Exhibit 10.1

 

Execution Version

 

PURCHASE AGREEMENT

 

PURCHASE AGREEMENT (the “Agreement”), dated as of November 25, 2014, by and
between xG TECHNOLOGY, INC., a Delaware corporation, (the “Company”), LINCOLN
PARK CAPITAL FUND, LLC, an Illinois limited liability company (“Lincoln Park”),
and the other investors identified on Schedule 1 hereto (collectively with
Lincoln Park, the “Investors”).

 

WHEREAS:

 

Subject to the terms and conditions set forth in this Agreement, the Company
wishes to sell to the Investors, and the Investors wish to buy from the Company,
an aggregate of One Million Three Hundred Nineteen Thousand Five Hundred Dollars
($1,331,500) of the Company's common stock, $0.00001 par value per share (the
“Common Stock”). The shares of Common Stock to be purchased hereunder are
referred to herein as the “Purchase Shares.”

 

NOW THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Investors hereby
agree as follows:

 

1. CERTAIN DEFINITIONS.

 

For purposes of this Agreement, the following terms shall have the following
meanings:

 

(a) “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state
law for the relief of debtors.

 

(b) “Base Prospectus” means the Company’s final base prospectus, dated August
21, 2014, a preliminary form of which is included in the Registration Statement,
including the documents incorporated by reference therein.

 

(c) “Business Day” means any day on which the Principal Market is open for
trading, including any day on which the Principal Market is open for trading for
a period of time less than the customary time.

 

(d) “Confidential Information” means any information disclosed by either party
to the other party, either directly or indirectly, in writing, orally or by
inspection of tangible objects (including, without limitation, documents,
prototypes, samples, plant and equipment), which is designated as
"Confidential," "Proprietary" or some similar designation. Information
communicated orally shall be considered Confidential Information if such
information is confirmed in writing as being Confidential Information within ten
(10) Business Days after the initial disclosure. Confidential Information may
also include information disclosed to a disclosing party by third parties.
Confidential Information shall not, however, include any information which (i)
was publicly known and made generally available in the public domain prior to
the time of disclosure by the disclosing party; (ii) becomes publicly known and
made generally available after disclosure by the disclosing party to the
receiving party through no action or inaction of the receiving party; (iii) is
already in the possession of the receiving party at the time of disclosure by
the disclosing party as shown by the receiving party’s files and records
immediately prior to the time of disclosure; (iv) is obtained by the receiving
party from a third party without a breach of such third party’s obligations of
confidentiality; (v) is independently developed by the receiving party without
use of or reference to the disclosing party’s Confidential Information, as shown
by documents and other competent evidence in the receiving party’s possession;
or (vi) is required by law to be disclosed by the receiving party, provided that
the receiving party gives the disclosing party prompt written notice of such
requirement prior to such disclosure and assistance in obtaining an order
protecting the information from public disclosure.

 

 

 

 

(e) “Custodian” means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.

 

(f) “DTC” means The Depository Trust Company, or any successor performing
substantially the same function for the Company.

 

(g) “DWAC Shares” means shares of Common Stock that are (i) issued in electronic
form, (ii) freely tradable and transferable and without restriction on resale
and (iii) timely credited by the Company to the Investors’ or their designee’s
specified Deposit/Withdrawal at Custodian (DWAC) account with DTC under its Fast
Automated Securities Transfer (FAST) Program or any similar program hereafter
adopted by DTC performing substantially the same function.

 

(h) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.

 

(i) “Initial Prospectus Supplement” means the prospectus supplement to the Base
Prospectus complying with Rule 424(b) under the Securities Act that is filed
with the SEC and delivered by the Company to the Investors upon the execution
and delivery of this Agreement in accordance with Section 5(a), including the
documents incorporated by reference therein.

 

(j) “Material Adverse Effect” means any material adverse effect on (i) the
enforceability of any Transaction Document, (ii) the results of operations,
assets, business or financial condition of the Company and its Subsidiaries,
taken as a whole, other than any material adverse effect that resulted primarily
from (A) any change in the United States or foreign economies or securities or
financial markets in general that does not have a disproportionate effect on the
Company and its Subsidiaries, taken as a whole, (B) any change that generally
affects the industry in which the Company and its Subsidiaries operate that does
not have a disproportionate effect on the Company and its Subsidiaries, taken as
a whole, (C) any change arising in connection with earthquakes, hostilities,
acts of war, sabotage or terrorism or military actions or any escalation or
material worsening of any such hostilities, acts of war, sabotage or terrorism
or military actions existing as of the date hereof, (D) any action taken by the
Investors, their affiliates or their successors and assigns with respect to the
transactions contemplated by this Agreement, (E) the effect of any change in
applicable laws or accounting rules that does not have a disproportionate effect
on the Company and its Subsidiaries, taken as a whole, or (F) any change
resulting from compliance with terms of this Agreement or the consummation of
the transactions contemplated by this Agreement, or (iii) the Company’s ability
to perform in any material respect on a timely basis its obligations under any
Transaction Document to be performed as of the date of determination.

 

(k) “Person” means an individual or entity including but not limited to any
limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any department or
agency thereof.

 

(l) “Principal Market” means The NASDAQ Capital Market (or any nationally
recognized successor thereto).

 

(m) “Prior Agreements” means (i) that certain Purchase Agreement, dated as of
September 19, 2014, by and between the Company and Lincoln Park, providing for
the sale by the Company to Lincoln Park of up to Fifteen Million Dollars
($15,000,000) worth of Common Stock from time to time during the term thereof
and (ii) that certain Purchase Agreement, dated as of September 22, 2014, by and
between the Company and Lincoln Park, providing for the sale by the Company to
Lincoln Park of One Million Dollars ($1,000,000) worth of Common Stock.

 

-2-

 

 

(n) “Prospectus” means the Base Prospectus, as supplemented by any Prospectus
Supplement (including the Initial Prospectus Supplement), including the
documents incorporated by reference therein.

 

(o) “Prospectus Supplement” means any prospectus supplement to the Base
Prospectus (including the Initial Prospectus Supplement) filed with the SEC
pursuant to Rule 424(b) under the Securities Act in connection with the
transactions contemplated by this Agreement, including the documents
incorporated by reference therein.

 

(p) “Registration Statement” means the effective registration statement on Form
S-3 (Commission File No. 333-197820) filed by the Company with the SEC pursuant
to the Securities Act for the registration of shares of its Common Stock,
including the Purchase Shares, and certain other securities, as such
Registration Statement has been or may be amended and supplemented from time to
time, including all documents filed as part thereof or incorporated by reference
therein, and including all information deemed to be a part thereof at the time
of effectiveness pursuant to Rule 430B of the Securities Act, including any
comparable successor registration statement filed by the Company with the SEC
pursuant to the Securities Act for the registration of shares of its Common
Stock, including the Purchase Shares.

 

(q) “SEC” means the U.S. Securities and Exchange Commission.

 

(r) “Securities Act” means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.

 

(s) “Subsidiary” means any Person the Company wholly-owns or controls, or in
which the Company, directly or indirectly, owns a majority of the voting stock
or similar voting interest, in each case that would be disclosable pursuant to
Item 601(b)(21) of Regulation S-K promulgated under the Securities Act.

 

(t) “Transaction Documents” means, collectively, this Agreement and the
schedules and exhibits hereto, and each of the other agreements, documents,
certificates and instruments entered into or furnished by the parties hereto in
connection with the transactions contemplated hereby and thereby.

 

(u) “Transfer Agent” means Continental Stock Transfer & Trust, or such other
Person who is then serving as the transfer agent for the Company in respect of
the Common Stock.

 

 

2. PURCHASE OF COMMON STOCK.

 

Subject to the terms and conditions set forth in this Agreement, the Company
desires to sell to the Investors, and the Investors desire to purchase from the
Company, the Purchase Shares as follows:

 

(a) Purchase of Common Stock. Upon the satisfaction of the conditions set forth
in Sections 7 and 8 hereof (the “Closing” and the date of satisfaction of such
conditions the “Closing Date”), Lincoln Park shall purchase 500,000 Purchase
Shares at a price of $1.25 per Purchase Share and the other Investors shall
purchase the number of Purchase Shares set forth opposite their respective names
on Schedule 1 hereto.

 

-3-

 

 

(b) Payment for Purchase Shares. Lincoln Park shall pay to the Company a total
of $625,000 in cash as full payment for such 500,000 Purchase Shares and each
other Investor shall pay to the Company the amount of cash Shares set forth
opposite its name on Schedule 1 hereto for its Purchase Shares, in each case via
wire transfer of immediately available funds on the same Business Day that such
Investor receives such Purchase Shares, if such Purchase Shares are received by
such Investor before 1:00 p.m., Eastern time, or, if such Purchase Shares are
received by such Investor after 1:00 p.m., Eastern time, the next Business Day.
All payments made under this Agreement shall be made in lawful money of the
United States of America or wire transfer of immediately available funds to the
account designated by the Company by written notice to each of the Investors
prior to the date of this Agreement.

 

(c) Compliance with Registration Statement Eligibility Requirements and Rules of
Principal Market. The Company hereby confirms that the issuance of the Purchase
Shares to the Investors pursuant to this Agreement shall not result in the
issuance of a number of shares of Common Stock that would exceed the lesser of:
(A) the maximum number of shares of Common Stock that the Company may issue
pursuant to this Agreement (taking into account all shares of Common Stock
issued or issuable pursuant to any transaction or series of transactions that
may be aggregated with the transactions contemplated by this Agreement under
applicable rules of The NASDAQ Stock Market, including, without limitation,
shares of Common Stock issued pursuant to the Prior Agreements) without (1)
breaching the Company’s obligations under the applicable rules of The NASDAQ
Stock Market or (2) obtaining stockholder approval under the applicable rules of
The NASDAQ Stock Market; and (B) the maximum number of shares of Common Stock
that the Company may issue pursuant to this Agreement without exceeding the
limitations set forth in General Instruction I.B.6. of Form S-3 (such lesser
amount, the “Maximum Share Cap”). The Company shall not issue any shares of
Common Stock pursuant to this Agreement if such issuance would reasonably be
expected to result in (i) a violation of the Securities Act (including, without
limitation, non-compliance with General Instruction I.B.6. of Form S-3) or (ii)
a breach of the rules and regulations of The NASDAQ Stock Market. The provisions
of this Section 2(c) shall be implemented in a manner otherwise than in strict
conformity with the terms hereof only if necessary to ensure compliance with the
Securities Act (including, without limitation, General Instruction I.B.6. of
Form S-3) and the rules and regulations of The NASDAQ Stock Market.

 

(d) Beneficial Ownership Limitation. Notwithstanding anything to the contrary
contained in this Agreement, the Company shall not issue or sell, and none of
the Investors shall purchase or acquire, any shares of Common Stock under this
Agreement which, when aggregated with all other shares of Common Stock then
beneficially owned by such Investor and its respective affiliates (as calculated
pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated
thereunder) would result in the beneficial ownership by such Investor and its
respective affiliates of more than 9.99% of the then issued and outstanding
shares of Common Stock (the “Beneficial Ownership Limitation”), unless, as of
the date of this Agreement, such Investor already has beneficial ownership above
the Beneficial Ownership Limitation.

 

3. INVESTORS’ REPRESENTATIONS AND WARRANTIES.

 

Each Investor, severally and only with respect to itself and not jointly,
represents and warrants to the Company that as of the date hereof and as of the
Closing Date:

 

(a) Accredited Investor Status. The Investor is an “accredited investor” as that
term is defined in Rule 501(a)(3) of Regulation D promulgated under the
Securities Act.

 

-4-

 

 

(b) Information. The Investor understands that its investment in the Purchase
Shares involves a high degree of risk. The Investor (i) is able to bear the
economic risk of an investment in the Purchase Shares including a total loss
thereof, (ii) has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the proposed
investment in the Purchase Shares and (iii) has had an opportunity to ask
questions of and receive answers from the officers of the Company concerning the
financial condition and business of the Company and others matters related to an
investment in the Purchase Shares. Neither such inquiries nor any other due
diligence investigations conducted by the Investor or its representatives shall
modify, amend or affect the Investor's right to rely on the Company's
representations and warranties contained in Section 4 below. The Investor has
sought such accounting, legal and tax advice as it has considered necessary to
make an informed investment decision with respect to its acquisition of the
Purchase Shares.

 

(c) No Governmental Review. The Investor understands that no U.S. federal or
state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Purchase Shares or the fairness or
suitability of an investment in the Purchase Shares nor have such authorities
passed upon or endorsed the merits of the offering of the Purchase Shares.

 

(d) Validity; Enforcement. This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Investor and is a valid and binding
agreement of the Investor enforceable against the Investor in accordance with
its terms, subject as to enforceability to general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies.

 

(e) Residency. Lincoln Park is a resident of the State of Illinois and each
other Investor is a resident of the state set forth opposite such Investor’s
name on Schedule 1 hereto.

 

(f) No Short Selling. The Investor represents and warrants to the Company that
at no time prior to the date of this Agreement has any of the Investor, its
agents, representatives or affiliates engaged in or effected, in any manner
whatsoever, directly or indirectly, any (i) "short sale" (as such term is
defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common Stock
or (ii) hedging transaction, which establishes a net short position with respect
to the Common Stock.

 

4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company represents and warrants to the Investors that as of the date hereof
and as of the Closing Date:

 

(a) Organization and Qualification. The Company and each of its Subsidiaries is
an entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite corporate power and authority to own and use
its properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any of its Subsidiaries is in violation or
default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents.  Each of the
Company and its Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, would result in a Material Adverse Effect and no
proceeding has been instituted in any such jurisdiction revoking, limiting or
curtailing or seeking to revoke, limit or curtail such power and authority or
qualification. The Company has no Subsidiaries except as set forth on Exhibit
21.1 to the Company’s Annual Report on Form 10-K for the year ended December 31,
2013.

 

-5-

 

 

(b) Authorization; Enforcement; Validity. (i) The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement and each of the other Transaction Documents, and to issue the
Purchase Shares in accordance with the terms hereof and thereof, (ii) the
execution and delivery of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby,
including without limitation, the reservation for issuance and the issuance of
the Purchase Shares issuable under this Agreement, have been duly authorized by
the Company's Board of Directors and no further consent or authorization is
required by the Company, its Board of Directors or its stockholders, (iii) this
Agreement has been, and each other Transaction Document shall be on the Closing
Date, duly executed and delivered by the Company and (iv) this Agreement
constitutes, and each other Transaction Document upon its execution on behalf of
the Company, shall constitute, the valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of creditors' rights and
remedies. The Board of Directors of the Company has approved the resolutions
(the “Signing Resolutions”) substantially in the form as set forth as Exhibit C
attached hereto to authorize this Agreement and the transactions contemplated
hereby. The Signing Resolutions are valid, in full force and effect and have not
been modified or supplemented in any respect. The Company has delivered to each
of the Investors a true and correct copy of a unanimous written consent adopting
the Signing Resolutions executed by all of the members of the Board of Directors
of the Company. Except as set forth in this Agreement, no other approvals or
consents of the Company’s Board of Directors, any authorized committee thereof,
and/or stockholders is necessary under applicable laws and the Company’s
Certificate of Incorporation and/or Bylaws to authorize the execution and
delivery of this Agreement or any of the transactions contemplated hereby,
including, but not limited to, the issuance of the Purchase Shares.

 

(c) Capitalization. As of the date hereof, the authorized capital stock of the
Company is set forth in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2013. Except as disclosed in the SEC Documents (as defined
below), (i) no shares of the Company's capital stock are subject to preemptive
rights or any other similar rights or any liens or encumbrances suffered or
permitted by the Company, (ii) there are no outstanding debt securities, (iii)
there are no outstanding options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its Subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its Subsidiaries or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its Subsidiaries, (iv) there
are no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of their securities under
the Securities Act, (v) there are no outstanding securities or instruments of
the Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries, (vi) there
are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by the issuance of the Purchase Shares as described in
this Agreement and (vii) the Company does not have any stock appreciation rights
or "phantom stock" plans or agreements or any similar plan or agreement. The
Company has furnished to each of the Investors true and correct copies of the
Company's Certificate of Incorporation, as amended and as in effect on the date
hereof (the "Certificate of Incorporation"), and the Company's Bylaws, as
amended and as in effect on the date hereof (the "Bylaws"), and summaries of the
terms of all securities convertible into or exercisable for Common Stock, if
any, and copies of any documents containing the material rights of the holders
thereof in respect thereto.

 

-6-

 

 

(d) Issuance of Securities. Upon issuance and payment thereof in accordance with
the terms and conditions of this Agreement, the Purchase Shares shall be validly
issued, fully paid and nonassessable and free from all taxes, liens, charges,
restrictions, rights of first refusal and preemptive rights with respect to the
issue thereof, with the holders being entitled to all rights accorded to a
holder of Common Stock. 1,041,584 shares of Common Stock have been duly
authorized and reserved for issuance upon purchase under this Agreement as
Purchase Shares.

 

(e) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the reservation
for issuance and issuance of the Purchase Shares) will not (i) result in a
violation of the Certificate of Incorporation, any Certificate of Designations,
Preferences and Rights of any outstanding series of preferred stock of the
Company or the Bylaws or (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its Subsidiaries is a party, or result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations and the rules and regulations of the Principal Market
applicable to the Company or any of its Subsidiaries) or by which any property
or asset of the Company or any of its Subsidiaries is bound or affected, except
in the case of conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations under clause (ii), which would not result in a
Material Adverse Effect. Neither the Company nor its Subsidiaries is in
violation of any term of or in default under its Certificate of Incorporation,
any Certificate of Designation, Preferences and Rights of any outstanding series
of preferred stock of the Company or Bylaws or their organizational charter or
Bylaws, respectively. Neither the Company nor any of its Subsidiaries is in
violation of any term of or is in default under any material contract,
agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or
order or any statute, rule or regulation applicable to the Company or its
Subsidiaries, except for possible conflicts, defaults, terminations or
amendments that would not have a Material Adverse Effect. The business of the
Company and its Subsidiaries is not being conducted, and shall not be conducted,
in violation of any law, ordinance, regulation of any governmental entity,
except for possible violations, the sanctions for which either individually or
in the aggregate would not have a Material Adverse Effect. Except as
specifically contemplated by this Agreement and as required under the Securities
Act or applicable state securities laws and the rules and regulations of the
Principal Market and under the Corporate Financing Rule 5110 of the Financial
Industry Regulatory Authority (FINRA), the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency or any regulatory or self-regulatory agency in
order for it to execute, deliver or perform any of its obligations under or
contemplated by the Transaction Documents in accordance with the terms hereof or
thereof. Except as set forth elsewhere in this Agreement, all consents,
authorizations, orders, filings and registrations which the Company is required
to obtain pursuant to the preceding sentence shall be obtained or effected on or
prior to the Closing Date. Since one year prior to the date hereof, the Company
has not received nor delivered any notices or correspondence from or to the
Principal Market. The Principal Market has not commenced any delisting
proceedings against the Company.

 

(f) SEC Documents; Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by the
Company under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof
(or such shorter period as the Company was required by law or regulation to file
such material) (the foregoing materials, including the exhibits thereto and
documents incorporated by reference therein, being collectively referred to
herein as the “SEC Documents”) on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Documents prior to
the expiration of any such extension.  As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable. None of the SEC Documents,
when filed, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. The financial statements of the Company included in
the SEC Documents comply in all material respects with applicable accounting
requirements and the rules and regulations of the SEC with respect thereto as in
effect at the time of filing.  Such financial statements have been prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes thereto and except
that unaudited financial statements may not contain all footnotes required by
GAAP, and fairly present in all material respects the financial position of the
Company and its consolidated Subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal, immaterial, year-end audit
adjustments. Except as set forth in the SEC Documents, the Company has received
no notices or correspondence from the SEC for the one year preceding the date
hereof. The SEC has not commenced any enforcement proceedings against the
Company or any of its Subsidiaries.

 

-7-

 

 

(g) Absence of Certain Changes. Except as disclosed in the SEC Documents, since
December 31, 2013, there has been no material adverse change in the business,
properties, operations, financial condition or results of operations of the
Company or its Subsidiaries. The Company has not taken any steps, and does not
currently expect to take any steps, to seek protection pursuant to any
Bankruptcy Law nor does the Company or any of its Subsidiaries have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy or insolvency proceedings. The Company is financially solvent and is
generally able to pay its debts as they become due.

 

(h) Absence of Litigation. There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the Company
or any of its Subsidiaries, threatened against or affecting the Company, the
Common Stock or any of the Company's or its Subsidiaries' officers or directors
in their capacities as such, which would have a Material Adverse Effect.

 

(i) Acknowledgment Regarding Investors’ Status. The Company acknowledges and
agrees that each of the Investors are acting solely in the capacity of an arm's
length purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby. The Company further acknowledges that none of
the Investors are acting as a financial advisor or fiduciary of the Company (or
in any similar capacity) with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and any advice given by any of the
Investors or any of their respective representatives or agents in connection
with the Transaction Documents and the transactions contemplated hereby and
thereby is merely incidental to such Investor's purchase of the Purchase Shares.
The Company further represents to each of the Investors that the Company's
decision to enter into the Transaction Documents has been based solely on the
independent evaluation by the Company and its representatives and advisors.

 

(j) No Integrated Offering. None the Company, any of its affiliates, or any
Person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security,
under circumstances that would cause this offering of the Purchase Shares to be
integrated with prior offerings by the Company in a manner that would require
stockholder approval pursuant to the rules of the Principal Market on which any
of the securities of the Company are listed or designated. The issuance and sale
of the Purchase Shares hereunder does not contravene the rules and regulations
of the Principal Market.

 

-8-

 

 

(k) Intellectual Property Rights. The Company and its Subsidiaries own or
possess adequate rights or licenses to use all material trademarks, trade names,
service marks, service mark registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their respective
businesses as now conducted. None of the Company's material trademarks, trade
names, service marks, service mark registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, government authorizations,
trade secrets or other intellectual property rights have expired or terminated,
or, by the terms and conditions thereof, could expire or terminate within two
years from the date of this Agreement. The Company and its Subsidiaries do not
have any knowledge of any infringement by the Company or its Subsidiaries of any
material trademark, trade name rights, patents, patent rights, copyrights,
inventions, licenses, service names, service marks, service mark registrations,
trade secret or other similar rights of others, or of any such development of
similar or identical trade secrets or technical information by others, and there
is no claim, action or proceeding being made or brought against, or to the
Company's knowledge, being threatened against, the Company or its Subsidiaries
regarding trademark, trade name, patents, patent rights, invention, copyright,
license, service names, service marks, service mark registrations, trade secret
or other infringement, which would have a Material Adverse Effect.

 

(l) Environmental Laws. The Company and its Subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where, in each of the
three foregoing clauses, the failure to so comply would not have, individually
or in the aggregate, a Material Adverse Effect.

 

(m) Title. The Company and its Subsidiaries have good and marketable title in
fee simple to all real property owned by them and good and marketable title in
all personal property owned by them that is material to the business of the
Company and its Subsidiaries, in each case free and clear of all liens,
encumbrances and defects (“Liens”) and, except for Liens as do not materially
affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and its
Subsidiaries and Liens for the payment of federal, state or other taxes, the
payment of which is neither delinquent nor subject to penalties.  Any real
property and facilities held under lease by the Company and its Subsidiaries are
held by them under valid, subsisting and enforceable leases with which the
Company and its Subsidiaries are in compliance with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its Subsidiaries.

 

(n) Insurance. The Company and each of its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as management of the Company believes to be prudent and customary in the
businesses in which the Company and its Subsidiaries are engaged. Neither the
Company nor any such Subsidiary has been refused any insurance coverage sought
or applied for and neither the Company nor any such Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not materially
and adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its Subsidiaries, taken as a whole.

 

-9-

 

 

(o) Regulatory Permits. The Company and its Subsidiaries possess all material
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit.

 

(p) Tax Status. The Company and each of its Subsidiaries has made or filed all
federal and state income and all other material tax returns, reports and
declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provision reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.

 

(q) Transactions With Affiliates.  Except as set forth in the SEC Documents,
none of the officers or directors of the Company and, to the knowledge of the
Company, none of the employees of the Company is presently a party to any
transaction with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Company, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner, in each
case in excess of $120,000 other than for (i) payment of salary or consulting
fees for services rendered, (ii) reimbursement for expenses incurred on behalf
of the Company and (iii) other employee benefits, including stock option
agreements under any stock option plan of the Company.

 

(r) Application of Takeover Protections. The Company and its board of directors
have taken or will take prior to the Closing Date all necessary action, if any,
in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Certificate of Incorporation
or the laws of the state of its incorporation which is or could become
applicable to any of the Investors as a result of the transactions contemplated
by this Agreement, including, without limitation, the Company's issuance of the
Purchase Shares and the Investors' ownership of the Purchase Shares.

 

(s)  Disclosure.  Except with respect to the material terms and conditions of
the transactions contemplated by the Transaction Documents that will be timely
publicly disclosed by the Company, the Company confirms that neither it nor any
other Person acting on its behalf has provided any of the Investors or its
agents or counsel with any information that it believes constitutes or might
constitute material, non-public information which is not otherwise disclosed in
the Registration Statement or any Prospectus Supplements thereto.  The Company
understands and confirms that each of the Investors will rely on the foregoing
representation in effecting purchases and sales of securities of the
Company.  All of the disclosure furnished by or on behalf of the Company to the
Investors regarding the Company, its business and the transactions contemplated
hereby, including the disclosure schedules to this Agreement, is true and
correct in all material respects and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The press releases disseminated by the Company during the
twelve months preceding the date of this Agreement taken as a whole do not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made and when made,
not misleading.  The Company acknowledges and agrees that none of the Investors
make or have made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Section 3 hereof and, in that case, only with respect to such Investor and not
with respect to any other Investor.

 

-10-

 

 

(t) Foreign Corrupt Practices.  Neither the Company, nor to the knowledge of the
Company, any agent or other Person acting on behalf of the Company, has (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any Person acting on its behalf of
which the Company is aware) which is in violation of law, or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.

 

(u) Registration Statement. The Company has prepared and filed with the SEC in
accordance with the provisions of the Securities Act the Registration Statement.
The Registration Statement was declared effective by order of the SEC on August
21, 2014. The Registration Statement is effective pursuant to the Securities Act
and available for the issuance of the Purchase Shares thereunder, and the
Company has not received any written notice that the SEC has issued or intends
to issue a stop order or other similar order with respect to the Registration
Statement or the Prospectus or that the SEC otherwise has (i) suspended or
withdrawn the effectiveness of the Registration Statement or (ii) issued any
order preventing or suspending the use of the Prospectus or any Prospectus
Supplement, in either case, either temporarily or permanently or intends or has
threatened in writing to do so. The “Plan of Distribution” section of the
Prospectus permits the issuance of the Purchase Shares hereunder. At the time
the Registration Statement and any amendments thereto became effective, at the
date of this Agreement and at each deemed effective date thereof pursuant to
Rule 430B(f)(2) of the Securities Act, the Registration Statement and any
amendments thereto complied and will comply in all material respects with the
requirements of the Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading; and
the Base Prospectus and any Prospectus Supplement thereto, at the time such Base
Prospectus or such Prospectus Supplement thereto was issued and on the Closing
Date, complied and will comply in all material respects with the requirements of
the Securities Act and did not and will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided that this representation and warranty does not apply to
statements in or omissions from any Prospectus Supplement made in reliance upon
and in conformity with information relating to any of the Investors furnished to
the Company in writing by or on behalf of such Investor expressly for use
therein. The Company meets all of the requirements for the use of a registration
statement on Form S-3 pursuant to the Securities Act for the offering and sale
of the Purchase Shares contemplated by this Agreement in reliance on General
Instruction I.B.6. of Form S-3, and the SEC has not notified the Company of any
objection to the use of the form of the Registration Statement pursuant to
Rule 401(g)(1) of the Securities Act. The Company hereby confirms that the
issuance of the Purchase Shares to the Investors pursuant to this Agreement
would not result in non-compliance with General Instruction I.B.6. of Form S-3.
The Registration Statement, as of its effective date, meets the requirements set
forth in Rule 415(a)(1)(x) pursuant to the Securities Act. At the earliest time
after the filing of the Registration Statement that the Company or another
offering participant made a bona fide offer (within the meaning of Rule
164(h)(2) of the Securities Act) relating to any of the Purchase Shares, the
Company was not and is not an Ineligible Issuer (as defined in Rule 405 of the
Securities Act). The Company has not distributed any offering material in
connection with the offering and sale of any of the Purchase Shares, and, until
none of the Investors hold any of the Purchase Shares, shall not distribute any
offering material in connection with the offering and sale of any of the
Purchase Shares, to or by any of the Investors, in each case, other than the
Registration Statement or any amendment thereto, the Prospectus or any
Prospectus Supplement required pursuant to applicable law or the Transaction
Documents. The Company has not made, and agrees that unless it obtains the prior
written consent of each of the Investors it will not make, an offer relating to
the Purchase Shares that would constitute a “free writing prospectus” as defined
in Rule 405 under the Securities Act. The Company shall comply with the
requirements of Rules 164 and 433 under the Securities Act applicable to any
such free writing prospectus consented to by each of the Investors, including in
respect of timely filing with the SEC, legending and record keeping.

 

-11-

 

 

(v) DTC Eligibility. The Company, through the Transfer Agent, currently
participates in the DTC Fast Automated Securities Transfer (FAST) Program and
the Common Stock can be transferred electronically to third parties via the DTC
Fast Automated Securities Transfer (FAST) Program.

 

(w) Sarbanes-Oxley. The Company is in compliance with all provisions of the
Sarbanes-Oxley Act of 2002, as amended, which are applicable to it as of the
date hereof.

 

(x) Certain Fees. No brokerage or finder’s fees or commissions are or will be
payable by the Company to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents. None of the Investors
shall have any obligation with respect to any fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated in this
Section 4(x) that may be due in connection with the transactions contemplated by
the Transaction Documents.

 

(y) Investment Company. The Company is not, and immediately after receipt of
payment for the Purchase Shares will not be, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.

 

(z) Listing and Maintenance Requirements. The Common Stock is registered
pursuant to Section 12(b) of the Exchange Act, and the Company has taken no
action designed to, or which to its knowledge is likely to have the effect of,
terminating the registration of the Common Stock pursuant to the Exchange Act
nor has the Company received any notification that the SEC is currently
contemplating terminating such registration. The Company has not, in the twelve
(12) months preceding the date hereof, received any notice from any Person to
the effect that the Company is not in compliance with the listing or maintenance
requirements of the Principal Market. The Company is, and has no reason to
believe that it will not in the foreseeable future continue to be, in compliance
with all such listing and maintenance requirements.

 

(aa) Accountants. The Company’s accountants are set forth in the SEC Documents
and, to the knowledge of the Company, such accountants are an independent
registered public accounting firm as required by the Securities Act.

 

(bb) No Market Manipulation. The Company has not, and to its knowledge no Person
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the Purchase
Shares, (ii) sold, bid for, purchased, or, paid any compensation for soliciting
purchases of, any of the Purchase Shares, or (iii) paid or agreed to pay to any
Person any compensation for soliciting another to purchase any other securities
of the Company.

 

-12-

 

 

(cc) Shell Company Status. The Company is not currently, and has never been, an
issuer identified in Rule 144(i)(1) under the Securities Act.

 

5. COVENANTS.

 

(a) Filing of Current Report and Initial Prospectus Supplement. The Company
agrees that it shall, within the time required under the Exchange Act, file with
the SEC a report on Form 8-K relating to the transactions contemplated by, and
describing the material terms and conditions of, the Transaction Documents (the
“Current Report”). The Company further agrees that it shall, within the time
required under Rule 424(b) under the Securities Act, file with the SEC the
Initial Prospectus Supplement pursuant to Rule 424(b) under the Securities Act
specifically relating to the transactions contemplated by, and describing the
material terms and conditions of, the Transaction Documents, containing
information previously omitted at the time of effectiveness of the Registration
Statement in reliance on Rule 430B under the Securities Act, and disclosing all
information relating to the transactions contemplated hereby required to be
disclosed in the Registration Statement and the Prospectus as of the date of the
Initial Prospectus Supplement, including, without limitation, information
required to be disclosed in the section captioned “Plan of Distribution” in the
Prospectus. The Company shall permit Lincoln Park to review and comment upon the
Current Report and the Initial Prospectus Supplement at least two (2) Business
Days prior to their filing with the SEC, the Company shall give reasonable
consideration to all such comments, and the Company shall not file the Current
Report or the Initial Prospectus Supplement with the SEC in a form to which
Lincoln Park reasonably object. Lincoln Park shall use its reasonable best
efforts to comment upon the Current Report and the Initial Prospectus Supplement
within one (1) Business Day from the date Lincoln Park receives the final
pre-filing draft version thereof from the Company. Each of the Investors shall
furnish to the Company such information regarding themselves, the Purchase
Shares held by them and the intended method of distribution thereof, including
any arrangement between such Investor and any other Person relating to the sale
or distribution of the Purchase Shares, as shall be reasonably requested by the
Company in connection with the preparation and filing of the Current Report and
the Initial Prospectus Supplement, and shall otherwise cooperate with the
Company as reasonably requested by the Company in connection with the
preparation and filing of the Current Report and the Initial Prospectus
Supplement with the SEC.

 

(b) Blue Sky. The Company shall take all such action, if any, as is reasonably
necessary in order to obtain an exemption for or to register or qualify (i) the
sale of the Purchase Shares to the Investors under this Agreement and (ii) any
subsequent resale of all Purchase Shares by the Investors, in each case, under
applicable securities or “Blue Sky” laws of the states of the United States in
such states as is reasonably requested by any of the Investors from time to
time, and shall provide evidence of any such action so taken to the Investors.

 

(c) Listing/DTC. The Company shall promptly secure the listing of all of the
Purchase Shares to be issued to the Investors hereunder on the Principal Market
(subject to official notice of issuance) and upon each other national securities
exchange or automated quotation system, if any, upon which the Common Stock is
then listed, and shall use commercially reasonable best efforts to maintain, so
long as any shares of Common Stock shall be so listed, such listing of all such
Purchase Shares from time to time issuable hereunder. The Company shall use
commercially reasonable best efforts to maintain the listing of the Common Stock
on the Principal Market and shall comply in all respects with the Company’s
reporting, filing and other obligations under the bylaws or rules and
regulations of the Principal Market. Neither the Company nor any of its
Subsidiaries shall take any action that would reasonably be expected to result
in the delisting or suspension of the Common Stock on the Principal Market. The
Company shall promptly, and in no event later than the following Business Day,
provide to each of the Investors copies of any notices it receives from any
Person regarding the continued eligibility of the Common Stock for listing on
the Principal Market. The Company shall pay all fees and expenses in connection
with satisfying its obligations under this Section 5(c). The Company shall take
all action necessary to ensure that its Common Stock can be transferred
electronically as DWAC Shares.

 

-13-

 

 

(d) Prohibition of Short Sales and Hedging Transactions. During the term of this
Agreement, none of the Investors and or their agents, representatives and
affiliates shall in any manner whatsoever enter into or effect, directly or
indirectly, any (i) “short sale” (as such term is defined in Rule 200 of
Regulation SHO of the Exchange Act) of the Common Stock or (ii) hedging
transaction, which establishes a net short position with respect to the Common
Stock.

 

(e) Reserved.

 

(f) Non-Public Information. Each party hereto agrees not to disclose any
Confidential Information of the other party to any third party and shall not use
the Confidential Information for any purpose other than in connection with, or
in furtherance of, the transactions contemplated hereby. Each party hereto
acknowledges that the Confidential Information shall remain the property of the
disclosing party and agrees that it shall take all reasonable measures to
protect the secrecy of any Confidential Information disclosed by the other
party. The Company confirms that neither it nor any other Person acting on its
behalf shall provide any of the Investors or their agents or counsel with any
information that constitutes or might constitute material, non-public
information, unless a simultaneous public announcement thereof is made by the
Company in the manner contemplated by Regulation FD. In the event of a breach of
the foregoing covenant by the Company or any Person acting on its behalf, as
determined in the reasonable good faith judgment of any Investor, in addition to
any other remedy provided herein or in the other Transaction Documents, if such
Investor is holding Purchase Shares at the time of the disclosure of material,
non-public information, such Investor shall have the right to make a public
disclosure, in the form of a press release, public advertisement or otherwise,
of such material, non-public information without the prior approval by the
Company; provided such Investor shall have first provided notice to the Company
that it believes it has received information that constitutes material,
non-public information, the Company shall have at least 48 hours to publicly
disclose such material, non-public information prior to any such disclosure by
such Investor or demonstrate to such Investor in writing why such information
does not constitute material, non-public information, and (assuming such
Investor and its counsel disagree with the Company’s determination) the Company
shall have failed to publicly disclose such material, non-public information
within such time period. No Investor shall have any liability to the Company,
any of its Subsidiaries, or any of their respective directors, officers,
employees, stockholders or agents, for any such disclosure. The Company
understands and confirms that each of the Investors shall be relying on the
foregoing covenants in effecting transactions in securities of the Company.

 

(g) Reserved.

 

(h) Taxes. The Company shall pay any and all transfer, stamp or similar taxes
that may be payable with respect to the issuance and delivery of any shares of
Common Stock to the Investors made under this Agreement.

 

(i) Securities Law Compliance. The Company shall use its reasonable best efforts
to keep the Registration Statement effective pursuant to Rule 415 promulgated
under the Securities Act, and to keep the Registration Statement and the
Prospectus current and available for issuances and sales of all of the Purchase
Shares by the Company to the Investors, and for the resale by the Investors, at
all times until the date on which the Investors shall have sold all the Purchase
Shares (the "Registration Period"). Without limiting the generality of the
foregoing, during the Registration Period, the Company shall (a) take all action
necessary to cause the Common Stock to continue to be registered as a class of
securities under Sections 12(b) of the Exchange Act, shall comply with its
reporting and filing obligations under the Exchange Act, and shall not take any
action or file any document (whether or not permitted by the Exchange Act) to
terminate or suspend such registration or to terminate or suspend its reporting
and filing obligations under the Exchange Act, and (b) prepare and file with the
SEC, at the Company’s expense, such amendments (including, without limitation,
post-effective amendments) to the Registration Statement and such Prospectus
Supplements pursuant to Rule 424(b) under the Securities Act, in each case, as
may be necessary to keep the Registration Statement effective pursuant to Rule
415 promulgated under the Securities Act, and to keep the Registration Statement
and the Prospectus current and available for issuances and sales of all of the
Purchase Shares by the Company to the Investors, and for the resale of all of
the Purchase Shares by the Investors, at all times during the Registration
Period. Each Investor shall furnish to the Company such information regarding
itself, the Purchase Shares held by it and the intended method of distribution
thereof as shall be reasonably requested by the Company in connection with the
preparation and filing of any such amendment to the Registration Statement or
any such Prospectus Supplement, and shall otherwise cooperate with the Company
as reasonably requested by the Company in connection with the preparation and
filing of any such amendment to the Registration Statement or any such
Prospectus Supplement. The Company shall comply with all applicable federal,
state and foreign securities laws in connection with the offer, issuance and
sale of the Purchase Shares contemplated by the Transaction Documents. Without
limiting the generality of the foregoing, neither the Company nor any of its
officers, directors or affiliates will take, directly or indirectly, any action
designed or intended to stabilize or manipulate the price of any security of the
Company, or which would reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the Company.

 

-14-

 

 

(j) Stop Orders. The Company shall advise each of the Investors promptly (but in
no event later than 24 hours) and shall confirm such advice in writing: (i) of
the Company’s receipt of notice of any request by the SEC for amendment of or a
supplement to the Registration Statement, the Prospectus, any Prospectus
Supplement or for any additional information; (ii) of the Company’s receipt of
notice of the issuance by the SEC of any stop order suspending the effectiveness
of the Registration Statement or prohibiting or suspending the use of the
Prospectus or any Prospectus Supplement, or of the Company’s receipt of any
notification of the suspension of qualification of the Purchase Shares for
offering or sale in any jurisdiction or the initiation or contemplated
initiation of any proceeding for such purpose; and (iii) of the Company becoming
aware of the happening of any event, which makes any statement of a material
fact made in the Registration Statement, the Prospectus or any Prospectus
Supplement untrue or which requires the making of any additions to or changes to
the statements then made in the Registration Statement, the Prospectus or any
Prospectus Supplement in order to state a material fact required by the
Securities Act to be stated therein or necessary in order to make the statements
then made therein (in the case of the Prospectus or any Prospectus Supplement,
in light of the circumstances under which they were made) not misleading, or of
the necessity to amend the Registration Statement or supplement the Prospectus
or any Prospectus Supplement to comply with the Securities Act or any other law.
The Company shall not be required to disclose to the Investors the substance or
specific reasons of any of the events set forth in clauses (i) through (iii) of
the immediately preceding sentence, but rather, shall only be required to
disclose that the event has occurred. If at any time the SEC shall issue any
stop order suspending the effectiveness of the Registration Statement or
prohibiting or suspending the use of the Prospectus or any Prospectus
Supplement, the Company shall use its reasonable best efforts to obtain the
withdrawal of such order at the earliest possible time. The Company shall
furnish to each of the Investors, without charge, a copy of any correspondence
from the SEC or the staff of the SEC to the Company or its representatives
relating to the Registration Statement or the Prospectus, as the case may be.

 

-15-

 

 

(k) Amendments to Registration Statement; Prospectus Supplements. Except as
provided in this Agreement and other than periodic and current reports required
to be filed pursuant to the Exchange Act, the Company shall not file with the
SEC any amendment to the Registration Statement or any supplement to the Base
Prospectus that refers to any of the Investors, the Transaction Documents or the
transactions contemplated thereby (including, without limitation, any Prospectus
Supplement filed in connection with the transactions contemplated by the
Transaction Documents), in each case with respect to which (a) such Investor
shall not previously have been advised and afforded the opportunity to review
and comment thereon at least two (2) Business Days prior to filing with the SEC,
as the case may be, (b) the Company shall not have given due consideration to
any comments thereon received from such Investor or its counsel, or (c) such
Investor shall reasonably object, unless the Company reasonably has determined
that it is necessary to amend the Registration Statement or make any supplement
to the Prospectus to comply with the Securities Act or any other applicable law
or regulation, in which case the Company shall promptly (but in no event later
than 24 hours) so inform such Investor, such Investors shall be provided with a
reasonable opportunity to review and comment upon any disclosure referring to
such Investor, the Transaction Documents or the transactions contemplated
thereby, as applicable, and the Company shall expeditiously furnish to such
Investor a copy thereof. In addition, for so long as, in the reasonable opinion
of counsel for any of the Investors, a Prospectus is required to be delivered in
connection with any acquisition or sale of Purchase Shares by such Investor, the
Company shall not file any Prospectus Supplement with respect to the Purchase
Shares without furnishing to such Investor as many copies of such Prospectus
Supplement, together with the Prospectus, as such Investor may reasonably
request.

 

(l) Prospectus Delivery. The Company consents to the use of the Prospectus (and
of each Prospectus Supplement thereto) in accordance with the provisions of the
Securities Act and with the securities or “blue sky” laws of the jurisdictions
in which the Purchase Shares may be sold by the Investors, in connection with
the offering and sale of the Purchase Shares and for such period of time
thereafter as a Prospectus is required by the Securities Act to be delivered in
connection with sales of the Purchase Shares. The Company will make available to
each of the Investors upon request, and thereafter from time to time will
furnish to each of the Investors, as many copies of the Prospectus (and each
Prospectus Supplement thereto) as such Investor may reasonably request for the
purposes contemplated by the Securities Act within the time during which the
Prospectus is required by the Securities Act to be delivered in connection with
sales of the Purchase Shares. If during such period of time any event shall
occur that in the reasonable judgment of the Company and its counsel, or in the
reasonable judgment of any Investor and its counsel, is required to be set forth
in the Registration Statement, the Prospectus or any Prospectus Supplement or
should be set forth therein in order to make the statements made therein (in the
case of the Prospectus or any Prospectus Supplement, in light of the
circumstances under which they were made) not misleading, or if in the
reasonable judgment of the Company and its counsel, or in the reasonable
judgment of any of the Investors and its counsel, it is otherwise necessary to
amend the Registration Statement or supplement the Prospectus or any Prospectus
Supplement to comply with the Securities Act or any other applicable law or
regulation, the Company shall forthwith prepare and, subject to Section 5(k)
above, file with the SEC an appropriate amendment to the Registration Statement
or an appropriate Prospectus Supplement and in each case shall expeditiously
furnish to each of the Investors, at the Company’s expense, such amendment to
the Registration Statement or such Prospectus Supplement, as applicable, as may
be necessary to reflect any such change or to effect such compliance. The
Company shall have no obligation to separately advise the Investors of, or
deliver copies to the Investors of, the SEC Documents, all of which the
Investors shall be deemed to have notice of.

 

(m) Integration. From and after the date of this Agreement, neither the Company,
nor or any of its affiliates will, and the Company shall use its reasonable best
efforts to ensure that no Person acting on their behalf will, directly or
indirectly, make any offers or sales of any security or solicit any offers to
buy any security, under circumstances that would cause this offering of the
Purchase Shares to be integrated with other offerings by the Company in a manner
that would require stockholder approval pursuant to the rules of the Principal
Market on which any of the securities of the Company are listed or designated,
unless stockholder approval is obtained before the closing of such subsequent
transaction in accordance with the rules of such Principal Market.

 

-16-

 

 

(n) Use of Proceeds. The Company will use the net proceeds from the offering as
described in the Prospectus.

 

(o) Other Transactions. The Company shall not enter into, announce or recommend
to its stockholders any agreement, plan, arrangement or transaction in or of
which the terms thereof would restrict, materially delay, conflict with or
impair the ability or right of the Company to perform its obligations under the
Transaction Documents, including, without limitation, the obligation of the
Company to deliver the Purchase Shares to each of the Investors in accordance
with the terms of the Transaction Documents.

 

6. TRANSFER AGENT INSTRUCTIONS.

 

On the Closing Date, the Company shall issue to the Transfer Agent irrevocable
instructions, in the form substantially similar to those used in substantially
similar transactions, to issue the Purchase Shares in accordance with the terms
of this Agreement (the “Irrevocable Transfer Agent Instructions”). All Purchase
Shares to be issued to or for the benefit of the Investors pursuant to this
Agreement shall be issued as DWAC Shares. The Company warrants to the Investors
that no instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section 6 will be given by the Company to the Transfer Agent
with respect to the Purchase Shares, and the Purchase Shares shall otherwise be
freely transferable on the books and records of the Company.

 

7. CONDITIONS TO THE COMPANY'S RIGHT TO COMMENCE SALES OF SHARES OF COMMON
STOCK.

 

The obligation of the Company hereunder to issue the Purchase Shares on the
Closing Date is subject to the satisfaction or, where legally permissible, the
waiver of each of the following conditions:

 

(a) Each Investor shall have executed each of the Transaction Documents and
delivered the same to the Company;

 

(b) No stop order with respect to the Registration Statement shall be pending or
threatened by the SEC; and

 

(c) The representations and warranties of the Investors shall be true and
correct in all material respects as of the date hereof and as of the Closing
Date as though made at that time.

 

8. CONDITIONS TO THE INVESTORS’ OBLIGATION TO PURCHASE SHARES OF COMMON STOCK.

 

The obligation of each Investor to purchase the Purchase Shares under this
Agreement is subject to the satisfaction or, where legally permissible, the
waiver of each of the following conditions:

 

-17-

 

 

(a) The Company shall have executed each of the Transaction Documents and
delivered the same to each Investor;

 

(b) The Common Stock shall be listed on the Principal Market, trading in the
Common Stock shall not have been within the last 365 days suspended by the SEC
or the Principal Market, and all Purchase Shares to be issued by the Company to
the Investors pursuant to this Agreement shall have been approved for listing or
quotation on the Principal Market in accordance with the applicable rules and
regulations of the Principal Market, subject only to official notice of
issuance;

 

(c) Lincoln Park shall have received the opinions of the Company's legal counsel
dated as of the Closing Date substantially in the form of Exhibit A attached
hereto;

 

(d) The representations and warranties of the Company shall be true and correct
in all material respects (except to the extent that any of such representations
and warranties is already qualified as to materiality in Section 4 above, in
which case, such representations and warranties shall be true and correct
without further qualification) as of the date hereof and as of the Closing Date
as though made at that time (except for representations and warranties that
speak as of a specific date, which shall be true and correct as of such date)
and the Company shall have performed, satisfied and complied with the covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Closing Date.
Lincoln Park shall have received a certificate, executed by the CEO, President
or CFO of the Company, dated as of the Closing Date, to the foregoing effect in
the form attached hereto as Exhibit B;

 

(e) The Board of Directors of the Company shall have adopted resolutions in the
form attached hereto as Exhibit C which shall be in full force and effect
without any amendment or supplement thereto as of the Closing Date;

 

(f) The Irrevocable Transfer Agent Instructions shall have been delivered to and
acknowledged in writing by the Company and the Company's Transfer Agent;

 

(g) The Company shall have delivered to Lincoln Park a certificate evidencing
the incorporation and good standing of the Company in the State of Delaware
issued by the Secretary of State of the State of Delaware as of a date within
ten (10) Business Days of the Closing Date;

 

(h) The Company shall have delivered to Lincoln Park a certified copy of the
Certificate of Incorporation as certified by the Secretary of State of the State
of Delaware within ten (10) Business Days of the Closing Date;

 

(i) The Company shall have delivered to Lincoln Park a secretary's certificate
executed by the Secretary of the Company, dated as of the Closing Date, in the
form attached hereto as Exhibit D;

 

(j) The Registration Statement shall be effective and no stop order with respect
to the Registration Statement shall be pending or threatened by the SEC. The
Company shall have a maximum dollar amount certain of Common Stock registered
under the Registration Statement which is sufficient to issue to the Investors
not less than all of the Purchase Shares to be purchased hereunder. The Current
Report and the Initial Prospectus Supplement each shall have been filed with the
SEC, as required pursuant to Section 5(a), and copies of the Prospectus shall
have been delivered to each of the Investors in accordance with Section 5(l)
hereof. The Prospectus shall be current and available for the issuance and sale
of all of the Purchase Shares by the Company to the Investors, and for the
resale of all of the Purchase Shares by the Investors. Any other Prospectus
Supplements required to have been filed by the Company with the SEC under the
Securities Act at or prior to the Closing Date shall have been filed with the
SEC within the applicable time periods prescribed for such filings under the
Securities Act. All reports, schedules, registrations, forms, statements,
information and other documents required to have been filed by the Company with
the SEC at or prior to the Closing Date pursuant to the reporting requirements
of the Exchange Act shall have been filed with the SEC within the applicable
time periods prescribed for such filings under the Exchange Act;

 

-18-

 

 

(k) The Company shall be eligible to transfer its Common Stock electronically as
DWAC Shares;

 

(l) All federal, state and local governmental laws, rules and regulations
applicable to the transactions contemplated by the Transaction Documents and
necessary for the execution, delivery and performance of the Transaction
Documents and the consummation of the transactions contemplated thereby in
accordance with the terms thereof shall have been complied with, and all
consents, authorizations and orders of, and all filings and registrations with,
all federal, state and local courts or governmental agencies and all federal,
state and local regulatory or self-regulatory agencies necessary for the
execution, delivery and performance of the Transaction Documents and the
consummation of the transactions contemplated thereby in accordance with the
terms thereof shall have been obtained or made, including, without limitation,
in each case those required under the Securities Act, the Exchange Act,
applicable state securities or “Blue Sky” laws or applicable rules and
regulations of the Principal Market, or otherwise required by the SEC, the
Principal Market or any state securities regulators;

 

(m) No statute, regulation, order, decree, writ, ruling or injunction shall have
been enacted, entered, promulgated, threatened or endorsed by any federal,
state, local or foreign court or governmental authority of competent
jurisdiction which prohibits the consummation of or which would materially
modify or delay any of the transactions contemplated by the Transaction
Documents;

 

(n) No action, suit or proceeding before any federal, state, local or foreign
arbitrator or any court or governmental authority of competent jurisdiction
shall have been commenced or threatened, and no inquiry or investigation by any
federal, state, local or foreign governmental authority of competent
jurisdiction shall have been commenced or threatened, against the Company, or
any of the officers, directors or affiliates of the Company, seeking to
restrain, prevent or change the transactions contemplated by the Transaction
Documents, or seeking material damages in connection with such transactions;

 

(o) No Person shall have commenced a proceeding against the Company pursuant to
or within the meaning of any Bankruptcy Law;

 

(p) The Company, pursuant to or within the meaning of any Bankruptcy Law, shall
not have (i) commenced a voluntary case, (ii) consented to the entry of an order
for relief against it in an involuntary case, (iii) consented to the appointment
of a Custodian of it or for all or substantially all of its property, or (iv)
made a general assignment for the benefit of its creditors or is generally
unable to pay its debts as the same become due;

 

(q) A court of competent jurisdiction shall not have entered an order or decree
under any Bankruptcy Law that (i) is for relief against the Company in an
involuntary case, (ii) appoints a Custodian of the Company or for all or
substantially all of its property, or (iii) orders the liquidation of the
Company or any Subsidiary; and

 

-19-

 

 

(r) The issuance of the Purchase Shares shall not cause the Company to exceed
the Maximum Share Cap.

  

9. INDEMNIFICATION.

 

In consideration of the Investors’ execution and delivery of the Transaction
Documents and acquiring the Purchase Shares hereunder and in addition to all of
the Company's other obligations under the Transaction Documents, the Company
shall defend, protect, indemnify and hold harmless each of the Investors and all
of its affiliates, stockholders, officers, directors, employees and direct or
indirect investors and any of the foregoing Person's agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
“Indemnitees”) from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including
reasonable attorneys' fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to:
(a) any misrepresentation or breach of any representation or warranty made by
the Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(c) any cause of action, suit or claim brought or made against such Indemnitee
and arising out of or resulting from the execution, delivery, performance or
enforcement of the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (d) any violation of the Securities
Act, the Exchange Act, state securities or “Blue Sky” laws, or the rules and
regulations of the Principal Market in connection with the transactions
contemplated by the Transaction Documents by the Company or any of its
Subsidiaries, affiliates, officers, directors or employees, (e) any untrue
statement or alleged untrue statement of a material fact contained, or
incorporated by reference, in the Registration Statement or any amendment
thereto or any omission or alleged omission to state therein, or in any document
incorporated by reference therein, a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (f) any untrue
statement or alleged untrue statement of a material fact contained, or
incorporated by reference, in the Prospectus, or any omission or alleged
omission to state therein, or in any document incorporated by reference therein,
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that (I) the indemnity contained in clause
(c) of this Section 9 shall not apply to any Indemnified Liabilities which
directly and primarily result from the fraud, gross negligence or willful
misconduct of an Indemnitee, (II) the indemnity contained in clauses (d), (e)
and (f) of this Section 9 shall not apply to any Indemnified Liabilities to the
extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Investors expressly for use in any Prospectus
Supplement (it being hereby acknowledged and agreed that the written information
set forth on Exhibit E attached hereto is the only written information furnished
to the Company by or on behalf of any Investor expressly for use in the Initial
Prospectus Supplement), if the Prospectus was timely made available by the
Company to the Investors pursuant to Section 5(l), (III) the indemnity contained
in clauses (d), (e) and (f) of this Section 9 shall not inure to the benefit of
an Investor to the extent such Indemnified Liabilities are based on a failure of
such Investor to deliver or to cause to be delivered the Prospectus made
available by the Company, if such Prospectus was timely made available by the
Company pursuant to Section 5(l), and if delivery of the Prospectus would have
cured the defect giving rise to such Indemnified Liabilities, and (IV) the
indemnity in this Section 9 shall not apply to amounts paid in settlement of any
claim if such settlement is effected without the prior written consent of the
Company, which consent shall not be unreasonably withheld, conditioned or
delayed. To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. Payment under this indemnification shall be
made within thirty (30) days from the date an Investor makes a written request
for it. A certificate containing reasonable detail as to the amount of such
indemnification submitted to the Company by an Investor shall be conclusive
evidence, absent manifest error, of the amount due from the Company to such
Investor. If any action shall be brought against any Indemnitee in respect of
which indemnity may be sought pursuant to this Agreement, such Indemnitee shall
promptly notify the Company in writing, and the Company shall have the right to
assume the defense thereof with counsel of its own choosing reasonably
acceptable to the Indemnitee. Any Indemnitee shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnitee, except to the extent that (i) the employment thereof has been
specifically authorized by the Company in writing, (ii) the Company has failed
after a reasonable period of time to assume such defense and to employ counsel
or (iii) in such action there is, in the reasonable opinion of such separate
counsel, a material conflict on any material issue between the position of the
Company and the position of such Indemnitee, in which case the Company shall be
responsible for the reasonable fees and expenses of no more than one such
separate counsel.

 

-20-

 

 

10. RESERVED.

 

11. TERMINATION

 

This Agreement may be terminated only as follows:

 

(a) If pursuant to or within the meaning of any Bankruptcy Law, the Company
commences a voluntary case or any Person commences a proceeding against the
Company, a Custodian is appointed for the Company or for all or substantially
all of its property, or the Company makes a general assignment for the benefit
of its creditors, this Agreement shall automatically terminate without any
liability or payment to the Company (except as set forth below) without further
action or notice by any Person.

 

(b) In the event that the Closing shall not have occurred on or before November
28, 2014, due to the failure to satisfy the conditions set forth in Sections 7
and 8 above with respect to the Closing, either the Company, on the one hand, or
any Investor, on the other hand, shall have the option to terminate this
Agreement at the close of business on such date or thereafter without liability
of any party to any other party (except as set forth below); provided, however,
that the right to terminate this Agreement under this Section 11(b) shall not be
available to any party if such party is then in breach of any covenant or
agreement contained in this Agreement or any representation or warranty of such
party contained in this Agreement fails to be true and correct such that the
conditions set forth in Section 7(c) or Section 8(d), as applicable, could not
then be satisfied. Any termination of this Agreement pursuant to this Section
11(b) shall be effected by written notice from the Company to each of the
Investors, or any Investor to the Company and each of the other Investors, as
the case may be, setting forth the basis for the termination hereof.

 

The representations and warranties and covenants of the Company and the
Investors contained in Sections 3, 4, 5, and 6 hereof, the indemnification
provisions set forth in Section 9 hereof and the agreements and covenants set
forth in Sections 10, 11 and 12, shall survive the Closing and any termination
of this Agreement. No termination of this Agreement shall be deemed to release
the Company or any Investor from any liability for intentional misrepresentation
or willful breach of any of the Transaction Documents.

 

-21-

 

 

12. MISCELLANEOUS.

 

(a) Governing Law; Jurisdiction; Jury Trial. The corporate laws of the State of
Delaware shall govern all issues concerning the relative rights of the Company
and its stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the other Transaction
Documents shall be governed by the internal laws of the State of Illinois,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Illinois or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of
Illinois. Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in the State of Illinois, County of Cook,
for the adjudication of any dispute hereunder or under the other Transaction
Documents or in connection herewith or therewith, or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that a facsimile signature or signature
delivered by e-mail in a “.pdf” format data file shall be considered due
execution and shall be binding upon the signatory thereto with the same force
and effect as if the signature were an original signature.

 

(c) Headings. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.

 

(d) Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

 

(e) Entire Agreement; Amendment. This Agreement supersedes all other prior oral
or written agreements among the Investors, the Company, their affiliates and
Persons acting on their behalf with respect to the subject matter hereof, and
this Agreement, the other Transaction Documents and the instruments referenced
herein contain the entire understanding of the parties with respect to the
matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor any of the Investors makes any
representation, warranty, covenant or undertaking with respect to such matters.
The Company acknowledges and agrees that is has not relied on, in any manner
whatsoever, any representations or statements, written or oral, other than as
expressly set forth in the Transaction Documents. No provision of this Agreement
may be amended other than by a written instrument signed by both parties hereto.

 

-22-

 

 

(f) Notices. Any notices, consents or other communications required or permitted
to be given under the terms of this Agreement must be in writing and will be
deemed to have been delivered: (i) upon receipt when delivered personally; (ii)
upon receipt when sent by facsimile or email (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one Business Day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses for such communications shall be:

 

If to the Company:

  xG Technology, Inc.   240 S. Pineapple Avenue, Suite 701   Sarasota, Florida
34236   Telephone: (941) 953-9035   Facsimile:     E-mail:     Attention:    

 

With a copy to (which shall not constitute notice or service of process):

  Robinson Brog Leinwand Greene Genovese & Gluck, P.C.   875 Third Avenue   New
York, NY 10022   Telephone: (212) 603-6391   Facsimile: (212) 956-2164   E-mail:
ded@robinsonbrog.com   Attention: David E. Danovitch, Esq.

 

If to Lincoln Park:

  Lincoln Park Capital Fund, LLC   440 North Wells, Suite 410   Chicago, IL
60654   Telephone: 312-822-9300   Facsimile: 312-822-9301   E-mail:
jscheinfeld@lpcfunds.com/jcope@lpcfunds.com   Attention: Josh
Scheinfeld/Jonathan Cope

 

With a copy to (which shall not constitute notice or service of process):

  Greenberg Traurig, LLP   The MetLife Building   200 Park Avenue   New York, NY
10166   Telephone: (212) 801-9200   Facsimile: (212) 801-6400   E-mail:
marsicoa@gtlaw.com   Attention: Anthony J. Marsico, Esq.

 

If to any Investor other than Lincoln Park:

  c/o xG Technology, Inc.   240 S. Pineapple Avenue, Suite 701   Sarasota,
Florida 34236   Telephone: (941) 953-9035   Facsimile:     E-mail:    
Attention:    

 

If to the Transfer Agent:

  Continental Stock Transfer & Trust   17 Battery Place, 8th Floor   New York,
NY 10004   Telephone: (212) 845-3285   Facsimile: (212) 616-7608   Attention:
Richard Viscovich

  

-23-

 

 

or at such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party three (3) Business Days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine or email account containing the
time, date, and recipient facsimile number or email address, as applicable, and
an image of the first page of such transmission or (C) provided by a nationally
recognized overnight delivery service, shall be rebuttable evidence of personal
service, receipt by facsimile or receipt from a nationally recognized overnight
delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.

 

(g) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns. The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each of the Investors, including by merger
or consolidation. None of the Investors may assign its rights or obligations
under this Agreement.

 

(h) No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

 

(i) Publicity. The Company shall afford each of the Investors and its counsel
with the opportunity to review and comment upon the form and substance of, and
shall give reasonable consideration to all such comments from such Investor or
its counsel on, any press release, SEC filing or any other public disclosure by
or on behalf of the Company relating to such Investor, its purchases hereunder
or any aspect of the Transaction Documents or the transactions contemplated
thereby, not less than 24 hours prior to the issuance, filing or public
disclosure thereof. Each Investor must be provided with a final version of any
such press release, SEC filing or other public disclosure at least 24 hours
prior to any release, filing or use by the Company thereof. The Company agrees
and acknowledges that its failure to fully comply with this provision
constitutes a Material Adverse Effect.

 

-24-

 

 

(j) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

(k) No Financial Advisor, Placement Agent, Broker or Finder. The Company
represents and warrants to each of the Investors that it has not engaged any
financial advisor, placement agent, broker or finder in connection with the
transactions contemplated hereby. Each Investor, severally and only with respect
to itself and not jointly, represents and warrants to the Company that it has
not engaged any financial advisor, placement agent, broker or finder in
connection with the transactions contemplated hereby. The Company shall be
responsible for the payment of any fees or commissions, if any, of any financial
advisor, placement agent, broker or finder relating to or arising out of the
transactions contemplated hereby. The Company shall pay, and hold each of the
Investors harmless against, any liability, loss or expense (including, without
limitation, attorneys' fees and out of pocket expenses) arising in connection
with any such claim.

 

(l) No Strict Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

 

(m) Remedies, Other Obligations, Breaches and Injunctive Relief. The Investors’
remedies provided in this Agreement, including, without limitation, the
Investors’ remedies provided in Section 9, shall be cumulative and in addition
to all other remedies available to the Investors under this Agreement, at law or
in equity (including a decree of specific performance and/or other injunctive
relief), no remedy of any of the Investors contained herein shall be deemed a
waiver of compliance with the provisions giving rise to such remedy and nothing
herein shall limit any Investor's right to pursue actual damages for any failure
by the Company to comply with the terms of this Agreement. The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Investors and that the remedy at law for any such breach
may be inadequate. The Company therefore agrees that, in the event of any such
breach or threatened breach, any Investor shall be entitled, in addition to all
other available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being
required.

 

(n) Enforcement Costs. If: (i) this Agreement is placed by any Investor in the
hands of an attorney for enforcement or is enforced by any Investor through any
legal proceeding; (ii) an attorney is retained to represent any Investor in any
bankruptcy, reorganization, receivership or other proceedings affecting
creditors' rights and involving a claim under this Agreement; or (iii) an
attorney is retained to represent any Investor in any other proceedings
whatsoever in connection with this Agreement, then the Company shall pay to such
Investor, as incurred by such Investor, all reasonable costs and expenses
including attorneys' fees incurred in connection therewith, in addition to all
other amounts due hereunder.

 

(o) Waivers. No provision of this Agreement may be waived other than in a
written instrument signed by the party against whom enforcement of such waiver
is sought. No failure or delay in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.

 

-25-

 

 

(p) Independent Nature of Investors’ Obligations and Rights. The obligations of
each Investor under the Transaction Documents are several and not joint with the
obligations of any other Investor, and no Investor shall be responsible in any
way for the performance of the obligations of any other Investor under any
Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Investor pursuant hereto or thereto, shall
be deemed to constitute the Investors as, and the Company acknowledges that the
Investors do not so constitute, a partnership, an association, a joint venture
or any other kind of group or entity, or create a presumption that the Investors
are in any way acting in concert or as a group or entity with respect to such
obligations or the transactions contemplated by the Transaction Documents or any
matters, and the Company acknowledges that the Investors are not acting in
concert or as a group, and the Company shall not assert any such claim, with
respect to such obligations or the transactions contemplated by the Transaction
Documents. The decision of each Investor to purchase Purchase Shares pursuant to
the Transaction Documents has been made by such Investor independently of any
other Investor. Each Investor acknowledges that no other Investor has acted as
agent for such Investor in connection with such Investor making its investment
hereunder and that no other Investor will be acting as agent of such Investor in
connection with monitoring such Investor’s investment in the Purchase Shares or
enforcing its rights under the Transaction Documents. The Company and each
Investor confirms that each Investor has independently participated with the
Company in the negotiation of the transaction contemplated hereby with the
advice of its own counsel and advisors. Each Investor shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Investor to be joined as an
additional party in any proceeding for such purpose. The use of a single
agreement to effectuate the purchase and sale of the Securities contemplated
hereby was solely in the control of the Company, not the action or decision of
any Investor, and was done solely for the convenience of the Company and not
because it was required or requested to do so by any Investor. It is expressly
understood and agreed that each provision contained in this Agreement and in
each other Transaction Document is between the Company and an Investor, solely,
and not between the Company and the Investors collectively and not between and
among the Investors.

 

 

*     *     *     *     *

 

-26-

 

 

IN WITNESS WHEREOF, the Investors and the Company have caused this Agreement to
be duly executed as of the date first written above.

 

 

  THE COMPANY:         xG TECHNOLOGY, INC.         By:     Name:     Title:    
            INVESTORS:               By:
                                           Name:   Title:                    
By:     Name:       Title:                       By:     Name:     Title:  

 

-27-

 

 

SCHEDULES

 

Schedule 1 Investors

 

EXHIBITS

 

Exhibit A Form of Company Counsel Opinion Exhibit B Form of Officer’s
Certificate Exhibit C Form of Resolutions of Board of Directors of the Company
Exhibit D Form of Secretary’s Certificate Exhibit E Information About Lincoln
Park Furnished to the Company

 

 

 

 

Schedule 1 - Investors

 

Name Purchase Shares Purchase Amount State of Residence                        
                               

 

 

 

 

EXHIBIT A

 

FORM OF COMPANY COUNSEL OPINION

 

Capitalized terms used herein but not defined herein, have the meaning set forth
in the Purchase Agreement. Based on the foregoing, and subject to the
assumptions and qualifications set forth herein, we are of the opinion that:

 

1. The Company is a corporation existing and in good standing under the laws of
the State of Delaware. The Company is qualified to do business as a foreign
corporation and is in good standing in the State of Florida.

 

2. The Company has the corporate power to execute and deliver, and perform its
obligations under, the Purchase Agreement. The Company has the corporate power
to conduct its business as, to the best of our knowledge, it is now conducted,
and to own and use the properties owned and used by it.

 

3. The execution, delivery and performance by the Company of the Purchase
Agreement have been duly authorized by all necessary corporate action on the
part of the Company. The execution and delivery of the Purchase Agreement by the
Company, the performance of the obligations of the Company thereunder and the
consummation by it of the transactions contemplated therein have been duly
authorized and approved by the Company's Board of Directors and no further
consent, approval or authorization of the Company, its Board of Directors or its
stockholders is required. The Purchase Agreement has been duly executed and
delivered by the Company and is the valid and binding obligation of the Company,
enforceable against the Company in accordance with their terms except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting creditor’s rights and remedies.

 

4. The execution, delivery and performance by the Company of the Purchase
Agreement, the consummation by the Company of the transactions contemplated
thereby including the offering, sale and issuance of the Purchase Shares in
accordance with the terms and conditions of the Purchase Agreement, and
fulfillment and compliance with terms of the Purchase Agreement, does not and
shall not: (i) conflict with, constitute a breach of or default (or an event
which, with the giving of notice or lapse of time or both, constitutes or could
constitute a breach or a default), under (a) the Certificate of Incorporation or
the Bylaws of the Company, (b) any material agreement, note, lease, mortgage,
deed or other material instrument to which to our knowledge the Company is a
party or by which the Company or any of its assets are bound (“Material
Agreements”), (ii) result in any violation of any statute, law, rule or
regulation applicable to the Company, or (iii) to our knowledge, violate any
order, writ, injunction or decree applicable to the Company or any of its
subsidiaries.

 

5. The issuance of the Purchase Shares pursuant to the terms and conditions of
the Purchase Agreement has been duly authorized by all necessary corporate
action on the part of the Company. When issued and paid for in accordance with
the Purchase Agreement, the Purchase Shares shall be validly issued, fully paid
and non-assessable, to our knowledge, free of all taxes, liens, charges,
restrictions, rights of first refusal and preemptive rights.

 

6. As of the date hereof, the authorized capital stock of the Company consists
of __,___,___ shares of common stock, par value $0.00001 per share, of which to
our knowledge __________ shares are issued and outstanding.

 

 

 

 

7. Other than that which has been obtained and completed prior to the date
hereof, no authorization, approval, consent, filing or other order of any
federal or state governmental body, regulatory agency, or stock exchange or
market, or any court, or, to our knowledge, any third party is required to be
obtained by the Company to enter into and perform its obligations under the
Purchase Agreement or for the Company to issue and sell the Purchase Shares as
contemplated by the Purchase Agreement.

 

9. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act.
To our knowledge, since one year preceding the date of the Purchase Agreement,
the Company has been in compliance with the reporting requirements of the
Exchange Act applicable to it. To our knowledge, since one year preceding the
date of the Purchase Agreement, the Company has not received any written notice
from any Person stating that the Company has not been in compliance with any of
the rules and regulations (including the requirements for continued listing) of
the Principal Market.

 

10. Any required filing of the Prospectus Supplement pursuant to Rule 424(b)
under the Securities Act has been made in the manner and within the time period
required by such Rule.

 

11. The statements in the Base Prospectus under the captions “Description of
Capital Stock”, “Description of Warrants”, “Description of Debt Securities”,
“Description of Convertible Debt Securities”, “Description of Global
Securities”, “Description of Rights”, “Description of Units”, “Legal Matters”,
and the statements in the Registration Statement under Part II, Item 15, insofar
as such statements contain descriptions of laws, rules or regulations, and
insofar as they describe the terms of agreements or the Company’s Certificate of
Incorporation or Bylaws, are correct in all material respects.

 

12. The Company is not, and after giving effect to the issuance of the Purchase
Shares and the application of the proceeds as described in the Base Prospectus
and Prospectus Supplement, will not be, an “investment company,” as that term is
defined in the Investment Company Act of 1940, as amended.

 

13. Except as described in the Registration Statement, the Base Prospectus and
the Prospectus Supplement, none of the Material Agreements grants to any person
the right to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Securities Act.

  

[THE FOLLOWING MAY BE MADE IN A SEPARATE NEGATIVE ASSURANCES LETTER]

 

As counsel to the Company, we reviewed the Registration Statement, the Base
Prospectus and the Prospectus Supplement, and participated in discussions with
your representatives and those of the Company, at which the contents of the
Registration Statement, the Base Prospectus and the Prospectus Supplement were
discussed. Between the date of the Purchase Agreement and the time of the
delivery of this letter, we participated in further discussions with your
representatives and those of the Company, and we reviewed certain certificates
of officers of the Company and public officials delivered to you today.

 

The purpose of our engagement was not to establish or to confirm factual matters
set forth in the Registration Statement, the Base Prospectus and the Prospectus
Supplement, and we have not undertaken any obligation to verify independently
any of the factual matters set forth in the Registration Statement, the Base
Prospectus and the Prospectus Supplement. Moreover, many of the determinations
required to be made in the preparation of the Registration Statement, the Base
Prospectus and the Prospectus Supplement involve matters of a non-legal nature.

 

 

 

 

Subject to the foregoing, we confirm to you that, on the basis of the
information that we gained in the course of performing the services referred to
above, nothing came to our attention that caused us to believe that: (a) the
Registration Statement, as of its most recent effective date, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
(b) the Base Prospectus, as of its date, contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or (c) the Prospectus Supplement, as of its date and as of the
date and time of delivery of this letter, contained or contains any untrue
statement of a material fact or omitted or omits to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that we do not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Base Prospectus or the Prospectus
Supplement, and we do not express any belief as to the financial statements and
related notes, financial statement schedules or financial statistics or other
financial or accounting data and information contained in or omitted from the
Registration Statement, the Base Prospectus or the Prospectus Supplement.

 

We inform you that the Registration Statement became effective under the
Securities Act on August 21, 2014 and that no stop order suspending the
effectiveness of the Registration Statement has been issued under the Securities
Act.

 

We are not representing the Company in any pending litigation in which it is a
named defendant that challenges the validity or enforceability of, or seeks to
enjoin the performance of, the Purchase Agreement.

 

Further, we confirm to you that the Registration Statement, as of its effective
date, and the Prospectus Supplement, as of its date, appeared to us on their
face to respond in all material respects to the requirements of Form S-3, except
that the foregoing statement does not address any requirement relating to
financial statements, notes or schedules and financial and accounting data or
information contained in or omitted from the Registration Statement or the
Prospectus Supplement.

  

 

 

 

EXHIBIT B

 

FORM OF OFFICER’S CERTIFICATE

 

This Officer’s Certificate (“Certificate”) is being delivered pursuant to
Section 8(d) of that certain Purchase Agreement dated as of November 25, 2014,
(“Purchase Agreement”), by and between xG TECHNOLOGY, INC., a Delaware
corporation (the “Company”), LINCOLN PARK CAPITAL FUND, LLC (“Lincoln Park”) and
the other investors identified on Schedule 1 thereto (collectively with Lincoln
Park, the “Investors”). Terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Purchase Agreement.

 

The undersigned, ___________, ______________ of the Company, hereby certifies as
follows:

 

1. I am the _____________ of the Company and make the statements contained in
this Certificate;

 

2. The representations and warranties of the Company are true and correct in all
material respects (except to the extent that any of such representations and
warranties is already qualified as to materiality in Section 4 of the Purchase
Agreement, in which case, such representations and warranties are true and
correct without further qualification) as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date, in which case such representations
and warranties are true and correct as of such date);

 

3. The Company has performed, satisfied and complied in all material respects
with covenants, agreements and conditions required by the Transaction Documents
to be performed, satisfied or complied with by the Company at or prior to the
Closing Date.

 

4. The Company has not taken any steps, and does not currently expect to take
any steps, to seek protection pursuant to any Bankruptcy Law nor does the
Company or any of its Subsidiaries have any knowledge or reason to believe that
its creditors intend to initiate involuntary bankruptcy or insolvency
proceedings. The Company is financially solvent and is generally able to pay its
debts as they become due.

 

IN WITNESS WHEREOF, I have hereunder signed my name on this ___ day of
___________.

 

        Name:     Title:  

 

The undersigned as Secretary of xG TECHNOLOGY, INC., a Delaware corporation,
hereby certifies that ___________ is the duly elected, appointed, qualified and
acting ________ of _________ and that the signature appearing above is his
genuine signature.

 

        Secretary  

 

 

 

EXHIBIT C

 

FORM OF COMPANY RESOLUTIONS

FOR SIGNING PURCHASE AGREEMENT

 

UNANIMOUS WRITTEN CONSENT OF

xG TECHNOLOGY, INC.

 

In accordance with the corporate laws of the state of Delaware, the undersigned,
being all of the directors of xG TECHNOLOGY, INC., a Delaware corporation (the
“Corporation”) do hereby consent to and adopt the following resolutions as the
action of the Board of Directors for and on behalf of the Corporation and hereby
direct that this Consent be filed with the minutes of the proceedings of the
Board of Directors:

 

WHEREAS, there has been presented to the Board of Directors of the Corporation a
draft of the Purchase Agreement (the “Purchase Agreement”) by and between the
Corporation, Lincoln Park Capital Fund, LLC (“Lincoln Park”) and the other
investors identified on Schedule 1 thereto (collectively with Lincoln Park, the
“Investors”), providing for the purchase by the Investors of an aggregate of One
Million Three Hundred Nineteen Thousand Five Hundred Dollars ($1,319,500) of the
Corporation’s common stock, $0.00001 par value per share (the “Common Stock”);
and

 

WHEREAS, after careful consideration of the Purchase Agreement, the documents
incident thereto and other factors deemed relevant by the Board of Directors,
the Board of Directors has determined that it is advisable and in the best
interests of the Corporation to engage in the transactions contemplated by the
Purchase Agreement, including, but not limited to, the sale of 500,000 shares of
Common Stock (the "Purchase Shares") to Lincoln Park for a purchase price of
$1.25 per Purchase Share and [____] shares of common stock to the other
Investors for a purchase price of $[___] per Purchase Share.

 

Transaction Documents

 

NOW, THEREFORE, BE IT RESOLVED, that the transactions described in the Purchase
Agreement are hereby approved and ________________________________________ (the
“Authorized Officers”) are severally authorized to execute and deliver the
Purchase Agreement, and any other agreements or documents contemplated thereby,
with such amendments, changes, additions and deletions as the Authorized
Officers may deem to be appropriate and approve on behalf of, the Corporation,
such approval to be conclusively evidenced by the signature of an Authorized
Officer thereon; and

 

FURTHER RESOLVED, that the terms and provisions of the forms of Irrevocable
Transfer Agent Instructions (the “Instructions”) are hereby approved and the
Authorized Officers are authorized to execute and deliver the Instructions on
behalf of the Company in accordance with the Purchase Agreement, with such
amendments, changes, additions and deletions as the Authorized Officers may deem
appropriate and approve on behalf of, the Corporation, such approval to be
conclusively evidenced by the signature of an Authorized Officer thereon; and

 

 

 

 

Execution of Purchase Agreement

 

FURTHER RESOLVED, that the Corporation be and it hereby is authorized to execute
the Purchase Agreement providing for the purchase of an aggregate of One Million
Three Hundred Nineteen Thousand Five Hundred Dollars ($1,319,500) of the
Corporation’s common stock; and

 

Issuance of Common Stock

 

FURTHER RESOLVED, that the Corporation is hereby authorized to issue 500,000
Purchase Shares under the Purchase Agreement for a purchase price of $1.25 per
Purchase Share to Lincoln Park and [____] shares of common stock to the other
Investors for a purchase price of $[___] per Purchase Share in accordance with
the terms of the Purchase Agreement and that, upon issuance of the Purchase
Shares pursuant to the Purchase Agreement, the Purchase Shares will be duly
authorized, validly issued, fully paid and nonassessable with no personal
liability attaching to the ownership thereof; and

 

Approval of Actions

 

FURTHER RESOLVED, that, without limiting the foregoing, the Authorized Officers
are, and each of them hereby is, authorized and directed to proceed on behalf of
the Corporation and to take all such steps as deemed necessary or appropriate,
with the advice and assistance of counsel, to cause the Corporation to
consummate the agreements referred to herein and to perform its obligations
under such agreements; and

 

FURTHER RESOLVED, that the Authorized Officers be, and each of them hereby is,
authorized, empowered and directed on behalf of and in the name of the
Corporation, to take or cause to be taken all such further actions and to
execute and deliver or cause to be executed and delivered all such further
agreements, amendments, documents, certificates, reports, schedules,
applications, notices, letters and undertakings and to incur and pay all such
fees and expenses as in their judgment shall be necessary, proper or desirable
to carry into effect the purpose and intent of any and all of the foregoing
resolutions, and that all actions heretofore taken by any officer or director of
the Corporation in connection with the transactions contemplated by the
agreements described herein are hereby approved, ratified and confirmed in all
respects.

 

IN WITNESS WHEREOF, the Board of Directors has executed and delivered this
Consent effective as of __________, 2014.

 

 

______________________

 

______________________

 

______________________

 

 

being all of the directors of xG TECHNOLOGY, INC.

 

 

 

 

EXHIBIT D

 

FORM OF SECRETARY’S CERTIFICATE

 

This Secretary’s Certificate (“Certificate”) is being delivered pursuant to
Section 8(i) of that certain Purchase Agreement dated as of November 25, 2014
(“Purchase Agreement”), by and between xG TECHNOLOGY, INC., a Delaware
corporation (the “Company”), LINCOLN PARK CAPITAL FUND, LLC (“Lincoln Park”) and
the other investors identified on Schedule 1 thereto (collectively with Lincoln
Park, the “Investors”), pursuant to which the Company may sell to the Investors
an aggregate of One Million Three Hundred Nineteen Thousand Five Hundred Dollars
($1,319,500) of the Company's Common Stock, $0.00001 par value per share (the
"Common Stock"). Terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Purchase Agreement.

 

The undersigned, ____________, Secretary of the Company, hereby certifies as
follows:

 

1. I am the Secretary of the Company and make the statements contained in this
Secretary’s Certificate.

 

2. Attached hereto as Exhibit A and Exhibit B are true, correct and complete
copies of the Company’s bylaws (“Bylaws”) and Certificate of Incorporation
(“Charter”), in each case, as amended through the date hereof, and no action has
been taken by the Company, its directors, officers or stockholders, in
contemplation of the filing of any further amendment relating to or affecting
the Bylaws or Charter.

 

3. Attached hereto as Exhibit C are true, correct and complete copies of the
resolutions duly adopted by the Board of Directors of the Company on
_____________, at which a quorum was present and acting throughout. Such
resolutions have not been amended, modified or rescinded and remain in full
force and effect and such resolutions are the only resolutions adopted by the
Company’s Board of Directors, or any committee thereof, or the stockholders of
the Company relating to or affecting (i) the entering into and performance of
the Purchase Agreement, or the issuance, offering and sale of the Purchase
Shares and (ii) and the performance of the Company of its obligation under the
Transaction Documents as contemplated therein.

 

 

 

 

4. As of the date hereof, the authorized, issued and reserved capital stock of
the Company is as set forth on Exhibit D hereto.

 

IN WITNESS WHEREOF, I have hereunder signed my name on this ___ day of
____________.

 

        Secretary  

 

The undersigned as ___________ of xG TECHNOLOGY, INC., a Delaware corporation,
hereby certifies that ____________ is the duly elected, appointed, qualified and
acting Secretary of _________, and that the signature appearing above is his
genuine signature.

___________________________________

 

 

 

 

EXHIBIT E

 

Information About Lincoln Park Furnished To The Company By Lincoln Park

Expressly For Use In Connection With The Initial Prospectus Supplement

  

Information With Respect to Lincoln Park Capital

 

As of the date of the Purchase Agreement, Lincoln Park Capital Fund, LLC,
beneficially owned 1,132,150 shares of our common stock. Josh Scheinfeld and
Jonathan Cope, the Managing Members of Lincoln Park Capital, LLC, the manager of
Lincoln Park Capital Fund, LLC, are deemed to be beneficial owners of all of the
shares of common stock owned by Lincoln Park Capital Fund, LLC. Messrs. Cope and
Scheinfeld have shared voting and investment power over the shares being offered
under the prospectus supplement filed with the SEC in connection with the
transactions contemplated under the Purchase Agreement. Lincoln Park Capital,
LLC is not a licensed broker dealer or an affiliate of a licensed broker dealer.