Item 1.01 Entry Into a Material Definitive Agreement
Amendment to
Business Purchase Agreement
As previously
disclosed on Current Report to Form 8-K filed by xG Technology, Inc. (the “Company”) on December 19, 2016, on December
16, 2016, the Company entered into a Business Purchase Agreement (the “Business Purchase Agreement”) by and between:
(i) the Company; (ii) Vislink PLC, an England and Wales registered limited company (the “Guarantor”); (iii) Vislink
International Limited, an England and Wales registered limited liability company (the “U.K. Seller”); and (iv) Vislink
Inc., a Delaware corporation (the “U.S. Seller”, and together with the UK Seller, “VCS” or the “Sellers”),
pursuant to which the Sellers will sell and the Company will purchase certain assets and liabilities relating to the hardware segment
of the Sellers (the “Transaction”).
On January 13,
2017 (the “Amendment Effective Date”), the Company and the Sellers entered into a Deed of Variation to the Business
Purchase Agreement (the “Amendment”), whereby the Company and the Sellers agreed to amend the form of consideration
used to satisfy the purchase price paid in order to close the Transaction. Pursuant to the Amendment, on February 2, 2017, or on
the day on which the Amended Approval Condition (as defined below) is satisfied (the “Amended Closing Date”), the Company
will deliver to the Sellers: (i) $6,500,000 in cash consideration; and (ii) $9,500,000 in promissory notes, which will be due within
45 days of the Amended Closing Date and the terms of which are still to be negotiated. Additionally, the Guarantor is required
to pass, at a duly convened meeting of the shareholders of the Guarantor, the Amendment Approval Resolution set out in the circular
dispatched to its shareholders pursuant to the Business Purchase Agreement (the “Amended Approval Condition”). The
Company released the $6,500,000 into escrow on Friday, January 13, 2017. If the Amended Closing Date does not occur by February
10, 2017, the $6,500,000 will be returned to the Company.
The foregoing
description of the Amendment is not complete and is qualified in its entirety by reference to the full text of the Amendment, attached
hereto as Exhibit 10.1.
Settlement
Agreement
As
previously disclosed on Current Report to Form 8-K filed by the Company on April 18, 2016, on April 12, 2016, the Company, in connection
with its acquisition of certain liabilities and assets of Integrated Microwave Technologies, LLC (“IMT”) entered into
an Asset Purchase Modification Agreement (the “Asset Purchase Modification Agreement”) with IMT. On January 13, 2017,
IMT assigned the Company’s remaining obligations to it under the Asset Purchase Modification Agreement to institutional investors
(the “New Holders”).
On
January 13, 2017, the Company and the New Holders entered into a settlement agreement (the
“Settlement Agreement”), whereby the Company and MEF agreed to amend certain terms of the Asset Purchase
Modification Agreement. Pursuant to the Settlement Agreement, in consideration for extending the due date from December 31,
2016, and other consideration, the remaining obligation will be increased to a principal amount of $1,358,939, which amount
includes all previously accrued and unpaid interest. As a result, the due date of the obligation was extended to July 15,
2017. All other terms of the Asset Purchase Modification Agreement will remain in effect. Additionally, pursuant to the
Settlement Agreement, the New Holders were granted a limited right of participation to participate in certain future
financings of the Company.
The foregoing
description of the Settlement Agreement is not complete and is qualified in its entirety by reference to the full text of the Settlement
Agreement, attached hereto as Exhibit 10.2.