LIMITED WAIVER AND ELEVENTH amendment of VENTURE LOAN AND SECURITY AGREEMENT

Exhibit 10.2

LIMITED WAIVER AND ELEVENTH amendment of VENTURE LOAN AND SECURITY AGREEMENT

This ELEVENTH AMENDMENT OF VENTURE LOAN AND SECURITY AGREEMENT (this “Agreement”), effective and dated as of August 31, 2016, is entered into by and between Xtera Communications, Inc., a Delaware corporation (“Xtera” or “Borrower”) and Horizon Technology Finance Corporation, a Delaware corporation (“Lender”).

RECITALS

A.Xtera and Lender are parties to a certain Venture Loan and Security Agreement dated as of May 10, 2011, as amended from time to time (as amended, the “Loan Agreement”) pursuant to which Lender, among other things, has (i) provided certain loans to Xtera as evidenced by (1) a certain Fourth Amended and Restated Secured Promissory Note (Loan A) executed by Xtera in favor of Lender, fourth amended and restated as of May 31, 2016, in the principal amount of Five Million Nine Hundred Eighteen Thousand Three Hundred Seventy-Seven and 53/100 Dollars ($5,918,377.53) (the “Loan A Note”) and (2) a certain Fourth Amended and Restated Secured Promissory Note (Loan B) executed by Xtera in favor of Lender, fourth amended and restated as of May 31, 2016, in the principal amount of One Million Six Hundred Forty-Four Thousand Five Hundred Seventy and 43/100 Dollars ($1,644,570.43) (the “Loan B Note” and together with the Loan A Note, the “Notes”), and (ii) been granted a security interest in all assets of Xtera, including Intellectual Property (as defined in the Loan Agreement).

B.Xtera has now requested that Lender amend the Loan Agreement to permit Borrower to incur additional Indebtedness, to revise the repayment schedule with respect to the Notes and to waive an Event of Default thereunder.

C.Lender is willing to grant such requests, but only to the extent, and in accordance with the terms, and subject to the conditions, set forth herein.

agreement

NOW, THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Co-Borrowers and Lender hereby agree as follows:

““Commitment Document” means a term sheet or letter of intent or other similar document, acceptable to Lender, executed by Person(s) acceptable to Lender, evidencing the commitment of such Person(s) to enter into one of the following transactions, upon terms and conditions acceptable to Lender:

(a)the issuance to such Person(s) of Equity Securities and/or debt securities of Borrower, in connection with which Borrower is required, under the terms of the Commitment Document, to repay all of the Obligations in full;

(b)a transaction other than that set forth in subsection (i) above, pursuant to which Borrower shall receive cash, in such amount and upon such terms and conditions as are satisfactory to Lender in its sole discretion; or

(c)a sale of all, or substantially all, of Borrower’s assets or Equity Securities to such Person(s).”

““Commitment Document Deadline” means the date that is three (3) Business Days after the date on which Lender has transmitted to Borrower, by email, which shall be deemed received by Borrower when transmitted by Lender, a request for a copy of an executed Commitment Document.”

““Loan A Maturity Date” means October 1, 2016, or if earlier, the date of acceleration of all Obligations outstanding with respect to Loan A following an Event of Default or the date of prepayment, whichever is applicable.”

““Loan B Maturity Date” means October 1, 2016, or if earlier, the date of acceleration of all Obligations outstanding with respect to Loan B following an Event of Default or the date of prepayment, whichever is applicable.”

“Indebtedness arising on or after September 1, 2016, to a group of Persons (collectively, the “New Lenders”) in an aggregate principal amount not to exceed One Million Five Hundred Thousand Dollars ($1,500,000) (the “New Lender Indebtedness”), provided that prior to Borrower incurring any New Lender Indebtedness, Lender and the New Lenders shall have entered into a subordination or similar agreement, acknowledged and agreed to by Borrower, containing terms and conditions acceptable to Lender.”

“Commitment Document Deadline. Borrower shall, on or prior to the Commitment Document Deadline, provide Lender with the Commitment Document.”

“Delivery of Budget. On or before September 12, 2016, Borrower shall deliver to Lender a budget (the “September 2016 Budget”) acceptable to Lender, setting forth up to $500,000 of Borrower’s Necessary Non-Payroll Expenses.  For the purposes of this Agreement: (i) “Necessary Non-Payroll Expenses” means and includes only those expenses of Borrower which (A) do not include Payroll Expenses, and (B) Borrower represents and warrants are necessary for the operation of Borrower’s business during the period of September 16 through September 30, 2016; (ii) “Payroll Expenses” means and includes only the following: salaries, wages, payroll taxes and unemployment compensation insurance; (iii) “Budgeted Non-Payroll Expenses” means and includes Necessary Non-Payroll Expenses which are set forth in the September 2016 Budget; and (iv) “Non-Budgeted Non-Payroll Expenses” means and includes Necessary Non-Payroll Expenses which are not set forth in the September 2016 Budget.”

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IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to be executed as of the day and year first above written.

BORROWER:

XTERA COMMUNICATIONS, INC.

LENDER:

HORIZON TECHNOLOGY FINANCE CORPORATION