Document:

Confidential Settlement Agreement - Luna Innovations Incorporated

 Exhibit 10.52 

CONFIDENTIAL SETTLEMENT AGREEMENT 

This Confidential Settlement Agreement (“Agreement”) is entered into as of December 11, 2009, by and between Luna
Innovations, Inc. (“Luna”) and Luna Technologies, Inc. (“Luna Technologies”) (collectively, the “Debtors”), and Hansen Medical, Inc. (“Hansen”) (together with the Debtors, the
“Parties”). 
 This Agreement is made with respect to the following recitals: 

A. Hansen and Luna are parties to the California Action, and Hansen and the Debtors are parties to the Bankruptcy Case, as respectively
defined below. 
 B. The Parties deem it to be in their best interests and to their mutual advantage to settle their disputes on
the terms and conditions set forth in this Agreement, and nothing in this Agreement shall be construed as an admission of fault or liability by either such Party. 

C. This Agreement is one of the “Settlement Documents” for purposes of the Amended Joint Plan of Reorganization (the
“Amended Plan”), a substantially complete form of which is attached hereto, as described in the Amended Disclosure Statement in Support of Amended Joint Plan of Reorganization of Luna Innovations Incorporated, et al. under Chapter
11 of the Bankruptcy Code (the “Disclosure Statement”) and the Confirmation Order entered by the U.S. Bankruptcy Court for the Western District of Virginia (the “Bankruptcy Court”) in the Bankruptcy Case.

 NOW, THEREFORE, in consideration of all of the terms and conditions of this Agreement, the Parties agree as follows:

 1. Definitions. The following words and phrases shall have the meanings set forth below for purposes of this
Agreement. 
 1.1 “Affiliates” shall mean any corporation or other entity that is directly or indirectly
controlling, controlled by, or under common control with a party. For purposes of this definition, “control” of an entity means the direct or indirect ownership of securities representing fifty percent (50%) or more of the total
voting power entitled to vote in elections of such entity’s board of directors or other governing authority, or equivalent interests conferring the power to direct or cause the direction of the governance or policies of such entity. 

1.2 “Bankruptcy Case” means the Chapter 11 case titled In re Luna Innovations, et al., Case No. 09-71811 (WFS),
United States Bankruptcy Court for the Western District of Virginia, Roanoke Division. 
 1.3 “California
Action” means the civil action entitled Hansen Medical Inc. v. Luna Innovations Inc., Case No. 07-088551, Superior Court of the State of California, County of Santa Clara. 

1.4 “Claims” means any and all claims, actions, causes of action, demands, costs, and charges of whatever nature. This
definition of “claims” applies only to this Agreement and is not intended to the change the definition of “claims” as used in the Amended Plan for bankruptcy purposes. 

 1.5 “Defendant Released Parties” means Luna and Luna Technologies and each
of its Affiliates, and each of their respective current and former officers, directors, employees, agents, attorneys, and representatives in their capacity as such. “Defendant Released Parties” does not include third parties such as
business partners and parties with contractual relationships with Luna other than those listed in the preceding sentence. 
 1.6
“Effective Date” means the Effective Date of the Amended Plan after entry of the Confirmation Order by the Bankruptcy Court; subject, however, to the conditions precedent set forth in Section 2. 

1.7 “Legal Proceeding” means any lawsuit or any other civil or administrative proceeding of any kind in any court,
tribunal, agency or governmental entity. 
 1.8 “License Agreement” means that certain license agreement
between the Parties entered into as of the Effective Date. 
 1.9 “Party” means Luna, Luna Technologies or
Hansen, and when used in the plural shall mean all of them. 
 1.10 “Person” means an individual, trust,
corporation, partnership, joint venture, limited liability company, association, unincorporated organization or other legal or governmental entity, including those defined as “persons” in 11 U.S.C. § 101. 

1.11 “Plaintiff Released Parties” means Hansen and its Affiliates, and each of their respective current and former
officers, directors, employees, agents, attorneys, and representatives in their capacity as such. “Plaintiff Released Parties” does not include third parties such as business partners and parties with contractual relationships with Hansen
other than those listed in the preceding sentence. 
 1.12 “Release” means the Confidential Mutual Release
Agreement attached as Exhibit C-6 of the Amended Plan. 
 1.13 “Settlement Documents” means each of
(i) this Agreement; (ii) the Cross License Agreement Between Intuitive and Hansen; (iii) the License Agreement Between Intuitive and Luna; (iv) the License Agreement Between Hansen and Luna; (v) the Development and Supply
Agreement; (vi) the Confidential Mutual Release Agreement; (vii) the Hansen Secured Promissory Note; (viii) the Patent and Trademark Security Agreement; (ix) the Security Agreement; and (x) the Warrant to Purchase Common
Stock of Luna Innovations Incorporated, as attached as Exhibits C-1 through C-10 of the Amended Plan, respectively. 
 1.14
“Third Party” means a Person, other than a Party to this Agreement or any of such Parties’ Affiliates. 

 2. Execution of Settlement Documents Upon Approval of Amended Plan. Subject to
entry of the Confirmation Order by the Bankruptcy Court and subject to the conditions precedent set forth in sub-sections (a) through (g) below, and effective upon the Effective Date, the Parties shall execute each of the other Settlement
Document contracts, namely Exhibits C-2 through C-10 to the Amended Plan. Subject to Section 1125 of the Bankruptcy Code, Hansen hereby agrees to support the Amended Plan and efforts by the Debtors to obtain a Confirmation Order of the Amended
Plan. Notwithstanding anything else herein to the contrary, the Parties’ obligations under this Agreement are conditioned upon, and this Agreement will terminate upon the occurrence of any of the following prior to the Effective Date, unless
waived: 
 (a) the Bankruptcy Court’s denial of the Debtors’ request for approval of the Disclosure Statement or, in
the alternative, any modification(s) to the Disclosure Statement that would adversely affect, in any material way, (i) any of the terms and conditions contained in the Agreement, any Settlement Document, the Amended Plan, or the Confirmation
Order; or (ii) the ability of any Party to perform or comply with the Agreement, any other Settlement Document, the Amended Plan, or the Confirmation Order; 

(b) the Bankruptcy Court’s denial of the Debtors’ request for confirmation of the Amended Plan or for entry of the Confirmation
Order, or, in the alternative, the requirement or approval by the Bankruptcy Court of any material modification(s) to the Amended Plan or Confirmation Order that would adversely affect, in any material way, (i) any of the terms and conditions
contained in or benefits of the Agreement, any other Settlement Document, the Amended Plan, or the Confirmation Order; or (ii) the ability of any Party to perform or comply with the Agreement, any other Settlement Document, the Amended Plan, or
the Confirmation Order; 
 (c) the Debtors notify Hansen that they intend to cease prosecution of the Amended Plan or, in the
absence of such notice, take affirmative action to abandon or cease prosecution of such Amended Plan (provided that such actions shall not include amendments to the Amended Plan that do not adversely affect Hansen’s material rights under the
Agreement, the other Settlement Documents or the Amended Plan); 
 (d) the Bankruptcy Court or any appellate court of competent
jurisdiction shall enter a judgment or order declaring this Agreement or any material portion hereof to be unenforceable; 
 (e)
if the Debtors shall take any action or fail to take any action or there shall exist any facts or circumstances that result in a material breach of any of the other Settlement Documents, provided that for the purposes of this section (e) each
Settlement Document shall be treated as if it had been executed as of the date hereof and if Luna were not subject to the provisions of the Bankruptcy Code; 

 (f) if Intuitive Surgical, Inc. (“Intuitive”), shall not have executed the License
Agreement Between Intuitive and Luna and the Cross License Agreement Between Intuitive and Hansen and shall not have executed an amendment to the Development and Supply Agreement between Debtor and Intuitive dated June 11, 2007, so as to enable
the grant of licenses by Luna to Hansen pursuant to the License Agreement Between Hansen and Luna, each before the Effective Date; and 

(g) the Effective Date has not occurred by March 31, 2010. 

Upon termination of this Agreement in accordance with the foregoing, each Party shall be released from its commitments, undertakings and
agreement under or related to this Agreement, and shall have the rights and remedies that it would have had, and shall be entitled to take all actions that it would have been entitled to take, had it not entered into this Agreement, including all
rights and remedies available to it under applicable law. 
 3 Stock Issuance. On the Effective Date, Luna shall
deliver to Hansen a certificate representing a number of shares of Common Stock, which, as of the Effective Date, shall represent 9.9% of the outstanding capital stock of Luna (the “Shares”), after giving full effect to the issuance of all
shares required hereunder. The Shares shall have the following legend; provided that such legend will be removed from such issued Shares when such Shares may be sold without applicable volume limits under Rule 144: 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.” 
 4.
Confidentiality. 
 4.1 Limitations on Disclosure. The Parties and their counsel shall take all
commercially diligent efforts to ensure that the terms of this Agreement remain strictly confidential and are not disclosed to any Third Party, except as will be necessarily disclosed and made public pursuant to filing with the Bankruptcy Court as a
part of the Amended Plan and set forth below. 
 4.1.1 Pursuant to Order. The terms of this Agreement may be
disclosed pursuant to any order or subpoena requiring disclosure in any Legal Proceeding, so long as the Party that has the disclosure requirement provides the other Party with written notice of such requirement not later than ten business days
after first learning of such order or subpoena. 
 4.1.2 As Necessary to Lenders and Certain Third Parties. The
terms of this Agreement may be disclosed to actual or potential lenders and other third parties, including government agencies such as the United States Securities and Exchange Commission, listing agencies such as the NASDAQ, and similar entities,
and any entities whose consent is required for the transactions contemplated herein, as the relevant Party reasonably determines to be required. 

 4.1.3 Professional Advisors. The terms of this Agreement may be disclosed to
any Party’s attorney, accountant, auditor, or insurer, but only under a professional duty of confidentiality. 
 4.1.4
Required by Law. The terms of this Agreement may be disclosed as required by law, including but not limited to any disclosure required to be made pursuant to the reporting obligations required by the United States Securities Exchange
Commission or any other United States or foreign regulatory authorities. 
 4.1.5 Media Matters. Notwithstanding
the generality of the restrictions imposed by Section 4.1, the Parties acknowledge that as public companies they are required to file publicly any material agreements and disclose publicly the material terms of the settlement. If a Party
intends to file a Confidential Treatment Request in order to redact any portion of the Settlement Documents, or otherwise to omit any exhibits to any of the Settlement Documents for filing with the SEC, the other Party shall cooperate with any
reasonable request for it to do likewise. The Parties further acknowledge that they may generally discuss and communicate any of this publicly available information. If the Parties agree, the Parties may issue a joint press release, the language of
which shall be approved by the Parties. Neither party is required to agree to a joint press release. Without limiting the foregoing, any Party may make additional public disclosures regarding this Agreement as required by the rules and regulations
promulgated by the Securities and Exchange Commission, the NASDAQ, or a similar entity, subject to reasonable prior notice to the other Party. 

5. Final and Binding Agreement. Each Party agrees that it has made such investigation of all matters pertaining to this
Agreement that such Party deems necessary. Each Party agrees that it is not relying in any manner on any statement, promise, representation or omission, whether oral or written, express or implied, made by any Person, not specifically set forth in
this Agreement, the Settlement Documents, the Disclosure Statement, the Amended Plan, or the Confirmation Order. Each Party acknowledges that, after execution of this Agreement, such Party may discover facts different from or in addition to those
which it now knows or believes to be true. Nevertheless, each Party agrees that this Agreement shall be and remain in full force and effect in all respects, notwithstanding such different or additional facts. This Agreement is intended to be, and
is, final and binding on all Parties, regardless of any allegation of misrepresentation, fraud, mistake of law or fact, or any other circumstances whatsoever. 

6. No Assignment of Agreement. Unless expressly stated herein, including the exhibits hereto, neither Plaintiff nor
Defendant (nor any Affiliate) may assign any rights conferred by or obligations imposed under this Agreement, in whole or in part, outright or by way of collateral assignment, without the written consent of the other Party (which consent may be
withheld for any reason or no reason). 
 7. Status Quo. If at any time either Debtor has any reason to know or
expect that it will be unable or unwilling to continue to support, or to be able to perform or comply with, any provision of any Settlement Document or any provision of the Amended Plan or Confirmation Order, then the Debtors shall promptly notify
Hansen thereof in writing. The Parties shall use their best efforts to preserve the status quo as to their respective pending disputes pending the 

 
Effective Date or the termination of this Agreement and to facilitate the reservation of their respective rights, defenses, claims, titles and interests, pending that Effective Date or
termination, without prejudice in the event of a termination, other than as expressly set forth herein. Without limiting the foregoing, Debtors shall forbear from objecting to the Hansen claim or proof of claim until the first to occur of the
termination of this agreement or the Effective Date, and the Debtors shall forbear from recommencing or advancing its estimation motion until the first to occur of the termination of this Agreement or the Effective Date. 

8. Warranties and Representations. The Parties hereby make the following representations and warranties as of the date
hereof and of the Effective Date. 
 8.1 No Assignment of Claims. Each Party warrants and represents that such
Party has not sold, assigned, conveyed, pledged, encumbered, or otherwise in any way transferred to any Person any Claim released by such Party pursuant to this Agreement or the Release. 

8.2 Independent Advice. Each Party warrants and represents that it has received or had the opportunity to obtain
independent legal advice from such Party’s attorney with respect to the rights and obligations arising from, and the advisability of executing, this Agreement. 

8.3 Valid Issuance. The Shares to be issued by Luna to Hansen will, upon the Effective Date, be duly authorized and, when
issued and delivered in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable, and the issuance of such Shares will not be subject to any preemptive or similar rights. 

8.4 Corporate Power. Hansen warrants and represents that it is a corporation duly organized and validly existing under the
laws of the state of Delaware. Luna warrants and represents that Luna is a corporation duly organized and validly existing under the laws of Delaware. Upon the Effective Date of the Amended Plan subject to entry of the Confirmation Order by the
Bankruptcy Court, the Parties further warrant and represent that they have full corporate power and authority to enter into this Agreement and carry out the provisions hereof. 

8.5 Survival of Warranties. All warranties and representations set forth in this Agreement shall survive the execution and
delivery of this Agreement. 
 9. General Provisions. 

9.1 Benefit. This Agreement and the Release shall inure to the benefit of and be binding upon the Parties’ respective
agents, employees, officers, directors, shareholders, parents, subsidiaries, related entities, Affiliates, attorneys, successors and assigns. 

9.2 Severability. All provisions contained herein are severable and in the event that any of them shall be held to be to
any extent invalid or otherwise unenforceable by any court of competent jurisdiction, such provision shall be construed as if it were written so as to effectuate to the greatest possible extent the Parties’ expressed intent; and in every case
the remainder of this Agreement shall not be affected thereby and shall remain valid and enforceable, as if such affected provision were not contained herein. If, and to the extent that, 

 
the Bankruptcy Court fails to approve in the Confirmation Order any or all of the agreements of the Parties concerning (i) the treatment of the Settlement Documents under Section 365(n)
of the Bankruptcy Code, contained in Section 9.11 hereof, in Section 10.6 of the Development and Supply Agreement, or in Section 6.6 of the License Agreement (or in the corresponding provisions of the Amended Plan incorporating such
specified provisions), or (ii) the exoneration provisions that benefit Hansen in Section 8.5 of the Plan, then such non-approval shall not result in a termination or a failure of condition precedent under Section 2 of this Agreement
or under the Amended Plan or the Confirmation Order. 
 9.3 Choice of Law. This Agreement shall be governed by and
construed in accordance with the United States Bankruptcy Code. Matters not covered by the Bankruptcy Code shall be construed in accordance with the internal substantive laws of the state of Delaware as applied to contracts made and wholly performed
within the state of Delaware without regard to its principles of choice of law. 
 9.4 Selection of Forum. The
exclusive venue for any action arising out of, related to, or connected with this Agreement shall be the United States Bankruptcy Court for the Western District of Virginia, Roanoke Division, but for any other disputes, the federal or state courts
in the State of Delaware. 
 9.5 No Oral Modification. No provision of this Agreement can be waived, modified,
amended, or supplemented except in a writing that expressly references this Agreement and is signed by an authorized representative of each Party to be bound. 

9.6 No Construction Against Drafter. Because all Parties have participated in drafting, reviewing, and editing the language
of this Agreement, no presumption for or against any Party arising out of drafting all or any part of this contract shall be applied in any action whatsoever. 

9.7 No Third-Party Beneficiaries. Except as expressly set forth herein, the Parties agree that there are no third-party
beneficiaries of any kind to this Confidential Settlement Agreement or the Release other than those listed as Defendant Released Parties and Plaintiff Released Parties. 

9.8 Integrated Agreement. Subject to Section 9.11, this Agreement, the Settlement Documents (including the Exhibits
hereto), the Disclosure Statement, the Amended Plan, and the Confirmation Order collectively constitute the entire understanding and contract between the Parties with respect to the subject matter referred to herein. Any and all other
representations, understandings, or agreements, whether oral, written, or implied, are merged into and superseded by the terms of this Agreement. 

9.9 Headings. The subject headings used in this Agreement are included for purposes of convenience only, and shall not
affect the construction or interpretation of any provisions of this document. 

 9.10 Notice. Any notice required or desired to be given hereunder shall be in
writing and shall be served as provided herein either by an air courier service (such as FedEx, DHL or UPS) or by personal delivery. Notice may be served by email, if a confirming copy of the notice is also served by air courier service or
hand-served. Service of any notice shall be deemed complete (i) in the case of notice via personal delivery, actual receipt before 5:00 p.m. at the location of delivery (and shall be deemed complete on the following day if actually received
after 5:00 p.m. at the location of delivery); or (ii) in the case of notice via air courier, the third day following delivery of the notice to an air courier service with all costs fully prepaid. In order to be effective, any notice must be
served upon and received by both the Party and the persons designated to receive a copy thereof at the addresses set forth below: 

If to Hansen: 

Hansen Medical, Inc. 

800 East Middlefield Road 

Mountain View, CA 94043 

Attention: Arthur Hsieh and Fred Moll 

With a copy to: 

Morrison & Foerster LLP 

755 Page Mill Road 

Palo Alto, CA 94304 

Attention: Bryan Wilson 

If to Defendant: 

Luna Innovations, Inc. 

1 Riverside Circle, Suite 400 

Roanoke, VA 24016 

Attention: Chief Executive Officer 

With a copy to: 

Pachulski Stang Ziehl & Jones LLP 

919 North Market Street, 17th Floor 

Wilmington, DE 19899-8705 

Attention: Laura Davis Jones 

Munger, Tolles & Olson LLP 

560 Mission Street 

San Francisco, CA 94105 

Attention: Kristin Linsley Myles 

9.11 Special Provision Regarding Licenses. The License Agreement and any licenses contained in the Development and Supply
Agreement shall not be deemed to be integrated with the other Settlement Documents in any way that would (i) prevent, prejudice or otherwise adversely affect any setoff or recoupment or other rights or security under such Settlement Document in
the event that the License Agreement or such other licenses should be 

 
rejected in the future pursuant to § 365 and Hansen or Luna, as applicable, makes any election to retain rights and licenses under § 365(n)(1)(B); and (ii) require payment of any
royalties by Hansen or Luna, as applicable, under § 365(n)(2)(B). For avoidance of any doubt, notwithstanding any other provision of any Settlement Document, the result of the exception to integration of such contracts is that Hansen or Luna,
as applicable, shall be entitled to make its § 365(n)(1)(B) election to retain rights under a rejected License Agreement or with respect to licenses in the Development and Supply Agreement without impairing, affecting or prejudicing any of
Hansen’s or Luna’s, as applicable, rights, defenses, claims or interests of any kind, including setoff or recoupment, under or with respect to any other Settlement Document and without Hansen or Luna, as applicable, being required to pay
any amount as deemed “royalties” under such retained rights (since there shall be none). 
 9.12 Execution in
Counterparts. This Agreement may be executed and delivered in any number of counterparts. When each Party has signed and delivered at least one counterpart to all other Parties, each counterpart shall be deemed an original and all
counterparts, taken together, shall constitute one and the same agreement, which shall be binding and effective on the Parties hereto. This Agreement shall not become binding on the Parties hereto unless it has been executed by authorized
representatives of all Parties. 
 [Remainder of page intentionally left blank—signature page follows] 

 IN WITNESS WHEREOF, the Parties have approved and executed this Confidential Settlement
Agreement as of the Effective Date. 
  

					
		 	HANSEN MEDICAL, INC.
			
		 	By:	 	 /s/ Fred Moll

		 	Name	 	 Fred Moll

		 	Its 	 	 CEO

		
		 	LUNA INNOVATIONS, INC.
			
		 	By:	 	 /s/ Kent A. Murphy

		 	Name:	 	 Kent A. Murphy

		 	Its:	 	 Chairman and CEO

		
		 	LUNA TECHNOLOGIES, INC.
			
		 	By:	 	 /s/ Scott A. Graeff

		 	Name:	 	 Scott A. Graeff

		 	Its:	 	 PresidentWarrant to Purchase Common Stock of Luna Innovations Incorporated

 Exhibit 10.53 

THIS WARRANT AND THE SHARES PURCHASABLE HEREUNDER HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 

 Dated: January 12, 2010 

WARRANT TO PURCHASE 

COMMON STOCK OF 

LUNA INNOVATIONS INCORPORATED 

This certifies that Hansen Medical, Inc. (the “Holder”), for value received, and contingent upon the satisfaction of the
conditions set forth in Section 1 below, is entitled to purchase, at a purchase price of $0.01 per share (the “Stock Purchase Price”), from Luna Innovations Incorporated, a Delaware corporation (the “Company”), up to that
number, if any, of fully paid and nonassessable shares of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”), equal to the Warrant Shares, as determined in accordance with the following calculation:

  

					
	number of shares of Common Stock issuable upon exercise of the Warrant (the “Warrant Shares”)	  	=	  	((0.099 × Total Shares of Outstanding Common Stock of the Company) – number of Shares (as defined below)) / 0.901

For the purposes hereof, “Shares” at any given time means the number of shares of Common Stock issued to Hansen Medical, Inc. pursuant to the
Settlement Agreement plus the aggregate number of shares of Common Stock issued upon exercises of this Warrant prior to such time, if any. Within fifteen business days following the end of each fiscal quarter of the Company, and within ten business
days after receipt of any request from the Holder, the Company shall provide the Holder a certificate signed by the Company’s Chief Financial Officer specifying the total number of shares of Common Stock issued and outstanding as of the end of
such fiscal quarter or, as applicable, the date of such request (the “Total Shares of Outstanding Common Stock of the Company”) and the total number of Shares as of the end of such fiscal quarter or, as applicable, the date of such
request. For purposes of calculating the number of Warrant Shares, the Holder shall be entitled to rely on such certification. 

 1. Exercise; Issuance of Certificates; Acknowledgement. This Warrant shall not be
exercisable unless and until the Company has issued any shares of Common Stock after the Effective Date. To the extent there exists any Warrant Shares during the Term, this Warrant shall be exercisable at any time from time to time from and after
the Effective Date (as defined in that certain Confidential Settlement Agreement, dated December 11, 2009, by and between Luna Innovations, Inc. and Luna Technologies, Inc., and Hansen Medical, Inc. (the “Agreement”)) up to and
including 5:00 p.m. (Pacific Time) on the three (3) year anniversary of the Effective Date (such duration being the “Term”), upon delivery to the Company in accordance with Section 9 below of (i) the Form of Subscription
attached hereto duly completed and executed, and (ii) payment pursuant to Section 2 of the aggregate Stock Purchase Price for the number of Warrant Shares for which this Warrant is being exercised determined in accordance with the
provisions hereof. 
 This Warrant is exercisable at the option of the Holder for all or any part of the Warrant Shares (but not
for a fraction of a share) which may be purchased hereunder from time to time, if any. The Company agrees that the shares of Common Stock purchased under this Warrant shall be and are deemed to be issued to the Holder hereof as the record owner of
such shares as of the close of business on the date on which the duly completed and executed Form of Subscription is delivered in accordance with Section 9 and payment is received for such shares. Certificates for the shares of the Common Stock
so purchased, together with any other securities or property to which the Holder hereof is entitled upon such exercise, shall be delivered to the Holder hereof by the Company at the Company’s expense within a reasonable time after the rights
represented by this Warrant have been so exercised and in any event no later than three (3) business days. Any shares of Common Stock issued pursuant to this Warrant shall have the following legend; provided that such legend will be removed
from such issued shares when such shares may be sold without applicable volume limits under Rule 144: 
 “THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.” 

Each Certificate so delivered shall be in such denominations of the Warrant Shares as may be requested by the Holder hereof and shall be
registered in the name of such Holder. Notwithstanding anything to the contrary contained herein, unless the Holder otherwise notifies the Company, this Warrant shall be deemed to be automatically exercised using the Net Issuance Method pursuant to
Section 2 hereof immediately prior to the date on which this Warrant ceases to be exercisable. 
 2. Payment for
Shares. The aggregate purchase price for Warrant Shares being purchased hereunder may be paid either (i) by cash or wire transfer of immediately available funds, (ii) if the fair market value of one (1) share of the Warrant Shares
on the date of exercise is greater than the Stock Purchase Price, by surrender of a number of Warrant Shares which have a fair market value equal to the aggregate purchase price of the Warrant Shares being purchased (“Net Issuance”) as
determined herein, or (iii) any combination of the foregoing. If the Holder elects the Net Issuance method of payment, the Company shall issue to Holder upon exercise a number of shares of Warrant Shares determined in accordance with the
following formula: 
 X = Y(A-B) 

        A 

			
	where:	    	X = the number of Warrant Shares to be issued to the Holder;
		
		    	Y = the number of Warrant Shares with respect to which the Holder is exercising its purchase rights under this Warrant;
		
		    	A = the fair market value of one (1) share of the Warrant Shares on the date of exercise; and
		
		    	B = the Stock Purchase Price.

 No
fractional shares arising out of the above formula for determining the number of shares to be issued to the Holder shall be issued, and the Company shall in lieu thereof make payment to the Holder of cash in the amount of such fraction multiplied by
the fair market value of one (1) share of the Warrant Shares on the date of exercise. For purposes of the above calculation, the fair market value of each share of Common Stock shall be deemed to be the average of the closing prices of one
share of common stock on the national securities exchange or other nationally recognized trading system on which the shares of Common Stock are traded over the five (5) day period ending one (1) day prior to the date of exercise.

 3. Shares to be Fully Paid; Reservation of Shares. The Company covenants and agrees that all Warrant Shares will, upon
issuance, be duly authorized, validly issued, fully paid and nonassessable and free from all preemptive rights of any stockholder and free of all liens and encumbrances with respect to the issue thereof except for (i) restrictions on transfer
provided for herein or under applicable federal and state securities laws and (ii) liens and encumbrances created by Holder. The Company further covenants and agrees that during the Term, the Company will at all times have authorized and
reserved, for the purpose of issue, a sufficient number of authorized but unissued shares of Common Stock when and as required to provide for the exercise of the rights represented by this Warrant. 

4. Adjustments. 

4.1 Reclassification. If any reclassification of the capital stock of the Company shall be effected in such a way that holders of
Common Stock shall be entitled to receive stock, securities, or other assets or property, then, as a condition of such reclassification, lawful and adequate provisions shall be made whereby the Holder hereof shall thereafter have the right to
purchase and receive (in lieu of the shares of the Common Stock purchasable and receivable upon the exercise of the rights represented hereby) such shares of stock, securities or other assets or property as may be issued or payable with respect to
or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares of such Common Stock purchasable and receivable upon the exercise of the rights represented hereby as if Holder had so exercised such rights
immediately prior to such reclassification. In any reclassification described above, appropriate provision shall be made with respect to the rights and interests of the Holder of this Warrant to the end that the provisions hereof shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof. 

 4.2 Notice of Adjustment. Upon any adjustment contemplated in this Section 4,
the Company shall give written notice thereof in accordance with Section 9. The notice shall be signed by the Company’s chief financial officer and shall set forth in reasonable detail the method of calculation of such adjustment and the
facts upon which such calculation is based. 
 4.3 Other Notices. If at any time: 

(a) the Company shall declare any cash dividend upon its Common Stock; 

(b) there shall be any capital reorganization or reclassification of the capital stock of the Company; or consolidation or merger of the
Company with, or sale of all or substantially all of its assets to, another person; or 
 (c) there shall be a voluntary or
involuntary dissolution, liquidation or winding-up of the Company; 
 then, in any one or more of said cases, the Company shall give by notice
in accordance with Section 9: (a) at least ten (10) days prior written notice of the date on which the books of the Company shall close or a record shall be taken for such dividend or for determining rights to vote in respect of any
such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, and (b) in the case of any such reorganization, reclassification, consolidation, merger, sale, dissolution (except to the extent
involuntary), liquidation, winding-up or public offering, notice on the earlier of (X) the date on which notice is given to the Company’s stockholders or (Y) at least ten (10) days prior written notice of the date when the same
shall take place. Any notice given in accordance with the foregoing clause (a) shall also specify, in the case of any such dividend, the date on which the holders of Common Stock shall be entitled thereto. Any notice given in accordance with
the foregoing clause (b) shall also specify the date on which the holders of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, winding-up, conversion or public offering, as the case may be. 
 4.5
Acquisition. In the event of any reorganization, consolidation or merger of the Company other than a mere reincorporation transaction (an “Acquisition”), then, as a condition of such Acquisition, lawful and adequate provisions shall
be made whereby the Holder hereof shall thereafter have the right to purchase and receive (in lieu of the shares of the Common Stock purchasable and receivable upon the exercise of the rights represented hereby), at the same exercise price, such
shares of stock, securities or other assets or property as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares of such Common Stock purchasable and receivable
upon the exercise of the rights represented hereby as if Holder had so exercised such rights immediately prior to such Acquisition. In any Acquisition described above, appropriate provision shall be made with respect to the rights and interests of
the Holder of this Warrant to the end that the provisions hereof shall thereafter be applicable, as nearly as may be, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof. 

 5. No Voting or Dividend Rights. Nothing contained in this Warrant shall be construed
as conferring upon the Holder hereof the right to vote or to consent to receive notice as a stockholder of the Company or any other matters or any rights whatsoever as a stockholder of the Company. No dividends or interest shall be payable or
accrued in respect of this Warrant or the interest represented hereby or the shares purchasable hereunder until, and only to the extent that, this Warrant shall have been duly exercised and the applicable Warrant Shares received by Holder.

 6. Warrant Non Transferable. This Warrant and all rights hereunder may not be transferred, in whole or in part,
without Company’s prior written consent. Notwithstanding the foregoing, Holder may transfer or assign this Warrant in connection with a merger, consolidation or sale of substantially all of the assets of Holder, provided that Holder provides
the Company with written notice of such transfer or assignment. 
 7. Lost Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such
mutilation upon surrender and cancellation of such Warrant, the Company, at Holder’s expense, will make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant. 

8. Modification and Waiver. Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived
(either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Holder. 

9. Notices. Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to
this Warrant shall be in writing and shall be conclusively deemed to have been duly given (a) when hand delivered to the other party; (b) when sent by facsimile, with receipt confirmation, to the number set forth below if sent between 8:00
a.m. and 5:00 p.m. recipient’s local time on a business day, or on the next business day if sent by facsimile to the number set forth below if sent other than between 8:00 a.m. and 5:00 p.m. recipient’s local time on a business day; or
(c) the next business day after deposit with a national overnight delivery service, postage prepaid, addressed to the applicable parties as set forth below with next business day delivery guaranteed, provided that the sending party receives a
confirmation of delivery from the delivery service provider. Each person making a communication hereunder by facsimile shall promptly confirm by telephone to the person to whom such communication was addressed each communication made by it by
facsimile pursuant hereto but the absence of such confirmation shall not affect the validity of any such communication. A party may change or supplement the addresses given below, or designate additional addresses, for purposes of this
Section 9 by giving the other party written notice of the new address in the manner set forth above. 

			
	If to the Holder:	  	Hansen Medical, Inc.
		  	800 E. Middlefield Road
		  	Mountain View, CA 94043
		  	Attn: Arthur Hsieh
		  	Facsimile:
		  	Email:
		
	If to the Company:	  	Luna Innovations Inc.
		  	One Riverside Circle, Suite 400
		  	Roanoke, VA 24016
		  	Attn:                            
 
		  	Facsimile:                           
  

 10. Governing Law; Jurisdiction; Venue. 

(a) Choice of Law. This Warrant shall be governed by, and interpreted in accordance with the laws of the State of Delaware, without
regard to conflicts of laws, or applicable federal law as to a particular subject where federal law governs, such as for example, the Patent Act governing patents or the Copyright Act governing copyrights. 

(b) Alternative Dispute Resolution. Notwithstanding subsections (c) below, in the event some provision of a Settlement
Document expressly creates an alternative dispute resolution provision as to a particular type of dispute, then such disputes shall be resolved as so specified in the Agreement. 

(c) Consent to Jurisdiction. Each Party hereby (i) consents and submits to the venue and co-exclusive jurisdiction of the
courts of New Castle County in the State of Delaware and the Federal courts of the United States sitting in such part of the District of Delaware, (ii) agrees that all claims may be heard and determined in such courts, (iii) irrevocably
waives (to the extent permitted by applicable law) any objection that it now or hereafter may have to the laying of venue of any such action or proceeding brought in any of the foregoing courts, and any objection on the ground that any such action
or proceeding in any such court has been brought in an inconvenient forum, and (iv) agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any
other manner permitted by law. Each of the parties hereby consents to service of process by any party in any suit, action or proceeding in accordance with such applicable law. 

[Signature Page Follows] 

 IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by an officer,
thereunto duly authorized as of the date first above written. 
  

			
	LUNA INNOVATIONS INCORPORATED
		
	By:	 	 /s/ KENT MURPHY

	Name:	 	Kent Murphy
	Title:	 	CEO

  

			
	 Agreed and Acknowledged:

	
	 HANSEN MEDICAL, INC.

		
	By:	 	 /s/ FRED MOLL

	Name:	 	Fred Moll
	Its:	 	CEO

 FORM OF SUBSCRIPTION 

(To be signed only upon exercise of Warrant) 

To:                        
      
 The undersigned, the holder of a right to purchase shares of Common Stock of Luna
Innovations Incorporated, a Delaware corporation (the “Company”), pursuant to that certain Warrant to Purchase Common Stock of Luna Innovations Incorporated (the “Warrant”), dated as of January 12, 2010, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder,
                    (    ) shares of Common Stock of the Company, it being agreed that the foregoing shares shall
not exceed the number of Warrant Shares as of the date hereof, and herewith makes payment of                      Dollars
($        ) therefor by the following method: 
 (Check one of the following):

  

			
	         (check if applicable)	  	The undersigned hereby elects to make payment of                     
Dollars ($        ) therefor in cash.
		
	         (check if applicable)	  	The undersigned hereby elects to make payment for the aggregate exercise price of this exercise using the Net Issuance method pursuant to Section 2 of the
Warrant.

 The undersigned represents that it is acquiring such securities for its own account for investment and
not with a view to or for sale in connection with any distribution thereof and that the undersigned is an accredited investor as defined in Rule 501 under the Securities Act of 1933, as amended. 

DATED:                      

 

			
	 HANSEN MEDICAL, INC.

		
	 By:
	 	  

	 Name:
	 	  

	 Its:

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