Document:

xcom-ex101_45.htm

Exhibit 10.1

 

Limited Waiver and 

Sixth Amendment to 

Loan Agreement

 

Borrowers:Xtera Communications, Inc. 

Azea Networks, Inc.

Neovus, Inc.

Xtera Asia Holdings, LLC

 

Effective Date:July 31, 2016

This Limited Waiver and Sixth Amendment to Loan Agreement (this “Amendment”) is entered into between Pacific Western Bank (“Lender”) and, jointly and severally, the borrowers named above (collectively referred to herein as “Borrower”).

The parties hereto agree to amend the Loan and Security Agreement between Borrower and Lender (as successor in interest by merger to Square 1 Bank), dated January 16, 2015 (as amended, restated, supplemented, or otherwise modified from time to time, the “Loan Agreement”), and Lender agrees to waive certain Events of Default thereunder, as follows, effective as of the date hereof, unless otherwise indicated below, subject to the Condition Precedent and the terms and conditions set forth below.  Capitalized terms used but not defined in this Amendment shall have the meanings set forth in the Loan Agreement.

Limited Waiver.  Borrower acknowledges and agrees that (i) Borrower received from Callidus Capital (“Callidus”) a Commitment Document, as defined in Section 5 of the Schedule, in the subsection titled “Cash Infusion to Parent”, (ii) Callidus has revoked such Commitment Document, (iii) the effective Consummation Deadline, as defined in Section 5 of the Schedule, has become a date after July 31, 2016 and (iv) such revocation by Callidus and change in Consummation Deadline each constitute an Event of Default (the “Specified Defaults”).

Lender hereby waives the Specified Defaults.  Such waiver does not constitute any of the following: (i) a waiver of Borrower’s obligation to meet the covenant referenced above at any other date; (ii) a waiver of any other term or provision of any of the Loan Documents; or (iii) an agreement to waive in the future the covenant referenced above, or any other term or provision of any of the Loan Documents.

1.Success Fee.  That portion of Section 3 of the Schedule which currently reads:

	
 
	
“Success Fee I:
	
A fee in the amount of $150,000 (‘Success Fee I’), due and payable immediately upon occurrence of any event in connection with which Borrower receives or shall receive cash 
	
 

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   Pacific Western BankLimited Waiver and Sixth Amendment to Loan Agreement

 

	
 
		
proceeds in an amount sufficient to pay all then-outstanding Indebtedness to Lender (each a ‘Sufficient Cash Infusion Event’), including without limitation: (i) a Sale of Parent; (ii) any Sale of a Subsidiary; (iii) a Change in Control; or (iv) the issuance to any Person(s) of equity and/or debt securities of Parent. Notwithstanding the foregoing, the amount of Success Fee I shall be reduced to: 
	
 

 

	
 
	
(a)
	
$50,000, if the Obligations are repaid on or before May 31, 2016; and
	
 

 

	
 
	
(b)
	
$100,000, if the Obligations are repaid after May 31, 2016, but on or before June 30, 2016.
	
 

 

The obligations set forth in this paragraph shall survive any termination of the Loan Agreement.

 

	
 
	
Success Fee II:
	
A fee in the amount of $100,000, which shall be (i) in addition to Success Fee I, and (ii) due and payable immediately upon the occurrence of any Sufficient Cash Infusion Event.”
	
 

 

is hereby amended to read:

	
 
	
“Success Fee I:
	
A fee in the amount of $150,000 (‘Success Fee I’), which shall be (i) in addition to Success Fee II and Success Fee III, and (ii) due and payable immediately upon occurrence of any Sufficient Cash Infusion Event.
	
 

 

	
 
	
Success Fee II:
	
A fee in the amount of $100,000 (‘Success Fee II’), which shall be (i) in addition to Success Fee I and Success Fee III, and (ii) due and payable immediately upon occurrence of any Sufficient Cash Infusion Event.
	
 

 

	
 
	
Success Fee III:
	
A fee in the amount of $100,000 (‘Success Fee III’), which shall be (i) in addition to Success Fee I and Success Fee II, and (ii) due and payable immediately upon the occurrence of any Sufficient Cash Infusion Event. 
	
 

	
 
	

	
 
	
 

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   Pacific Western BankLimited Waiver and Sixth Amendment to Loan Agreement

 

	
 
	

	
Notwithstanding the foregoing, the amount of Success Fee III shall be reduced to $0.00 if all of the Obligations are repaid on or before August 17, 2016. 
	
 

 

For the purposes of this Agreement, a ‘Sufficient Cash Infusion Event’ means any event in connection with which Borrower receives or will receive cash proceeds in an amount sufficient to pay all then-outstanding Indebtedness of Borrower to Lender, including without limitation: (i) a Sale of Parent; (ii) any Sale of a Subsidiary; (iii) a Change in Control; or (iv) the issuance to any Person(s) of equity and/or debt securities of Parent.

 

The obligations set forth in this paragraph shall survive any termination of the Loan Agreement.”

 

2.Maturity Date.  Section 4 of the Schedule is hereby amended in its entirety to read as follows:

“4.  Maturity Date

	
 
	
(Section 6.1)
	
September 1, 2016.”
	
 

3.Condition Precedent.  This Amendment is conditioned upon and shall only be and become effective upon Lender’s receipt of evidence satisfactory to Lender (such receipt being referred to in this Amendment as the “Condition Precedent”) that Borrower and Horizon have each agreed that until all of the Obligations have been indefeasibly paid in full, and the Loan Documents have been terminated, Borrower shall not make any payments of any Indebtedness owing to Horizon, and Horizon shall not accept any payments of any Indebtedness owing from Borrower, other than regularly schedule payments of interest only.  Until Lender has received such evidence, none of the terms or provisions of this Amendment shall be effective or enforceable by any party hereto.

4.Fee.  [Intentionally omitted.]   

5.Representations True.  Borrower represents and warrants to Lender that all representations and warranties set forth in the Loan Agreement, as amended hereby, are true and correct as if made on the date hereof.  

6.No Waiver.  Nothing herein constitutes a waiver of any default or Event of Default under the Loan Agreement or any other Loan Documents, whether or not known to Lender, except as set forth in Section 1 above.

7.General Release.  In consideration for Lender entering into this Amendment, Borrower hereby irrevocably releases and forever discharges Lender, and its successors, assigns, 

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   Pacific Western BankLimited Waiver and Sixth Amendment to Loan Agreement

 

agents, shareholders, directors, officers, employees, agents, attorneys, parent corporations, subsidiary corporations, affiliated corporations, affiliates, participants, and each of them, from any and all claims, debts, liabilities, demands, obligations, costs, expenses, actions and causes of action, of every nature and description, known and unknown, which Borrower now has or at any time may hold, by reason of any matter, cause or thing occurred, done, omitted or suffered to be done prior to the date of this Amendment (collectively, the “Released Claims”). Borrower hereby irrevocably waives the benefits of any and all statutes and rules of law to the extent the same provide in substance that a general release does not extend to claims which the creditor does not know or suspect to exist in its favor at the time of executing the release.  Borrower represents and warrants that it has not assigned to any other Person any Released Claim, and agrees to indemnify Lender against any and all actions, demands, obligations, causes of action, decrees, awards, claims, liabilities, losses and costs, including but not limited to reasonable attorneys' fees of counsel of Lender’s choice and costs, which Lender may sustain or incur as a result of a breach or purported breach of the foregoing representation and warranty.  

8.General Provisions.  Borrower hereby ratifies and confirms the continuing validity, enforceability and effectiveness of the Loan Agreement and all other Loan Documents. This Amendment, the Loan Agreement, any prior written amendments to the Loan Agreement signed by Lender and Borrower, and all other written documents and agreements between Lender and Borrower, set forth in full all of the representations and agreements of the parties with respect to the subject matter hereof and supersede all prior discussions, representations, agreements and understandings between the parties with respect to the subject hereof.  Except as herein expressly amended, all of the terms and provisions of the Loan Agreement, and all other documents and agreements between Lender and Borrower shall continue in full force and effect and the same are hereby ratified and confirmed.  Without limiting the generality of the foregoing, the provisions of all subsections of Section 9 of the Loan Agreement (titled “General Provisions”), including without limitation all provisions relating to governing law, venue, jurisdiction, dispute resolution, and the waiver of the right to a jury trial, shall apply equally to this Amendment, and the same are incorporated herein by this reference.

[Signatures on Following Page]

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   Pacific Western BankLimited Waiver and Sixth Amendment to Loan Agreement

 

		
		
	
Borrower:

Xtera Communications, Inc. 

By: /s/ Jon R. Hopper

Title: Chief Executive Officer

 
	
Borrower:

Azea Networks, Inc. 

By: /s/ Jon R. Hopper

Title: Chief Executive Officer

 

	
Borrower:

Neovus, Inc. 

By: /s/ Jon R. Hopper

Title: Chief Executive Officer

 
	
Borrower:

Xtera Asia Holdings, LLC 

By: /s/ Jon R. Hopper

Title: Chief Executive Officer

 

	
Lender:

Pacific Western Bank

By: /s/ Jim Duncan

Title: SVP

 
	
 

 

[Signature Page – Limited Waiver and Sixth Amendment to Loan Agreement]

 

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Exhibit 10.2

TENTH amendment of VENTURE LOAN AND SECURITY AGREEMENT 

This TENTH AMENDMENT OF VENTURE LOAN AND SECURITY AGREEMENT (this “Agreement”), effective and dated as of July 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 is in default of the Loan and Security Agreement between Xtera and Pacific Western Bank (as successor in interest by merger to Square 1 Bank) dated as of January 16, 2015 (the “Pacific Western Loan Agreement”), as a result of (i) the revocation by Callidus Capital of its term sheet to provide financing to Xtera, and (ii) the extension of the consummation of a financing transaction beyond July 31, 2016, which defaults caused a default under Section 8.7 of the Loan Agreement (the “Pacific Western Agreement Default”).

C.Xtera has now requested that Lender waive the Pacific Western Agreement Default and amend the Loan Agreement to revise the repayment schedule with respect to the Notes.

D.Lender is willing to grant such request, 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:

	
1.
	
Definitions; Interpretation.  Unless otherwise defined herein, all capitalized terms used herein and defined in the Loan Agreement shall have the respective meanings given to those terms in the Loan Agreement.  Other rules of construction set forth in the Loan Agreement, to the extent not inconsistent with this Agreement, apply to this Agreement and are hereby incorporated by reference.

 

 

	
2.
	
Amendments to Loan Agreement.  

	
 
	
(a)
	
Borrower and Lender hereby agree that definition of “Loan A Maturity Date” in Section 1.1 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

““Loan A Maturity Date” means September 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.”

	
 
	
(b)
	
Borrower and Lender hereby agree that definition of “Loan B Maturity Date” in Section 1.1 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

““Loan B Maturity Date” means September 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.”

	
3.
	
Amendment to Notes. The Notes are each amended as follows:

	
 
	
(a)
	
The date “July 1, 2016” appearing in the third (3rd) full paragraph on page 3 of each of Notes is deleted and replaced with “August 1, 2016”.

	
 
	
(b)
	
Each instance of the date “July 31, 2016” appearing in the fourth (4th) and fifth (5th) full paragraphs on page 3 of each of the Notes is deleted and replaced with “September 1, 2016”.  

	
4.
	
Limited Waiver. Lender hereby agrees to waive the Pacific Western Agreement Default. Such waiver does not constitute: (a) a waiver of Borrower’s obligation to comply with Section 8.7 of the Loan Agreement at any other date, (b) a waiver of any other term or provision of any of the Loan Documents, or (b) an agreement to waive, in the future, the provisions of Section 8.7 of the Loan Agreement or any other term or provision of any of the Loan Documents.

	
5.
	
Conditions to Effectiveness. Lender’s consent and agreement contained herein is expressly conditioned on the Borrower executing and delivering to Lender an executed copy of this Agreement. 

	
6.
	
Effect of Agreement.  On and after the date hereof, each reference to the Loan Agreement in the Loan Agreement or in any other document shall mean the Loan Agreement as amended by this Agreement.  Except as expressly provided hereunder, the execution, delivery and effectiveness of this Agreement shall not operate as a waiver of any right, power, or remedy of Lender, nor constitute a waiver of any provision of the Loan Agreement.  Except to the limited extent expressly provided herein, nothing contained herein shall, or shall be construed to (nor shall the Borrower ever argue to the contrary) (i) modify the Loan Agreement or any other Loan Document (ii) modify, waive, impair, or affect any of the covenants, agreements, terms, and conditions thereof, or (iii) waive the due keeping, observance and/or performance 

 

 

		
thereof, each of which is hereby ratified and confirmed by the Borrower.  Except as expressly amended herein, the Loan Agreement remains in full force and effect. 

	
7.
	
Headings.  Headings in this Agreement are for convenience of reference only and are not part of the substance hereof.

	
8.
	
Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Connecticut without reference to conflicts of law rules.

	
9.
	
Counterparts.  This Agreement may be executed in any number of counterparts, including by electronic or facsimile transmission, each of which when so delivered shall be deemed an original, but all such counterparts taken together shall constitute but one and the same instrument.

	
10.
	
Integration.  This Agreement and the Loan Documents constitute and contain the entire agreement of Borrower and Lender with respect to their respective subject matters, and supersede any and all prior agreements, correspondence and communications.

 

[Remainder of page intentionally blank. Signature page follows]

 

 

 

 

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.

	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
/s/ Jon R. Hopper

	
 
	
 
	
 
	
Jon R. Hopper

	
 
	
 
	
 
	
Chief Executive Officer

 

				
	
 
	
 
	
LENDER:

	
 
	
 
	
 

	
 
	
 
	
HORIZON TECHNOLOGY FINANCE CORPORATION

	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
/s/ Robert D. Pomeroy, Jr.

	
 
	
 
	
 
	
Robert D. Pomeroy, Jr.

	
 
	
 
	
 
	
Chief Executive Officer

 

 

[Signature page to Tenth Amendment to Venture Loan and Security Agreement]

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