Exhibit 10.28
Luna Innovations Incorporated
2851 Commerce Street
Blacksburg, Virginia 24060
February 1, 2006
Dear Common Stockholder and/or Optionee of Luna
Innovations Incorporated:
This letter agreement is being sent to you
because you are either a holder of outstanding shares of common
stock (the “ Common Stock ”), par value $0.001
per share, of Luna Innovations Incorporated (“ Luna
Innovations ” or the “ Company ”) or a
holder of options to purchase Common Stock (each, a “
Holder ”).
As part of our strategy to grow our business and
build a successful company, we are preparing to offer shares of our
Common Stock to the public in the near future (the “
Public Offering ”). As a result of the Public Offering
and the creation of a public market for our Common Stock, however,
we risk losing our eligibility to apply for Small Business
Innovation Research (“ SBIR ”) grants if too
many shares of our Common Stock end up being held by stockholders
who are not individuals. To be eligible for SBIR grants, greater
than fifty percent of our capital stock (including outstanding
stock options) must be owned by individuals and not, for example,
by corporations, mutual funds or other institutional investors. We
believe that we can reduce the risk of losing SBIR eligibility in
the near term by reducing the number of shares that Holders are
able to sell to the public.
In order to achieve this objective, and after
careful consideration of different scenarios and potential
solutions, we are asking each employee to agree to certain
restrictions on the sale and transfer of (i) any outstanding
shares of Common Stock (excluding shares that were received upon
exercise of options prior to December 31, 2005) and
(ii) any shares of Common Stock to be received upon exercise
of options to purchase Common Stock, whether vested or unvested,
that he or she currently holds and that he or she acquires from the
Company prior to the Public Offering (collectively, the “
Subject Securities ”). Please note that this
letter agreement applies only to the Subject Securities and not to
any option grants or other securities of Luna Innovations that you
may receive after the Public Offering.
AGREEMENT
In consideration of the execution of the
underwriting agreement by the underwriters in connection with the
Public O
