Exhibit 10.2


 


 


January 13, 2017


 


xG Technology, Inc.


240 S. Pineapple
Avenue


Suite 701


Sarasota FL 34236


Attn: Roger Branton, CFO


 


Re: Acquisition and Settlement of IMT Obligation (the “Obligation”)


 


Ladies and Gentlemen:


 


Reference is made to the Obligation issued
to Integrated Microwave Technology LLC identified above, the transaction documents of which are attached hereto as Exhibit
A (the “Transaction Documents”). Capitalized terms used and not defined herein shall have the meanings ascribed
to them in the Transaction Documents.


 


Following our various discussions over the
past week, including yesterday’s discussion, this will confirm that we have agreed to the following:


 


Given IMT/SkyView’s desire to be paid in full
as provided by that certain Asset Purchase Modification Agreement dated April 16, 2016 (the “Modification Agreement”),
and in full settlement of that agreement MEF I LP and DiamondRock LLC (the “Investors”) have paid a total of $1,038,194.56
to IMT/SkyView in an assignment of all their rights and obligations under the Modification Agreement. In an effort to assist the
Company in its efforts to concentrate on running the business and integrating the IMT assets and new Vislink assets, the Investors
have proposed and the Company has agreed to waive all existing penalties, guarantees, defaults and under premiums consistent with
the term sheet dated January 10, 2017, and attached hereto as Exhibit B, which is considered an integral component
of this settlement agreement. In full settlement and satisfaction of the Company’s obligations under the Obligation, which
the parties agree is valued at $1,038,194.56, we have agreed that the Company shall, consistent with the original transaction documents,
issue to the Investors shares of Series D Preferred previously issued or available for issue to IMT equal to $ 1,350,095.25 on
the same terms and conditions previously available to IMT.


 


This letter agreement
relates only to the Obligation that was acquired from IMT on January 13, 2017, and not to any other funding or security that may
be owned by the Investors.





 


[Signatures follow on next page]


 






     


     


    




 


If the foregoing is correct, please acknowledge
where provided below.


 


Very truly yours,





 


	MEF I, LP	 	xG TECHNOLOGY, INC. 	 
	 	 	 	 	 	 
	By:  	/s/ Marc Manuel	 	By:  	/s/ Roger Branton	 
	 	 	 	 	 	 
	Its:	Chief Investment Officer	 	Its:	Chief Financial Officer	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	DIAMONDROCK LLC	 	 	 	 
	 	 	 	 	 	 
	By:	/s/ Neil Rock	 	 	 	 
	 	 	 	 	 	 
	Its:	Managing Member	 	 	 	 


 






     


     


    

 


 


 


Purchase of IMT Obligations 


 


On the terms and subject
to the conditions set forth below, MEF I, L.P. will commit to the purchase of $1,044,995.52 of IMT Obligations in
xG Technology, Inc. on the principal terms set forth below. Except for the Binding Section and the sections mentioned within
the Binding Section, this letter is subject to the parties entering into formal agreements setting forth their respective right
and obligations. Such agreements will contain customary representations, warranties and indemnifications. The material terms of
the IMT Obligations Purchase are set forth below:


 


	Company:	xG Technology, Inc. (the “Company” or “Issuer”)
	 	 
	Investor:	MEF I, L.P. (the “Investor” or “Holder”)
	 	 
	Debtholder:	Integrated Microwave Technologies, LLC (“IMT”)
	 	 
	Funding:	The Investor shall purchase the obligations from IMT on the date of execution of definitive documents (the “Execution Date”) for $1,044,995.52.  In exchange, the Investor shall take over and assume all rights and obligations owed to IMT pursuant to the IMT Obligations.  
	 	 
	Term Extension:	The Investor shall agree to extend the term of the Obligation until July 15, 2017.
	New Obligation:	In exchange for purchasing the IMT Obligation the Investor shall receive a New Obligation in the amount of $1,358,939. 
	 	 
	Accrued Interest:	The Obligation shall carry an Interest rate of 9%, which shall be guaranteed for a period of 12 months.
	 	 
	Closing Condition:	Nasdaq shall sign off on the deal, affirming the Investor will be covered under the 20% previously voted upon.
	 	 
	Warrants:	None



 





40 Wall Street |
New York, NY | 10005


p. 347.491.4240 | f. 646.737.9948







 






     


     


    

 





	Share Reserve Calculation:	TBD
	 	 
	Release of Personal Guaranty:	
        The Investor shall agree to release the Company from the Personal
        Guaranty obligation, as described in the IMT Obligations.

         

	 	 
	Legal Fees:	The Company shall pay all Legal Fees.
	 	 
	Release of Personal Guaranty:	
        The Investor shall agree to release the Company from the Personal
        Guaranty obligation, as described in the IMT Obligations.

         

	 	 
	Right of Participation:	The Investor shall have the Right of Participation in all financing transactions for up to 1 year from the Execution Date. Such Right shall not exceed 25% of such financing transaction.
	 	 
	Exclusivity:	So long the IMT Obligations are outstanding the Company shall not enter into any variable, reset or otherwise adjustable transactions. 
	 	 
	Confidentiality:	The existence of this term sheet and the individual terms and conditions are of a confidential nature and shall not be disclosed to anyone, except to the Company, the Investor and their respective legal advisors.  
	 	 
	Binding Effect:	The provisions of this term sheet relating to Right of Participation, Confidentiality, Exclusivity, Legal Fees and Binding Effect shall be binding obligations of the parties hereto.  All other provisions of this term sheet shall not be binding in any respect on the parties hereto and are subject to the parties entering into definitive and binding agreements setting forth their respective rights and obligations. This term sheet is intended for discussion purposes only and is not an offer for the purchase or sale of the Company’s securities.







 





40 Wall Street |
New York, NY | 10005


p. 347.491.4240 | f. 646.737.9948




 






     


     


    

 





If the terms and conditions contained herein are satisfactory,
please sign as indicated below. We appreciate this opportunity to work with you. We look forward to an expeditious and successful
closing of this transaction.


 





	 	 	 	Sincerely,
	 	 	 	 	 
	 	 	 	MEF I, L.P.
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	By:	/s/ Marc Manuel
	 	 	 	 	
        Name: Marc Manuel

        Position: M.D./C.I.O.

	 	 	 	 	 
	 	 	 	 	 
	AGREED TO AND ACCEPTED:	 	 	 
	 	 	 	 	 
	xG Technology, Inc.	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	By:	/s/ Roger Branton	 	 	 
	 	
        Name: Roger Branton

        Position: CFO
	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	Dated:
    January 10, 2017	 	 	 







 





40 Wall Street |
New York, NY | 10005


p. 347.491.4240 | f. 646.737.9948