Luna Innovations (LUNA) Announces Settlement Agreement with Hansen Medical (HNSN)
Luna Innovations (NASDAQ: LUNA) has executed a Settlement Agreement with Hansen Medical, Inc. (NASDAQ: HNSN) resolving the outstanding litigation between the companies.
Additionally today, Luna has filed with the bankruptcy court its First Amended Joint Plan of Reorganization and other bankruptcy documents to implement the Settlement Agreement and allow the Company to emerge from Chapter 11 reorganization as quickly as possible. Under the Plan, the Company proposes to pay 100% of its due and payable valid claims and Luna stockholders will retain their shares of Luna's Common Stock. The Settlement Agreement and the transactions contemplated by it, as well as the Plan and other bankruptcy documents, are subject to court approval and entry of an applicable confirmation order, as well as other conditions.
The Settlement Agreement contemplates that Luna and Hansen will enter into a number of additional documents, which will include:
1) A development and supply agreement between Luna and Hansen for purposes of integrating Luna's fiber optic shape sensing technology into Hansen's medical robotic instruments.
2) A license of Luna's shape sensing technology to Hansen in the fields of medical robotics and medical non-robotics.
3) A $5 million secured promissory note payable over four years from Luna to Hansen, whose security interest may be subordinated in favor of a working capital credit facility.
4) Issuance of shares of Luna Common Stock to Hansen in the amount equal to 9.9% of the total outstanding shares and a warrant for Hansen to maintain that equity position for three years.
5) A mutual release of outstanding claims in litigation between Hansen and Luna.
"This settlement with Hansen Medical clears the largest hurdle on our pathway to emerge from Chapter 11 reorganization and pay our creditors what they are owed. We look forward to integrating our shape sensing technology with Hansen's surgical devices, as we expand the potential market for our products in robotically assisted procedures," stated Kent Murphy, Luna's Chairman and Chief Executive Officer. "It's exciting for Luna and Hansen to move forward together in a long-term partnership that is focused on creating enhanced procedures that help save lives."
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