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THE COURT OF CHANCERY OF THE STATE OF DELAWARE
OF PENDENCY OF CLASS ACTION,
SETTLEMENT AND SETTLEMENT HEARING
READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT AND DISMISSAL WITH PREJUDICE OF A LAWSUIT
AND CONTAINS IMPORTANT INFORMATION. YOUR RIGHTS WILL BE AFFECTED BY THESE LEGAL PROCEEDINGS IN THIS LITIGATION. IF THE COURT APPROVES
THE PROPOSED SETTLEMENT, YOU WILL BE FOREVER BARRED FROM CONTESTING THE APPROVAL OF THE PROPOSED SETTLEMENT, OR PURSUING THE RELEASED
YOU WERE NOT THE BENEFICIAL HOLDER OF COMMON STOCK OF PAVMED INC. BUT HELD SUCH STOCK FOR A BENEFICIAL HOLDER, PLEASE TRANSMIT THIS DOCUMENT
PROMPTLY TO SUCH BENEFICIAL HOLDER.
purpose of this Notice is to inform you of a proposed settlement (the "Settlement") of the captioned action (the "Action")
pending before the Court of Chancery of the State of Delaware (the "Court"), and of a hearing in the Court of Chancery, Leonard
L. Williams Justice Center, 500 North King Street, Wilmington, DE 19801, or by telephonic or video means as may be designated by the
Court, on November 3, 2022, at 1:30 p.m. (the "Settlement Hearing"). The purpose of the Settlement Hearing is to (a) determine
whether the proposed Settlement, on the terms and conditions provided for in the Stipulation and Agreement of Compromise, Settlement
And Release (the "Stipulation") dated March 10, 2022, is fair, reasonable and adequate and in the best interests of Plaintiff
and the Class and should be approved by the Court; (b) determine whether the preliminary class certification described in this Order
shall be made final; (c) determine whether Plaintiff and Plaintiff's counsel have adequately represented Plaintiff and the Class;
(d) determine whether the Court should enter an Order and Final Judgment as provided in the Stipulation, releasing the Plaintiff Released
Claims and Defendant Released Claims; (e) hear the application by Plaintiff's counsel for an award of attorneys' fees and
reimbursement of litigation expenses of up to $600,000; (f) hear the application by Plaintiff for an incentive award for Plaintiff of
up to $5,000; and (g) rule on such other matters as the Court may deem appropriate.1
you held PAVmed common stock as of the close of business on June 3, 2020, this Notice will inform you of how, if you so choose, you may
enter your appearance in the Action or object to the proposed Settlement and have your objection heard at the Settlement Hearing.
FOLLOWING RECITATION DOES NOT CONSTITUTE FINDINGS OF THE COURT AND SHOULD NOT BE UNDERSTOOD AS AN EXPRESSION OF ANY OPINION OF THE COURT
AS TO THE MERITS OF ANY CLAIMS OR DEFENSES BY ANY OF THE PARTIES. IT IS BASED ON STATEMENTS OF THE PARTIES AND IS SENT FOR THE SOLE PURPOSE
OF INFORMING YOU OF THE EXISTENCE OF THIS ACTION AND OF A HEARING ON A PROPOSED SETTLEMENT SO THAT YOU MAY MAKE APPROPRIATE DECISIONS
AS TO STEPS YOU MAY, OR MAY NOT, WISH TO TAKE IN RELATION TO THIS ACTION.
All capitalized terms used in this notice, unless otherwise defined herein, are defined as set forth in the Stipulation.
November 2, 2020, plaintiff George A. Spritzer ("Plaintiff") filed on behalf of the Class a Verified Class Action Complaint
(the "Complaint") against PAVmed, Lishan Aklog, Ronald M. Sparks, David S. Battleman, M.D., James L. Cox, David Weild IV,
and Michael J. Glennon (collectively, "Defendants", and collectively with Plaintiff, the "Settling Parties").
Complaint seeks relief on behalf of the Class based upon alleged breaches of contract. The Complaint alleges that Defendants breached
the Company's operative bylaws and that the following four stockholder resolutions were not approved at PAVmed's July 24,
2020 annual stockholder meeting (the "2020 Annual Meeting"): (1) an amendment to the Company's 2014 Long-Term Incentive
Equity Plan to increase its aggregate share limit by 2,000,000 shares; (2) an amendment to the Company's Employee Stock Purchase
Plan to increase the number of shares authorized for purchase by 500,000 shares; (3) the issuance of stock to certain holders of PAVmed
2019 senior secured convertible notes; and (4) the issuance of stock to a certain holder of PAVmed 2020 senior convertible notes, (collectively,
the "Challenged Resolutions");
January 28, 2021, after negotiations between the parties, who were all represented by counsel with extensive experience and expertise
in stockholder class action litigation the parties reached an agreement in principle and executed a Settlement Term Sheet Agreement providing
for the settlement of Plaintiff's claims against Defendants on the terms set forth therein
an analysis of the strengths and weaknesses of the Action, Plaintiff believes that the settlement consideration reflected below provides
the Class relief that address the specific claims in the Complaint.
Plaintiff believes that the Action is meritorious and asserts valid claims, he is agreeing to settle the Action to eliminate the uncertainties
inherent in further litigation and in recognition of the immediate benefits that this Settlement will afford the Company and its stockholders.
and his counsel have determined that the terms of the Settlement are fair, reasonable, adequate and in the best interests of the Class.
deny each and every allegation of wrongdoing or liability arising out of or relating in any way to the events, conduct, statements, acts,
or omissions alleged in the Action. Defendants further assert that, at all times, they acted in good faith, and in a manner they reasonably
believed to be and that was in the best interests of PAVmed stockholders. Defendants assert that they have meritorious defenses to the
claims in the Action.
of the Defendants has vigorously denied, and continues to vigorously deny, each and every allegation of wrongdoing or liability arising
out of or relating in any way to the events, conduct, statements, acts, or omissions alleged in the Action, including that he, she, or
it has breached any contract, including PAVmed's Bylaws, or otherwise engaged in any wrongful acts alleged in the Action or violated
any law. Each of the Defendants expressly maintains that he, she, or it has complied with his, her, or its legal duties at all times.
Nonetheless, Defendants have entered into the Stipulation, without admitting or conceding any fault, liability, wrongdoing, or damage
whatsoever, in order to avoid the risks inherent in any lawsuit and the burden and expense of further litigation.
consideration for the full settlement and release of the Plaintiff Released Claims against the Defendant Released Parties and the dismissal
with prejudice of the Action, the proposed Settlement requires the following:
Settlement Hearing shall be held on November 3, 2022, at 1:30 p.m. in the Delaware Court of Chancery, Leonard L. Williams Justice Center,
500 North King Street, Wilmington, Delaware, 19801 or by telephonic or video means as may be designated by the Court. The purpose of
the Settlement Hearing is to (a) determine whether the proposed Settlement, on the terms and conditions provided for in the Stipulation,
is fair, reasonable and adequate and in the best interests of Plaintiff and the Class and should be approved by the Court; (b) determine
whether the preliminary class certification described in this Order shall be made final; (c) determine whether Plaintiff and Plaintiff's
counsel have adequately represented Plaintiff and the Class; (d) determine whether the Court should enter an Order and Final Judgment
as provided in the Stipulation, releasing the Plaintiff Released Claims and Defendant Released Claims; (e) hear the application by Plaintiff's
Counsel for an award of attorneys' fees and reimbursement of litigation expenses of up to $600,000; (f) hear the application by
Plaintiff for an incentive award for Plaintiff of up to $5,000; and (g) rule on such other matters as the Court may deem appropriate.
Court reserves the right to adjourn the Settlement Hearing or any adjournment thereof, including the consideration of the application
for attorneys' fees, without further notice of any kind other than oral announcement at the Settlement Hearing or any adjournment
Court reserves the right to approve the Settlement at or after the Settlement Hearing with such modification(s) as may be consented to
by the Parties to the Stipulation and without further notice to Class Members.
to Appear and Object
Class member who objects to the Settlement, the Order and Final Judgment to be entered in the Action, and/or Plaintiff's counsel's
application for attorneys' fees, or who otherwise wishes to be heard, may appear personally or by his attorney at the Settlement
Hearing and present evidence or argument that may be proper and relevant; provided, however, that, except for good cause shown, no person
shall be heard and no papers, briefs, pleadings or other documents submitted by any person shall be considered by the Court unless not
later than fourteen (14) calendar days prior to the Settlement Hearing such person files with the Register in Chancery, Delaware Court
of Chancery, 500 North King Street, Wilmington, Delaware, 19801 and serves upon counsel listed below: (a) a written notice of intention
to appear that includes the name, address, and telephone number of the objector and, if represented by counsel, the name and address
of the objector's counsel; (b) proof of membership in the Class including the number of shares of PAVmed common stock held and
the date of purchase; (c) a detailed statement of such person's objections to any matters before the Court; and (d) the grounds
for such objections and the reasons that such person desires to appear and be heard, as well as all documents or writings such person
desires the Court to consider. Such filings shall be served upon the following counsel by File & ServeXpress, by hand, by
first-class mail, or by express service upon the following attorneys such that they are received no later than fourteen (14) calendar
days prior to the Settlement Hearing:
the Court otherwise directs, no person shall be entitled to object to the approval of the Settlement, any judgment entered thereon, the
adequacy of the representation of the Company's stockholders by Plaintiff and their counsel, any award of attorneys' fees,
or otherwise be heard, except by serving and filing a written objection and supporting papers and documents as prescribed above. Any
person who fails to object in the manner described above shall be deemed to have waived the right to object (including any right of appeal)
and shall be forever barred from raising such objection in this or any other action or proceeding. Any Class member who does not object
to the Settlement or the request by Plaintiff's counsel for an award of attorneys' fees and expenses or to any other matter
stated above need not do anything.
Final Order and Judgment
the Court determines that the Settlement, as provided for in the Stipulation, is fair, reasonable, adequate and in the best interests
of the Class, the Court may enter the Order and Final Judgment, which will, among other things:
| a. | certify the Class and approve the Settlement as fair, reasonable, adequate and in the best interests of the Class and direct consummation of the Settlement in accordance with its terms and conditions; | |
| b. | determine that the requirements of the rules of the Court and due process have been satisfied in connection with this Notice; |
| c. | dismiss the Action with prejudice on the merits and grant the releases prescribed by the Stipulation; and | |
| d. | award attorneys' fees and expenses to Plaintiff's counsel and an incentive award to Plaintiff. |
Stipulation provides that on the date on which the Order and Final Judgment approving the Settlement and dismissing the Action with prejudice
becomes final and no longer subject to further appeal or review, Plaintiff and each and every other Class Member (directly or indirectly),
on behalf of themselves, and on behalf of any other person or entity who could assert any of the Plaintiff Released Claims, in such capacity
only, shall fully, finally, and forever release, settle, and discharge, and shall forever be enjoined from prosecuting, all claims of