Document:

Exhibit 10.1

 Exhibit 10.1 
 EXECUTION COPY 
 SECOND LOAN MODIFICATION AGREEMENT 

This Second Loan Modification Agreement (this “Loan Modification Agreement”) is entered into as of May 18, 2011, by
and between (i) SILICON VALLEY BANK, a California corporation with a loan production office located at 275 Grove Street, Suite 2-200, Newton, Massachusetts 02466 (“Bank”), and (ii) LUNA INNOVATIONS
INCORPORATED, a Delaware corporation and LUNA TECHNOLOGIES, INC., a Delaware corporation, each with offices located at 1 Riverside Circle, Suite 400, Roanoke, Virginia 24016 (individually and collectively, jointly and severally, the
“Borrower”). 
 1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations which
may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan arrangement dated as of February 18, 2010, evidenced by, among other documents, a certain Loan and Security Agreement dated as of February 18, 2010, between
Borrower and Bank, as amended by a certain First Loan Modification Agreement, dated as of March 7, 2011 (as amended, the “Loan Agreement”). Capitalized terms used but not otherwise defined herein shall have the same meaning as
in the Loan Agreement. 
 2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the Collateral as described in the
Loan Agreement and in certain Intellectual Property Security Agreements executed by each Borrower in favor of Bank (collectively, the “IP Agreements”, and together with any other collateral security granted to Bank, the
“Security Documents”). 
 Hereinafter, the Security Documents, together with all other documents evidencing or securing the
Obligations shall be referred to as the “Existing Loan Documents”. 
 3. DESCRIPTION OF CHANGE IN TERMS. 

 

	 	A.	Modifications to Loan Agreement. 

  

	 	1	The Loan Agreement shall be amended by inserting the following new Section 2.1.5 immediately following Section 2.1.4 thereof: 

“2.1.5 Term Loan. 
 “(a) Availability. Bank shall make one (1) term loan available to Borrower in an amount up to the Term Loan Amount on or within five (5) days after the Second Loan Modification
Effective Date subject to the satisfaction of the terms and conditions of this Agreement. 
 (b) Repayment. Borrower
shall repay the Term Loan in (i) forty-eight (48) equal installment payments of principal, based on a forty-eight (48) month amortization schedule; plus (ii) monthly payments of accrued interest (each such payment being
referred to herein as a “Term Loan Payment”). Commencing on the last day of the month following the month in which the Funding Date occurs, each Term Loan Payment shall be payable on the last day of each month. Borrower’s final
Term Loan Payment, due on the Term Loan Maturity Date, shall include all outstanding principal and accrued and unpaid interest under the Term Loan. Once repaid, the Term Loan may not be reborrowed. 

(c) Prepayment. Prior to the Term Loan Maturity Date, Borrower may prepay all or any portion of the Term Loan, effective three
(3) Business Days after written notice of such prepayment is given to Bank. Notwithstanding any such prepayment, Bank’s lien and security interest in the Collateral shall continue until Borrower fully satisfies its Obligations. If such
prepayment is at Borrower’s election or at Bank’s election due to the occurrence and continuance of an Event of Default, Borrower shall pay to Bank, in 

 
addition to the payment of any other expenses or fees then-owing, an early termination fee in an amount equal to (i) if such prepayment is made on or before the day that is 365 days after
the Second Loan Modification Effective Date (the “First Anniversary”), an amount equal to two percent (2.00%) of the amount of the Term Loan so prepaid; and (ii) if such prepayment is made after the First Anniversary but
on or before the day that is 365 days after the First Anniversary, an amount equal to one percent (1.00%) of the amount of the Term Loan so prepaid; provided that no termination fee shall be charged if the credit facility
hereunder is replaced with a new facility from another division of Silicon Valley Bank. Any prepayments on the Term Loan shall be in an amount equal to One Million Dollars ($1,000,000) and Two Hundred Fifty Thousand Dollars ($250,000) increments in
excess thereof. Upon payment in full of the Obligations and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall terminate and release its liens and security interests in the Collateral and all rights therein
shall revert to Borrower. 
 (d) Use of Proceeds - Term Loan. Borrower acknowledges and agrees that the proceeds of the
Term Loan hereunder shall be used to immediately repay in full all remaining outstanding principal and accrued and unpaid interest owed to Hansen Medical pursuant to the Hansen Subordinated Loan Documents and the Hansen Settlement Documents,
together with any additional fees associated therewith and for other general corporate purposes of the Borrower.” 
  

	 	2	The Loan Agreement shall be amended by deleting the following text appearing as Section 2.3(a) thereof: 

“(a) Interest Rate; Advances. Subject to Section 2.3(b), the principal amount outstanding under the Revolving Line shall
accrue interest at a floating per annum rate equal to the Prime Rate plus two percentage points (2.00%), which interest shall be payable monthly, in arrears, in accordance with Section 2.3(f) below.” 

and inserting in lieu thereof the following: 
 “(a) Interest Rate; 
 (i) Advances. Subject to
Section 2.3(b), the principal amount outstanding under the Revolving Line shall accrue interest at a floating per annum rate equal to the Prime Rate plus one and one-quarter percentage points (1.25%), which interest shall be payable monthly, in
arrears, in accordance with Section 2.3(f) below. 
 (ii) Term Loan. Subject to Section 2.3(b),
the principal amount outstanding under the Term Loan shall accrue interest at a floating per annum rate equal to the Prime Rate plus two percentage points (2.00%), which interest shall be payable monthly, in arrears, in accordance with
Section 2.1.5(b).” 
  

	 	3	The Loan Agreement shall be amended by deleting the following text appearing as Section 2.4(d) thereof: 

“(d) Unused Revolving Line Facility Fee. A fee (the “Unused Revolving Line Facility Fee”), payable
quarterly, in arrears, on a calendar year basis on the last Business Day of each quarter, in an amount equal to one-half of one percent (0.50%) per annum of the average unused portion of the Revolving Line, as determined by Bank. The unused portion
of the Revolving Line, for the purposes of this calculation, shall not include amounts reserved for products provided in connection with Cash Management Services and FX Forward Contracts. Borrower shall not be entitled to any credit, rebate or
repayment of any Unused Revolving Line Facility Fee previously earned by Bank pursuant to this Section notwithstanding any termination of the Agreement or the suspension or termination of Bank’s obligation to make loans and advances hereunder,
including during any Streamline Period; and” 

 and inserting in lieu thereof the following: 

Unused Revolving Line Facility Fee. A fee (the “Unused Revolving Line Facility Fee”), payable monthly, in
arrears, on a calendar year basis on the last Business Day of each month, in an amount equal to one-quarter of one percent (0.25%) per annum of the average unused portion of the Revolving Line, as determined by Bank. The unused portion of the
Revolving Line, for the purposes of this calculation, shall not include amounts reserved for products provided in connection with Cash Management Services and FX Forward Contracts. Borrower shall not be entitled to any credit, rebate or repayment of
any Unused Revolving Line Facility Fee previously earned by Bank pursuant to this Section notwithstanding any termination of the Agreement or the suspension or termination of Bank’s obligation to make loans and advances hereunder, including
during any Streamline Period; and 
  

	 	4	The Loan Agreement shall be amended by deleting the following text appearing as Section 6.2(a)(ii) thereof: 

“(ii) within fifteen (15) days, or the next succeeding Business Day if the 15th day is not a Business Day, after the end of each month,
(A) monthly accounts receivable agings, aged by invoice date, (B) monthly accounts payable agings, aged by invoice date, and outstanding or held check registers, if any, and (C) monthly reconciliations of accounts receivable agings
(aged by invoice date), transaction reports, Deferred Revenue/billings in excess of cost report and general ledger;” 
 and
inserting in lieu thereof the following: 
 “(ii) within fifteen (15) days, or the next succeeding
Business Day if the 15th day is not a Business Day, after
the end of each month, (A) monthly accounts receivable agings, aged by invoice date, (B) monthly accounts payable agings, aged by invoice date (including, without limitation, project identifiers for the purpose of tracking the status of
assignments under the Federal Assignment of Claims Act of 1940, as amended), and outstanding or held check registers, if any, and (C) monthly reconciliations of accounts receivable agings (aged by invoice date), transaction reports, Deferred
Revenue/billings in excess of cost report and general ledger;” 
  

	 	5	The Loan Agreement shall be amended by deleting the following text appearing as Section 6.2(a)(v) thereof: 

“(v) within thirty (30) days of approval by Borrower’s board of directors (or sooner if reasonably requested by Bank) and
as amended and approved by Borrower’s board of directors, annual operating budgets (including income statements, balance sheets and cash flow statements, by month) for the upcoming fiscal year of Borrower and financial projections for the
following fiscal year (on a quarterly basis) as approved by Borrower’s board of directors, together with any related business forecasts used in the preparation of such annual financial projections;” 

and inserting in lieu thereof the following: 
 “(v) within thirty (30) days after the end of each fiscal year of Borrower and as amended and approved by Borrower’s board of directors, annual operating budgets (including income
statements, balance sheets and cash flow statements, by month) for the upcoming fiscal year of Borrower and financial projections for the following fiscal year (on a quarterly basis) as approved by Borrower’s board of directors, together with
any related business forecasts used in the preparation of such annual financial projections;” 

	 	6	The Loan Agreement shall be amended by deleting the following text appearing as Section 6.9(a) thereof: 

“(a) Adjusted Quick Ratio. A ratio of (i) Quick Assets to (ii) Current Liabilities (net of the Litigation
Accrual for purposes of the December 31, 2009 test) minus the current portion of Deferred Revenue of at least 1.25 to 1.00.” 
 and inserting in lieu thereof the following: 
 “(a) Liquidity.
Borrower’s (i) unrestricted cash at Bank plus (ii) the lesser of (x) thirty percent (30%) of net billed accounts receivable (including, without limitation, unbilled but contractually due accounts receivable) or
(y) Three Million Dollars ($3,000,000) of not less than Seven Million Dollars ($7,000,000).” 
  

	 	7	The Loan Agreement shall be amended by deleting the following text appearing as Section 6.9(b) thereof: 

“(b) Adjusted EBITDA. Maintain, measured as of the end of each fiscal quarter during the following periods on a trailing
three month basis, Adjusted EBITDA of at least the following: 
  

					
		
	Trailing Three Month Period Ended	  	Minimum
Adjusted
EBITDA	 
		
	 December 31, 2009
	  	($	1,000,000	) 
		
	 March 31, 2010
	  	($	250,000	) 
		
	 June 30, 2010
	  	$	1.00	 
		
	 September 30, 2010
	  	$	250,000	  
		
	 December 31, 2010
	  	$	500,000	  
		
	 March 31, 2011
	  	($	300,000	)” 

 and inserting in lieu thereof the following: 

“(b) Adjusted EBITDA. Maintain, measured as of the end of each fiscal quarter during the following periods on a trailing
three month basis, Adjusted EBITDA of at least the following: 
  

			
		
	Trailing Three Month Period Ended	  	Minimum Adjusted EBITDA
		
	March 31, 2011	  	($300,000)
		
	June 30, 2011 through and including September 30, 2011	  	$500,000
		
	December 31, 2011	  	$100,000
		
	March 31, 2012, and each trailing three month period ending thereafter	  	The greater of (i) forty percent (40%) of forecasted Adjusted EBITDA per the board approved projections; or (b) $100,000”

	 	8	The Loan Agreement shall be amended by deleting the following text appearing as Section 8.1 thereof: 

“8.1 Payment Default. Borrower fails to (a) make any payment of principal or interest on any Credit Extension on its due
date, or (b) pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day cure period shall not apply to payments due on the Revolving Line Maturity Date). During
the cure period, the failure to make or pay any payment specified under clause (a) or (b) hereunder is not an Event of Default (but no Credit Extension will be made during the cure period);” 

and inserting in lieu thereof the following: 
 “8.1 Payment Default. Borrower fails to (a) make any payment of principal or interest on any Credit Extension on its due date, or (b) pay any other Obligations within three
(3) Business Days after such Obligations are due and payable (which three (3) Business Day cure period shall not apply to payments due on the Revolving Line Maturity Date and/or the Term Loan Maturity Date, as applicable). During the cure
period, the failure to make or pay any payment specified under clause (a) or (b) hereunder is not an Event of Default (but no Credit Extension will be made during the cure period);” 

 

	 	9	The Loan Agreement shall be amended by deleting the following text appearing as Section 12.1 thereof: 

“12.1 Termination Prior to Maturity Date. This Agreement may be terminated prior to the Revolving Line Maturity Date by
Borrower, effective three (3) Business Days after written notice of termination is given to Bank or if Bank’s obligation to fund Credit Extensions terminates pursuant to the terms of Section 2.1.1(b). Notwithstanding any such
termination, Bank’s lien and security interest in the Collateral shall continue until Borrower fully satisfies its Obligations. If such termination is at Borrower’s election, Borrower shall pay to Bank, in addition to the payment of any
other expenses or fees then-owing, a termination fee in an amount equal to Fifty Thousand Dollars ($50,000) (one percent (1.00%) of $5,000,000), provided that no termination fee shall be charged if the credit facility hereunder is replaced with
a new facility from another division of Silicon Valley Bank. Upon payment in full of the Obligations and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall release its liens and security interests in the
Collateral and all rights therein shall revert to Borrower.” 
 and inserting in lieu thereof the following: 

“12.1 Termination Prior to Maturity Date. This Agreement may be terminated prior to the Revolving Line Maturity Date by
Borrower, effective three (3) Business Days after written notice of termination is given to Bank or if Bank’s obligation to fund Credit Extensions terminates pursuant to the terms of Section 2.1.1(b). Notwithstanding any such
termination, Bank’s lien and security interest in the Collateral shall continue until Borrower fully satisfies its Obligations. If such termination is at Borrower’s election, Borrower shall pay to Bank, in addition to the payment of any
other expenses or fees then-owing, a termination fee in an amount equal to Ten Thousand Dollars ($10,000) (one percent (1.00%) of $1,000,000), provided that no termination fee shall be charged if the credit facility hereunder is replaced with a
new facility from another division of Silicon Valley Bank. Upon payment in full of the Obligations and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall release its liens and security interests in the
Collateral and all rights therein shall revert to Borrower.” 

	 	10	The Loan Agreement shall be amended by deleting following definitions appearing in Section 13.1 thereof: 

““Eligible Governmental Accounts” are, so long as Borrower’s unrestricted cash at Bank minus all
outstanding Obligations of Borrower owed to Bank is equal to or greater than $2,500,000 (the “Eligible Governmental Accounts Threshold”), Accounts that are otherwise Eligible Accounts which are owing from an Account Debtor which is
a United States government entity or any department, agency or instrumentality thereof, for which Bank determines, in its sole discretion, that Borrower and the Account Debtors of such Eligible Governmental Accounts are using best efforts to obtain
an assignment under the Federal Assignment of Claims Act of 1940 in favor of Bank. For the avoidance of doubt, at any time the Borrower fails to maintain the Eligible Governmental Accounts Threshold, no Accounts will be considered “Eligible
Governmental Accounts” until such time as Bank determines, in its sole discretion, that Borrower has achieved the Eligible Governmental Accounts Threshold. Any Overadvance created by Borrower failing to maintain the Eligible Governmental
Accounts Threshold shall immediately be repaid in accordance with Section 2.2. 
 “Litigation Accrual” is
a onetime amount accrued and reported by Borrower under GAAP for the first quarter of 2009 between Borrower and Hansen Medical, Inc. in the approximate amount of $36,100,000.” 

 

	 	11	The Loan Agreement shall be amended by deleting the following definitions appearing in Section 13.1 thereof: 

““Adjusted EBITDA” shall mean (a) Net Income, plus (b) Interest Expense, plus (c) to
the extent deducted in the calculation of Net Income, depreciation expense and amortization expense, plus (d) income tax expense, plus (e) to the extent deducted in the calculation of Net Income, non-cash stock compensation
expense, less (f) to the extent included in the calculation of Net Income, the reversal of any portion of the Litigation Accrual. 
 “Borrowing Base” is (a) eighty percent (80%) of Eligible Accounts plus (b) the lesser of (i) eighty percent (80%) of Eligible Governmental Accounts or
(ii) Two Million Five Hundred Thousand Dollars ($2,500,000), in each case as determined by Bank from Borrower’s most recent Borrowing Base Certificate; provided, however, that Bank may decrease the foregoing percentage in its
good faith business judgment based on events, conditions, contingencies, or risks which, as determined by Bank, may adversely affect the Collateral.” 
 “Credit Extensions” is any Advance, Letter of Credit, FX Forward Contract, amount utilized for Cash Management Services, or any other extension of credit by Bank for Borrower’s
benefit. 
 “Revolving Line” is an Advance or Advances in an amount not to exceed Five Million Dollars
($5,000,000). 
 “Revolving Line Maturity Date” is May 18, 2011.” 

and inserting in lieu thereof the following: 
 ““Adjusted EBITDA” shall mean (a) Net Income, plus (b) Interest Expense, plus (c) to the extent deducted in the calculation of Net Income, depreciation
expense and amortization expense, plus (d) income tax expense, plus (e) to the extent deducted in the calculation of Net Income, non-cash stock compensation expense, plus (f) to the extent deducted in the
calculation of Net Income, after-tax dividends (provided, that nothing herein shall be construed as permitting Borrower to pay and dividends or distributions in violation of Section 7.7 hereof) less (g) to the extent
included in the calculation of Net Income, non-cash income recognized in connection with the early termination of the Indebtedness under the Hansen Subordinated Loan Documents. 

 “Borrowing Base” is (a) eighty percent (80%) of Eligible
Accounts, as determined by Bank from Borrower’s most recent Borrowing Base Certificate; provided, that Bank may decrease the foregoing percentage in its good faith business judgment based on events, conditions, contingencies, or
risks which, as determined by Bank, may adversely affect the Collateral.” 
 “Credit Extensions” is any
Advance, Letter of Credit, FX Forward Contract, amount utilized for Cash Management Services, Term Loan or any other extension of credit by Bank for Borrower’s benefit. 
 “Revolving Line” is an Advance or Advances in an amount not to exceed One Million Dollars ($1,000,000). 
 “Revolving Line Maturity Date” is May 17, 2012.” 
  

	 	12	The Loan Agreement shall be amended by deleting the following clauses (j) and clause (s) from the definition of “Eligible Accounts” in
Section 13.1 thereof: 

 “(j) Accounts owing from the United States or any department, agency, or
instrumentality thereof except for Accounts of the United States if Borrower has assigned its payment rights to Bank and the assignment has been acknowledged under the Federal Assignment of Claims Act of 1940, as amended, except for Eligible
Governmental Accounts; 
 (s) Accounts for which the Account Debtor is Hansen Medical; and” 

and inserting in lieu thereof the following: 
 “(j) Accounts owing from the United States or any department, agency, or instrumentality thereof except for Accounts of the United States if Borrower has assigned its payment rights to Bank and the
assignment has been acknowledged under the Federal Assignment of Claims Act of 1940, as amended; 
 (s) prior to
(i) payment in full of all Indebtedness of Borrower under the Hansen Subordinated Loan Documents and (y) the termination of all of the Hansen Subordinated Loan Documents and prior to release of all security interests or Liens created
thereunder, Accounts for which the Account Debtor is Hansen Medical; and” 
  

	 	13	The loan Agreement shall be amended by inserting the following definitions in Section 13.1 thereof, each in its appropriate alphabetical order:

 ““Second Loan Modification Effective Date” is May 18, 2011. 

“Term Loan” is a loan made by Bank pursuant to the terms of Section 2.1.5 hereof. 

“Term Loan Amount” is an aggregate amount equal to Six Million Dollars ($6,000,000) outstanding at any time. 

“Term Loan Maturity Date” is the earliest of (a) May 1, 2015 or (b) the occurrence of an Event of
Default. 
 “Term Loan Payment” is defined in Section 2.1.5(b).” 

 

	 	14	The Compliance Certificate appearing as Exhibit B to the Loan Agreement is hereby replaced with the Compliance Certificate attached as Exhibit A hereto.

 4. CONDITIONS PRECEDENT. Borrower hereby agrees that the following documents shall be delivered to
the Bank prior to or concurrently with the Second Loan Modification Effective Date, each in form and substance satisfactory to the Bank, in its sole discretion (collectively, the “Conditions Precedent”): 

 

	 	A.	Copies, certified by a duly authorized officer of the Borrower, to be true and complete as of the date hereof, of each of (i) the governing documents of the
Borrower as in effect on the date hereof (but only to the extent modified since last delivered to the Bank), (ii) the resolutions of the Borrower authorizing the execution and delivery of this Loan Modification Agreement, the other documents
executed in connection herewith and the Borrower’s performance of all of the transactions contemplated hereby (but only to the extent required since last delivered to Bank), and (iii) an incumbency certificate giving the name and bearing a
specimen signature of each individual who shall be so authorized (but only to the extent any signatories have changed since such incumbency certificate was last delivered to Bank); 

 

	 	B.	A certificate from the Secretary of State of the applicable State of organization as of a recent date as to the Borrower’s existence and good standing, together
with certificates of foreign qualification from the applicable authority in each applicable jurisdiction in which Borrower is so qualified, each as of a recent date; 

 

	 	C.	An executed Payoff and Release Letter from Hansen Medical; 

  

	 	D.	Updated Perfection Certificates, executed by Borrower; and 

  

	 	E.	Such other documents as Bank may reasonably request. 

 5. FEES. Borrower shall pay to Bank Borrower shall pay to Bank (i) a Term Loan commitment fee equal to Twenty Nine Thousand Seven Hundred Fifty Dollars ($29,750); and (ii) a Revolving
Line commitment fee equal to Five Thousand Two Hundred Fifty Dollars ($5,250), which fees shall be due on the date hereof and shall be deemed fully earned as of the date hereof. Borrower shall also reimburse Bank for all legal fees and expenses
incurred in connection with this amendment to the Existing Loan Documents. 
 6. CONDITIONS SUBSEQUENT. On or before the date that is
three (3) Business Days after the Second Loan Modification Effective Date (the “Due Date”) (or such later date as Bank shall determine, in its sole discretion), Borrower shall cause to be delivered to Bank the following
documents with all applicable executed signature pages and attachments (each a “Condition Subsequent” and collectively, the “Conditions Subsequent”). Borrower’s failure to timely fulfill and deliver each
Condition Subsequent to Bank on or before the Due Date (or such later date as Bank shall determine, in its sole discretion), shall constitute an Event of Default under the Loan Agreement. In addition, until such time as all of the following
Conditions Subsequent have been either received by Bank or, in Bank’s sole discretion, have been waived by Bank, no Accounts, the Account Debtor for which is Hansen Medical, shall be included in any Borrowing Base calculation: 

 

	 	A.	Filed UCC-3 Termination Statements, terminating the UCC-1 financing Statements in favor of Hansen Medical; 

 

	 	B.	Evidence satisfactory to Bank that Borrower has received its Hansen Secured Promissory Note, marked “canceled”; and 

 

	 	C.	Executed Release of Security Interest in Patents and Trademarks, executed by Hansen Medical, in form and substance acceptable to Bank. 

7. RATIFICATION OF IP AGREEMENTS. Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and conditions of the IP
Agreements, and acknowledges, confirms and agrees that said IP Agreements, as modified by certain disclosures made by Borrower to Bank through and including the date hereof, contain an accurate and complete listing of all Intellectual Property
Collateral as defined in each respective IP Agreement, and each remains in full force and effect. Notwithstanding the terms and conditions of any of the IP Agreements, Borrower shall not register any Copyrights or Mask Works in the United States
Copyright Office unless it: (i) has given at least fifteen (15) days’ prior written notice to Bank of its intent to register such Copyrights 

 
or Mask Works and has provided Bank with a copy of the application it intends to file with the United States Copyright Office (excluding exhibits thereto); (ii) executes a security agreement
or such other documents as Bank may reasonably request in order to maintain the perfection and priority of Bank’s security interest in the Copyrights proposed to be registered with the United States Copyright Office; and (iii) records such
security documents with the United States Copyright Office contemporaneously with filing the Copyright application(s) with the United States Copyright Office. Borrower shall promptly provide to Bank a copy of the Copyright application(s) filed with
the United States Copyright Office, together with evidence of the recording of the security documents necessary for Bank to maintain the perfection and priority of its security interest in such Copyrights or Mask Works. Borrower shall provide
written notice to Bank of any application filed by Borrower in the United States Patent Trademark Office for a patent or to register a trademark or service mark within thirty (30) days of any such filing. 

8. RATIFICATION OF PERFECTION CERTIFICATE. Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained
in certain Perfection Certificates, each dated as of February 18, 2010, each as modified by written disclosures made by Borrower to Bank through and including the date hereof, and acknowledges, confirms and agrees the disclosures and
information above Borrower provided to Bank in each such Perfection Certificate, as modified through the date hereof, remains true and correct in all material respects as of the date hereof. 
 9. AUTHORIZATION TO FILE. Borrower hereby authorizes Bank to file UCC financing statements without notice to Borrower, with all appropriate jurisdictions, as Bank deems appropriate, in order to
further perfect or protect Bank’s interest in the Collateral, including a notice that any disposition of the Collateral, by either the Borrower or any other Person, shall be deemed to violate the rights of the Bank under the Code. 

10. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described above. 

11. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of the Loan Agreement (as modified
by this Loan Modification Agreement), and all security or other collateral granted to the Bank, and confirms that the indebtedness secured thereby includes, without limitation, the Obligations. 

12. NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that Borrower has no offsets, defenses, claims, or counterclaims against Bank
with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or in equity, all of them are hereby expressly WAIVED and
Borrower hereby RELEASES Bank from any liability thereunder. 
 13. CONTINUING VALIDITY. Borrower understands and agrees that in
modifying the existing Obligations, Bank is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Existing Loan Documents. Except as expressly modified pursuant to this Loan Modification Agreement, the terms
of the Existing Loan Documents remain unchanged and in full force and effect. Bank’s agreement to modifications to the existing Obligations pursuant to this Loan Modification Agreement in no way shall obligate Bank to make any future
modifications to the Obligations. Nothing in this Loan Modification Agreement shall constitute a satisfaction of the Obligations. It is the intention of Bank and Borrower to retain as liable parties all makers of Existing Loan Documents, unless the
party is expressly released by Bank in writing. No maker will be released by virtue of this Loan Modification Agreement. 
 14.
JURISDICTION/VENUE. Section 11 of the Loan Agreement is hereby incorporated by reference in its entirety. 
 15.
COUNTERSIGNATURE. This Loan Modification Agreement shall become effective only when it shall have been executed by Borrower and Bank. 
 [The remainder of this page is intentionally left blank] 

 IN WITNESS WHEREOF, the parties hereto have caused this Loan Modification Agreement
to be executed as a sealed instrument under the laws of the Commonwealth of Massachusetts as of the date first above written. 
  

			
	BORROWER:
	
	LUNA INNOVATIONS INCORPORATED

			
		
	By:	 	 /s/ My E. Chung

			
	Name:	 	My E. Chung
	Title:	 	President and CEO
	
	LUNA TECHNOLOGIES, INC.

			
		
	By:	 	 /s/ Scott A. Graeff

			
	Name:	 	Scott A. Graeff
	Title:	 	President
	
	BANK:
	
	SILICON VALLEY BANK

			
		
	By:	 	 /s/ Christopher Leary

	Name:	 	 Christopher Leary

	Title:	 	 Vice President

 Exhibit A to Second Loan Modification Agreement 

EXHIBIT B 

COMPLIANCE CERTIFICATE 
  

					
	TO:	  	SILICON VALLEY BANK	  	 Date:                     

	FROM:	  	LUNA INNOVATIONS INCORPORATED	  	
		  	LUNA TECHNOLOGIES, INC.	  	

 The undersigned authorized officer of Luna Innovations Incorporated, a Delaware corporation, and Luna Technologies, Inc.,
a Delaware corporation (individually and collectively, jointly and severally, the “Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the
“Agreement”), (1) Borrower is in complete compliance for the period ending              with all required covenants except as noted below, (2) there are no Events
of Default, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to
any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true,
accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes,
assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries, if
any, relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank. Attached are the required documents supporting the certification. The undersigned certifies that these are prepared in
accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is
not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the
Agreement. 
  

					
	Please indicate compliance status by circling Yes/No under “Complies” column.
			
	 Reporting Covenant
	  	 Required
	 	 Complies

			
	Monthly financial statements with Compliance Certificate	  	Monthly within 30 days	 	Yes  No
			
	Annual financial statement (CPA Audited) + CC	  	FYE within 120 days	 	Yes  No
			
	10-Q, 10-K and 8-K	  	Within 5 days after filing with SEC	 	Yes  No
			
	A/R & A/P Agings, Deferred Revenue/billings in excess of cost report/project identifiers for Assignments of Claim tracking purposes	  	Monthly within 15 days	 	Yes  No
			
	Transaction Reports	  	 Bi-weekly (monthly with 30 days

during a Streamline Period) and with each request for an advance
	 	Yes  No
			
	Projections	  	FYE within 30 days, and as amended	 	Yes  No

							
	
	 The following Intellectual Property was registered after the Effective Date (if no registrations, state
“None”)

	  
	 	

  

											
	 Financial Covenant
	  	Required	 	  	Actual	 	  	 Complies

				
	 Maintain as indicated:
	  				  				  	
	 Minimum Liquidity
	  	$	7,000,000	  	  	$	            	  	  	Yes  No
	 Minimum Adjusted EBITDA
	  	 	*	  	  	$	            	  	  	Yes  No

  

	*	See Section 6.9(b) of the Loan and Security Agreement 

  
 1 

 The following financial covenant analyses and information set forth in Schedule 1 attached
hereto are true and accurate as of the date of this Certificate. 
 The following are the exceptions with respect to the
certification above: (If no exceptions exist, state “No exceptions to note.”) 
  

 
  

 
  

 
  

											
	 LUNA INNOVATIONS INCORPORATED
 LUNA TECHNOLOGIES, INC.
	 		 	BANK USE ONLY
		 		 		 		 	Received by:	 	  

		 		 		 		 		 	AUTHORIZED SIGNER

									
					
	By:	 	 /s/ My E. Chung
	 		 	Date:	 	  

									
	Name:	 	 My E. Chung
	 		 		 	
	Title:	 	 President & CEO
	 		 	Verified:	 	  

		 		 		 		 	AUTHORIZED SIGNER

									
		 		 		 	Date:	 	  

									
					
		 		 		 	Compliance Status:	 	Yes    No

  
 2 

 Schedule 1 to Compliance Certificate 

Financial Covenants of Borrower 
 Dated:             
  

	I.	Liquidity (Section 6.9(a)) 

 Required:
Liquidity. Borrower’s (i) unrestricted cash at Bank plus (ii) the lesser of (x) thirty percent (30%) of net billed accounts receivable (including, without limitation, unbilled but contractually due accounts
receivable) or (y) Three Million Dollars ($3,000,000) of not less than Seven Million Dollars ($7,000,000).” 
 Actual: 

 

					
	A.	  	Aggregate value of Borrower’s unrestricted cash at Bank	  	$            
			
	B.	  	The lesser of (x) thirty percent (30%) of net billed accounts receivable (including, without limitation, unbilled but contractually due accounts receivable) or (y) Three Million
Dollars ($3,000,000)	  	$            
			
	C.	  	LIQUIDITY (line A plus line B)	  	$            

 Is line C equal to or greater than $7,000,000? 

 

			
	             No, not in compliance	  	             Yes, in compliance

  
 3 

	II.	Adjusted EBITDA (Section 6.9(b)) 

Required: Maintain, measured as of the end of each fiscal quarter during the following periods on a trailing three month basis, Adjusted EBITDA of at
least the following: 
  

			
		
	Trailing Three Month Period Ended	  	Minimum Adjusted EBITDA
		
	March 31, 2011	  	($300,000)
		
	June 30, 2011 through and including September 30, 2011	  	$500,000
		
	December 31, 2011	  	$100,000
		
	March 31, 2012, and each trailing three month period ending thereafter	  	The greater of (i) forty percent (40%) of forecasted Adjusted EBITDA per the board approved projections; or (b) $100,000

 Actual: All amounts calculated on a trailing three month basis: 

 

							
	A.	  	Net Income	  	$        
			
	B.	  	To the extent included in the determination of Net Income	  	
				
		  	1.	  	The provision for income taxes	  	$        
				
		  	2.	  	Depreciation expense	  	$        
				
		  	3.	  	Amortization expense	  	$        
				
		  	4.	  	Net Interest Expense	  	$        
				
		  	5.	  	Non-cash stock compensation expense	  	$        
				
		  	6.	  	After-tax dividends (provided, that nothing herein shall be construed as permitting Borrower to pay and dividends or distributions in violation of Section 7.7 of the
Loan Agreement)	  	$        
				
		  	7.	  	Non-cash income recognized in connection with the early termination of the Indebtedness under the Hansen Subordinated Loan Documents.	  	$        
				
		  	8.	  	The sum of lines 1 through 6 minus line 7	  	$        
			
	C.	  	Adjusted EBITDA (line A plus line B.8)	  	

 Is line C equal to or greater than $
[                    ]? 
  

			
	            No, not in compliance	  	             Yes, in compliance

  
 1Exhibit 10.2

 Exhibit 10.2 
 *** Text Omitted and Filed Separately 
 Confidential Treatment Requested 

Under 17 CFR §§ 200.80(b)(4) and 240.24b-2 
 AMENDMENT NO. 3 TO 
 DEVELOPMENT AND SUPPLY AGREEMENT 

This Amendment No. 3 to Development and Supply Agreement (this “Amendment”) is entered into as of May 18,
2011, by and between Luna Innovations Incorporated, a Delaware corporation, together with Luna Technologies, Inc., a Delaware corporation (acting jointly and severally, individually and collectively, “Luna”), and Hansen Medical,
Inc., a Delaware corporation (“Hansen”). 
 RECITALS 

WHEREAS, Luna and Hansen are parties to that certain Development and Supply Agreement having an effective date of January 12, 2010
and amended by Amendment Nos. 1 and 2 to Development and Supply Agreement dated as of February 17, 2010 and April 2, 2010, respectively (collectively, the “Agreement”); 

WHEREAS, Luna and Hansen desire to amend and restate Exhibits A and B of the Agreement to amend certain existing Specifications and
estimated budget amounts (for Development Milestones [***]) and add new Development Milestones ([***]) and Specifications therefor; 
 WHEREAS, Luna and Hansen desire to deem Development Milestone [***] (“[***]”) to have been successfully achieved; 
 WHEREAS, Luna and Hansen desire to amend the Agreement to provide for a payment structure whereby Luna shares [***]% of the Development Fees up to a certain amount and to change the mechanism for
calculating the Holdback Amount as a result; 
 WHEREAS, Luna and Hansen desire to amend the Agreement to lower the discount on
the Commercial Transfer Price from [***]% to [***]% and to increase the limit on the Commercial Transfer Price per unit with respect to the Interrogators part of the Luna Product from $[***] to $[***] (until [***] units have been purchased);

 WHEREAS, as Luna expects to refinance its existing credit facility with Silicon Valley Bank on or prior to May 18, 2011,
Luna and Hansen also desire to agree, pursuant to the separate Amendment to Secured Promissory Note and Payoff Letter (“Amendment and Payoff Letter”) entered into by the Parties contemporaneously with this Amendment, to a discount
on the Promissory Note of $190,000 in connection with Luna paying it off within five (5) business days of the date hereof, and this Amendment is contingent upon Luna and Hansen entering into the Amendment and Payoff Letter and Luna making the
payments to Hansen set forth therein. 
 NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, Luna and Hansen hereby agree to the following terms and conditions and to amend the Agreement as follows: 

  
 [***] =
Certain information on this page has been omitted and filed separately with the Securities and Exchange 
 Commission.
Confidential treatment has been requested with respect to the omitted portions. 

 *** Text Omitted and Filed Separately 

Confidential Treatment Requested 
 Under 17 CFR §§ 200.80(b)(4) and 240.24b-2 
  

 AMENDMENT AND AGREEMENT 

1. Definitions. Except as otherwise provided herein, capitalized terms used in this Amendment shall have the definitions
set forth in the Agreement. 
 2. Amendment and Restatements of Exhibits A and B. Exhibits A and B of the
Agreement are hereby amended and restated and replaced in their entirety by the exhibits attached hereto as Exhibits A and B, respectively. 
 3. [***] Achievement. The Parties hereby deem [***] to have been successfully achieved as of March 31, 2011, with any otherwise applicable penalties in respect of [***] deemed waived,
and the related [***] Amount of [***] shall be due and payable within thirty (30) days after the effective date of this Amendment. 
 4. Amendment to Section 4.1 of the Agreement regarding Payment and the Holdback Amount. Section 4.1 of the Agreement shall be amended as follows: 

(a) Section 4.1.1 ([***] Fees) of the Agreement shall be replaced in its entirety with the following: 

[***] Fees. [***]. 
 (b) The second sentence of Section 4.1.2 (Invoicing and Payment) of the Agreement shall be replaced in its entirety with the following: 

[***]. 
 (c)
The second-to-last sentence of Section 4.1.3 ([***]) of the Agreement shall be replaced in its entirety with the following: 
 [***]. 
 5. Commercial Transfer Price. Section 3.3.2
(Commercial Transfer Price) of the Agreement shall be amended as follows: 
 (a) The second sentence of
Section 3.3.2 (Commercial Transfer Price) of the Agreement shall be replaced in its entirety with the following: 
 [***].

 (b) Clause (a) in the proviso at the end of the last sentence of Section 3.3.2 (Commercial Transfer Price)
of the Agreement shall be replaced in its entirety with the following: 
 [***], and 

  
 [***] =
Certain information on this page has been omitted and filed separately with the Securities and Exchange 
 Commission.
Confidential treatment has been requested with respect to the omitted portions. 

 *** Text Omitted and Filed Separately 

Confidential Treatment Requested 
 Under 17 CFR §§ 200.80(b)(4) and 240.24b-2 
  

 6. Manufacturing Technology Transfer. Section 3.7(c) of the Agreement
shall be replaced in its entirety with the following: 
 [***] 

7. Discount to Promissory Note. Pursuant to the Amendment and Payoff Letter, Hansen intends to provide Luna with a $190,000
discount against the outstanding principal balance and accrued interest on the Promissory Note. This Amendment is contingent upon Luna paying in full such discounted balance and accrued interest in accordance with the terms of the Amendment and
Payoff Letter. If Luna does not pay in full such amounts in accordance therewith, this Amendment shall, without further action by the Parties, automatically terminate and be deemed null and void and of no force and effect. 

8. Terms and Conditions of Agreement. Except as expressly modified hereby, all terms, conditions and provisions of the
Agreement shall continue in full force and effect. 
 9. Conflicting Terms. In the event of any inconsistency or
conflict between the Agreement and this Amendment, the terms, conditions and provisions of this Amendment shall govern and control. 
 10. Term and Termination. This Amendment shall become effective upon its execution by each of Luna and Hansen and shall continue unless terminated as set forth in Section 6 of this
Amendment. 
 11. Entire Agreement. This Amendment and the Agreement constitute the entire and exclusive agreement
between the Parties with respect to this subject matter. All previous discussions and agreements with respect to this subject matter are superseded by the Agreement and this Amendment. This Amendment may be executed in one or more counterparts, each
of which shall be an original and all of which taken together shall constitute one and the same instrument. 
 [Signature Page
to Follow] 

  
 [***] =
Certain information on this page has been omitted and filed separately with the Securities and Exchange 
 Commission.
Confidential treatment has been requested with respect to the omitted portions. 

 *** Text Omitted and Filed Separately 

Confidential Treatment Requested 
 Under 17 CFR §§ 200.80(b)(4) and 240.24b-2 
  

 IN WITNESS WHEREOF, the Parties have
caused this Amendment to be executed by their duly authorized representatives as of the date first listed above. 
  

									
	LUNA INNOVATIONS INCORPORATED	 		 	HANSEN MEDICAL, INC.
					
	By:	 	 /s/ My E. Chung
	 		 	By:	 	 /s/ Bruce J. Barclay

					
	Name:	 	 My E. Chung
	 		 	Name:	 	 Bruce J. Barclay

					
	Title:	 	 President and CEO
	 		 	Title:	 	 President and CEO

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

  
 SIGNATURE
PAGE TO AMENDMENT NO. 3 TO DEVELOPMENT AND SUPPLY AGREEMENT 

 *** Text Omitted and Filed Separately 

Confidential Treatment Requested 
 Under 17 CFR §§ 200.80(b)(4) and 240.24b-2 
  

 Exhibit A 
 Development Milestones 
 [***] 

  
 [***] =
Certain information on this page has been omitted and filed separately with the Securities and Exchange 
 Commission.
Confidential treatment has been requested with respect to the omitted portions. 

 *** Text Omitted and Filed Separately 

Confidential Treatment Requested 
 Under 17 CFR §§ 200.80(b)(4) and 240.24b-2 
  

 Exhibit B 
 Development Plan 
 [***] 

  
 [***] =
Certain information on this page has been omitted and filed separately with the Securities and Exchange 
 Commission.
Confidential treatment has been requested with respect to the omitted portions.

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