Hansen Medical enters into Confidential Settlement Agreement with Luna Innovations

Hansen Medical, Inc. (NASDAQ: HNSN) announced today that it has entered into a Confidential Settlement Agreement (the "Settlement Agreement") with Luna Innovations Incorporated (NASDAQ: LUNA) and its wholly-owned subsidiary, Luna Technologies, Inc. The settlement agreement is designed to resolve all pending claims between the parties stemming from Hansen Medical's suit against Luna in California Superior Court, as well as litigation between the parties stemming from Luna's bankruptcy filing in the Western District of Virginia. The settlement agreement contemplates that, subject to certain conditions including Luna's emergence from bankruptcy, Hansen Medical, Luna and Intuitive Surgical, Inc. (NASDAQ: ISI), shall enter into agreements including the following:

-- Luna to issue to Hansen Medical a $5,000,000 Secured Promissory Note secured by a Security Agreement and Patent and Trademark Security Agreement; -- Luna to issue to Hansen Medical shares of Common Stock equal to 9.9 percent of Luna's outstanding capital stock after issuance. In addition, Luna will grant Hansen Medical a warrant to purchase additional shares of Luna's Common Stock for three years after the Effective Date, at a purchase price of $0.01 per share, to the extent necessary for Hansen Medical to retain its ownership of 9.9 percent of Luna's outstanding capital stock; -- License of certain Luna intellectual property to Hansen Medical; -- Intuitive Surgical to enter into a Cross License Agreement with Hansen Medical with respect to certain fiber optic shape sensing and localization technology; and -- Luna to develop a fiber optic shape sensing and localization solution for Hansen Medical under a Development and Supply Agreement, including a discount for future purchases with an aggregate limit comparable to the amount of Hansen Medical's Secured Promissory Note.

"We are pleased to successfully resolve our outstanding litigation with Luna and we are looking forward to partnering with Luna in developing important new medical devices that utilize Luna's fiber optic shape sensing technology," said Frederic Moll, M.D., president and CEO, Hansen Medical. "The intellectual property agreements between Hansen Medical, Luna and Intuitive Surgical will further the development of this technology and its application in the delivery of therapeutic treatments, which will benefit both physicians and patients," continued Dr. Moll.

We believe fiber optic shape sensing and localization technology can provide real-time position measurements to help surgeons navigate through the body. The system consists of software, instrumentation and disposable optical sensing fibers. The technology, originally developed at NASA, is unique and designed to provide the user with an accurate, direct and continuous measurement of device location with no adverse effect from line of sight limitations, and without introducing electrical charge or radiation into the body.