joint Claimant, if any

THIS CLAIM FORM MUST BE MAILED TO THE CLAIMS ADMINISTRATOR BY FIRST-CLASS MAIL, POSTAGE PREPAID, POSTMARKED BY ________________, 2018 AND ADDRESSED TO:

Avinger Securities Litigation c/o KCC Class Action Services

P.O. Box 404064 Louisville, KY 40233-4064

A Proof of Claim received by the Claims Administrator shall be deemed to have been

submitted when posted, if mailed by ___________, 2018, and if a postmark is indicated on the envelope and it is mailed First Class, and addressed in accordance with the above instructions. In all other cases, a Proof of Claim shall be deemed to have been submitted when actually received by the Claims Administrator.

You should be aware that it will take a significant amount of time to fully process all of the Proof of Claim forms. Please notify the Claims Administrator of any change of address.


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REMINDER CHECKLIST 1. Please sign the above release and certification. If this Proof of Claim is being made on

behalf of joint claimants, then both must sign. 2. Remember to attach only copies of acceptable supporting documentation. 3. Please do not highlight any portion of the Proof of Claim or any supporting documents. 4. Do not send original securities certificates or other original documentation. These items

cannot be returned to you by the Claims Administrator. 5. Keep copies of your completed Proof of Claim and the originals of your documentation

for your own records. 6. The Claims Administrator will acknowledge receipt of your Proof of Claim by mail,

within 60 days. Your claim is not deemed filed until you receive an acknowledgement postcard. If you do not receive an acknowledgement postcard within 60 days, please call the Claims Administrator toll free at 1-866-674-1729.

7. If your address changes in the future, or if this Proof of Claim was sent to an old or incorrect address, please send the Claims Administrator written notification of your new address. If you change your name, please inform the Claims Administrator.

8. If you have any questions or concerns regarding your claim, please contact the Claims Administrator at the above address or at 1-866-674-1729, or visit www.AvingerSecuritiesLitigation.com.


EXHIBIT A-3


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SUMMARY NOTICE


EXHIBIT A-3

TO STIPULATION OF SETTLEMENT

John T. Jasnoch (CA 281605) SCOTT+SCOTT ATTORNEYS AT LAW LLP 600 W. Broadway, Suite 3300 San Diego, CA 92101 Telephone: (619) 233-4565 Facsimile: (619) 233-0508 Email: [email protected] Attorneys for Lead Plaintiffs Banerjee & Harjai

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION


Plaintiffs, v.


Defendants.


SUMMARY NOTICE


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2 SUMMARY NOTICE


TO: ALL PERSONS OR ENTITIES WHO PURCHASED OR ACQUIRED AVINGER, INC. COMMON STOCK BETWEEN JANUARY 29, 2015 AND APRIL 10, 2017, INCLUSIVE

YOU ARE HEREBY NOTIFIED, pursuant to an Order of the United States District Court

for the Northern District of California, that a hearing will be held on __________, 2018, at

_:__.m., before The Honorable Claudia Wilken, at the United States District Court for the

Northern District of California, Oakland Courthouse, 1301 Clay Street, Oakland, CA, 94612, for

the purpose of determining: (1) whether the proposed Settlement of the claims in the above-

captioned Action for $5,000,000 in cash should be approved by the Court as fair, reasonable, and

adequate to members of the Class; (2) whether to certify the proposed Class for settlement

purposes only; (3) whether, thereafter, this Action should be dismissed with prejudice pursuant to

the terms and conditions set forth in the Stipulation of Settlement dated May 9, 2018; (4) whether

the proposed plan to distribute the settlement proceeds (the “Plan of Allocation”) is fair,

reasonable, adequate and should be approved; and (5) whether the application of Plaintiffs’

Counsel for payment of attorneys’ fees and expenses (including an award to Plaintiffs for their

time and expense in representing the Class) should be approved. If you purchased or acquired

Avinger, Inc. common stock between January 29, 2015 and April 10, 2017, inclusive (the “Class

Period”), your rights may be affected by this Settlement. If you have not received the detailed

Notice of Pendency of Class Action and Proposed Settlement, Settlement Fairness Hearing and

Motion for An Award of Attorneys’ Fees and Reimbursement of Litigation Expenses (the

“Notice”) and accompanying Proof of Claim and Release form, you may obtain copies by writing

to Avinger Securities Litigation, c/o KCC Class Action Services, P.O. Box 404064, Louisville, KY

40233-4064, or you can download a copy at www.AvingerSecuritiesLitigation.com. If you are a

Class Member, in order to share in the distribution of the Net Settlement Fund, you must submit a


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3 SUMMARY NOTICE


valid Proof of Claim and Release form postmarked no later than ____________, 2018, establishing

that you are entitled to recovery.

PLEASE DO NOT CONTACT THE COURT OR THE CLERK’S OFFICE REGARDING

THIS NOTICE. If you have any questions about the Settlement, you may contact Lead Counsel

at the address listed below:

William C. Fredericks SCOTT+SCOTT ATTORNEYS AT LAW LLP The Helmsley Building 230 Park Avenue, 17th Floor New York, NY 10169-1820 Telephone: (800) 404-7770 Facsimile: (212) 223-6334 Email: [email protected]

or go to the Settlement website at www.AvingerSecuritiesLitigation.com.

DATED: _________, 2018 By Order of the United States District Court for the Northern District of California


EXHIBIT B


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FINAL JUDGMENT AND ORDER OF DISMISSAL WITH PREJUDICE


EXHIBIT B

TO STIPULATION OF SETTLEMENT John T. Jasnoch (CA 281605) SCOTT+SCOTT ATTORNEYS AT LAW LLP 600 W. Broadway, Suite 3300 San Diego, CA 92101 Telephone: (619) 233-4565 Facsimile: (619) 233-0508 Email: [email protected] Attorneys for Lead Plaintiffs Banerjee & Harjai


OAKLAND DIVISION


Plaintiffs, v.


Defendants.


FINAL JUDGMENT AND ORDER OF DISMISSAL WITH PREJUDICE


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FINAL JUDGMENT AND ORDER OF DISMISSAL WITH PREJUDICE Case No. 4:17-cv-03400-CW

1

This matter came before the Court for hearing pursuant to an Order of this Court, dated

__________ ___, 2018 (the “Preliminary Approval Order”), on the application of the Settling

Parties for approval of the Settlement set forth in the Stipulation of Settlement dated as of May 9,

2018 (the “Stipulation”). Due and adequate notice having been given of the Settlement as required

in said Order, and the Court having considered all papers filed and proceedings held herein and

otherwise being fully informed in the premises and good cause appearing therefore, IT IS

HEREBY ORDERED, ADJUDGED AND DECREED that:

1. Incorporation of Settlement Documents. This Judgment incorporates by

reference the Stipulation and the definitions in the Stipulation, and all terms used herein shall have

the same meanings as set forth in the Stipulation or in the Preliminary Approval Order.

2. Jurisdiction. This Court has jurisdiction over the subject matter of this Action, and

over all parties to this Action, including all Members of the Class who did not timely submit a

request for exclusion from the Class by the _________, 2018 deadline [21 days before Settlement

Hearing] set forth in the Notice pursuant to the terms of the Preliminary Approval Order.

3. Class Certification. The Court certifies this Action as a class action for the

purposes of settlement and finds that the prerequisites for a class action under Rules 23(a) and

(b)(3) of the Federal Rules of Civil Procedure have been satisfied in that: (a) the number of Class

Members is so numerous that joinder of all members thereof is impracticable; (b) there are

questions of law and fact common to the Class; (c) the claims of the Court appointed Class

Representatives are typical of the claims of the Class they represent; (d) the questions of law and

fact common to the members of the Class predominate over any questions affecting only

individual members of the Class; and (e) a class action is superior to other available methods for

the fair and efficient adjudication of the controversy. The Court further finds that Class

Representatives and Lead Counsel have, and will continue to, fairly and adequately represent the


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2 FINAL JUDGMENT AND ORDER OF DISMISSAL WITH PREJUDICE


interests of the Class both in terms of litigating this Action and for purposes of entering into and

implementing the Settlement and have satisfied the requirements of Federal Rules of Civil

Procedure 23(a)(4) and 23(g), respectively.

4. Class Definition. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, this

Court hereby finally certifies this Action for settlement as a class action on behalf of all persons or

entities who purchased or otherwise acquired the publicly traded common stock of Avinger, Inc.

(“Avinger” or the “Company”) between January 29, 2015 and April 10, 2017, inclusive, and were

damaged thereby. Excluded from the Class are the Defendants; their respective immediate family

members, parents, successors or assigns; the past and current officers and directors of Avinger and

the Underwriter Defendants, the legal representatives, heirs, successors and assigns of any

excluded Person; and any entity in which any of the above excluded Persons have or had a

majority ownership interest. Also excluded will be any Person that validly requests exclusion for

the Class in accordance with the procedures set forth below in this Order. Also excluded from the

Class are those persons and entities who submitted valid and timely requests for exclusion in

accordance with the Notice, and who are listed on Exhibit 1 hereto.

5. Adequacy of Notice. The dissemination of the Notice and the publication of the

Summary Notice, as provided for in the Preliminary Approval Order, constituted the best notice

practicable under the circumstances, including individual notice to all members of the Class who

could be identified through reasonable effort. Said notices provided the best notice practicable

under the circumstances of those proceedings and of the matters set forth therein, including the

proposed Settlement set forth in the Stipulation, to all Persons entitled to such notices, and said

notices fully satisfied the requirements of Federal Rule of Civil Procedure 23, Section 21D(a)(7) of

the Securities and Exchange Act of 1934, 15 U.S.C. §78u-4(a)(7), the requirements of Due

Process, and any other applicable laws and rules.


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6. Final Approval of Settlement and Dismissal of Claims. Pursuant to and in

accordance with Rule 23 of the Federal Rules of Civil Procedure, this Court hereby fully and

finally approves the Settlement set forth in the Stipulation in all respects (including, without

limitation, the amount of the Settlement, the releases provided for therein, and the dismissal with

prejudice of the claims asserted against Defendants in this Action), and finds that said Settlement

is, in all respects, fair, reasonable, and adequate to the Class. This Court further finds the

Settlement set forth in the Stipulation is the result of arm’s-length negotiations between

experienced counsel representing the interests of the Plaintiffs, Class Members and the

Defendants. Accordingly, the Settlement embodied in the Stipulation is hereby approved in all

respects and the Settling Parties are directed to implement, perform and consummate the

Settlement in accordance with the terms and provisions contained in the Stipulation.

7. The Action and all of the claims asserted against the Defendants in this Action by

Plaintiffs are hereby dismissed with prejudice. The Settling Parties are to bear their own costs,

except as otherwise provided in the Stipulation.

8. Releases. The releases set forth in paragraphs 24-25 of the Stipulation, together

with the definitions contained in ¶¶1.1 to 1.43 of the Stipulation relating thereto, are expressly

incorporated herein in all respects. Except as to any individual claim of those Persons (identified

in Exhibit 1 attached hereto) who timely requested exclusion from the Class, the releases shall be

effective as of the Effective Date. Accordingly, this Court orders that:

(a) In accordance with Paragraph 1.31 of the Stipulation, for purposes of this

Judgment, the term “Released Claims” means all claims (including but not limited to Unknown

Claims as defined in ¶1.43 of the Stipulation), demands, losses, rights and causes of action of any

nature whatsoever, that have been or could have asserted in either of the Actions or could in future

be asserted in any forum, whether foreign or domestic, whether arising under federal, state,


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common, or foreign law, by Federal Plaintiffs, State Plaintiff, or any other Class Member, or their

successors, assigns, executors, administrators, representatives, attorneys and agents, in their

capacities as such, whether brought directly or indirectly against any of the Released Defendants’

Parties, that (a) arise out of, are based upon, or relate in any way to any of the allegations, acts,

transactions, facts, events, matters, occurrences, statements, representations or omissions involved,

set forth, alleged or referred to, in either of the Actions, or which could have been alleged in the

Actions; and (b) arise out of, are based upon, or relate to the purchase or acquisition of any shares

of Avinger common stock during the Class Period, provided, however, that “Released Claims”

does not include claims to enforce the Settlement or this Judgment.

(b) In accordance with Paragraph 1.29 of the Stipulation, for purposes of this

Judgment, the term “Released Defendants’ Claims” means “all claims (including, but not limited

to “Unknown Claims” as defined in ¶1.43 of the Stipulation), demands, losses, rights, and causes

of action of any nature whatsoever by the Released Defendants’ Parties or any of them against

Plaintiffs, members of the Class, or Plaintiffs’ Lead Counsel, State Counsel or other or additional

Plaintiffs’ Counsel, which arise out of or relate in any way to the institution, prosecution, assertion,

settlement, or resolution of either of the Actions, provided, however, that Released Defendants’

Claims does not include any claims to enforce the terms of the Settlement or this Judgment.

(c) In accordance with Paragraph 1.30 of the Stipulation, for purposes of this

Judgment, the term “Released Defendants’ Parties” means (i) each Defendant, (ii) each of their

respective immediate family members (for individuals) and each of their direct or indirect parent

entities, subsidiaries, related entities and affiliates, any trust of which any individual defendant is

the settler or which is for the benefit of any Defendant and/or member(s) of his or his family, and

(iii) for any of the persons or entities listed in parts (i) or (ii), their respective past and present



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(d) In accordance with Paragraph 1.32 of the Stipulation, for purposes of this

Judgment, the term “Released Plaintiffs’ Parties” means (i) Federal Plaintiffs, State Plaintiff and

the members of the Class, and (ii) each of their respective family members, and their respective






capacities as such.

(e) Without further action by anyone, upon the Effective Date of the Settlement,

Plaintiffs and each of the Class Members, on behalf of themselves and each of their Related

Parties, to the maximum extent permitted by law, shall be deemed to have, and by operation of this

Judgment shall have, fully, finally, and forever released, relinquished, and discharged all Released

Claims against the Released Defendant Parties, and shall have covenanted not to sue the Released

Defendant Parties with respect to all such Released Claims, and shall be permanently barred and

enjoined from commencing, instituting, or continuing to prosecute any action or other proceeding

in any court of law or equity, arbitration tribunal or administrative forum that asserts the Released

Claims against any of the Released Defendant Parties; provided, however, that nothing herein shall

bar any action or claim to enforce the terms of the Settlement or this Judgment.


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(f) Without further action by anyone, upon the Effective Date of the Settlement,

each of the Defendants, and each of their Related Parties, to the maximum extent permitted by law,

shall be deemed to have, and by operation of this Judgment shall have, fully, finally, and forever

released, relinquished, and discharged all Released Defendants’ Claims against the Released

Plaintiffs’ Parties, and shall have covenanted not to sue the Released Plaintiffs’ Parties with

respect to all such Released Defendants’ Claims, and shall be permanently barred and enjoined

from commencing, instituting, or continuing to prosecute any action or other proceeding in any

court of law or equity, arbitration tribunal or administrative forum that asserts the Released

Defendants’ Claims against any of the Released Plaintiffs’ Parties and Class members, and any

Federal Counsel or State Counsel.

9. No Admissions. Neither the Stipulation nor the Settlement contained therein, nor

any act performed or document executed pursuant to, or in furtherance of, the Stipulation or the

Settlement: (a) is or may be deemed to be or may be used as an admission of, or evidence of, the

validity of any Released Claim, or of any wrongdoing or liability of the Defendants or Released

Defendants’ Parties; or (b) is or may be deemed to be or may be used as an admission of, or

evidence of, any fault or omission of any of the Released Defendants’ Parties in any civil, criminal

or administrative proceeding in any court, administrative agency or other tribunal. The Released

Defendants’ Parties may file the Stipulation and/or the Judgment in any other litigation that may be

brought against them in order to support a defense or counterclaim based on principles of res

judicata, collateral estoppel, release, good faith settlement, judgment bar or reduction or any other

theory of claim preclusion or issue preclusion or similar defense or counterclaim.

10. Retention of Jurisdiction. Without affecting the finality of this Judgment in any

way, this Court hereby retains continuing jurisdiction over: (a) implementation of this Settlement

as set forth in the Stipulation and any award or distribution of the Settlement Fund, including


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interest earned thereon; (b) disposition of the Settlement Fund; (c) hearing and determining

applications for attorneys’ fees and expenses in the Litigation; and (d) all Parties hereto for the

purpose of construing, enforcing and administering the Stipulation. With respect to any future

hearing or determination of any investment or distribution of the Settlement Fund to Class

Members, the Plan of Allocation, the determination, administration or calculation of claims by

claimants and attorneys’ fees of Plaintiff’s counsel, or the payment or withholding of Taxes of the

Settlement Fund, Defendants and Released Defendants’ Parties have no responsibility for, interest

in, or liability in connection with such matters and do not have to appear or participate in any

hearing for or determination of such separate matters.

11. Compliance with Rule 11. The Court finds that during the course of this Action

that the Parties and their respective counsel at all times complied with the requirements of Rule 11

of the Federal Rules of Civil Procedure as to all proceedings herein.

12. Failure of Effective Date to Occur. In the event that the Settlement does not

become effective in accordance with the terms of the Stipulation or the Effective Date does not

occur, or in the event that the Settlement Fund, or any portion thereof, is returned to the

Defendants, then this Judgment shall be rendered null and void and shall be vacated and all orders

entered and releases delivered in connection herewith shall be null and void, except as otherwise

provided in the Stipulation, and this Judgment shall be without prejudice to the rights of the Parties

and the Class members, and the Parties shall revert to their respective positions in the Action as of

March 23, 2018.

13. Modification of the Agreement of Settlement. Without further approval from the

Court, Lead Plaintiffs and Defendants are hereby authorized to agree to and adopt such

amendments or modifications of the Stipulation or any exhibits attached thereto to effectuate the

Settlement that: (a) are not materially inconsistent with this Judgment; and (b) do not materially


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limit the rights of Class Members in connection with the Settlement. Without further order of the

Court, Lead Plaintiffs and Defendants may agree to reasonable extensions of time to carry out any

provisions of the Settlement.

14. Entry of Final Judgment. There is no just reason to delay the entry of this

Judgment as a final judgment in this Action. Accordingly, pursuant to Rule 54(b) of the Federal

Rules of Civil Procedure, the Clerk of the Court is expressly directed to immediately enter this

final judgment in this Action, provided, however, that any further orders or proceedings solely

regarding the Plan of Allocation or the Fee and Expense Application shall in no way disturb or

affect this Judgment.

DATED: _______________ _______________________________

The Honorable Claudia Wilken Senior United States District Judge
