Luna Innovations Incorporated
10/29/2024 | Press release | Distributed by Public on 10/29/2024 07:23
Material Agreement Form 8 K
Item 1.01 Entry into a Material Definitive Agreement.
First Amendment to Loan Agreement
On October 25, 2024 (the "Closing Date"), Luna Innovations Incorporated (the "Company") entered into that certain First Amendment (the "Loan Amendment") to Loan Agreement (the "Loan Agreement"), by and among the Company, as borrower, Luna Technologies, Inc. and General Photonics Corp., as guarantors (together with the Company, the "Loan Parties"), certain funds affiliated with White Hat Capital Partners LP (collectively, the "Lenders"), and White Hat Lightning Opportunity LP, as agent (the "Agent"). The Loan Amendment provides for, among other things, the extension of certain incremental term facilities to the Company in an aggregate amount of $15,000,000 (the "Term Loans"), bringing the resulting total Term Loan commitment to $30,000,000, to provide funds for working capital and general corporate purposes of the Loan Parties. The Loan Amendment provides that the Loan Agreement will mature on the earlier of (i) June 30, 2025, subject to possible extension if the Company meets certain milestones related to a Sale Transaction (as defined in the Loan Agreement), and (ii) the date on which a Sale Transaction closes.
The Loan Amendment provides that the Loan Agreement will bear interest at a floating rate per annum equal to the Secured Overnight Financing Rate plus a margin of 12%, with such interest payable monthly in cash in arrears, effective as of the Closing Date.
In connection with the Loan Amendment, on the Closing Date, (i) the Loan Parties and PNC Bank, National Association ("PNC") entered into that certain Fifth Amendment (the "PNC Amendment") to the Loan Agreement, dated as of December 1, 2020, to, among other things, permit the incurrence of the new Term Loans and (ii) the Loan Parties, Lenders, Agent and PNC entered into that certain First Amendment (the "Subordination Agreement Amendment" and, together with the Loan Amendment and the other ancillary transaction documents executed in connection with the Loan Amendment, the "Transaction Documents") to the Subordination and Intercreditor Agreement, dated as of July 19, 2024, to, among other things, restate the relative rights and priority of PNC and the Agent.
The foregoing descriptions of the PNC Amendment and Loan Amendment contained herein do not purport to be complete and are qualified in their entirety by reference to the full texts of the PNC Amendment and the Loan Amendment, which are filed herewith as Exhibits 10.1 and 10.2 and incorporated herein by reference.
Private Placement of Series B Convertible Preferred Stock
In connection with the execution of the Transaction Documents, on the Closing Date, the Company entered into that certain Letter Agreement (the "Letter Agreement") with the holders (the "Holders") of the Company's outstanding Series B Convertible Preferred Stock, par value $0.001 per share (the "Series B Convertible Preferred Stock") pursuant to which, among other things, the Holders (i) provided consent to the Company's entry into the Transaction Documents (the "Preferred Consent") as required by the terms of the outstanding Series B Convertible Preferred Stock and (ii) agreed to exercise a portion of their right to purchase, on a pro rata basis, and the Company agreed to issue and sell, 3,000 shares of the Series B Convertible Preferred Stock in exchange for the Preferred Consent and an amount in cash equal to the par value thereof, in accordance with that certain Subscription Agreement, dated December 21, 2023, as amended by the Letter Agreement. The offer and sale of the Series B Convertible Preferred Stock were made in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.
The foregoing description of the Letter Agreement contained herein does not purport to be complete and is qualified in its entirety by reference to the full text of the Loan Amendment, which is filed herewith as Exhibit 10.3 and incorporated herein by reference.