NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND
THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.


 


Original
Issue Date: May 29, 2018


Original
Conversion Price (subject to adjustment herein): $0.45


$_____________





 


Second
Amended and Restated 


6%
SENIOR SECURED CONVERTIBLE DEBENTURE


DUE
SEPTEMBER 30, 2019


 


THIS
SECOND AMENDED AND RESTATED 6% SENIOR SECURED CONVERTIBLE DEBENTURE is one of a series of duly authorized and validly issued Second
Amended and Restated 6% Senior Secured Convertible Debentures of xG Technology, Inc., a Delaware corporation (the “Company”),
having its principal place of business at 240 S. Pineapple Avenue, Suite 701 Sarasota, Florida 34236, designated as its 6% Senior
Secured Convertible Debenture due September 30, 2019 (this debenture, the “Debenture” and, collectively with
the other debentures of such series, the “Debentures”). This Debenture amends and restates the original 6%
Senior Secured Convertible Debenture due May 29, 2019, issued to the Holder on May 29, 2018, as amended and restated on October
9, 2018, by the first Amended and Restated 6% Senior Secured Convertible Debenture due May 29, 2019.


 


FOR
VALUE RECEIVED, the Company promises to pay to _____________ or its registered assigns (the “Holder”), or shall
have paid pursuant to the terms hereunder, the principal sum of $_____________ on September 30, 2019 (the “Maturity Date”)
or such earlier date as this Debenture is required or permitted to be repaid as provided hereunder, and to pay interest to the
Holder on the aggregate unconverted and then outstanding principal amount of this Debenture in accordance with the provisions
hereof. This Debenture is subject to the following additional provisions:


 



    	1



    	 



    

 





Section
1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Debenture, (a)
capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the
following terms shall have the following meanings:


 


“Alternate
Consideration” shall have the meaning set forth in Section 5(e).


 


“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in
Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the
Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof
any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary
thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered,
(d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial
part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Significant
Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof
calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts, (g) the Company
or any Significant Subsidiary thereof admits in writing that it is generally unable to pay its debts as they become due, (h) the
Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or
acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.


 


“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(d).


 


“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action
to close.


 


“Buy-In”
shall have the meaning set forth in Section 4(c)(v).


 


“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof
by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act)
of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise)
of in excess of 40% of the voting securities of the Company (other than by means of conversion or exercise of the Debentures and
the Securities issued together with the Debentures), (b) the Company merges into or consolidates with any other Person, or any
Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company
immediately prior to such transaction own less than 66% of the aggregate voting power of the Company or the successor entity of
such transaction, (c) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders
of the Company immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately
after the transaction, (d) a replacement at one time or within a three year period of more than one-half of the members of the
Board of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original
Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board
of Directors was approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the
execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events
set forth in clauses (a) through (d) above.


 




    	2



    	 



    

 


“Conversion”
shall have the meaning ascribed to such term in Section 4.


 


“Conversion
Date” shall have the meaning set forth in Section 4(a).


 


“Conversion
Price” shall have the meaning set forth in Section 4(b).


 


“Conversion
Schedule” means the Conversion Schedule in the form of Schedule 1 attached hereto.


 


“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Debenture in accordance with
the terms hereof.


 


“Debenture
Register” shall have the meaning set forth in Section 2(c).


 


“Effectiveness
Period” shall have the meaning set forth in the Registration Rights Agreement.


 


“Equity
Conditions” means, during the period in question, (a) the Company shall have duly honored all conversions and redemptions
scheduled to occur or occurring by virtue of one or more Notices of Conversion of the Holder, if any, (b) the Company shall have
paid all liquidated damages and other amounts owing to the Holder in respect of this Debenture, (c)(i) there is an effective Registration
Statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the shares of Common
Stock issuable pursuant to the Transaction Documents (and the Company believes, in good faith, that such effectiveness will continue
uninterrupted for the foreseeable future) or (ii) all of the Conversion Shares issuable pursuant to the Transaction Documents
may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions or current public information requirements as
determined by the counsel to the Company as set forth in a written opinion letter to such effect, addressed and acceptable to
the Transfer Agent and the Holder, (d) the Common Stock is trading on a Trading Market and all of the shares issuable pursuant
to the Transaction Documents are listed or quoted for trading on such Trading Market (and the Company believes, in good faith,
that trading of the Common Stock on a Trading Market will continue uninterrupted for the foreseeable future), (e) there is a sufficient
number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all of the shares then issuable
pursuant to the Transaction Documents, (f) there is no existing Event of Default and no existing event which, with the passage
of time or the giving of notice, would constitute an Event of Default, (g) the issuance of the shares in question (or, in the
case of an Optional Redemption, the shares issuable upon conversion in full of the Optional Redemption Amount) to the Holder would
not violate the limitations set forth in Section 4(d) and Section 4(e) herein, (h) there has been no public announcement of a
pending or proposed Fundamental Transaction or Change of Control Transaction that has not been consummated, (i) the applicable
Holder is not in possession of any information provided by the Company, any of its Subsidiaries, or any of their officers, directors,
employees, agents or Affiliates, that constitutes, or may constitute, material non-public information and (j) the Common Stock
has closed above the Floor Price on the Trading Market with respect to the Trading Day immediately prior to any Conversion Date,
Optional Redemption Date, Mandatory Redemption Date, Monthly Redemption Date, or on the Maturity Date (each as applicable).


 




    	3



    	 



    

 


“Event
of Default” shall have the meaning set forth in Section 8(a).


 


“Floor
Price” with respect to the Trading Market that the Company’s Common Stock is listed or quoted, shall be a price
equal to twenty cents ($0.20) (subject to adjustment for forward and reverse stock splits, recapitalizations and the like).


 


“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).


 


“Interest
Payment Date” shall have the meaning set forth in Section 2(a).


 


“Issuable
Maximum” shall have the meaning set forth in Section 4(e).


 


“Late
Fees” shall have the meaning set forth in Section 2(d).


 


“Mandatory
Default Amount” means the sum of (a) the greater of (i) the outstanding principal amount of this Debenture, plus all
accrued and unpaid interest hereon, divided by the Conversion Price on the date the Mandatory Default Amount is either (A) demanded
(if demand or notice is required to create an Event of Default) or otherwise due or (B) paid in full, whichever has a lower Conversion
Price, multiplied by 85% of the VWAP on the date the Mandatory Default Amount is either (x) demanded or otherwise due or (y) paid
in full, whichever has a higher VWAP, or (ii) 130% of the outstanding principal amount of this Debenture, plus 100% of accrued
and unpaid interest hereon, and (b) all other amounts, costs, expenses and liquidated damages due in respect of this Debenture.
Notwithstanding anything to the contrary contained in this definition of “Mandatory Default Amount”, the Holder shall
not be issued shares of Common Stock below the Floor Price.


 


“Mandatory
Redemption Amount” means, with respect to such principal amount that is subject to a Mandatory Redemption pursuant to
Section 6(d) herein, the sum of (a)(i), as to any Mandatory Redemption made prior to the 181-day anniversary of the Original Issue
Date, 110% of the then outstanding principal amount of the Debenture, and (ii), as to any Mandatory Redemption made on or after
the 181-day anniversary of the Original Issue Date, 115% of the then outstanding principal amount of the Debenture, (b) 100% of
the accrued and unpaid interest hereon and (c) all liquidated damages and other amounts due in respect of the Debenture.


 




    	4



    	 



    

 


“Monthly
Redemption” means the redemption of this Debenture pursuant to Section 6(b) hereof.


 


“Monthly
Redemption Amount” means, as to a Monthly Redemption, the following formula: (one-twelfth (1/12) of the Principal Amount
due under this Debenture, plus accrued but unpaid interest, liquidated damages and any other amounts then owing to the Holder
in respect of this Debenture), multiped by 110% .


 


“Monthly
Redemption Date” means the 1st of each month, commencing immediately on December 1, 2018, and terminating
upon the full redemption of this Debenture.


 


“Monthly
Redemption Notice” shall have the meaning set forth in Section 6(b) hereof.


 


“New
York Courts” shall have the meaning set forth in Section 9(d).


 


“Notice
of Conversion” shall have the meaning set forth in Section 4(a).


 


“Optional
Redemption” shall have the meaning set forth in Section 6(a).


 


“Optional
Redemption Amount” means the sum of (a)(i) as to any Optional Redemption made prior to the 181-day anniversary of the
Original Issue Date, 110% of the then outstanding principal amount of the Debenture, and (ii), as to any Optional Redemption made
on or after the 181-day anniversary of the Original Issue Date, 115% of the then outstanding principal amount of the Debenture,
(b) accrued but unpaid interest and (c) all liquidated damages and other amounts due in respect of the Debenture.


 


“Optional
Redemption Date” shall have the meaning set forth in Section 6(a).


 


“Optional
Redemption Notice” shall have the meaning set forth in Section 6(a).


 


“Optional
Redemption Notice Date” shall have the meaning set forth in Section 6(a).


 


“Optional
Redemption Period” shall have the meaning set forth in Section 6(a).


 


“Original
Issue Date” means the date of the first issuance of the Debentures, regardless of any transfers of any Debenture and
regardless of the number of instruments which may be issued to evidence such Debentures.


 


“Permitted
Indebtedness” means (a) the indebtedness evidenced by the Debentures, (b) indebtedness existing on the Original Issue
Date, and (c) indebtedness that (i) is expressly subordinate to the Debentures pursuant to a written subordination agreement with
the Purchasers that is reasonably acceptable to each Purchaser in its sole and absolute discretion and (ii) matures at a date
later than the 91st day following the Maturity Date.


 




    	5



    	 



    

 


“Permitted
Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company)
have been established in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Company’s
business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other
similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate
materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business
of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien,
and (c) Liens incurred in connection with Permitted Indebtedness.


 


“Purchase
Agreement” means the Securities Purchase Agreement, dated as of May 29, 2018 among the Company and the original Holders,
as amended, modified or supplemented from time to time in accordance with its terms.


 


“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of the date of the Purchase Agreement, among the
Company and the original Holders, in the form of Exhibit B attached to the Purchase Agreement.


 


“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and
covering the resale of the Underlying Shares by each Holder as provided for in the Registration Rights Agreement.


 


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


 


“Share
Delivery Date” shall have the meaning set forth in Section 4(c)(ii).


 


“Subsequent
Financing” means any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents
for cash consideration, Indebtedness or a combination of units thereof.


 


“Successor
Entity” shall have the meaning set forth in Section 5(e).


 


“Trading
Day” means a day on which the principal Trading Market is open for trading.


 




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“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market
or the New York Stock Exchange (or any successors to any of the foregoing).


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX
as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common
Stock are then reported in the “Pink Sheets” published by OTC Markets, Inc. (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other
cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the
Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.


 


 Section
2. Interest.


 


a) Payment
of Interest in Cash. The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding
principal amount of this Debenture at the rate of ten percent (10%) per annum, which twelve (12) months’ interest
amount shall be guaranteed, payable quarterly on January 1, April 1, July 1 and October 1, beginning on the first such date
after the Original Issue Date, on each Conversion Date (as to that principal amount then being converted), on each Optional
Redemption Date (as to that principal amount then being redeemed), on each Mandatory Redemption Date (as to that principal
amount then being redeemed), on each Monthly Redemption Date (as to that principal amount then being redeemed) and on the
Maturity Date (each such date, an “Interest Payment Date”) (if any Interest Payment Date is not a Business
Day, then the applicable payment shall be due on the next succeeding Business Day), in cash.


 


b)
[RESERVED]


 


c) Interest
Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods,
and shall accrue daily commencing on the Original Issue Date until payment in full of the outstanding principal, together
with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made.
Interest shall cease to accrue with respect to any principal amount converted, provided that, the Company actually delivers
the Conversion Shares within the time period required by Section 4(c)(ii) herein. Interest hereunder will be paid to the
Person in whose name this Debenture is registered on the records of the Company regarding registration and transfers of this
Debenture (the “Debenture Register”).


 




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d) Late
Fee. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to
the lesser of fifteen percent (15%) per annum or the maximum rate permitted by applicable law (the “Late
Fees”) which shall accrue daily from the date such interest is due hereunder through and including the date of
actual payment in full.


 


e) Prepayment.
Except as otherwise set forth in Section 6 herein and elsewhere in this Debenture, the Company may not prepay any portion of
the principal amount of this Debenture without the prior written consent of the Holder.


 


Section
3.Registration of Transfers and Exchanges.


 


a) Different
Denominations. This Debenture is exchangeable for an equal aggregate principal amount of Debentures of different
authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such
registration of transfer or exchange.


 


b) Investment
Representations. This Debenture has been issued subject to certain investment representations of the original Holder set
forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and
applicable federal and state securities laws and regulations.


 


c) Reliance
on Debenture Register. Prior to due presentment for transfer to the Company of this Debenture, the Company and any agent
of the Company may treat the Person in whose name this Debenture is duly registered on the Debenture Register as the owner
hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Debenture is
overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.


 


Section
4.Conversion.


 


a) Voluntary
Conversion. At any time after the Original Issue Date until this Debenture is no longer outstanding, this Debenture
shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time
to time (subject to the conversion limitations set forth in Section 4(d) and Section 4(e) hereof). The Holder shall effect
conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A
(each, a “Notice of Conversion”), specifying therein the principal amount of this Debenture to be
converted and the date on which such conversion shall be effected (such date, the “Conversion Date”). If
no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of
Conversion is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions
hereunder, the Holder shall not be required to physically surrender this Debenture to the Company unless the entire principal
amount of this Debenture, plus all accrued and unpaid interest thereon, has been so converted in which case the Holder shall
surrender this Debenture as promptly as is reasonably practicable after such conversion without delaying the Company’s
obligation to deliver the shares on the Share Delivery Date. Conversions hereunder shall have the effect of lowering the
outstanding principal amount of this Debenture in an amount equal to the applicable conversion. The Holder and the Company
shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver
an objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. In the event
of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest
error. The Holder, and any assignee by acceptance of this Debenture, acknowledge and agree that, by reason of
the provisions of this paragraph, following conversion of a portion of this Debenture, the unpaid and unconverted principal
amount of this Debenture may be less than the amount stated on the face hereof.


 




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b) Conversion
Price. The conversion price in effect on any Conversion Date shall be equal to forty-five cents ($0.45), subject
to adjustment herein (the “Conversion Price”). However, (i) from and after the Maturity Date, the
Conversion Price shall be equal to the lesser of (x) the Conversion Price, and (y) 85% of the VWAP for the Trading Day
immediately prior to the applicable Conversion Date; and (ii) upon an Event of Default, the Conversion Price shall be equal
to the lesser of (x) the Conversion Price, and (y) 85% of the lowest VWAP on any Trading Day during the fifteen (15) Trading
Days immediately prior to the applicable Conversion Date, unless such Event of Default is cured. Nothing herein shall limit a
Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 8 hereof and the Holder
shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from
seeking to enforce damages pursuant to any other Section hereof or under applicable law. Notwithstanding anything to the
contrary contained in this Section 4(b), the Holder shall not be issued shares of Common Stock below the Floor
Price.


 


 c) Mechanics of Conversion.




 


i. Conversion
Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion
hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to
be converted by (y) the Conversion Price.


 


ii. Delivery
of Conversion Shares Upon Conversion. Not later than the earlier of (i) two (2) Trading Days and (ii) the number of
Trading Days comprising the Standard Settlement Period (as defined below) after each Conversion Date (the “Share
Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) the Conversion Shares
which, on or after the earlier of (i) the six month anniversary of the Original Issue Date or (ii) the Effective Date, shall
be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase
Agreement) representing the number of Conversion Shares being acquired upon the conversion of this Debenture and (B) a bank
check in the amount of accrued and unpaid interest. On or after the earlier of (i) the six month anniversary of the Original
Issue Date or (ii) the Effective Date, the Company shall deliver any Conversion Shares required to be delivered by the
Company under this Section 4(c) electronically through the Depository Trust Company or another established clearing
corporation performing similar functions. As used herein, “Standard Settlement Period” means the standard
settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the
Common Stock as in effect on the date of delivery of the Notice of Conversion.


 




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iii. Failure
to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to
or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice
to the Company at any time on or before its receipt of such Conversion Shares, to rescind such Conversion, in which event the
Company shall promptly return to the Holder any original Debenture delivered to the Company and the Holder shall promptly
return to the Company the Conversion Shares issued to such Holder pursuant to the rescinded Conversion Notice.


 


iv. Obligation
Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares upon
conversion of this Debenture in accordance with the terms hereof are absolute and unconditional, irrespective of any action
or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of
any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or
termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which
might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however,
that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder.
In the event the Holder of this Debenture shall elect to convert any or all of the outstanding principal amount hereof, the
Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has
been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to
Holder, restraining and or enjoining conversion of all or part of this Debenture shall have been sought and obtained, and the
Company posts a surety bond for the benefit of the Holder in the amount of 100% of the outstanding principal amount of this
Debenture, which is subject to the injunction, which bond shall remain in effect until the completion of
arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to the Holder to the extent it
obtains judgment. In the absence of such injunction, the Company shall issue Conversion Shares or, if applicable, cash, upon
a properly noticed conversion. If the Company fails for any reason to deliver to the Holder such Conversion Shares pursuant
to Section 4(c)(ii) by the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not
as a penalty, for each $1,000 of principal amount being converted, $5 per Trading Day (increasing to $10 per Trading Day on
the fifth (5th) Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Share
Delivery Date until such Conversion Shares are delivered or Holder rescinds such conversion. Nothing herein shall limit a
Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 8 hereof for the
Company’s failure to deliver Conversion Shares within the period specified herein and the Holder shall have the right
to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce
damages pursuant to any other Section hereof or under applicable law.


 




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v. Compensation
for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights available to
the Holder, if the Company fails for any reason to deliver to the Holder such Conversion Shares by the Share Delivery Date
pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase
(in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive
upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in
cash to the Holder (in addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x)
the Holder’s total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y)
the product of (1) the aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion
at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed
(including any brokerage commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Debenture in
a principal amount equal to the principal amount of the attempted conversion (in which case such conversion shall be deemed
rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company had
timely complied with its delivery requirements under Section 4(c)(ii). For example, if the Holder purchases Common Stock
having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Debenture with
respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such
purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Company shall be
required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the
Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall
limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely
deliver Conversion Shares upon conversion of this Debenture as required pursuant to the terms hereof.


 




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vi. Reservation
of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of
its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Debenture, each
as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the
Holder (and the other holders of the Debentures), not less than 200% of such aggregate number of shares of the Common Stock
as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the
adjustments and restrictions of Section 5) upon the conversion of the then outstanding principal amount of this Debenture.
The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized,
validly issued, fully paid and nonassessable and, if the Registration Statement is then effective under the Securities Act,
shall be registered for public resale in accordance with such Registration Statement (subject to such Holder’s
compliance with its obligations under the Registration Rights Agreement).


 


vii. Fractional
Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this
Debenture. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the
Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such
fraction multiplied by the Conversion Price or round up to the next whole share.


 


viii. Transfer
Taxes and Expenses. The issuance of Conversion Shares on conversion of this Debenture shall be made without charge to
the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such
Conversion Shares, provided that the Company shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the
Holder of this Debenture so converted and the Company shall not be required to issue or deliver such Conversion Shares unless
or until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid. The Company shall pay all Transfer Agent
fees required for same-day processing of any Notice of Conversion and all fees to the Depository Trust Company (or another
established clearing corporation performing similar functions) required for same-day electronic delivery of the Conversion
Shares.


 




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d) Holder’s
Conversion Limitations. The Company shall not effect any conversion of this Debenture, and a Holder shall not have the
right to convert any portion of this Debenture, to the extent that after giving effect to the conversion set forth on the
applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a
group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution
Parties”)) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes
of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and
Attribution Parties shall include the number of shares of Common Stock issuable upon conversion of this Debenture with
respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable
upon (i) conversion of the remaining, unconverted principal amount of this Debenture beneficially owned by the Holder or any
of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted portion of any
other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained
herein (including, without limitation, any other Debentures or the Warrants) beneficially owned by the Holder or any of its
Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 4(d),
beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. To the extent that the limitation contained in this Section 4(d) applies, the determination of
whether this Debenture is convertible (in relation to other securities owned by the Holder together with any Affiliates and
Attribution Parties) and of which principal amount of this Debenture is convertible shall be in the sole discretion of the
Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this
Debenture may be converted (in relation to other securities owned by the Holder together with any Affiliates or
Attribution Parties) and which principal amount of this Debenture is convertible, in each case subject to the Beneficial
Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to the Company each
time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this
paragraph and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a
determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 4(d), in determining the
number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as
stated in the most recent of the following: (i) the Company’s most recent periodic or annual report filed with the
Commission, as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written notice
by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the
written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the
number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be
determined after giving effect to the conversion or exercise of securities of the Company, including this Debenture, by the
Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The
“Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Debenture held by
the Holder. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions
of this Section 4(d), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of
the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of
this Debenture held by the Holder and the Beneficial Ownership Limitation provisions of this Section 4(d) shall continue to
apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such
notice is delivered to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d) to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained
herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations
contained in this paragraph shall apply to a successor holder of this Debenture.


 




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e) Issuance
Limitations. Notwithstanding anything herein to the contrary, if the Company has not obtained Shareholder Approval, then
the Company may not issue, upon conversion of this Debenture, a number of shares of Common Stock which, when aggregated with
any shares of Common Stock issued on or after the Original Issue Date and prior to such Conversion Date (i) in connection
with the conversion of any Debentures issued pursuant to the Purchase Agreement and (ii) in connection with the exercise of
any Warrants issued pursuant to the Purchase Agreement, would exceed 3,228,174 shares of Common Stock (subject to adjustment
for forward and reverse stock splits, recapitalizations and the like) (such number of shares, the “Issuable
Maximum”). Each Holder shall be entitled to a portion of the Issuable Maximum equal to the quotient obtained by
dividing (x) the original principal amount of the Holder’s Debenture by (y) the aggregate original principal amount of
all Debentures issued on the Original Issue Date to all Holders. In addition, each Holder may allocate its pro-rata portion
of the Issuable Maximum among Debentures and Warrants held by it in its sole discretion. Such portion shall be adjusted
upward ratably in the event a Holder no longer holds any Debentures or Warrants and the amount of shares issued to the Holder
pursuant to the Holder’s Debentures and Warrants was less than the Holder’s pro-rata share of the Issuable
Maximum.


 


Section
5. Certain Adjustments.


 


a) Stock
Dividends and Stock Splits. If the Company, at any time while this Debenture is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common
Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon
conversion of, or payment of interest on, the Debentures), (ii) subdivides outstanding shares of Common Stock into a larger
number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a
smaller number of shares or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of
capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the
number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event,
and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any
adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective
date in the case of a subdivision, combination or re-classification.


 




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b)
[RESERVED]


 


c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to
the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be
entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could
have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this
Debenture (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership
Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for
the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to
participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the
Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of
Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in
abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the
Beneficial Ownership Limitation).


 


d) Pro
Rata Distributions. During such time as this Debenture is outstanding, if the Company shall declare or make any dividend
or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return
of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar
transaction) (a “Distribution”), at any time after the issuance of this Debenture, then, in each such
case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have
participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this
Debenture (without regard to any limitations on conversion hereof, including without limitation, the Beneficial Ownership
Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution
(provided, however, to the extent that the Holder’s right to participate in any such Distribution would
result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in
such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such
Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder
until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership
Limitation).


 




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e) Fundamental
Transaction. If, at any time while this Debenture is outstanding, (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or
substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer,
tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by
the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or
property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share
purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off
or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of
Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or
associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business
combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion of this Debenture,
the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion
immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 4(d) and
Section 4(e) on the conversion of this Debenture), the number of shares of Common Stock of the successor or
acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the
“Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the
number of shares of Common Stock for which this Debenture is convertible immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 4(d) and Section 4(e) on the conversion of this Debenture). For purposes of any
such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such
Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of
Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Debenture
following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which
the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of
the Company under this Debenture and the other Transaction Documents (as defined in the Purchase Agreement) in accordance
with the provisions of this Section 5(e) pursuant to written agreements in form and substance reasonably satisfactory to the
Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option
of the holder of this Debenture, deliver to the Holder in exchange for this Debenture a security of the Successor Entity
evidenced by a written instrument substantially similar in form and substance to this Debenture which is convertible for a
corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of
Common Stock acquirable and receivable upon conversion of this Debenture (without regard to any limitations on the conversion
of this Debenture) prior to such Fundamental Transaction, and with a conversion price which applies the conversion price
hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant
to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and
such conversion price being for the purpose of protecting the economic value of this Debenture immediately prior to the
consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon
the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that
from and after the date of such Fundamental Transaction, the provisions of this Debenture and the other Transaction Documents
referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this Debenture and the other Transaction
Documents with the same effect as if such Successor Entity had been named as the Company herein.


 




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f) Calculations.
All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may
be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given
date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and
outstanding.


 


g) Notice
to the Holder.


 


i. Adjustment
to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company
shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a
brief statement of the facts requiring such adjustment.


 




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ii. Notice
to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)
on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for
or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company
shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the
Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share
exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the
voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the
Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this Debenture, and
shall cause to be delivered to the Holder at its last address as it shall appear upon the Debenture Register, at least twenty
(20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record
is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend,
distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it
is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share
exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not
affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided
hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the
Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall
remain entitled to convert this Debenture during the 20-day period commencing on the date of such notice through the
effective date of the event triggering such notice except as may otherwise be expressly set forth herein.


 


Section
6. Optional Redemption; Monthly Redemption; Mandatory Redemption.


 


a)
Optional Redemption at Election of Company. Subject to the provisions of this Section 6(a), at any time after the Effective
Date, the Company may deliver a notice to the Holder (an “Optional Redemption Notice” and the date such
notice is deemed delivered hereunder, the “Optional Redemption Notice Date”) of its irrevocable election to
redeem some or all of the then outstanding principal amount of this Debenture for cash in an amount equal to the Optional
Redemption Amount on the 20th Trading Day following the Optional Redemption Notice Date (such date, the
“Optional Redemption Date”, such twenty (20)-Trading Day period, the “Optional Redemption Period” and
such redemption, the “Optional Redemption”). The Optional Redemption Amount is payable in full on the
Optional Redemption Date. The Company may only effect an Optional Redemption if each of the Equity Conditions shall have been
met (unless waived in writing by the Holder) on each Trading Day during the period commencing on the Optional Redemption
Notice Date through to the Optional Redemption Date and through and including the date payment of the Optional Redemption
Amount is actually made in full. If any of the Equity Conditions shall cease to be satisfied at any time during the Optional
Redemption Period, then the Holder may elect to nullify the Optional Redemption Notice by notice to the Company within three
(3) Trading Days after the first day on which any such Equity Condition has not been met (provided that if, by a provision of
the Transaction Documents, the Company is obligated to notify the Holder of the non-existence of an Equity Condition, such
notice period shall be extended to the third Trading Day after proper notice from the Company) in which case the
Optional Redemption Notice shall be null and void, ab initio. The Company covenants and agrees that it will honor all Notices
of Conversion tendered from the time of delivery of the Optional Redemption Notice through the date all amounts owing thereon
are due and paid in full. The Company’s determination to pay an Optional Redemption in cash shall be applied ratably to
all of the holders of the then outstanding Debentures based on their (or their predecessor’s) initial purchases of
Debentures pursuant to the Purchase Agreement.


 




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b) Monthly
Redemption. On each Monthly Redemption Date, the Company shall redeem the Monthly Redemption Amount (the
“Monthly Redemption”). The Monthly Redemption Amount payable on each Monthly Redemption Date shall be paid
in shares of Common Stock, subject to the Equity Conditions, at rate equal to the lower of (i) the Conversion Price (as
defined in Section 4b), and (ii) ninety percent (90%) of the VWAP on the Trading Day immediately prior to such Monthly
Redemption Date. The Company covenants and agrees that it will honor all Notices of Conversion tendered up until such amounts
are paid in full. The Holder, collectively with all other holders of the other Debentures issued pursuant to the Purchase
Agreement, may sell their Conversion Shares from each Monthly Redemption at a thirty-five percent (35%) leak-out only if
being sold below the Conversion Price. If the shares are being sold above the Conversion Price, the Holder shall have no such
selling limitations. Notwithstanding anything to the contrary contained in this Section 6(b), upon an Event of Default, the
selling restrictions contained in this Section 6(b) shall be removed until such Event of Default is cured. In the event that
the sale of the Conversion Shares issued in connection with a particular Monthly Redemption does not net to the Holder
proceeds at least equal to the related Monthly Redemption Amount, immediately upon request of the Holder, then the Company
shall, at its option, pay the difference to the Holder in cash (the “True-Up Cash”) or issue to the Holder
a true-up number of shares of Common Stock (the “True-Up Shares”) equal to the dollar value of the
difference between the stated Redemption Amount less the net proceeds realized by the Holder, divided by ninety percent (90%)
of the VWAP on the day notice is given to the Company. If the Holder, using its reasonable efforts, is unable to sell all of
the Conversion Shares related to a particular Monthly Redemption, then it may defer any and all future Monthly Redemption
until such time that it has sold all prior Conversion Shares, including any True-Up Shares. Notwithstanding anything to the
contrary contained in this Section 6(b), the Holder shall not be issued shares of Common Stock below the Floor
Price.


 




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c) Optional
Redemption Procedure. The payment of cash pursuant to an Optional Redemption or a Monthly Redemption shall be payable on
the Optional Redemption Date or the Monthly Redemption Date, as applicable. If any portion of the payment pursuant to an
Optional Redemption or Monthly Redemption shall not be paid by the Company by the applicable due date, interest shall accrue
thereon at an interest rate equal to the lesser of 15% per annum or the maximum rate permitted by applicable law until such
amount is paid in full. Notwithstanding anything herein contained to the contrary, if any portion of the Optional Redemption
Amount or Monthly Redemption Amount, as applicable, remains unpaid after such date, the Holder may elect, by written notice
to the Company given at any time thereafter, to invalidate such Optional Redemption or Monthly Redemption, as applicable, ab
initio, and, with respect to the Company’s failure to honor the Optional Redemption, the Company shall have no
further right to exercise such Optional Redemption (for the avoidance of doubt, (i) in the event that the Holder elects to
invalidate such Optional Redemption, no further interest payments described in this Section 6(a) shall be due by the Company,
and (ii) the Company shall maintain the right to exercise subsequent Optional Redemptions). Notwithstanding anything to the
contrary in this Section 6, the Company’s determination to redeem in cash shall be applied ratably among the Holders of
Debentures. The Holder may elect to convert the outstanding principal amount of the Debenture pursuant to Section 4 prior to
actual payment in cash for any redemption under this Section 6 by the delivery of a Notice of Conversion to the
Company.


 


d) Mandatory
Redemption at Election of Holder. Subject to the provisions of this Section 6, if, at any time while this Debenture is
outstanding, the Company shall carry out a Subsequent Financing, the Holder shall have the right to require the Company to
first use up to 100% of the gross proceeds of such Subsequent Financing (such dollar amount, the “Mandatory
Redemption Proceeds”) to redeem all or a portion of this Debenture for an amount in cash equal to the Mandatory
Redemption Amount (a “Mandatory Redemption”). The Company shall deliver notice to the Holder of the
Subsequent Financing at least five (5) Trading Days prior to the closing of the Subsequent Financing
(“Pre-Notice”), which Pre-Notice shall ask such Purchaser if it wants to review the details of such
financing (such additional notice, a “Mandatory Redemption Notice” and the date such Mandatory Redemption
Notice is deemed delivered hereunder, the “Mandatory Redemption Notice Date”). If the Holder exercises its
right herein to require a Mandatory Redemption by delivering written notice to the Company within five (5) Trading Days of
the Mandatory Redemption Notice Date (“Mandatory Redemption Exercise Notice”), the Company shall effect
the Mandatory Redemption and pay the Mandatory Redemption Amount to the Holder on or prior to the second (2nd)
Trading Day following the consummation of the Subsequent Financing (“Mandatory Redemption Date”). The
Company’s payment of the Mandatory Redemption Proceeds shall be applied ratably to all of the holders of the then
outstanding Debentures which exercise the right to require a Mandatory Redemption on the basis of their (or their
predecessor’s) initial purchases of Debentures pursuant to the Purchase Agreement. Notwithstanding the foregoing, this
Section 6 shall not apply with respect to an Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt
Issuance.


 




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e) Mandatory
Redemption Procedure. The payment of cash pursuant to a Mandatory Redemption shall be payable in full on the Mandatory
Redemption Date. If any portion of the payment pursuant to an Mandatory Redemption shall not be paid by the Company by the
applicable due date, interest shall accrue thereon at an interest rate equal to the lesser of 15% per annum or the maximum
rate permitted by applicable law until such amount is paid in full. Notwithstanding anything to the contrary in this Section
6, in addition to, and without limiting any other rights hereunder and under the other Transaction Documents, the Holder may
elect, by written notice to the Company at any time following the Mandatory Redemption Notice Date through the date of actual
payment in full in cash of the Mandatory Redemption Amount, to rescind such Mandatory Redemption. Notwithstanding anything to
the contrary in this Section 6, the Mandatory Redemption Proceeds shall be applied ratably among the Holders of Debentures.
The Company covenants and agrees that it will honor all Notices of Conversion tendered from the date of delivery of the
Mandatory Redemption Exercise Notice through the date all amounts owing thereon are due and paid in full, provided that any
such Notice of Conversion shall first apply to any portion of the Debenture that is not subject to the Mandatory Redemption
unless the Notice of Conversion expressly states that it shall apply to a portion of the Debenture that is subject to the
Mandatory Redemption.


 


Section
7. Negative Covenants. As long as any portion of this Debenture remains outstanding, unless the holders of at
least 51% in principal amount of the then outstanding Debentures shall have otherwise given prior written consent (which such
consent shall include _____________ (“_____________”) so long as _____________ holds any Debentures), the
Company shall not, and shall not permit any of the Subsidiaries to, directly or indirectly:


 


a)
other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for
borrowed money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets
now owned or hereafter acquired or any interest therein or any income or profits therefrom;


 


b)
repay, repurchase or offer to repay, repurchase or otherwise acquire any Indebtedness other than this Debenture;


 


c)
other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to
any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits
therefrom;


 


d)
amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that
materially and adversely affects any rights of the Holder;


 


e)
repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its
Common Stock or Common Stock Equivalents other than as to (i) the Conversion Shares or Warrant Shares as permitted or
required under the Transaction Documents and (ii) repurchases of Common Stock or Common Stock Equivalents of departing
officers and directors of the Company, provided that such repurchases shall not exceed an aggregate of $100,000 for all
officers and directors during the term of this Debenture;


 


f)
repay, repurchase or offer to repay, repurchase or otherwise acquire any Indebtedness, other than the Debentures if on a
pro-rata basis, other than regularly scheduled principal and interest payments as such terms are in effect as of the Original
Issue Date, provided that such payments shall not be permitted if, at such time, or after giving effect to such payment, any
Event of Default exist or occur;


 




    	21



    	 



    

 


g)
pay cash dividends or distributions on any equity securities of the Company;


 


h)
pay cash as part of any acquisition;


 


i)
enter into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing
with the Commission, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of
the disinterested directors of the Company (even if less than a quorum otherwise required for board approval); or


 


j)
enter into any agreement with respect to any of the foregoing.


 


Section
8. Events of Default.


 


a)
“Event of Default” means, wherever used herein, any of the following events (whatever the reason for such
event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment,
decree or order of any court, or any order, rule or regulation of any administrative or governmental body):


 


i.
any default in the payment of (A) the principal amount of any Debenture, (B) True-Up Cash, or (C) interest, liquidated
damages and other amounts owing to a Holder on any Debenture, as and when the same shall become due and payable (whether on a
Conversion Date, Optional Redemption Date, Mandatory Redemption Date, Monthly Redemption Date, or the Maturity Date or by
acceleration or otherwise) which default, solely in the case of an interest payment or other default under clauses (B) and
(C) above, is not cured within three (3) Trading Days;


 


ii.
the Company shall fail to observe or perform any other covenant or agreement contained in the Debentures (other than a breach
by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed
in clause (xi) below) or in any Transaction Document, which failure is not cured, if possible to cure, within the earlier to
occur of (A) five (5) Trading Days after notice of such failure sent by the Holder or by any other Holder to the Company and
(B) ten (10) Trading Days after the Company has become or should have become aware of such failure;


 


iii.
a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or
instrument) shall occur under (A) any of the Transaction Documents or (B) any other (1) material agreement, (2) lease, (3)
document or (4) instrument to which the Company or any Subsidiary is obligated (and not covered by clause (vi)
below);


 


iv.
any representation or warranty made in this Debenture, any other Transaction Documents, any written statement pursuant hereto
or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall
be untrue or incorrect in any material respect as of the date when made or deemed made;


 




    	22



    	 



    

 


v.
the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a
Bankruptcy Event;


 


vi.
the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility,
indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be
secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement
that (a) involves an obligation greater than $250,000, whether such indebtedness now exists or shall hereafter be created,
and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise
become due and payable;


 


vii.
the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to
resume listing or quotation for trading thereon within five (5) Trading Days;


 


viii.
the Company shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or
dispose of all or in excess of 40% of its assets in one transaction or a series of related transactions (whether or not such
sale would constitute a Change of Control Transaction);


 


ix.
the Initial Registration Statement (as defined in the Registration Rights Agreement) shall not have been declared effective
by the Commission on or prior to the 90th calendar day after the last Closing Date or the Company does not meet
the current public information requirements under Rule 144 in respect of the Registrable Securities (as defined under the
Registration Rights Agreement);


 


x.
if, during the Effectiveness Period (as defined in the Registration Rights Agreement), either (a) the effectiveness of the
Registration Statement lapses for any reason or (b) the Holder shall not be permitted to resell Registrable Securities (as
defined in the Registration Rights Agreement) under the Registration Statement for a period of more than twenty (20)
consecutive Trading Days or thirty (30) non-consecutive Trading Days during any twelve (12)-month period; provided, however,
that if the Company is negotiating a merger, consolidation, acquisition or sale of all or substantially all of its assets or
a similar transaction and, in the written opinion of counsel to the Company, the Registration Statement would be required to
be amended to include information concerning such pending transaction(s) or the parties thereto which information is not
available or may not be publicly disclosed at the time, the Company shall be permitted an additional 10 consecutive Trading
Days during any 12 month period pursuant to this Section 8(a)(x);


 




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xi.
the Company shall fail for any reason to deliver Conversion Shares or True-Up Shares to a Holder prior to the fifth
(5th) Trading Day after a Conversion Date pursuant to Section 4(c) or the Company shall provide at any time notice
to the Holder, including by way of public announcement, of the Company’s intention to not honor requests for
conversions of any Debentures in accordance with the terms hereof;


 


xii.
any Person shall breach any material agreement delivered to the initial Holders pursuant to Section 2.2 of the Purchase
Agreement;


 


xiii.
the electronic transfer by the Company of shares of Common Stock through the Depository Trust Company or another established
clearing corporation is no longer available or is subject to a “chill”;


 


xiv.
any monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of
their respective property or other assets for more than $250,000, and such judgment, writ or similar final process shall
remain unvacated, unbonded or unstayed for a period of 45 calendar days;


 


xv.
a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company that the Equity
Conditions are satisfied or that there has been no Equity Conditions Failure or as to whether any Event of Default has
occurred; or


 


xvi.
if, the Holder defers three (3) Monthly Redemptions due to the circumstances contained in Section 6(b).


 


b) Remedies
Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Debenture, plus accrued
but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall
become, at the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. Commencing five
(5) days after the occurrence of any Event of Default that results in the eventual acceleration of this Debenture, the
interest rate on this Debenture shall accrue at an interest rate equal to the lesser of 18% per annum or the maximum rate
permitted under applicable law. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender
this Debenture to or as directed by the Company. In connection with such acceleration described herein, the Holder need not
provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may
immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other
remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to
payment hereunder and the Holder shall have all rights as a holder of the Debenture until such time, if any, as the Holder
receives full payment pursuant to this Section 8(b). No such rescission or annulment shall affect any subsequent Event of
Default or impair any right consequent thereon.


 




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Section
9. Miscellaneous.


 


a) Notices.
Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without
limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, by email attachment, or
sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, or such
other facsimile number, email address, or address as the Company may specify for such purposes by notice to the Holder
delivered in accordance with this Section 9(a). Any and all notices or other communications or deliveries to be provided by
the Company hereunder shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a
nationally recognized overnight courier service addressed to each Holder at the facsimile number, email address or address of
the Holder appearing on the books of the Company, or if no such facsimile number or email attachment or address appears on
the books of the Company, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any
notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the
email address set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on any date, (ii) the
next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile
number or email attachment to the email address set forth on the signature pages attached hereto on a day that is not a
Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date
of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom
such notice is required to be given.


 


b) Absolute
Obligation. Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as
applicable, on this Debenture at the time, place, and rate, and in the coin or currency, herein prescribed. This Debenture is
a direct debt obligation of the Company. This Debenture ranks pari passu with all other Debentures now or hereafter
issued under the terms set forth herein.


 


c) Lost
or Mutilated Debenture. If this Debenture shall be mutilated, lost, stolen or destroyed, the Company shall execute and
deliver, in exchange and substitution for and upon cancellation of a mutilated Debenture, or in lieu of or in substitution
for a lost, stolen or destroyed Debenture, a new Debenture for the principal amount of this Debenture so mutilated, lost,
stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Debenture, and of the
ownership hereof, reasonably satisfactory to the Company.


 




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d) Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Debenture shall be
governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation,
enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party
hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state
and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each
party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), 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 such New York Courts, or
such New York Courts are improper or inconvenient venue for such proceeding. 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 via
registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for
notices to it under this Debenture 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 other manner
permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law,
any and all right to trial by jury in any legal proceeding arising out of or relating to this Debenture or the transactions
contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Debenture, then
the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and
other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.


 


e) Waiver.
Any waiver by the Company or the Holder of a breach of any provision of this Debenture shall not operate as or be
construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Debenture. The
failure of the Company or the Holder to insist upon strict adherence to any term of this Debenture on one or more occasions
shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term
or any other term of this Debenture on any other occasion. Any waiver by the Company or the Holder must be in
writing.


 




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f) Severability.
If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in
effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all
other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder
violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to
equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully
do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion
of the principal of or interest on this Debenture as contemplated herein, wherever enacted, now or at any time hereafter in
force, or which may affect the covenants or the performance of this Debenture, and the Company (to the extent it may lawfully
do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the
execution of every such as though no such law has been enacted.


 


g) Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Debenture shall be
cumulative and in addition to all other remedies available under this Debenture and any of the other Transaction Documents at
law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall
limit the Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the
terms of this Debenture. The Company covenants to the Holder that there shall be no characterization concerning this
instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments,
conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except
as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company
acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder 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, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining
any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other
security being required. The Company shall provide all information and documentation to the Holder that is requested by the
Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this
Debenture.


 


h) Next
Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day.


 


i) Headings.
The headings contained herein are for convenience only, do not constitute a part of this Debenture and shall not be deemed
to limit or affect any of the provisions hereof.


 


j) Secured
Obligation. The obligations of the Company under this Debenture are secured by all assets of the Company and each
Subsidiary pursuant to the Security Agreement, dated as of May 29, 2018 between the Company, the Subsidiaries of the Company
and the Secured Parties (as defined therein).


 




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k) Minimum
Issuance Price. In no event shall the Company issue to the Holder, or be required to issue by the Holder, shares of
Common Stock issuable under this Debenture at a price per share less than the Floor Price (subject to adjustment for forward
and reverse stock splits, recapitalizations and the like).


 


l) Conversion
Cap. Notwithstanding anything to the contrary contained herein, unless Shareholder Approval has been obtained, the
Company shall not effect the conversion of any portion of this Debenture, and the Holder shall not have the right to convert
any portion of this Debenture pursuant to the terms and conditions of this Debenture and any such conversion shall be null
and void and treated as if never made, to the extent that after giving effect to such conversion, the shares of Common Stock
underlying this Debenture and the series of Debentures, collectively, would exceed 19.99% of the shares of Common Stock
outstanding immediately prior to the Original Issue Date.


 


Section
10. Disclosure. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Debenture, unless
the Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information
relating to the Company or its Subsidiaries, the Company shall within two (2) Business Days after such receipt or delivery publicly
disclose such material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes
that a notice contains material, non-public information relating to the Company or its Subsidiaries, the Company so shall indicate
to the Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed
to presume that all matters relating to such notice do not constitute material, nonpublic information relating to the Company
or its Subsidiaries.


 


*********************


 


(Signature
Pages Follow)


 




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IN
WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by a duly authorized officer as of the date first above
indicated.


 


	 	xG Technology, Inc.
	 	 	 
	 	By:	 
	 	Name:	Roger
    G. Branton
	 	Title:	Chief
    Executive Officer
	 	Facsimile No. for delivery of Notices: (941) 954-8595


 




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ANNEX
A


 


NOTICE
OF CONVERSION


 


The
undersigned hereby elects to convert principal under the Second Amended and Restated 6% Secured Convertible Debenture due September
30, 2019 of xG Technology, Inc., a Delaware corporation (the “Company”), into shares of common stock (the “Common
Stock”), of the Company according to the conditions hereof, as of the date written below. If shares of Common Stock
are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance
therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.


 


By
the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common
Stock does not exceed the amounts specified under Section 4 of this Debenture, as determined in accordance with Section 13(d)
of the Exchange Act.


 


The
undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with
any transfer of the aforesaid shares of Common Stock.


 


	Conversion
    calculations:	 	 
	 	 	Date
    to Effect Conversion:
	 	 	 
	 	 	Principal
    Amount of Debenture to be Converted:
	 	 	 
	 	 	Payment
    of Interest in Common Stock __ yes __ no
	 	 	If
    yes, $_____ of Interest Accrued on Account of Conversion at Issue.
	 	 	 
	 	 	Number
    of shares of Common Stock to be issued:
	 	 	 	 
	 	 	Signature:	 
	 	 	Name:	 
	 	 	 	 
	 	 	Address
    for Delivery of Common Stock Certificates:
	 	 	 	 
	 	 	Or	 
	 	 	 	 
	 	 	DWAC Instructions:
	 	 	 	 
	 	 	Broker
    No:	 
	 	 	Account
    No:	 





 






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Schedule
1


 


CONVERSION
SCHEDULE


 


The
Second Amended and Restated 6% Senior Secured Convertible Debentures due on September 30, 2019, in the aggregate principal amount
of $_____________ are issued by xG Technology, Inc., a Delaware corporation. This Conversion Schedule reflects conversions made
under Section 4 of the above referenced Debenture.


 


Dated:


 


	 

        Date
        of Conversion

        (or
        for first entry, Original Issue Date)
	 	 

        Amount
        of Conversion
	 	 

        Aggregate
        Principal Amount Remaining Subsequent to Conversion

        (or
        original Principal Amount)
	 	 

        Company
        Attest

	 

         

         
	 	 

         
	 	 

         
	 	 

         

	 

         

         
	 	 

         
	 	 

         
	 	 

         

	 

         

         
	 	 

         
	 	 

         
	 	 

         

	 

         

         
	 	 

         
	 	 

         
	 	 

         

	 

         

         
	 	 

         
	 	 

         
	 	 

         

	 

         

         
	 	 

         
	 	 

         
	 	 

         

	 

         

         
	 	 

         
	 	 

         
	 	 

         

	 

         

         
	 	 

         
	 	 

         
	 	 

         

	 

         

         
	 	 

         
	 	 

         
	 	 

         



 




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