September 2, 2003

Acquisition follows on heels of recent $30M financing

Allen, TX, September 2, 2003 – Xtera Communications Inc., a telecommunications network equipment provider, today announced it has acquired the assets of privately-held Metro-OptiX, Inc.  Terms of the acquisition were not disclosed. Metro-Optix Inc., creators of the CityStream™ bandwidth manager for optical edge TDM, ATM, IP and MPLS services had garnered 15 customers and 18 lab trials prior to the acquisition.

"We were impressed by the loyalty of the Metro-OptiX customer base during our due diligence process" said Jon Bayless, Chairman and CEO of Xtera. "Backed by the success of our recent funding efforts, we intend to fully support and expand the marketing of the CityStream product line”.

"The value proposition of CityStream in reducing traffic backhaul and central-office costs was never in question” said Kris Shankar, Vice President of Marketing and Business Development at Metro-OptiX. “Being part of Xtera reinforces the financial stability aspect, the last missing ingredient our customers aspired for ".  Kris Shankar will join Xtera in a similar role to ensure institutional and product continuity.

About Xtera Communications

Xtera Communications specializes in network infrastructure that delivers the highest capacity, reach and density. Our long-haul, Submarine, Metro and WAN technologies together with our deployment expertise drive customer success and long term value.

Xtera offers an extensive portfolio of Optical Transport solutions for long-haul, regional, metropolitan and sub-sea networks, and WAN Traffic Management solutions for both enterprise and telecom companies.  

With deployments in four continents, Xtera’s Optical Transport portfolio helps service providers worldwide reach new markets via new deployments, and extends the life of their existing network assets with cost-effective upgrades. Xtera's innovative Traffic Management solutions offer customers the best price/performance in network optimization.

Xtera delivers compelling advantage to its customers by maximizing network capacity, reach and value.

For more information, please visit www.xtera.com