Exhibit 10.1


 


EXECUTION VERSION


 


asset purchase modification
agreement


 


THIS asset
purchase modification AGREEMENT (the “Agreement”)
is entered into on the 12th day of April 2016, by and among:


 


		(1)	XG TECHNOLOGY, INC., a Delaware corporation, with its principal place of business at 240
South Pineapple Avenue, Suite 701, Sarasota, Florida, 34236 (referred to herein as "Borrower").



 


		(2)	INTEGRATED MICROWAVE TECHNOLOGIES, LLC, a Delaware limited liability company with its principal
place of business c/o Skyview Capital, LLC, 2000 Avenue of the Stars, Suite 810-N, Los Angeles, CA 90067 (“IMT”), and/or
its successors and assigns (together with IMT, collectively, the “Holder”).



 


Individually, each of
Borrower and Holder is a “Party” and collectively, the “Parties”.


 


Background


 


WHEREAS, the Borrower and the Holder
entered into an Asset Purchase Agreement on 29th January 2016 (the “APA”), and


 


WHEREAS, under the terms of the
APA, Borrower issued and delivered to Holder the Initial Payment Note (the “IPN”), dated 29th January
2016, pursuant to which Borrower unconditionally agreed and promised to pay to the order of Holder, in lawful money of the United
States of America, the principal sum of ONE MILLION FIVE HUNDRED THOUSAND ($1,500,000) DOLLARS (the “IPN Principal Indebtedness”),
together with interest on the outstanding IPN Principal Indebtedness, at the Interest Rate of six (6%) percent per annum, on or
before March 31, 2016 (the “IPN Maturity Date”), and


 


WHEREAS, Borrower issued and delivered
to Holder the Deferred Payment Note (the “DPN”), dated on 29th January 2016, pursuant to which
Borrower unconditionally agreed and promised to pay to the order of Holder, in lawful money of the United States of America, the
principal sum of ONE MILLION FIVE HUNDRED THOUSAND ($1,500,000) DOLLARS (the “DPN Principal Indebtedness”), together
with interest on the outstanding DPN Principal Indebtedness at the Interest Rate of six (6%) percent per annum, on or before July
31, 2017 (the “DPN Maturity Date”), and


 


WHEREAS, the Parties have agreed
to modify the original payment plan to settle all sums due and owing under the IPN and DPN, plus all accrued interest, and cancel
the IPN and DPN, and wish to record those terms, on a binding basis, in this Agreement, and


 


NOW, THEREFORE, in consideration
of the premises, Borrower hereby agrees as follows:


 


Agreed terms


 


		1.	Definitions and interpretation



 


		1.1	In this Agreement, unless the context otherwise requires, the definitions set out in the IPN and
DPN shall apply to the meaning of such terms in this Agreement.



 


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		1.2	“Cash Proceeds” means the net cash or cash equivalent received by Holder upon
sale of any Preferred Shares delivered by Borrower under this Agreement, net of any transaction costs or expenses, evidence which
shall be provided to the Borrower at the time of sale of such Preferred Shares.



 


		1.3	“Closing Price” shall mean the closing price of Shares as listed on the NASDAQ
stock exchange on the trading day immediately before the day on which such price is to apply to any given set of circumstances,
formula or value determination.



 


		1.4	“Preferred Shares” means shares of the Borrower’s Series D Convertible
Preferred Stock, par value $0.00001 per share. The Series D Convertible Preferred Stock will have a stated value of $1.00 per share,
and will convert into Shares at a conversion price of $0.10 per share.



 


		1.5	“Principal Market” shall mean the Nasdaq Capital Market.



 


		1.6	“Shares” means shares of the Borrower’s common stock, par value $0.00001
per share.



 


		2.	Effect of this agreement



 


The Parties hereby agree that
this Agreement shall be immediately fully and effectively binding on them upon Borrower’s compliance with Section 3.1 below,
failing which this Agreement shall be null and void and of no further force nor effect.


 


		3.	Payment



 


		3.1	Borrower shall immediately pay to Holder the total sum of Five Hundred Thousand Dollars ($500,000),
plus all accrued interest at a rate of 9% per annum (“Revised Interest”), as applicable, earned under the IPN
and the DPN, payable by way of wire transfer to the following bank account (the “Bank Account”):



 


Bank:


Routing Number:


Account Name:


Account Number:


 


		3.2	Before December 31, 2016, Borrower shall deliver to Holder Preferred Shares having an aggregate
value of Cash Proceeds of not less than Two Million Five Hundred Thousand Dollars ($2,500,000), plus all accrued Revised Interest
from the date of this Agreement. The Preferred Shares will issued in tranches of Two Hundred Fifty Thousand dollars ($250,000)
(each a “Tranche”), with the first Tranche being issued within 10 business days of the date of this Agreement.



 


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		3.3	Borrower shall immediately deliver further Tranches of Preferred Shares once Holder advises Borrower
that it has disposed of the Shares from the previously released Tranche on the Principal Market and realised Cash Proceeds. Every
time Holder requests a further Tranche, it will provide an updated account of its Cash Proceeds.



 


		3.4	Following the issuance of each Tranche, the Borrower will register the underlying Shares with U.S.
Securities and Exchange Commission on a Registration Statement on Form S-1 or Form S-3, if available, within five (5) business
days of the issuance of the Tranche.



 


		3.5	Notwithstanding anything contained herein to the contrary, the number of Shares issuable by the
Borrower through the conversion of the Preferred Shares shall not exceed 19.9% of the Borrower’s outstanding Shares as of
the date of this Agreement or such other amount required to comply with the shareholder approval rules of the Principal Market
(the “Maximum Common Stock Issuance”). If such issuance of Shares could cause a delisting on the Principal Market,
then the Maximum Common Stock Issuance shall first be approved by the Borrower’s shareholders in accordance with applicable
law and the By-laws and Certificate of Incorporation of the Borrower, as amended. The parties understand and agree that the Borrower’s
failure to seek or obtain such shareholder approval shall in no way adversely affect the validity and due authorization of the
issuance and sale of Preferred Shares, and that such approval pertains only to the applicability of the Maximum Common Stock Issuance
limitation.



 


		3.6	Time shall be of the essence in relation to all payments due under this Agreement.



 


		4.	Release



 


This Agreement is in full and
final settlement of, and each Party hereby releases and forever discharges, all and/or any actions, claims, rights, demands and
set-offs, whether in this jurisdiction or any other, whether or not presently known to the Parties or to the law, and whether in
law or equity, that it, its parent, subsidiaries, assigns, transferees, representatives, principals, agents, officers or directors
(“Related Parties”) or any of them ever had, may have or hereafter can, shall or may have against the other Party or
any of its Related Parties arising out of or connected with:


 


		(a)	the IPN;



 


		(b)	the DPN;



 


		(c)	the APA; and



 


		(d)	any other matter arising out of or connected with the relationship between the Parties



 


(collectively the “Released
Claims”).


 


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		5.	Agreement not to sue



 


Each Party agrees, on behalf
of itself and on behalf of its Related Parties not to sue, commence, voluntarily aid in any way, prosecute or cause to be commenced
or prosecuted against the other Party or its Related Parties any action, suit or other proceeding concerning the Released Claims,
in this jurisdiction or any other.


 


		6.	Costs



 


The Parties shall each bear their
own legal costs in relation to this Agreement.


 


		7.	Warranties and authority



 


Each Party warrants and represents
to the other with respect to itself that it has the full right, power and authority to execute, deliver and perform this Agreement.


 


		8.	No admission



 


This Agreement is entered into
in connection with the compromise of disputed matters and in the light of other considerations. It is not, and shall not be represented
or construed by the Parties as, an admission of liability or wrongdoing on the part of either Party to this Agreement or any other
person or entity.


 


		9.	Severability



 


If any provision of this Agreement
is found to be void or unenforceable, that provision shall be deemed to be deleted from this Agreement and the remaining provisions
of this Agreement shall continue in full force and effect and the Parties shall use their respective reasonable endeavours to procure
that any such provision is replaced by a provision which is valid and enforceable, and which gives effect to the spirit and intent
of this Agreement.


 


		10.	Entire agreement



 


		10.1	This Agreement constitutes the entire understanding and agreement between the Parties in relation
to the subject matter of this Agreement.



 


		10.2	Each Party acknowledges that it has not entered into this Agreement in reliance wholly or partly
on any representation or warranty made by or on behalf of the other Party (whether orally or in writing) other than as expressly
set out in this Agreement.



 


		11.	Confidentiality



 


The terms of this Agreement,
and the substance of all negotiations in connection with it, are confidential to the Parties and their advisers, who shall not
disclose them to, or otherwise communicate them to, any third party without the written consent of the other Party other than:


 


		(a)	to the Parties' respective auditors, insurers and lawyers on terms which preserve confidentiality;
and



 


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		(b)	pursuant to an order of a court of competent jurisdiction, or pursuant to any proper order or demand
made by any competent authority or body where they are under a legal or regulatory obligation to make such a disclosure;



 


		(c)	as required pursuant to the rules and regulations of the Securities Act of 1933, as amended, and
the Exchange Act of 1934, as amended,



 


		(d)	as maybe necessary to provide to any third party in the course of their due diligence of either
Party in conjunction with an acquisition of assets, sale of assets, or financing of a Party, and



 


		(e)	as far as necessary to implement and enforce any of the terms of this Agreement.



 


		12.	Governing law and jurisdiction



 


The provisions of this Agreement
shall be construed according to the internal substantive laws of the State of New York without regard to conflict of laws principles.
If any provision of this Agreement is in conflict with any statute or rule of law of the State of New York or is otherwise unenforceable
for any reason whatsoever, then such provision shall be deemed to be restated so that it may be enforced to the fullest extent
permitted by law, and the remainder of this Agreement shall remain in full force and effect.


 


		13.	Counterparts



 


This Agreement may be signed
in any number of counterparts, each of which, when signed, shall be an original and all of which together evidence the same agreement.


 


		14.	Variation



 


Any variation of this Agreement
shall be in writing and signed by or on behalf of each Party.


 


This Agreement has been entered into on
the date stated first above written.


 


	XG TECHNOLOGY, INC.	 	INTEGRATED MICROWAVE TECHNOLOGIES, LLC
	 	 	 
	 	 	 
	By:	 	 	By:	 
	 	 	 	 	 
	Name:	 	 	Name:	 
	 	 	 	 	 
	Title:	 	 	Title:	 
	 	 	 	 	 
	Date:	 	 	Date:	 


 


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