Document:

XG TECHNOLOGY, INC.

WARRANT AGENCY AGREEMENT

 

WARRANT AGENCY AGREEMENT
(this “Warrant Agreement”) made as of _______, 2013 (the “Issuance Date”), between xG Technology,
Inc., a Delaware corporation, with offices at 240 S. Pineapple Ave., Suite 701, Sarasota, Florida 34236 (“Company”),
and Continental Stock Transfer & Trust Co., with offices at 17 Battery Place, 8th Floor, New York, New York 10004 (“Warrant
Agent”).

 

WHEREAS, the
Company is engaged in a public offering (the “Offering”) of Common Stock and Warrants and, in connection with
the over-allotment option exercised by the Underwriters, has determined to issue and deliver up to _________ Warrants (the “Warrants”)
to the public investors, with each such Warrant evidencing the right of the holder thereof to purchase one share of common stock,
par value $.00001 per share, of the Company’s Common Stock (the “Common Stock”) for $6.87, subject to adjustment
as described herein; and

 

WHEREAS, the
Company has filed with the U.S. Securities and Exchange Commission (the “Commission”) a Registration Statement,
No. 333-185470 on Form S-1 (as the same may be amended from time to time, the “Registration Statement”) for
the registration, under the Securities Act of 1933, as amended (the “Securities Act”) of, among other securities,
the Warrants and the Common Stock issuable upon exercise of the Warrants (the “Warrant Shares”), and such Registration
Statement was declared effective on July 18, 2013; and

 

WHEREAS, the
Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with
the issuance, registration, transfer, exchange and exercise of the Warrants; and

 

WHEREAS, the
Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised,
and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants
(each, a “Holder”); and

 

WHEREAS, all
acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and
countersigned by or on behalf of the Warrant Agent, as provided herein, the valid and binding obligations of the Company, and to
authorize the execution and delivery of this Warrant Agreement.

 

NOW, THEREFORE,
in consideration of the mutual agreements herein contained, the parties hereto agree as follows:

 

1. Appointment of
Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant
Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this
Warrant Agreement.

 

2. Warrants.

 

2.1. Form of Warrant.
Each Warrant shall be issued in registered form only, shall be in substantially the form of Exhibit A hereto,
the provisions of which are incorporated herein, and shall be signed by, or bear the facsimile signature of, the Chief Executive
Officer, President, Chief Financial Officer or Treasurer, Secretary or Assistant Secretary of the Company and shall bear a facsimile
of the Company’s seal. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased
to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same
effect as if he or she had not ceased to be such at the date of issuance. All of the Warrants shall initially be represented by
one or more book-entry certificates (each a “Book-Entry Warrant Certificate”).

 

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2.2. Effect of Countersignature.
Unless and until countersigned by the Warrant Agent pursuant to this Warrant Agreement, a Warrant shall be invalid and of no effect
and may not be exercised by a Holder.

 

2.3. Registration.

 

2.3.1. Warrant Register.
The Warrant Agent shall maintain books (“Warrant Register”), for the registration of the original issuance and
the registration of any transfer of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue and
register the Warrants in the names of the respective Holders in such denominations and otherwise in accordance with instructions
delivered to the Warrant Agent by the Company. To the extent the Warrants are DTC eligible as of the Issuance Date, all of the
Warrants shall be represented by one or more Book-Entry Warrant Certificates deposited with the Depository Trust Company (the “Depository”)
and registered in the name of Cede & Co., a nominee of the Depository. Ownership of beneficial interests in the Book-Entry
Warrant Certificates shall be shown on, and the transfer of such ownership shall be effected through, records maintained (i) by
the Depository or its nominee for each Book-Entry Warrant Certificate; (ii) by institutions that have accounts with the Depository
(such institution, with respect to a Warrant in its account, a “Participant”); or (iii) directly on the book-entry
records of the Warrant Agent with respect only to owners of beneficial interests that represent such direct registration.

 

If the Warrants are
not DTC Eligible as of the Issuance Date or the Depository subsequently ceases to make its book-entry settlement system available
for the Warrants, the Company may instruct the Warrant Agent to make other arrangements for book-entry settlement within ten (10)
Business Days after the Depository ceases to make its book-entry settlement available. In the event that the Company does not make
alternative arrangements for book-entry settlement within ten (10) Business Days or the Warrants are not eligible for, or it is
no longer necessary to have the Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to
the Depository to deliver to the Warrant Agent for cancellation each Book-Entry Warrant Certificate, and the Company shall instruct
the Warrant Agent to deliver to the Depository definitive Warrant Certificates in physical form evidencing such Warrants. Such
definitive Warrant Certificates shall be in substantially the form annexed hereto as Exhibit A.

 

As used herein, the
term “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in the
City of New York are authorized or required by law or executive order to remain closed.

 

2.3.2. Beneficial
Owner; Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant
Agent may deem and treat the person in whose name such Warrant shall be registered upon the Warrant Register (“registered
holder”), as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation
of ownership or other writing on the Warrant Certificate made by anyone other than the Company or the Warrant Agent), for the purpose
of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice
to the contrary. Any person in whose name ownership of a beneficial interest in the Warrants evidenced by a Book-Entry Warrant
Certificate is recorded in the records maintained by the Depository or its nominee shall be deemed the “beneficial owner”
thereof; provided, that all such beneficial interests shall be held through a Participant which shall be the registered
holder of such Warrants. As used herein, the term “Holder” refers only to a registered holder of the Warrants.

 

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2.4. Uncertificated
Warrants. Notwithstanding the foregoing and anything else herein to the contrary, the Warrants may be issued in uncertificated
form.

 

3. Terms and Exercise
of Warrants.

 

3.1. Exercise Price.
Each Warrant shall, when countersigned by the Warrant Agent, entitle the Holder, subject to the provisions of such Warrant and
of this Warrant Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $6.87
per share, subject to the subsequent adjustments provided in Section 4 hereof. The term “Exercise Price” as
used in this Warrant Agreement refers to the price per share at which Common Stock may be purchased at the time a Warrant is exercised.

 

3.2. Duration of Warrants.
A Warrant may be exercised only during the period (“Exercise Period”) commencing on the Issuance Date and terminating
at 5:00 P.M., New York City time on _______, 2018 (“Expiration Date”). Each Warrant not exercised on or
before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Warrant Agreement
shall cease at the close of business on the Expiration Date.

 

3.3. Exercise of Warrants.

 

3.3.1. Exercise
and Payment. A Holder may exercise a Warrant by delivering, not later than 5:00 P.M., New York City time, on any Business
Day during the Exercise Period (the “Exercise Date”) to the Warrant Agent at its corporate trust department
(i) the Warrant Certificate evidencing the Warrants to be exercised, or, in the case of a Book-Entry Warrant Certificate, the Warrants
to be exercised (the “Book-Entry Warrants”) shown on the records of the Depository to an account of the Warrant
Agent at the Depository designated for such purpose in writing by the Warrant Agent to the Depository from time to time, (ii) an
election to purchase the Warrant Shares underlying the Warrants to be exercised (an “Election to Purchase”),
properly completed and executed by the Holder on the reverse of the Warrant Certificate or, in the case of a Book-Entry Warrant
Certificate, properly delivered by the Participant in accordance with the Depository’s procedures, and (iii) the Exercise
Price for each Warrant to be exercised in lawful money of the United States of America by certified or official bank check or by
bank wire transfer in immediately available funds payable to the Warrant Agent.

 

If any of (A) the Warrant
Certificate or the Book-Entry Warrants, (B) the Election to Purchase, or (C) the Exercise Price therefor, is received by the Warrant
Agent after 5:00 P.M., New York City time, on the specified Exercise Date, the Warrants will be deemed to be received and
exercised on the Business Day next succeeding the Exercise Date. If the date specified as the Exercise Date is not a Business Day,
the Warrants will be deemed to be received and exercised on the next succeeding day that is a Business Day. If the Warrants are
received or deemed to be received after the Expiration Date, the exercise thereof will be null and void and any funds delivered
to the Warrant Agent will be returned to the Holder. In no event will interest accrue on funds deposited with the Warrant Agent
in respect of an exercise or attempted exercise of Warrants. The validity of any exercise of Warrants will be determined by the
Company in its sole discretion and such determination will be final and binding upon the Holder and the Warrant Agent. Neither
the Company nor the Warrant Agent shall have any obligation to inform a Holder of the invalidity of any exercise of any Warrants.

 

The Warrant Agent shall
promptly deposit all funds received by it in payment of the Exercise Price in the account of the Company maintained with the Warrant
Agent for such purpose and shall advise the Company via telephone at the end of each day on which funds for the exercise of the
Warrants are received of the amount so deposited to its account. The Warrant Agent shall promptly confirm such telephonic advice
to the Company in writing.

  

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3.3.2. Issuance
of Certificates. The Warrant Agent shall, by 11:00 A.M. New York City time on the Business Day following the Exercise
Date of any Warrant, advise the Company or the transfer agent and registrar in respect of (a) the number of Warrant Shares issuable
upon such exercise in accordance with the terms and conditions of this Warrant Agreement, (b) the instructions of each Holder with
respect to delivery of the Warrant Shares issuable upon such exercise, and the delivery of definitive Warrant Certificates, as
appropriate, evidencing the balance, if any, of the Warrants remaining after such exercise, (c) in case of a Book-Entry Warrant
Certificate, the notation that shall be made to the records maintained by the Depository, its nominee for each Book-Entry Warrant
Certificate, or a Participant, as appropriate, evidencing the balance, if any, of the Warrants remaining after such exercise and
(d) such other information as the Company or such transfer agent and registrar shall reasonably require.

 

The Company shall,
by 5:00 P.M., New York City time, on the third Business Day next succeeding the Exercise Date of any Warrant and the clearance
of the funds in payment of the aggregate Exercise Price, execute, issue and deliver to the Warrant Agent, the Warrant Shares to
which such Holder is entitled, in fully registered form, registered in such name or names as may be directed by such Holder. Upon
receipt of such Warrant Shares, the Warrant Agent shall, by 5:00 P.M., New York City time, on the third Business Day next
succeeding such Exercise Date, transmit such Warrant Shares to, or upon the order of, such Holder.

 

In lieu of delivering
physical certificates representing the Warrant Shares issuable upon exercise of any Warrants, provided the Company’s transfer
agent is participating in the Depository’s Fast Automated Securities Transfer program, the Company shall use its commercially
reasonable efforts to cause its transfer agent to electronically transmit the Warrant Shares issuable upon exercise to the Depository
by crediting the account of the Depository or of the Participant, as the case may be, through its Deposit Withdrawal Agent Commission
system. The time periods for delivery described in the immediately preceding paragraph shall apply to the electronic transmittals
described herein.

 

3.3.3. Valid Issuance.
All Warrant Shares issued upon the proper exercise of a Warrant in conformity with this Warrant Agreement shall be validly issued,
fully paid and nonassessable.

 

3.3.4. No Fractional
Exercise. Warrants may be exercised only in whole numbers of Warrant Shares. No fractional Warrant Shares are to be issued
upon the exercise of a Warrant, but rather the number of Warrant Shares to be issued shall be rounded up or down, as applicable,
to the nearest whole number. If fewer than all of the Warrants evidenced by a Warrant Certificate are exercised, a new Warrant
Certificate for the number of unexercised Warrants remaining shall be executed by the Company and countersigned by the Warrant
Agent as provided in Section 2 of this Warrant Agreement, and delivered to the Holder at the address specified on the books of
the Warrant Agent or as otherwise specified by such Holder. If fewer than all of the Warrants evidenced by a Book-Entry Warrant
Certificate are exercised, a notation shall be made to the records maintained by the Depository, its nominee for each Book-Entry
Warrant Certificate, or a Participant, as appropriate, evidencing the balance of the Warrants remaining after such exercise.

 

3.3.5. No Transfer
Taxes. The Company shall not be required to pay any stamp or other tax or governmental charge required to be paid in connection
with any transfer involved in the issue of the Warrant Shares upon the exercise of Warrants; and in the event that any such transfer
is involved, the Company shall not be required to issue or deliver any Warrant Shares until such tax or other charge shall have
been paid or it has been established to the Company’s satisfaction that no such tax or other charge is due.

  

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3.3.6. Date of Issuance.
Each person in whose name any such certificate for Warrant Shares is issued shall for all purposes be deemed to have become the
holder of record of such shares on the date on which the applicable Warrant was surrendered and payment of the Exercise Price was
made, irrespective of the date of delivery of any such certificate, except that, if the date of such surrender and payment is a
date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of record of
such shares at the close of business on the next succeeding date on which the stock transfer books are open.

 

3.3.7. Cashless
Exercise Under Certain Circumstances.

 

(i) The Company shall
provide to the Holder prompt written notice of any time that the Company is unable to issue the Warrant Shares via DTC transfer
or otherwise (without restrictive legend), because (A) the Commission has issued a stop order with respect to the Registration
Statement, (B) the Commission otherwise has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily
or permanently, (C) the Company has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily
or permanently, or (D) otherwise (each a “Restrictive Legend Event”). To the extent that a Restrictive Legend
Event occurs after the Holder has exercised a Warrant in accordance with the terms of the Warrants but prior to the delivery of
the Warrant Shares, the Company shall, at the election of the Holder to be given within five (5) Business Days of receipt of notice
of the Restrictive Legend Event, either (A) rescind the previously submitted Election to Purchase and the Company shall return
all consideration paid by the Holder for such shares upon such rescission or (B) treat the attempted exercise as a cashless exercise
as described in the next paragraph and refund the cash portion of the Exercise Price to the Holder.

 

(ii) If a Restrictive
Legend Event has occurred and no exemption from the registration requirements is available, the Warrants shall only be exercisable
on a cashless basis. Notwithstanding anything herein to the contrary, the Company shall not be required to make any cash payments
or net cash settlement to the Holder in lieu of issuance of the Warrant Shares. Upon a “cashless exercise,”
the Holder shall be entitled to receive a certificate (or book entry) for the number of Warrant Shares equal to the quotient obtained
by dividing [(A-B) (X)] by (A), where:

 

(A) =the VWAP on
the Business Day immediately preceding the date on which the Holder elects to exercise the Warrant by means of a “cashless
exercise,” as set forth in the applicable Election to Purchase;

(B) =the Exercise
Price of the Warrant, as it may have been adjusted hereunder; and

(X) =the number
of Warrant Shares that would be issuable upon exercise of the Warrant in accordance with the terms of the Warrant if such exercise
were by means of a cash exercise rather than a cashless exercise.

  

Upon receipt of an Election
to Purchase for a cashless exercise, the Warrant Agent will promptly deliver a copy of the Election to Purchase to the Company
to confirm the number of Warrant Shares issuable in connection with the cashless exercise. The Company shall calculate and transmit
to the Warrant Agent, and the Warrant Agent shall have no obligation under this section to calculate, the number of Warrant Shares
issuable in connection with the cashless exercise.

 

“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 NYSE AMEX, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market or the New York Stock
Exchange (each, 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) on any day that the
Trading Market on which the Common Stock is then listed is open for trading), (b) the volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted
for trading on the OTC Bulletin Board 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 Holders of a majority in interest of the Warrants then outstanding
and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

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3.3.8. Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the applicable Holders the number of Warrant Shares that are not disputed.

 

3.4. Forced Exercise.
The Holder hereby understands and covenants that in the event the Common Stock of the Company is trading at an average
of at least $13.74 per share (equal to two times (2x) the Exercise Price on the date of issuance) for a period of not less than
20 consecutive trading days, the Holder shall be required to fully exercise the Warrants within ten (10) business days following
the 20th trading day. The Holder shall furnish the Company with a completed and fully executed Form of Election to Purchase
attached to the Warrants and remit the funds pursuant to the Form of Election to Purchase and the terms of the Warrants.

 

4. Adjustments.

 

4.1. Adjustment upon
Subdivision or Combination of Common Stock. If the Company at any time after the Issuance Date subdivides (by any stock split,
stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise) its outstanding shares of Common Stock into
a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced
and the number of Warrant Shares will be proportionately increased. If the Company at any time after the Issuance Date combines
(by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise) its outstanding shares
of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately
increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 4.1 shall become
effective at the close of business on the date the subdivision or combination becomes effective. The Company shall promptly notify
Warrant Agent of any such adjustment and give specific instructions to Warrant Agent with respect to any adjustments to the Warrant
Register.

 

4.2. Adjustment for
Other Distributions. In the event the Company shall fix a record date for the making of a dividend or distribution to all holders
of Common Stock of any evidences of indebtedness or assets or subscription rights or warrants (excluding those referred to in Section
4.1 or other dividends paid out of retained earnings), then in each such case the Exercise Price shall be adjusted by multiplying
the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such
distribution by a fraction of which the denominator shall be the VWAP determined as of the record date mentioned above, and of
which the numerator shall be such VWAP on such record date less the then per share fair market value at such record date of the
portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of the Common Stock as determined
by the Board of Directors in good faith. In either case the adjustments shall be described in a statement provided to each Holder
of the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common
Stock. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record
date mentioned above.

 

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4.3. Reclassification,
Consolidation, Purchase, Combination, Sale or Conveyance. If, at any time while the Warrants are 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 exercise of a Warrant, each Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, the same amount and kind
of securities, cash or property, if any, 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 each Warrant is exercisable immediately prior to such
Fundamental Transaction. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted
to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the Exercise 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 that such Holder receives upon any exercise of each Warrant 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”) and for which stockholders received any equity securities of the Successor
Entity, to assume in writing all of the obligations of the Company under this Warrant Agreement in accordance with the provisions
of this Section 4.3 pursuant to written agreements and shall, upon the written request of such Holder, deliver to such Holder in
exchange for the applicable Warrants created by this Warrant Agreement a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to the Warrants which are exercisable for a corresponding number of shares
of capital stock of such Successor Entity (or its parent entity), if any, plus any Alternate Consideration, receivable as a result
of such Fundamental Transaction by a holder of the number of shares of Common Stock for which the Warrants are exercisable immediately
prior to such Fundamental Transaction, and with an exercise price which applies the Exercise Price hereunder to such shares of
capital stock, if any, plus any Alternate Consideration (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 exercise price being for the purpose of protecting the economic value of such Warrant immediately prior to the consummation
of such Fundamental Transaction). 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 Warrant Agreement
and the Warrants 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 Warrant Agreement and the Warrants with
the same effect as if such Successor Entity had been named as the Company herein and therein.

 

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The Company shall instruct
the Warrant Agent to mail, by first class mail, postage prepaid, to each Holder, written notice of the execution of any such amendment,
supplement to this Warrant Agreement and/or the Warrants or other agreement. Any such amendment, supplement or other agreement
entered into by the Successor Entity shall provide for adjustments, which shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section 4. The Warrant Agent shall be under no responsibility to determine the correctness
of any provisions contained in such amendment, supplement or other agreement relating either to the kind or amount of securities
or other property receivable upon exercise of the Warrants or with respect to the method employed and provided therein for any
adjustments and shall be entitled to rely upon the provisions contained in any such amendment, supplement or other agreement. The
provisions of this Section 4.3 shall similarly apply to successive reclassifications, changes, consolidations, mergers, sales and
conveyances of the kind described above.

 

4.4. Other Events.
If any event occurs of the type contemplated by the provisions of Section 4.1, 4.2 or 4.3 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with
equity features to all holders of Common Stock for no consideration), then the Company’s Board of Directors will in good
faith make an adjustment in the Exercise Price and the number of Warrant Shares so as to protect the rights of each Holder.

 

4.5. Notices of Changes
in Warrant. Upon every adjustment of the Exercise Price or the number of Warrant Shares, the Company shall give written notice
thereof to the Warrant Agent, which notice shall state the Exercise Price resulting from such adjustment and the increase or decrease,
if any, in the number of Warrant Shares purchasable upon the exercise of a Warrant, setting forth in reasonable detail the method
of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified in Sections 4.1,
4.2 or 4.3, then, in any such event, the Company shall give written notice to each Holder, at the last address set forth for such
Holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of such event.

 

4.6. No Fractional
Shares. Notwithstanding any provision contained in this Warrant Agreement to the contrary, the Company shall not issue fractional
shares upon exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, a Holder would be entitled,
upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round up
or down, as applicable, to the nearest whole number the number of Warrant Shares to be issued to such Holder.

 

4.7. Form of Warrant.
The form of Warrant annexed hereto as Exhibit A need not be changed because of any adjustment pursuant to this
Section 4, and Warrants issued after such adjustment may state the same Exercise Price and the same number of shares as is stated
in the Warrants initially issued pursuant to this Warrant Agreement. However, the Company may at any time in its sole discretion
make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and
any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may
be in the form as so changed.

 

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5. Transfer and
Exchange of Warrants.

 

5.1. Registration
of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant
Register, upon surrender of such Warrant for transfer, properly endorsed with signatures properly guaranteed and accompanied by
appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants
shall be issued and the old Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled shall be delivered by the
Warrant Agent to the Company from time to time upon request.

 

5.2. Procedure for
Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer
reasonably acceptable to Warrant Agent, duly executed by the Holder thereof, or by a duly authorized attorney, and thereupon the
Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the Holder of the Warrants so surrendered,
representing an equal aggregate number of Warrants; provided, however, that except as otherwise provided herein or in any Book-Entry
Warrant Certificate, each Book-Entry Warrant Certificate may be transferred only in whole and only to the Depository, to another
nominee of the Depository, to a successor depository, or to a nominee of a successor depository; provided further, however, that
in the event that a Warrant surrendered for transfer bears a restrictive legend, the Warrant Agent shall not cancel such Warrant
and issue new Warrants in exchange therefor until the Warrant Agent has received an opinion of counsel for the Company stating
that such transfer may be made and indicating whether the new Warrants must also bear a restrictive legend. Upon any such registration
of transfer, the Company shall execute, and the Warrant Agent shall countersign and deliver, in the name of the designated transferee
a new Warrant Certificate or Warrant Certificates of any authorized denomination evidencing in the aggregate a like number of unexercised
Warrants.

 

5.3. Fractional Warrants.
The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the issuance of
a Warrant Certificate for a fraction of a Warrant.

 

5.4. Service Charges.
A service charge shall be made for any exchange or registration of transfer of Warrants, as negotiated between Company and Warrant
Agent.

 

5.5. Warrant Execution
and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of
this Warrant Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever
required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.

 

    	9

    	 

    

6. Limitations on
Exercise. Neither the Warrant Agent nor the Company shall effect any exercise of any Warrant, and no Holder shall have the
right to exercise any portion of a Warrant, to the extent that after giving effect to the issuance of shares of Common Stock after
exercise as set forth on the applicable Election to Purchase, such Holder (together with such Holder’s Affiliates (as defined
in Rule 405 under the Securities Act), and any other persons acting as a group together with such Holder or any of such Holder’s
Affiliates), would beneficially own in excess of 4.99% of the Company’s Common Stock. For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by a Holder and its Affiliates shall include the number of shares of Common
Stock issuable upon exercise of the Warrant with respect to which such determination is being made, but shall exclude the number
of shares of Common Stock which would be issuable upon exercise of the remaining, nonexercised portion of any Warrant beneficially
owned by such Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 6, beneficial
ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) and the rules and regulations promulgated thereunder, it being acknowledged by each Holder that neither the Warrant
Agent nor the Company is representing to such Holder that such calculation is in compliance with Section 13(d) of the Exchange
Act and such Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the
limitation contained in this Section 6 applies, the determination of whether a Warrant is exercisable (in relation to other securities
owned by a Holder together with any Affiliates) and of which portion of a Warrant is exercisable shall be in the sole discretion
of a Holder, and the submission of an Election to Purchase shall be deemed to be such Holder’s determination of whether such
Warrant is exercisable (in relation to other securities owned by such Holder together with any Affiliates) and of which portion
of a Warrant is exercisable, and neither the Warrant Agent nor the Company shall have any obligation to verify or confirm the accuracy
of such determination and neither of them shall have any liability for any error made by such Holder. 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 6, in determining the number of outstanding shares of Common
Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent
periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or
(C) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common
Stock outstanding. The provisions of this Section 6 shall be construed and implemented in a manner otherwise than in strict conformity
with the terms of this Section 6 to correct this subsection (or any portion hereof) which may be defective or inconsistent with
the intended beneficial ownership limitation herein contained 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.

 

7. Other Provisions
Relating to Rights of Holders of Warrants.

 

7.1. No Rights as
Stockholder. Except as otherwise specifically provided herein, a Holder, solely in its capacity as an owner of a Warrant, shall
not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall
anything contained in this Warrant Agreement be construed to confer upon a Holder, solely in its capacity as the owner of a Warrant,
any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether
any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice
of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares
which it is then entitled to receive upon the due exercise of a Warrant. For the avoidance of doubt, ownership of a Warrant does
not entitle the Holder or any beneficial owner thereof to any of the rights of a stockholder.

 

7.2. Lost, Stolen,
Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent
may on such terms as to indemnity (including obtaining an open penalty bond protecting the Warrant Agent) or otherwise as they
may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant
of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute
a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant
shall be at any time enforceable by anyone.

 

    	10

    	 

    

7.3. Reservation of
Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common
Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Warrant Agreement.

 

8. Concerning the
Warrant Agent and Other Matters.

 

8.1. Concerning the
Warrant Agent. The Warrant Agent:

 

a) shall have no duties
or obligations other than those set forth herein and no duties or obligations shall be inferred or implied;

 

b) may rely on and
shall be held harmless by the Company in acting upon any certificate, statement, instrument, opinion, notice, letter, facsimile
transmission, telegram or other document, or any security delivered to it, and reasonably believed by it to be genuine and to have
been made or signed by the proper party or parties;

 

c) may rely on and
shall be held harmless by the Company in acting upon written or oral instructions or statements from the Company with respect to
any matter relating to its acting as Warrant Agent;

 

d) may consult with
counsel satisfactory to it (including counsel for the Company) and shall be held harmless by the Company in relying on the advice
or opinion of such counsel in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance
with such advice or opinion of such counsel;

 

e) solely shall make
the final determination as to whether or not a Warrant received by Warrant Agent is duly, completely and correctly executed, and
Warrant Agent shall be held harmless by the Company in respect of any action taken, suffered or omitted by Warrant Agent hereunder
in good faith and in accordance with its determination;

 

f) shall not be obligated
to take any legal or other action hereunder which might, in its judgment, subject or expose it to any expense or liability unless
it shall have been furnished with an indemnity satisfactory to it; and

 

g) shall not be liable
or responsible for any failure of the Company to comply with any of the Company’s obligations relating to the Registration
Statement or this Warrant Agreement, including without limitation obligations under applicable regulation or law.

 

8.2. Payment of Taxes.
The Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent
in respect of the issuance or delivery of Warrant Shares upon the exercise of Warrants, but the Company shall not be obligated
to pay any transfer taxes in respect of the Warrants or such Warrant Shares. The Warrant Agent shall not register any transfer
or issue or deliver any Warrant Certificate(s) or Warrant Shares unless or until the persons requesting the registration or issuance
shall have paid to the Warrant Agent for the account of the Company the amount of such tax, if any, or shall have established to
the reasonable satisfaction of the Company that such tax, if any, has been paid.

 

8.3. Resignation,
Consolidation, or Merger of Warrant Agent.

 

    	11

    	 

    

8.3.1. Appointment
of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged
from all further duties and liabilities hereunder after giving sixty (60) calendar days’ notice in writing to the Company.
If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in
writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period
of thirty (30) calendar days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by
the Holder (who shall, with such notice, submit such Holder’s Warrants for inspection by the Company), then such Holder may
apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent,
the expenses of which shall be paid by the Company. Any successor Warrant Agent (but not including the initial Warrant Agent),
whether appointed by the Company or by such court, shall be a corporation organized and existing under the laws of the State of
New York, in good standing and having its principal office in the Borough of Manhattan, City of New York and State of New York,
and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state
authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties,
and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any
further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and
deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and
rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute,
acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor
Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.

 

8.3.2. Notice of
Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to
the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any such appointment.

 

8.3.3. Merger or
Consolidation of Warrant Agent. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated
or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor
Warrant Agent under this Warrant Agreement without any further act.

 

8.4. Fees and Expenses
of Warrant Agent.

 

8.4.1. Remuneration.
The Company agrees to pay the Warrant Agent reasonable remuneration in an amount separately agreed to between Company and Warrant
Agent for its services as Warrant Agent hereunder and will reimburse the Warrant Agent upon demand for all expenditures that the
Warrant Agent may reasonably incur in the execution of its duties hereunder. One half of the total Warrant Agent fees (not including
postage) must be paid upon execution of this Warrant Agreement. The remaining half must be paid within fifteen (15) Business Days
thereafter. An invoice for any out-of-pocket and/or per item fees incurred will be rendered to and payable by the Company within
fifteen (15) Business Days of the date of said invoice. It is understood and agreed that all services to be performed by Warrant
Agent shall cease if full payment for its services has not been received in accordance with the above schedule, and said services
will not commence thereafter until all payment due has been received by Warrant Agent.

 

8.4.2. Further Assurances.
The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered
all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying
out or performing of the provisions of this Warrant Agreement.

 

8.5. Liability of
Warrant Agent.

 

    	12

    	 

    

8.5.1. Reliance
on Company Statement. Whenever in the performance of its duties under this Warrant Agreement, the Warrant Agent shall deem
it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a statement signed by the President, Chief Executive Officer or Chief Financial Officer
of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered
in good faith by it pursuant to the provisions of this Warrant Agreement.

 

8.5.2. Indemnity.
The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. The Company agrees
to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, claims, losses, damages,
costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Warrant Agreement
except as a result of the Warrant Agent’s gross negligence, willful misconduct, or bad faith.

 

8.5.3. Limitation
of Liability. The Warrant Agent’s aggregate liability, if any, during the term of this Warrant Agreement with respect
to, arising from, or arising in connection with this Warrant Agreement, or from all services provided or omitted to be provided
under this Warrant Agreement, whether in contract, or in tort, or otherwise, is limited to, and shall not exceed, the amounts paid
or payable hereunder by the Company to Warrant Agent as fees and charges (not including reimbursable expenses).

 

8.5.4. Disputes.
In the event any question or dispute arises with respect to the proper interpretation of this Warrant Agreement or the Warrant
Agent’s duties hereunder or the rights of the Company or of any Holder, the Warrant Agent shall not be required to act and
shall not be held liable or responsible for refusing to act until the question or dispute has been judicially settled (and the
Warrant Agent may, if it deems it advisable, but shall not be obligated to, file a suit in interpleader or for a declaratory judgment
for such purpose) by final judgment rendered by a court of competent jurisdiction, binding on all parties interested in the matter
which is no longer subject to review or appeal, or settled by a written document in form and substance satisfactory to the Warrant
Agent and executed by the Company and each other interested party. In addition, the Warrant Agent may require for such purpose,
but shall not be obligated to require, the execution of such written settlement by all of the Holders of the Warrants and all other
parties that may have an interest in the settlement.

 

8.5.5. Exclusions.
The Warrant Agent shall have no responsibility with respect to the validity of this Warrant Agreement or with respect to the validity
or execution of any Warrant (except its countersignature hereof and thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Warrant Agreement or in any Warrant; nor shall it be responsible to make
any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method, or amount of any such
adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or reservation of any Warrant Shares to be issued pursuant
to this Warrant Agreement or any Warrant or as to whether any Warrant Shares will, when issued, be validly issued and fully paid
and nonassessable.

 

8.6. Acceptance of
Agency. The Warrant Agent hereby accepts the agency established by this Warrant Agreement and agrees to perform the same upon
the terms and conditions herein set forth and, among other things, shall account promptly to the Company with respect to Warrants
exercised and concurrently account for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of Warrant
Shares through the exercise of Warrants.

 

    	13

    	 

    

9. Miscellaneous
Provisions.

 

9.1. Successors.
All the covenants and provisions of this Warrant Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns.

 

9.2. Notices.
Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by a Holder to
or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or
private courier service within five (5) Business Days after deposit of such notice, postage prepaid, addressed (until another address
is filed in writing by the Company with the Warrant Agent), as follows:

 

xG Technology, Inc.

240 S. Pineapple Avenue, Suite 701

Sarasota, Florida 34236

Attn: Chief Executive Officer

 

Any notice, statement
or demand authorized by this Warrant Agreement to be given or made by the a Holder or by the Company to or on the Warrant Agent
shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier
service within five (5) Business Days after deposit of such notice, postage prepaid, addressed (until another address is filed
in writing by the Warrant Agent with the Company), as follows:

 

Continental Stock Transfer & Trust Co.

17 Battery Place, 8th Floor

New York, New York 10004

Attn: Monty Harry

 

with a copy in each case to:

 

Robinson Brog Leinwand Greene Genovese & Gluck
P.C.

875 Third Avenue – 9th Floor

New York, New York 10022

Attn: David E. Danovitch, Esq.

 

and:

 

Feltl and Company, inc.

2100 LaSalle Plaza

800 LaSalle Ave

Minneapolis, Minnesota 55402

Attn: Compliance Department

    	14

    	 

    

 

and:

 

Aegis Capital Corp.

810 Seventh Avenue, 11th Fl

New York, NY 10019

Attn: Compliance Department

 

and:

 

Reed Smith LLP

599 Lexington Avenue – 22nd Floor

New York, New York 10022

Attn: [ ]

 

9.3. Applicable Law.
The validity, interpretation, and performance of this Warrant Agreement and of the Warrants shall be governed in all respects by
the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of
the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it arising
out of or relating in any way to this Warrant Agreement shall be brought and enforced in the courts of the State of New York or
the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction
shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenience
forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or
certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 9.2 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim.

 

9.4. Persons Having
Rights under this Warrant Agreement. Nothing in this Warrant Agreement expressed and nothing that may be implied from any of
the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the
parties hereto and the Holders of the Warrants and, for purposes of Sections 3.3, 9.3 and 9.8, the Underwriter, any right, remedy,
or claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise, or agreement hereof.
The Underwriters shall be deemed to be an express third-party beneficiary of this Warrant Agreement with respect to Sections 3.3,
9.3 and 9.8 hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Warrant Agreement shall
be for the sole and exclusive benefit of the parties hereto (and the Underwriters with respect to the Sections 3.3, 3.4, 9.3 and
9.8 hereof) and their successors and assigns and of the Holders.

 

9.5. Examination of
this Warrant Agreement. A copy of this Warrant Agreement shall be available at all reasonable times at the office of the Warrant
Agent in the City of New York, State of New York, for inspection by any Holder. The Warrant Agent may require any such Holder to
submit his Warrant for inspection by it.

 

9.6. Counterparts.
This Warrant Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

 

9.7. Effect of Headings.
The Section headings herein are for convenience only and are not part of this Warrant Agreement and shall not affect the interpretation
thereof.

 

9.8. Amendments.
This Warrant Agreement may be amended by the parties hereto without the consent of any Holder for the purpose of curing any ambiguity,
or of curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions with
respect to matters or questions arising under this Warrant Agreement as the parties may deem necessary or desirable and that the
parties deem shall not adversely affect the interest of the Holders. All other modifications or amendments, including any amendment
to increase the Exercise Price or shorten the Exercise Period, shall require the written consent of the Underwriter and the Holders
of a majority of the then outstanding Warrants.

 

    	15

    	 

    

9.9. Severability.
This Warrant Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall
not affect the validity or enforceability of this Warrant Agreement or of any other term or provision hereof. Furthermore, in lieu
of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Warrant
Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

 

9.10. Force Majeure.
In the event either party is unable to perform its obligations under the terms of this Warrant Agreement because of acts of God,
strikes, failure of carrier or utilities, equipment or transmission failure or damage that is reasonably beyond its control, or
any other cause that is reasonably beyond its control, such party shall not be liable for damages to the other for any damages
resulting from such failure to perform or otherwise from such causes. Performance under this Warrant Agreement shall resume when
the affected party or parties are able to perform substantially that party’s duties.

 

9.11. Consequential
Damages. Notwithstanding anything in this Warrant Agreement to the contrary, neither party to this Warrant Agreement shall
be liable to the other party for any consequential, indirect, special or incidental damages under any provision of this Warrant
Agreement or for any consequential, indirect, punitive, special or incidental damages arising out of any act or failure to act
hereunder even if that party has been advised of or has foreseen the possibility of such damages.

 

[Signature Page Follows]

 

 

 

    	16

    	 

    

 

IN WITNESS WHEREOF,
this Warrant Agreement has been duly executed by the parties hereto as of the day and year first above written.

 

 

	 	XG TECHNOLOGY, INC.
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	 	 
	 	CONTINENTAL STOCK TRANSFER & TRUST CO.
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

   

 

    	17

    	 

    

 

Exhibit A

 

[FORM OF WARRANT CERTIFICATE]

 

EXERCISABLE ONLY IF COUNTERSIGNED BY THE
WARRANT

AGENT AS PROVIDED HEREIN.

 

Warrant Certificate Evidencing Warrants
to Purchase

Common Stock, par value of $0.00001 per share, as described herein.

 

XG TECHNOLOGY, INC.

 

	No. ___________	CUSIP  595117 110

 

VOID AFTER 5:00 P.M., NEW YORK CITY
TIME,

ON _______ __, 2018

 

This certifies that
________________________ or registered assigns is the registered holder (the “Holder”) of _____________________
warrants to purchase certain securities (each a “Warrant”). Each Warrant entitles the Holder, subject to the
provisions contained herein and in the Warrant Agreement (as defined below), to purchase from xG Technology, Inc., a Delaware corporation
(the “Company”), one share (collectively, the “Warrant Shares”) of Common Stock, par value
$0.00001 per share, of the Company (“Common Stock”), at the Exercise Price set forth below. The price per share
at which each Warrant Share may be purchased at the time each Warrant is exercised (the “Exercise Price”) is
$6.87 initially, subject to adjustments as set forth in the Warrant Agreement (as defined below).

 

This Warrant Certificate
is issued under and in accordance with the Warrant Agreement, dated as of _______, 2013 (the “Warrant Agreement”),
between the Company and the Warrant Agent, and is subject to the terms and provisions contained in the Warrant Agreement, to all
of which terms and provisions the Holder of this Warrant Certificate and the beneficial owners of the Warrants represented by this
Warrant Certificate consent by acceptance hereof. Copies of the Warrant Agreement are on file and can be inspected at the below-mentioned
office of the Warrant Agent and at the office of the Company at 240 S. Pineapple Ave., Suite 701, Sarasota, Florida 34236. Capitalized
terms used but not defined herein shall have the meaning ascribed to them in the Warrant Agreement.

 

Subject to the terms
of the Warrant Agreement, each Warrant evidenced hereby may be exercised in whole but not in part at any time, as specified herein,
on any Business Day (as defined below) occurring during the period (the “Exercise Period”) commencing on the
Issuance Date and terminating at 5:00 P.M., New York City time, on _______, 2018 (the “Expiration Date”).
Each Warrant remaining unexercised after 5:00 P.M., New York City time, on the Expiration Date shall become void, and all
rights of the Holder of this Warrant Certificate evidencing such Warrant shall cease.

 

The Holder of the Warrants
represented by this Warrant Certificate may exercise any Warrant evidenced hereby by delivering, not later than 5:00 P.M.,
New York City time, on any Business Day during the Exercise Period (the “Exercise Date”) to Continental Stock
Transfer & Trust Co. (the “Warrant Agent”, which term includes any successor warrant agent under the Warrant
Agreement described below) at its corporate trust department at 17 Battery Place, 8th Floor, New York, New York 10004, (i) this
Warrant Certificate or, in the case of a Book-Entry Warrant Certificate (as defined in the Warrant Agreement), the Warrants to
be exercised (the “Book-Entry Warrants”) as shown on the records of The Depository Trust Company (the “Depository”)
to an account of the Warrant Agent at the Depository designated for such purpose in writing by the Warrant Agent to the Depository,
(ii) an election to purchase (“Election to Purchase”), properly executed by the Holder hereof on the reverse
of this Warrant Certificate or properly executed by the institution in whose account the Warrant is recorded on the records of
the Depository (the “Participant”), and substantially in the form included on the reverse of this Warrant Certificate
and (iii) unless cashless exercise is permitted under the Warrant Agreement, the Exercise Price for each Warrant to be exercised
in lawful money of the United States of America by certified or official bank check or by bank wire transfer in immediately available
funds, in each case payable to the order of the Company.

 

    	A-1

    	 

    

As used herein, the
term “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in the
City of New York are authorized or required by law or executive order to remain closed.

 

Warrants may be exercised
only in whole numbers of Warrants. No fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather
the number of Warrant Shares to be issued shall be rounded up or down, as applicable, to the nearest whole number. If fewer than
all of the Warrants evidenced by this Warrant Certificate are exercised, a new Warrant Certificate for the number of Warrants remaining
unexercised shall be executed by the Company and countersigned by the Warrant Agent as provided in Section 2 of the Warrant Agreement,
and delivered to the Holder of this Warrant Certificate at the address specified on the books of the Warrant Agent or as otherwise
specified by such Holder.

 

The Company shall provide
to the Holder prompt written notice of any time that the Company is unable to issue the Warrant Shares via DTC transfer or otherwise
(without restrictive legend), because (A) the Commission has issued a stop order with respect to the Registration Statement, (B)
the Commission otherwise has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently,
(C) the Company has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently,
or (D) otherwise (each a “Restrictive Legend Event”). To the extent that a Restrictive Legend Event occurs after
the Holder has exercised a Warrant in accordance with the terms of the Warrants but prior to the delivery of the Warrant Shares,
the Company shall, at the election of the Holder to be given within five (5) Business Days of receipt of notice of the Restrictive
Legend Event, either (A) rescind the previously submitted Election to Purchase and the Company shall return all consideration paid
by the Holder for such shares upon such rescission or (B) treat the attempted exercise as a cashless exercise as described in the
next paragraph and refund the cash portion of the exercise price to the Holder.

 

If a Restrictive Legend
Event has occurred and no exemption from the registration requirements is available, the Warrant shall only be exercisable on a
cashless basis. Notwithstanding anything herein to the contrary, the Company shall not be required to make any cash payments or
net cash settlement to the Holder in lieu of issuance of the Warrant Shares. Upon a “cashless exercise,” the Holder
shall be entitled to receive a certificate (or book entry) for the number of Warrant Shares equal to the quotient obtained by dividing
[(A-B) (X)] by (A), where:

 

(A) =the VWAP on
the Business Day immediately preceding the date on which the Holder elects to exercise the Warrant by means of a “cashless
exercise,” as set forth in the applicable Election to Purchase;

(B) =the Exercise
Price of the Warrant, as it may have been adjusted hereunder; and

(X) =the number
of Warrant Shares that would be issuable upon exercise of the Warrant in accordance with the terms of the Warrant if such exercise
were by means of a cash exercise rather than a cashless exercise.

 

    	A-2

    	 

    

Upon receipt of an
Election to Purchase for a cashless exercise, the Warrant Agent will promptly deliver a copy of the Election to Purchase to the
Company to confirm the number of Warrant Shares issuable in connection with the cashless exercise. The Company shall calculate
and transmit to the Warrant Agent, and the Warrant Agent shall have no obligation under this section to calculate, the number of
Warrant Shares issuable in connection with the cashless exercise.

 

“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 NYSE AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock
Exchange (each, 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) on any day that the
Trading Market on which the Common Stock is then listed is open for trading), (b) the volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted
for trading on the OTC Bulletin Board 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 Holders of a majority in interest of the Warrants then outstanding
and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

The Exercise Price
and the number of Warrant Shares purchasable upon the exercise of each Warrant shall be subject to adjustment as provided pursuant
to Section 4 of the Warrant Agreement.

 

The Holder hereby understands
and covenants that in the event the Common Stock of the Company is trading at an average of at least $13.74 per share (equal to
two times (2x) the Exercise Price on the date of issuance) for a period of not less than 20 consecutive trading days, the Holder
shall be required to fully exercise this Warrant Certificate within ten (10) business days following the 20th trading
day. The Holder shall furnish the Company with a completed and fully executed Form of Election to Purchase attached to this Warrant
Certificate and remit the funds pursuant to the Form of Election to Purchase and the terms of this Warrant Certificate.

 

Upon due presentment
for registration of transfer or exchange of this Warrant Certificate at the stock transfer division of the Warrant Agent, the Company
shall execute, and the Warrant Agent shall countersign and deliver, as provided in Section 5 of the Warrant Agreement, in the name
of the designated transferee one or more new Warrant Certificates of any authorized denomination evidencing in the aggregate a
like number of unexercised Warrants, subject to the limitations provided in the Warrant Agreement.

 

Neither this Warrant
Certificate nor the Warrants evidenced hereby entitles the Holder to any of the rights of a stockholder of the Company, including,
without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent
or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or
any other matter.

 

The Warrant Agreement
and this Warrant Certificate may be amended as provided in the Warrant Agreement including, under certain circumstances described
therein, without the consent of the Holder of this Warrant Certificate or the Warrants evidenced thereby.

 

    	A-3

    	 

    

THIS WARRANT CERTIFICATE
AND ALL RIGHTS HEREUNDER AND UNDER THE WARRANT AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS FORMED AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF TO THE EXTENT SUCH PRINCIPLES OR RULES WOULD REQUIRE OR PERMIT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION.

 

This Warrant Certificate
shall not be entitled to any benefit under the Warrant Agreement or be valid or obligatory for any purpose, and no Warrant evidenced
hereby may be exercised, unless this Warrant Certificate has been countersigned by the manual signature of the Warrant Agent.

 

IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed.

 

Dated
as of ________ __, 2013

 

	 	XG TECHNOLOGY, INC.
	 	 
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 

 

	CONTINENTAL STOCK TRANSFER & TRUST CO., as Warrant Agent
	 	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 

 

	 
	 

 

    	A-4

    	 

    

 

 

[REVERSE]

 

Instructions for Exercise of Warrant

 

To exercise the Warrants
evidenced hereby, the Holder must, by 5:00 P.M., New York City time, on the specified Exercise Date, deliver to the Warrant
Agent at its stock transfer division, a certified or official bank check or a bank wire transfer in immediately available funds,
in each case payable to the Company, in an amount equal to the Exercise Price in full for the Warrants exercised. In addition,
the Holder must provide the information required below and deliver this Warrant Certificate to the Warrant Agent at the address
set forth below and the Book-Entry Warrants to the Warrant Agent in its account with the Depository designated for such purpose.
The Warrant Certificate and this Election to Purchase must be received by the Warrant Agent by 5:00 P.M., New York City time,
on the specified Exercise Date.

 

ELECTION TO PURCHASE

TO BE EXECUTED IF WARRANT HOLDER DESIRES

TO EXERCISE THE WARRANTS EVIDENCED HEREBY

 

The undersigned hereby
irrevocably elects to exercise, on __________, ____ (the “Exercise Date”), __________ Warrants, evidenced by
this Warrant Certificate, to purchase, __________ shares (the “Warrant Shares”) of Common Stock, par value of
$0.00001 per share (the “Common Stock”) of xG Technology, Inc., a Delaware corporation (the “Company”),
and represents that on or before the Exercise Date:

 

o such
Holder has tendered payment for such Warrant Shares by certified or official bank check payable to the order of the Company c/o
Continental Stock Transfer & Trust Co., 17 Battery Place, 8th Floor, New York, New York 10004, or by bank wire transfer in
immediately available funds payable to the Company at Account No. [ ], in each case in the amount of $_______ in accordance with
the terms hereof, or

 

o [if
permitted] the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
3.3.7 of the Warrant Agreement, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant
to the cashless exercise procedure set forth in subsection 3.3.7.

 

The undersigned requests that said number
of Warrant Shares be in fully registered form, registered in such names and delivered, all as specified in accordance with the
instructions set forth below.

 

If said number of Warrant
Shares is less than all of the Warrant Shares purchasable hereunder, the undersigned requests that a new Warrant Certificate evidencing
the remaining balance of the Warrants evidenced hereby be issued and delivered to the Holder of the Warrant Certificate unless
otherwise specified in the instructions below.

 

 

Dated: ________ __, ____

 

 

	 	Name	 	 
	 	 	(Please Print)	 

 

/   /   /   / - /   /   / - /   /   /   /   /

(Insert Social Security or Other Identifying Number
of Holder)

 

	 	Address	__________________________
	 	 	__________________________
	 	 	 
	 	Signature	__________________________

 

    	A-5

    	 

    

This Warrant may only be exercised by presentation
to the Warrant Agent at one of the following locations:

 

	 	By hand at:  	Continental Stock Transfer & Trust Co.
	 	 	17 Battery Place, 8th Floor
	 	 	New York, New York 10004
	 	 	 
	 	By mail at:	Continental Stock Transfer & Trust Co.
	 	 	17 Battery Place, 8th Floor
	 	 	New York, New York 10004

 

The method of delivery of this Warrant Certificate is at the
option and risk of the exercising Holder and the delivery of this Warrant Certificate will be deemed to be made only when actually
received by the Warrant Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended.
In all cases, sufficient time should be allowed to ensure timely delivery.

 

(Instructions as to form and delivery of Warrant Shares and/or
Warrant Certificates)

	 

Name in which Warrant Shares are
to be registered if other than in the name of the Holder of this Warrant Certificate:

 

Address to which Warrant Shares
are to be mailed if other than to the address of the Holder of this Warrant Certificate as shown on the books of the Warrant Agent:

 

 

(Street Address)

 

 

(City and State) (Zip Code)

 

 

Name in which Warrant Certificate
evidencing unexercised Warrants, if any, is to be registered if other than in the name of the Holder of this Warrant Certificate:

 

    	A-6

    	 

    

Address to which certificate representing
unexercised Warrants, if any, is to be mailed if other than to the address of the Holder of this Warrant Certificate as shown on
the books of the Warrant Agent: 

 

(Street Address)

 

 

(City and State) (Zip Code)

 

Dated:

 

 

Signature:

 

Signature must conform in
all respects to the name of the Holder as specified on the face of this Warrant Certificate.  If Warrant Shares, or a
Warrant Certificate evidencing unexercised Warrants, are to be issued in a name other than that of the Holder hereof or are to
be delivered to an address other than the address of such Holder as shown on the books of the Warrant Agent, the above signature
must be guaranteed by a an Eligible Guarantor Institution (as that term is defined in Rule 17Ad-15 of the Securities Exchange Act
of 1934, as amended).

 

 

SIGNATURE GUARANTEE 

  

Name of Firm _____________________________ 

Address _____________________________

Area Code  

and Number _____________________________ 

 

Authorized Signature _________________________  

Name____________________________________  

Title____________________________________  

Dated:__________, 20__

 

 

 

    	A-7

    	 

    

 

ASSIGNMENT

 

(FORM OF ASSIGNMENT TO BE EXECUTED IF WARRANT
HOLDER

DESIRES TO TRANSFER WARRANTS EVIDENCED HEREBY)

 

FOR VALUE RECEIVED, ____________ HEREBY SELL(S), ASSIGN(S) AND
TRANSFER(S) UNTO

 

	 	 	 
	(Please print name and address

including zip code of assignee)	 	(Please insert social security or

other identifying number of assignee)

 

the rights represented by the within Warrant Certificate and
does hereby irrevocably constitute and appoint ____________ Attorney to transfer said Warrant Certificate on the books of the Warrant
Agent with full power of substitution in the premises.

 

Dated:

 

 

Signature

 

(Signature
must conform in all respects to the name of the Holder as specified on the face of this Warrant Certificate and must bear a signature
guarantee by an Eligible Guarantor Institution (as that term is defined in Rule 17Ad-15 of the Securities Exchange Act of 1934,
as amended).

 

 

SIGNATURE
GUARANTEE

 

	Name of Firm	 	 
	Address	 	 
	Area Code	 	 
	and Number	 	 
	 	 	 
	Authorized Signature	 	 
	Name	 	 
	 	 	 
	Title	 	 
	 	 	 
	Dated:	 	, 20__

    	A-8CONTRIBUTION AGREEMENT

 

THIS CONTRIBUTION AGREEMENT
(this “Agreement”) is entered into as of November 12, 2012 (the “Effective Date”), by and
among FlexEnergy, Inc., a Delaware corporation (“FlexEnergy”), FlexEnergy Energy Systems, Inc., a Delaware corporation
(“FEES”; FEES and FlexEnergy individually and collectively referred to as “Flex”), and Flex
Power Generation, Inc. (“FPG”).

 

WHEREAS, FlexEnergy
currently owns all of the issued and outstanding equity securities in FEES and FPG;

 

WHEREAS, in addition
to the microturbine business acquired from Ingersoll-Rand and owned, operated and further developed primarily through FEES (the
“Microturbine Business”), FlexEnergy has owned and operated a business (initially acquired in 2008 by FlexEnergy
from FlexEnergy, Inc., a California corporation (“FIC”), and continued after the acquisition of the Microturbine
Business) to develop and commercialize the use of flameless combustion or oxidation reactions (the “Oxidizer Business”);
and

 

WHEREAS, FlexEnergy
desires to contribute to FPG certain specific assets related to the Oxidizer Business (as compared to the Microturbine Business)
and other assets solely or primarily used as of the Effective Date in, or intended as of the Effective Date solely or primarily
for use in, the Oxidizer Business (as compared to the Microturbine Business), and FPG desires to receive and assume such assets;
and

 

WHEREAS, FlexEnergy,
FEES and FPG intend to separately enter into a transition agreement relating to the commercial terms of the provision (i) by FlexEnergy
and/or FEES to FPG of certain products and services primarily relating to the Microturbine Business, and (ii) by FPG to FlexEnergy
and/or FEES of certain services by FPG personnel (a “Transition Agreement”); and

 

NOW, THEREFORE,
in consideration of the foregoing, the mutual covenants and agreements herein contained and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

 

1.          Contribution.

 

1.1           Contributed
Assets. Effective as of the Effective Date, Flex hereby transfers, contributes, conveys, grants and assigns to FPG and FPG
hereby accepts and assumes all of Flex’s right, title and interest in and to the assets set forth on Schedule 1 (the
“Fixed Assets”), the agreements set forth on Schedule 2 to the extent that Flex has rights, liabilities
or obligations with respect to such agreements (the “Agreements”), and the Intellectual Property, including
that Intellectual Property set forth on Schedule 3 (collectively, the Intellectual Property, the Fixed Assets, and Agreements
are referred to herein as the “Contributed Assets”).

 

    	 

    	 

    

 

1.1.1           Definition
of Intellectual Property.

 

(a)          “Intellectual
Property” shall mean all intellectual property rights that Flex owns or in which Flex has an interest solely or primarily
used as of the Effective Date in, or intended as of the Effective Date solely or primarily for use in, the Oxidizer Business (as
compared to the Microturbine Business), which the parties agree includes the following: (A) (i) Patents (but not Trademarks)
set forth on Schedule 3, but not any other Patents, (ii)  trade secrets, confidential business and technical information
and any other confidential information and proprietary information (including research and development, prototypes, models, production
and other designs, formulae, technology and other processes and techniques, schematics, technical data, business methods, customer
lists and supplier lists, and any other information meeting the definition of a trade secret under the Uniform Trade Secrets Act
or similar laws in any jurisdiction) (“Trade Secrets”) solely or primarily used as of the Effective Date in,
or intended as of the Effective Date solely or primarily for use in, the Oxidizer Business (as compared to the Microturbine Business),
(iii) other proprietary technology, intellectual property, industrial or similar proprietary rights, whether arising under common
law, state law, federal law or laws of foreign countries or jurisdictions therein solely or primarily used as of the Effective
Date in, or intended as of the Effective Date solely or primarily for use in, the Oxidizer Business (as compared to the Microturbine
Business); (B) rights to apply for or register any of the rights described in subsections (A)(i-iii) above; (C) licenses and
other arrangements to use the intellectual property that are owned by others but that Flex is using under a license or other arrangement
with the owner(s) of such intellectual property as of the Effective Date and which intellectual property is solely or primarily
used as of the Effective Date in, or intended as of the Effective Date solely or primarily for use in, the Oxidizer Business (as
compared to the Microturbine Business); (D) know-how, software and other information, whether the same is owned by Flex, either
alone or with others, or is owned by others but that Flex is using as of the Effective Date under a license or other arrangement
with the owner(s) of the intellectual property rights solely or primarily used as of the Effective Date in, or intended as
of the Effective Date solely or primarily for use in, the Oxidizer Business (as compared to the Microturbine Business); and (E)
claims against third parties arising solely from such Intellectual Property, whether past, present, or future, choate or inchoate,
known or unknown, or contingent or non-contingent.

 

(b)          “Intellectual
Property” also includes, but is not limited to, the Patents and patent applications expressly identified on Schedule 3
to this Agreement, including any United States or foreign utility or design patent to issue therefrom, together with any extensions,
reexaminations and reissues of such patents, patents of addition, divisions, continuations, continuations-in-part, and any subsequent
filings in any country or jurisdiction claiming priority therefrom.

 

(c)          “Intellectual
Property” also includes the intellectual property rights (of the nature described in Section 1.1.1(a)(A)-(E) above) that
Flex may otherwise own or have an interest in any oxidizer systems, including associated interfaces, modules, processes and controls,
and any enhancements, improvements and derivations thereof, hereafter developed, invented, or otherwise derived by FlexEnergy or
FEES, or any of their directors, officers, employees or agents on behalf of FlexEnergy or FEES, to the extent developed, invented
or otherwise derived in connection with performing engineering or other services for FPG (i) pursuant to a Transition Agreement,
service agreement or other substitute or successor written agreement, and (ii) for which FlexEnergy or FEES, as applicable, is
monetarily compensated for such services pursuant to such agreement (provided that FPG has paid in full all amounts owed to FlexEnergy
and FEES under such agreements).

 

    	2

    	 

    

 

1.1.2           “Patent”
or “Patents” shall mean any United States or foreign utility or design patents, together with any extensions,
reexaminations and reissues of such patents, patents of addition, patent applications, divisions, continuations, continuations-in-part,
and any subsequent filings in any country or jurisdiction claiming priority therefrom, owned by, or subject to assignment to, Flex.

 

1.2           Trademark
License. FlexEnergy hereby grants to FPG a worldwide, royalty-free, fully-paid up right and license to use the trademarks and
service marks identified on Schedule 3 (the “Licensed Trademarks”), provided that (a) such license shall
terminate upon the written request of FPG or a failure by FPG to promptly (in any event not to exceed five (5) business days following
notice thereof) reimburse FlexEnergy for any registration maintenance costs and other out-of-pocket costs of ownership with respect
to the Licensed Trademarks, (b) the permitted scope of use of the Licensed Trademark shall be for use in the Oxidizer Business
but not for any use that causes confusion with the Microturbine Business (as reasonably determined by FlexEnergy), and (c) such
license shall not be assigned or sublicensed by FPG without the prior written consent of FlexEnergy in its absolute discretion.

 

1.3           Liabilities.

 

1.3.1           Assumed
Liabilities. Effective as of the Effective Date, FPG hereby assumes, and agrees to pay, perform and discharge all liabilities
and obligations arising out of, relating to or otherwise in respect of the Contributed Assets and the Oxidizer Business (in its
present form or as previously conducted), specifically including, without limitation, the liabilities and obligations identified
on Schedule 4 (collectively, the “Assumed Liabilities”); provided that, for clarity, specific liabilities
and obligations for which FPG already has reimbursement obligations pursuant to Section 1.3.2 below shall not be further included
as Assumed Liabilities subject to this Section 1.3.1. As between Flex and FPG, the Retained Liabilities shall remain the sole responsibility
of, and shall be retained, paid, performed and discharged solely by, Flex. “Retained Liabilities” shall mean
every liability and obligation of Flex other than the Assumed Liabilities but including without limitation those liabilities and
obligations identified on Schedule 6. FlexEnergy or FEES may pay or discharge any Assumed Liability if it provides (i) evidence
to FPG that such Assumed Liability is subject to a notice of default, demand or claim (or is otherwise due and owing and FlexEnergy
or FEES is the obligor) and (ii) three business days advance written notice to FPG of its intention to pay or discharge such Assumed
Liability prior to such payment or discharge, in which chase FPG shall reimburse FlexEnergy or FEES, as applicable, for the full
cost of such payment or performance within five business days after receipt of evidence by FPG of Flex’s payment of such
Assumed Liability.

 

1.3.2           Reimbursement
Obligations. Effective as of the Effective Date, FPG hereby agrees to reimburse Flex for the portion of those liabilities and
obligations identified on Schedule 5 as being the responsibility of FPG, provided that the amount of FPG reimbursement obligations
under this Section 1.3.2 shall not exceed $635,702.56 (collectively, the “Reimbursement Obligations”), pursuant
to the following terms. Flex must provide three business days advance written notice to FPG of its intention to pay a liability
that is subject to a Reimbursement Obligation prior to such payment. Upon receipt of evidence of Flex’s payment of the corresponding
liability or obligation, FPG shall promptly (in any event not to exceed five business days following notice thereof) pay to Flex
the proportionate Reimbursement Obligation amount corresponding to such liability or obligation paid.

 

    	3

    	 

    

 

1.3.3           Termination.
For purposes of clarity, upon the reimbursement to Flex of $653,702.56 for Reimbursement Obligations (either through direct payment
by FPG or drawing upon the Letter of Credit (as defined in the Credit Support Agreement, which is described in Section 1.3.4 below),
FPG’s obligation to pay Reimbursement Obligations under Section 1.3.2 shall terminate.

 

1.3.4           Security.
As support for FPG’s obligations under this Section 1.3, FPG, Flex and SAIL Venture Partners II, L.P. are simultaneously
entering into to a Credit Support Agreement.

 

1.4           Third
Party Consents; Non-Assignment of Certain Assets. Notwithstanding the foregoing, in the event that the legal interest in any
of the Contributed Assets to be transferred, assigned or conveyed pursuant to this Agreement, or any claim, right, benefit or obligation
arising thereunder or resulting therefrom, cannot be transferred, assigned or conveyed hereunder as of the Effective Date because
any waiting or notice period has not expired or any consents or approvals required for such transfer have not been obtained or
waived, then FlexEnergy or FEES, as applicable, shall hold such legal interest in the Contributed Assets for the benefit and risk
of FPG until such time as such waiting or notice period expires or the requisite consent or approval for transfer is obtained,
at which time the parties will effect the legal transfer. Pending completion of such transfer, each of Flex and FPG shall cooperate
with each other in any lawful and reasonable arrangements designed to provide the benefits and obligations of ownership thereof
to FPG, and FPG shall make appropriate arrangements so that FPG promptly bears the full economic costs thereof to the same extent
such costs would have been borne by FPG upon an actual transfer, contribution, conveyance, grant or assignment to FPG on the Effective
Date (and further to the extent Flex bears any economic costs for such Contributed Asset after the Effective Date). Each party
shall, at its own expense, use commercially reasonable efforts to cooperate in obtaining such consents and/or approvals as may
be necessary to complete such transfers as soon as practicable.

 

1.5           License
of Control-Related IP. FPG hereby grants to Flex a worldwide, perpetual, irrevocable, royalty-free, fully-paid up right and
license to non-exclusively use (a) controls-related Intellectual Property to the extent that such controls-related Intellectual
Property was used in the Microturbine Business as of the Effective Date, and (b) controls-related Intellectual Property hereafter
developed, invented, or otherwise derived by FlexEnergy, FEES, or any of their directors, officers, employees or agents, as dual-use
technology for use in both the Microturbine Business and the Oxidizer Business and contributed, transferred, assigned or conveyed
to FPG pursuant to Section 1.1.1(c) above, provided that the permitted scope of use of the Intellectual Property licenses pursuant
to this Section 1.5 shall be for use in the Microturbine Business only.

 

2.          Representations
and Warranties of Flex. Each of FlexEnergy and FEES, jointly and severally, hereby represents and warrants to FPG that, as
of the Effective Date:

 

2.1           Binding
Obligation. Flex has full power and authority to enter into this Agreement. This Agreement has been duly authorized, executed
and delivered by Flex (and assuming the due authorization and delivery hereof and thereof by the other parties hereto) constitutes
the legal, valid and binding obligation of Flex enforceable against Flex in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors’
rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a proceeding
at law or in equity).

 

    	4

    	 

    

 

 

2.2           Authorization;
No Contravention. The execution, delivery and performance by Flex of this Agreement and the consummation by Flex of the transactions
contemplated thereby (i) have been duly authorized, if necessary, by all necessary action of Flex and no further action is required
of Flex in connection therewith, and (ii) do not and will not conflict with, contravene or constitute a default or breach under
(A) any provision of any law, regulation or governmental requirement applicable to Flex or (B) any of Flex’s organizational
documents.

 

2.3           Litigation.
There is no Proceeding (defined below) pending or currently threatened against Flex that questions the validity of this Agreement
or the right of Flex to enter into it, or to consummate the transactions contemplated by this Agreement. “Proceeding”
shall mean an action, claim, suit, investigation or proceeding (including, without limitation, an investigation), whether commenced
or overtly threatened.

 

2.4           Accounts
Payable. To the Knowledge of FlexEnergy, there are no outstanding, and neither Flex nor FPG has received prior to the date
hereof bills for valid, accounts payable which constitute Assumed Liabilities except those which are included on Schedules 4
or 5 hereto. “Knowledge of FlexEnergy” shall mean the knowledge of Jay Mitchell and Dan Whelan, assuming a reasonable
inquiry.

 

3.          Representations
and Warranties of FPG. FPG hereby represents and warrants to Flex that, as of the Effective Date:

 

3.1           Binding
Obligation. FPG has full power and authority to enter into this Agreement. This Agreement has been duly authorized, executed
and delivered by FPG (and assuming the due authorization and delivery hereof and thereof by the other parties hereto) constitutes
the legal, valid and binding obligation of FPG enforceable against FPG in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors’
rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a proceeding
at law or in equity).

 

3.2           Authorization;
No Contravention. The execution, delivery and performance by FPG of this Agreement and the consummation by FPG of the transactions
contemplated thereby (i) have been duly authorized, if necessary, by all necessary action of FPG and no further action is required
of FPG in connection therewith, and (ii) do not and will not conflict with, contravene or constitute a default or breach under
any (A) provision of any law, regulation or governmental requirement applicable to FPG, or (B) FPG’s organizational documents.

 

3.3           Litigation.
There is no Proceeding pending or currently threatened against FPG that questions the validity of this Agreement or the right of
FPG to enter into it, or to consummate the transactions contemplated by this Agreement.

 

    	5

    	 

    

 

4.          Disclaimer
of Warranties. FPG ACKNOWLEDGES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SPECIFICALLY SET FORTH IN THIS AGREEMENT,
THE CONTRIBUTED ASSETS ARE BEING CONVEYED “AS IS, WHERE IS” AND “WITH ALL FAULTS,” AND FLEX HAS NOT MADE,
AND FPG HEREBY EXPRESSLY DISCLAIMS AND NEGATES, ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND OR NATURE
WHATSOEVER, RELATING TO THE CONTRIBUTED ASSETS (INCLUDING ANY IMPLIED OR EXPRESSED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE).

 

5.          Indemnification.

 

5.1           Flex,
jointly and severally, shall indemnify, defend and hold FPG and its directors, officers, shareholders, partners, employees and
agents (each, a “FPG Indemnified Party”) harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements (with the approval of Flex, which
shall not be unreasonably withheld), court costs and reasonable attorneys’ fees and costs of investigation that any such
FPG Indemnified Party suffers or incurs to the extent arising or resulting from (a) any misrepresentation, breach or inaccuracy
of any of the representations, warranties, covenants or agreements made by Flex in this Agreement; or (b) any Retained Liability.

 

5.2           FPG
shall indemnify, defend and hold FlexEnergy, FEES and their respective directors, officers, shareholders, partners, employees and
agents (each, a “Flex Indemnified Party”) harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements (with the approval of FPG, which
shall not be unreasonably withheld), court costs and reasonable attorneys’ fees and costs of investigation that any such
Flex Indemnified Party suffers or incurs to the extent arising or resulting from (a) any misrepresentation, breach or inaccuracy
of any of the representations, warranties, covenants or agreements made by FPG in this Agreement; or (b) any Assumed Liability.

 

6.          Covenants

 

6.1           FlexEnergy,
FEES and FPG each agrees to use commercially reasonable efforts to work together in good faith to prepare and enter into a Transition
Agreement within a reasonable time following the execution of this Agreement.

 

6.2           Flex
agrees to supply to FPG and its affiliates for a period of three years from the Effective Date the following at the Best Price
(defined below): (a) MT250 EX turbines, (b) MT333 EX turbines, and (c) other turbines as may reasonably be supplied by Flex. Such
supply shall be on commercially reasonable terms generally available to other customers with similar credit ratings/risks ordering
similar units in similar quantities. “Best Price” means, with respect to the applicable proposed sale of products
to FPG, the lowest price at which such products (or similar products) were sold in the preceding six-month period in similar quantities
to customers with similar credit ratings/risks, provided that FPG shall be charged generally applicable rates for any special engineering
or product specialization required for such sales of products except to the extent Flex specifically otherwise agrees in writing.

 

    	6

    	 

    

 

7.          Miscellaneous

 

7.1           Further
Assurances.  The parties shall each use commercially reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable laws and regulations, and to
cooperate with each other as is reasonably required for such purpose, to make effective the transactions contemplated by this Agreement
and the other documents contemplated hereby. To that end, each party agrees that it shall execute and deliver, or cause to be executed
and delivered from time to time, such instruments, documents, agreements, consents and assurances (such as bills of sale, assumption
agreements, patent assignments, trademark licenses and other intellectual property instruments), and that it shall take such other
actions as may be reasonably required to more effectively (i) convey, transfer to and vest in FPG, and to put FPG in possession
of, the Contributed Assets, and (ii) assign the Assumed Liabilities to FPG. In the event of any conflict of conflict or inconsistency
between the terms of this Agreement and the terms of any such instruments, documents, agreements, consents and assurances (other
than an agreement clearly titled as an “Amendment to Contribution Agreement”), the terms of this Agreement shall prevail.

 

7.2           Successors
and Assigns. The rights under this Agreement may not be assigned by any party hereto. The terms and conditions of this Agreement
inure to the benefit of and are binding upon the respective successors and permitted assignees of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors
and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly
provided herein.

 

7.3           Governing
Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of law.

 

7.4           Counterparts;
Facsimile. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement may also be executed and delivered by facsimile or
electronically delivered signature and in two or more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

7.5           Titles
and Subtitles. The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing
or interpreting this Agreement.

 

7.6           Notices.
All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively
given upon the earlier of actual receipt or: (i) personal delivery to the party to be notified; (ii) when sent, if sent by electronic
mail or facsimile during the recipient’s normal business hours, and if not sent during normal business hours, then on the
recipient’s next business day (only if written notification of receipt is received by sender); (iii) five (5) days after
having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) business day after
the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next-day delivery, with
written verification of receipt.

 

    	7

    	 

    

 

7.7           Amendments
and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance, and either retroactively or prospectively) only with the written consent of all the parties
hereto.

 

7.8           Severability.
In case any one or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and such
invalid, illegal, or unenforceable provision shall be reformed and construed so that it will be valid, legal, and enforceable to
the maximum extent permitted by law.

 

7.9           Entire
Agreement. This Agreement (including any Schedule and Exhibits hereto), together with the other Transaction Agreement, constitutes
the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written
or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled.

 

7.10         Dispute
Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the federal and state courts
located within the geographic boundaries of the United States District Court for the Central District of California for the purpose
of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action
or other proceeding arising out of or based upon this Agreement except in the federal and state courts located within the geographic
boundaries of the United States District Court for the Central District of California, and (c) hereby waive, and agree not
to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that
the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper
or that this Agreement or the subject matter hereof may not be enforced in or by such court. Each party will bear its own costs
in respect of any disputes arising under this Agreement, except as set forth in Section 5 of this Agreement.

 

[Signature Page
Follows]

 

    	8

    	 

    

 

IN WITNESS WHEREOF, the
parties hereto have executed and delivered this Agreement as of the day and year first above written.

 

	 	FLEXENERGY, INC.,
	 	a Delaware corporation
	 	 	 
	 	By:	 
	 	Name:	James M. Mitchell
	 	Title:	President/CEO
	 	 	 
	 	FLEXENERGY ENERGY SYSTEMS, INC.,
	 	a Delaware corporation
	 	 	 
	 	By:	 
	 	Name:	James M. Mitchell
	 	Title:	CEO
	 	 	 
	 	FLEX POWER GENERATION, INC.,
	 	a Delaware corporation
	 	 	 
	 	By:	 
	 	Name:	Boris Maslov
	 	Title:	President

 

[Signature Page to Contribution Agreement]

 

    	 

    	 

    

 

SCHEDULE 1

 

Assets

 

SCHEDULE 1 - ASSETS (PART 1)

 

Portsmouth FP250: The PowerStation FP250 located at
FEES' Portsmouth location and all specifically related assets, including without limitation inventory, parts, components, drawings,
engineering files and engineering work product

 

Irvine Furniture, Fixtures and Equipment, Generally:
All FlexEnergy interests in furniture, fixtures and equipment at 9400 Toledo Way, Irvine, California (excluding parts and inventory
of FEES or solely or primarily relating to the Microturbine Business)

 

	Item	 	Assets in
    Irvine
	1	 	FP250 Thermal oxidizer - alturdyne unit
	2	 	Sparger "B"
	3	 	Blower skid from Alturdyne
	4	 	Blower Skid from Lamb Cyn
	5	 	Comp air - AIR compressor 100scfm
	6	 	Comp air - NG compressor 100scfm
	7	 	Recuperators - Solar -100kW sized (55?
    Total)
	 	 	 
	Item	 	Assets in
    Portsmouth
	1	 	Thermal Imaging Gun (FLIR, but not Fluke)
	2	 	Hydraulic Torque Tool and associated
    torquing heads
	3	 	Torque multiplier
	4	 	Pneumatic Torque Tool and associated
    nut drivers
	5	 	Insulation repair gun
	6	 	Combustor Rigs for Powerstation - combustor
    size (but not Blower or VFD)
	7	 	Combustor Rig for Powerstation - warmer
    size (but not Blower or VFD)
	8	 	FlexPower Station FP1 in Portsmouth
	9	 	Coriolis flow meter (only the very large Coriolis
    flow meter installed on FP1 aspirated gas line, and not any other Coriolis flow meter)
	10	 	Spare parts for Flex Power station (old
    pipe, pallet of gaskets, fill, etc).
	 	 	 
	Item	 	Computer
    software
	1	 	Solidworks - 1 Seat
	2	 	Pro E - 3 Seats (7 other seats retained)
	3	 	Mechanica - 1 Seat (2 other seats retained
    )
	4	 	Matlab Software - 2 Seats
	5	 	MS Office and other standards software (excel,
    word, powerpoint, project, visio, etc) as currently allocated to personnel (to be worked out by Greg Arbo)
	 	 	 
	Item	 	Misc
	1	 	Copies of all ASME Journals from previous years
    purchased/located in Irvine (but not Journals purchased/located in Portsmouth)
	2	 	Drill Press (if approved by FlexEnergy, not
    to be unreasonably withheld, upon specific identification by FPG)

 

	Software
	 
	-       
    LabVIEW License Version 11 (but not LabVIEW Version 7)
	-       
    2 AutoCAD  EE Licenses (all others retained by FEES)
	-       
    Visual Studio

 

    	10

    	 

    

 

	-       
    Direct Logic S/W (1/2 of software and keys only, the other 1/2 will be retained)
	-       
    Allen Bradley PLC S/W (1/2 of software and keys only, the other 1/2 will be retained)
	-       
    Beijer Programming S/W (1/3 of software and keys only, the other 2/3 will be retained)
	-       
    GE S/W (1/3 of software and keys only, the other 2/3 will be retained)

 

	Hardware
	 
	Ft Benning
	-       
    Computer, Large Monitor, Routers, SIXNET Modems & other equipment in control room
	-       
    Hardware located in storage bins
	-       
    Tool box and associated tools
	-       
    Thermal Camera
	-       
    Torque Tools

 

	Portsmouth	 
	 	-Flex Control Panel, 300 kW load bank, FP GBR, FP system, auxiliary panels,
    etc. (components and gear specifically purchased for FP1 being included, but not the propane tank, vaporizer or pump)
	 	-Desktop computer, monitor and software used for FP1 control in FP1 control
    room
	 	-High temperature filters for gradual oxidizer
	 	-Other equipment stored in FP control room ( (if approved by FlexEnergy, not
    to be unreasonably withheld, upon specific identification as primarily relating to the Oxidizer Business)
	 	-Compaq Field Point PLC

 

	Irvine Control Room - includes
	-       
    Large Monitors and computers
	 
	Irvine Control Lab Equipment - includes
	-       
    Simulator – includes Compaq Rio and P3000 PLC
	-       
    Hand Tools
	-       
    Band Saw
	-       
    Integrated FP250 Control Panel  with GE PLC
	-       
    3 Cabinets of Elect. Components
	-       
    Wire Rack
	-       
    BCM Simulator
	-       
    Trickle Flow Start Panel
	-       
    Alturdyne FP Panel
	-       
    Left Over Alturdyne Pallets
	 
	Irvine Storage Room – includes everything not on shelves, i.e.
    spare parts inventory
	-       
    Oxidizers
	-       
    Old Elliot systems
	-       
    Alturdyne GBR
	-       
    Lamb Canyon and Alturdyne blowers, compressors, etc.
	 
	Electrical equipment in Dian’s cubicles

 

    	11

    	 

    

 

SCHEDULE 1 - ASSETS (PART 2)

 

	Item	 	Description	 	Quantity
	***14.25"ID x	 	14.250"ID x	 	2
	21.0625" OD Flange	 	21.0625"OD Flange, RFWN? SCH? XXX#	 	1
	***20" CL150 WN FLANGE	 	20" Flange, 20.250"ID x	 	1
	**24" CL150	 	27.625"OD, No raised face, Weld Neck Flange	 	1
	RFWN FLANGE	 	Weldbend Flange,	 	3
	**316SS L Sheet,	 	24"-150STD B16.5	 	1
	0.090"thk	 	A105/SA105 1xx J11	 	19
	**316SS L Sheet,	 	316SS L Sheet, 36"L x	 	18
	0.090"thk - 2	 	31"W x 0.090"thk; (30deg Internal Cone)	 	156
	**Carbon Steel	 	316SS L Sheet, 96"L x	 	2
	Plate, 3/8"thk	 	36"W x 0.090"thk; (Flanges)	 	24
	1" Typak Media	 	Carbon Steel Plate,	 	78
	1" x 8-1/2"L Studs, SS	 	72"L x 36"W x 3/8"thk	 	25
	1-1/4" Threaded	 	1" Typak (Bow Ties) Ceramic Fill/Media	 	32
	Nut; 2" F2F	 	1" x 8-1/2"Length Stud Bolt, Stainless Steel, (used)	 	85
	1-1/4" x 10-1/4"L Studs, CS	 	1-1/4" Threaded Nut, 2" Flat to flat (Galvanized)	 	156
	1-1/4" x 7-1/2"L Studs, CS	 	1-1/4" x 10-1/4"Length Stud Bolt, Carbon Steel, (used
    w/ nuts)	 	147
	1-1/4" x 8"L Studs, CS	 	1-1/4" x 7-1/2"Length Stud Bolt, Carbon Steel; (used
    w/ nuts)	 	34
	1-1/4" x 8-1/2"L Studs, CS	 	1-1/4" x 8" Length Stud	 	44
	1-1/4" x 9-1/2"L Studs, CS	 	Bolt, Carbon Steel	 	11
	1-1/4" x 9-3/4"L Studs, CS	 	1-1/4" x 8-1/2"Length Stud Bolt, Carbon Steel; (used
    w/ nuts)	 	0
	1-1/4"-8 Nuts	 	1-1/4" x 9-1/2"Length Stud Bolt, Carbon Steel, (used)	 	180
	1-1/8"-7 Nuts, CS	 	1-1/4" x 9-3/4"Length Stud Bolt, Carbon Steel (used w/
    nuts)	 	4
	1-1/8"-7 x 6-1/4"L Studs, SS	 	1-1/4"-8 Nuts; Galvanized	 	1
	1-1/8"-7 x 7-3/4"L Studs, CS	 	1-1/8"-7 Nuts, Carbon Steel. 1-13/16" Flat to flat	 	0
	1/2" Saddles	 	1-1/8"-7 x 6-1/4"Length Stud Bolt, Stainless Steel	 	1
	1/2"-13 Nuts	 	1-1/8"-7 x 7-3/4"Length	 	0
	1/2"-13 x 1"L	 	Stud Bolt, Carbon Steel	 	2
	10" CL150 RF BLIND FLANGE	 	1/2" Saddles Ceramic	 	43
	118G26-W-Magnat rol	 	Fill/Media	 	 
	12" CL300 RFWN FLANGE, SCH STD	 	1/2"-13 Nuts, 316 SS;	 	 
	14" CL150 WN SLIP-ON FLANGE	 	1/2"-13 x 1" Length	 	 
	24" CL150, RFWN FLANGE, SCH STD	 	Bolt, 316 SS	 	 
	3" Woodward LFG Valve	 	10" CL150 Blind Flange	 	 
	3/4" TyPak Media	 	B16.5 A105 SA105	 	 
	 	 	1-1/2" NPT, 120vAC	 	 
	 	 	60Hz, 25psi	 	 
	 	 	12" CL300 WN Flange	 	 
	 	 	14" Slip-On Flange, Open Center, no raised face Weld Neck;
    B16.5	 	 
	 	 	24" 150# RFWN	 	 
	 	 	SCH30 A105 SER B; P	 	 
	 	 	3009854	 	 
	 	 	3" Woodward LFG Valve (Used for F100 and F250 in Alturdyne)	 	 
	 	 	3/4" Typak (Bow Ties)	 	 
	Ceramic Fill/Media	 	 	 	 

 

    	12

    	 

    

 

	Item	 	Description	 	Quantity
	3/4"-10 Nuts	 	3/4"-10 Nuts; CS and	 	24
	3/4"-10 x 6.5L	 	Galvanized	 	23
	3/8"-16 Nuts	 	3/4"-10 x 6.5" Length	 	92
	3/8"-16 x 1-3/4"L	 	Studs, CS	 	96
	305136	 	3/8"-16 Nuts, 310SS	 	3
	36" CL150 RFWN FLANGE, SCH STD	 	3/8"-16 x 1-3/4"Length	 	3
	36" STD BW CAP	 	Bolt	 	2
	36100103-01	 	Exciter; Champion	 	0
	36100103-02	 	Aerospace, (New)	 	0
	36100103-05	 	Weldbend Flange, 36" -	 	2
	36A27G-Magnatrol	 	150STD B16.5	 	1
	36LR27-Magnatrol	 	A105/SA105 1xx J11	 	5
	36LR27-Replacem ent-Magnatrol	 	Weldbend Cap/Dome,	 	4
	38608910040000	 	36"-150STD B16.5	 	8
	38608910050000	 	A105/SA105 1xx J11	 	48
	38608911050000	 	Cone Concent, 3/8"thk x 29-1/4"ID x 23-1/4"ID x
    5-1/4"L; SA-106-B, ICS Filter Pipe	 	26
	38608987730000	 	30" SCH. STD. Seamless Pipe 30" x	 	8
	38608987740000	 	48"L x 3/8"thk, Carbon	 	21
	38608987750000	 	Steel; SA-106-B B31.1, ICS Filter Pipe	 	4
	38608987760000	 	24" CL150 RFWN FLG, SCH.30 Bore, CS, SA105, ANSI B16.5	 	4
	38608987770000	 	2" NPT. Magnatrol	 	8
	38608987780000	 	Valve: 50PSI 24VDC	 	19
	38608987790000	 	23W Serial#1314413	 	8
	38608998060000	 	36LR27, 2" NPT, Normally Open Valve	 	20
	38608998070000	 	2" Valve- Replacement Piston Assembly with (green) gaskets	 	7
	38608998080000	 	PB M Mod R 12x12x4	 	29
	38608998090000	 	10# BL FE00000296-IFP	 	13
	38608998100000	 	PB M Mod R 12x12x5	 	27
	38608998110000	 	10# PB (Ox.Loc.A3)	 	34
	 	 	PB M Mod R 12x6x5	 	 
	 	 	10# SF [Ox.Loc.A4]	 	 
	 	 	PB M Mod R 12x14x5 (2-4-8) 10# BL [Ox.Loc.A1]	 	 
	 	 	PB M Mod R 8x10x5	 	 
	 	 	10# BL [Ox.Loc.A5]	 	 
	 	 	PB M Mod R D1019901-A 10# BL [Ox.Loc.A6]	 	 
	 	 	PB M Mod R D1019901-B 10# BL [Ox.Loc.A7]	 	 
	 	 	PB M Mod R D1019901-C 10# BL [Ox.Loc.A8]	 	 
	 	 	PB M Mod R D1019901-D 10# BL (Ox.Loc.A9)	 	 
	 	 	PB M Mod R 12x22x5 (3-12-7) 10# BL[Ox.Loc.A2]	 	 
	 	 	PB M R D1201201-A	 	 
	 	 	10# Pyro-Bloc; FE00000298 (FE...296Partials)	 	 
	 	 	PB M Mod R D1201201-B 10# BL FE00000296	 	 
	 	 	PB M R D1201201-C	 	 
	 	 	10# Pyro-Bloc; FE00000298 [FE...296	 	 
	 	 	Spares]	 	 
	 	 	PB M R D1201201-D	 	 
	 	 	10# Pyro-Bloc; FE00000298 [FE...296	 	 
	 	 	Spares]	 	 
	 	 	PB M R D1201201-E	 	 
	 	 	10# Pyro-Bloc; FE00000298 [FE...296	 	 
	 	 	Spares]	 	 
	 	 	PB M R D1201201-G	 	 
	 	 	10# Pyro-Bloc; FE00000298 [FE...296	 	 

 

    	13

    	 

    

 

	Item	 	Description	 	Quantity
	38608998120000	 	Spares]	 	6
	38608998130000	 	PB M R D1201201-H	 	26
	38608998140000	 	10# Pyro-Bloc; FE00000298 [FE...296	 	9
	42" CL150 RFWN FLANGE, SCH STD	 	Spares]	 	2
	42" STD BW CAP	 	PB M R D1201201-J	 	2
	44LR29 - Replacement-Magn atrol	 	10# Pyro-Bloc; FE00000298 [FE...296	 	3
	44LR29-Magnatrol	 	Spares]	 	1
	(Used)	 	PB M R D1201201-K	 	1
	50 Micron FIF	 	10# Pyro-Block	 	500
	52848242170000	 	FE00000298 [FE...296	 	4
	53363-6UEC	 	Spares]	 	100
	56048243630000	 	Weldbend Flange,	 	130
	58702880040000	 	42"-150STD B16.5	 	14
	6-18-623-1	 	A105/SA105 1xx J11	 	1
	60+kW Heater	 	Weldbend Cap/Dome,	 	4
	Element	 	42"-150STD B16.5	 	31
	7-21-174-1	 	A105/SA105 1xx J11	 	147
	7/8" x 5-1/8"L, Studs, SS	 	3" Valve- Replacement Piston Assembly with (green) gaskets	 	20
	7/8"-9 Nuts	 	3" NPT Normally Open	 	74
	7/8"-9 Studs w/ Nuts	 	Valve	 	28
	7/8"-9 x 6.5"L Studs	 	Filter in Filter; 50 Micron	 	46
	702245 (316SS)	 	Kaowool Flex-Wrap	 	2
	702245(Aluminum)	 	1/16x24x250 LF FE00000312	 	2
	702287C	 	Lead, Exciter/ Igniter	 	24
	702288B	 	Kaowool 3000 Paper	 	14
	702292	 	1/4x24x50 100LF FE00000312	 	1
	702293	 	310/SS T/C 288-4	 	9
	702317	 	5/16-18 Nut	 	2
	8" CL150 RF BLIND FLANGE	 	FE00000298	 	1
	8" CL150 RFWN FLANGE, SCH 80	 	6" Flange Heater, 1	 	1
	8" CL150 RFWN FLANGE, SCH STD	 	Phase, 480v, 5kW	 	2
	850059-001	 	Test Rig Heater	 	2
	850059-002	 	4" Flange Heater, 1	 	 
	850059-003	 	Phase-480v, 3kW	 	 
	 	 	7/8" x 5-1/8"Length, Stud Bolt, Stainless Steel, (used
    w/ nuts)	 	 
	 	 	7/8"-9 Nuts	 	 
	 	 	7/8"-9 Stud w/ Nuts	 	 
	 	 	7/8"-9 x 6.5"Length	 	 
	 	 	Stud Bolt, Carbon Steel	 	 
	 	 	Shim, Combustor Can Support Mount (Stainless Steel)	 	 
	 	 	Shim, Combustor Can Support Mount (Aluminum)	 	 
	 	 	TFS Piping, 10" (Refractory Castable Installed)	 	 
	 	 	TFS Heater Shell Assy. (Heaters not installed)	 	 
	 	 	Shim, Support, Upper	 	 
	 	 	Upstream Pipe	 	 
	 	 	Shim, Support, Lower	 	 
	 	 	Upstream Pipe	 	 
	 	 	GO Inlet Extension (Painted) - Not a completed assembly	 	 
	 	 	8" SA105 Blind Flange	 	 
	 	 	CL150	 	 
	 	 	8" RFWN Flange CL150, SA105, Raised Face; Weld Neck; Sch80	 	 
	 	 	8" Flange CL150 - Raised Face; Weld Neck; Standard Flange	 	 
	 	 	Ring Shim, 24" CL150	 	 
	 	 	Flg, 0.250"thk	 	 
	 	 	Ring Shim, 24" CL150	 	 
	 	 	Flg, 0.375"thk	 	 
	 	 	Ring Shim, 24" CL150	 	 
	 	 	Flg, 0.500"thk	 	 

 

    	14

    	 

    

 

	Item	 	Description	 	Quantity
	850059-004	 	Ring Shim, 24" CL150	 	3
	850059-005	 	Flg, 0.625"thk	 	2
	850059-006	 	Ring Shim, 24" CL150	 	0
	850059-007	 	Flg, 0.750"thk	 	2
	850059-008	 	Ring Shims, 24" CL150	 	1
	850059-009	 	Flg, 0.875"thk	 	1
	850059-010	 	Ring Shim, 24" CL150	 	2
	850060-001	 	Flg, 1.00"thk	 	2
	850060-002	 	Ring Shim, 24" CL150	 	1
	850060-003	 	Flg, 1.125"thk	 	0
	850060-004	 	Ring Shim, 24" CL150	 	2
	850060-005	 	Flg, 1.250"thk	 	2
	850061-001	 	Ring Shim, 24" CL150	 	1
	850061-002	 	Flg, 1.375"thk	 	1
	850061-003	 	Ring Shim, 20" CL150	 	1
	850061-004	 	Flg, 0.250"thk	 	1
	850061-005	 	Ring Shim, 20" CL150	 	1
	850062-001	 	Flg, 0.375"thk	 	1
	850062-002	 	Ring Shim, 20" CL150	 	1
	850062-003	 	Flg, 0.500"thk	 	2
	850062-004	 	Ring Shim, 20" CL150	 	2
	850062-005	 	Flg, 0.625"thk	 	1
	850062-006	 	Ring Shim, 20" CL150	 	1
	850062-007	 	Flg, 0.750"thk	 	1
	CH38921 UEC F076197	 	Ring Shim, 12" CL300	 	3
	Fully Threaded	 	Flg, 0.250"thk	 	6
	Stud, 3/4"-10 x	 	Ring Shim, 12" CL300	 	70
	6-1/2"L	 	Flg, 0.375"thk	 	110
	Fully Threaded	 	Ring Shim, 12" CL300	 	96
	Stud, 7/8"-9 x	 	Flg, 0.500"thk	 	35
	6-1/2"L	 	Ring Shim, 12" CL300	 	8
	Fully Threaded	 	Flg, 0.625"thk	 	6
	Stud,1-1/4"-8 x 8"L	 	Ring Shim, 12" CL300	 	37
	Gasket, 2"	 	Flg, 0.750"thk	 	35
	850012A	 	Ring Shim, 10" CL 300	 	18
	Gasket, 3"	 	Flg, 0.250"thk	 	8
	8500X1A	 	Ring Shim, 10" CL300	 	 
	Gasket, 4"	 	Flg, 0.375"thk	 	 
	8500XXA	 	Ring Shim, 10" CL300	 	 
	Gasket, 6"	 	Flg, 0.500"thk	 	 
	850011A	 	Ring Shim, 10" CL300	 	 
	Gasket, 8"	 	Flg, 0.625"thk	 	 
	850010A	 	Ring Shim, 10" CL300	 	 
	Gasket, 10"	 	Flg, 0.750"thk	 	 
	850009A	 	Ring Shim, 10" CL300	 	 
	Gasket, 10"	 	Flg, 0.875"thk	 	 
	850014A	 	Ring Shim, 10" CL300	 	 
	 	 	Flg, 1.00"thk	 	 
	 	 	Igniters, Champion	 	 
	 	 	Aerospace	 	 
	 	 	Sylvania Sureheat; Max	 	 
	 	 	Height Heater	 	 
	 	 	Alloy Steel Fully Thread	 	 
	 	 	Stud, Plain Finish,	 	 
	 	 	3/4"-10 x 6-1/2"L	 	 
	 	 	Alloy Steel Fully Thread	 	 
	 	 	Stud, Plain Finish,	 	 
	 	 	7/8"-9 x 6-1/2"L	 	 
	 	 	Alloy Steel, Fully Threaded Stud, Plain Finish, 1-1/4"-8 x
    8"L	 	 
	 	 	Spiral Wound Gasket -	 	 
	 	 	2" CL150 ASME/ANSI B16.5 FLG	 	 
	 	 	Spiral Wound	 	 
	 	 	Gasket-3" CL150	 	 
	 	 	ASME/ANSI B16.5 FLG	 	 
	 	 	Spiral Wound Gasket -	 	 
	 	 	4" CL150 ASME/ANSI B16.5 FLG	 	 
	 	 	Spiral Wound Gasket -	 	 
	 	 	6" CL150 ASME/ANSI B16.5 FLG	 	 
	 	 	Spiral Wound Gasket -	 	 
	 	 	8" CL150 ASME/ANSI B16.5 FLG	 	 
	 	 	Spiral Wound Gasket -	 	 
	 	 	10" CL150	 	 
	 	 	ASME/ANSI B16.5 FLG	 	 
	 	 	Spiral Wound Gasket -	 	 
	 	 	10" CL300 ASME/ANSI	 	 

 

    	15

    	 

    

 

	Item	 	Description	 	Quantity
	Gasket, 12"	 	B16.5 FLG	 	14
	850008A	 	Spiral Wound Gasket -	 	28
	Gasket, 12"	 	12" CL150	 	15
	850013A	 	ASME/ANSI B16.5 FLG	 	30
	Gasket, 20"	 	Spiral Wound Gasket -	 	4
	850007A	 	12" CL300	 	12
	Gasket, 24"	 	ASME/ANSI B16.5 FLG	 	7
	850006A	 	Spiral Wound Gasket -	 	2
	Gasket, 30"	 	20" CL150	 	1
	8500XXA	 	ASME/ANSI B16.5 FLG	 	2
	Gasket, 36"	 	Spiral Wound Gasket -	 	1
	850005A	 	24" CL150	 	1
	Gasket, 60"	 	ASME/ANSI B16.5 FLG	 	3
	850015A	 	Spiral Wound Gasket -	 	180
	Hast-X 0.060" -	 	30" CL150 ASME/ ANSI B16.5 FLG	 	200
	0.066"thk	 	Spiral Wound Gasket -	 	140
	Hastex 0.090" - 1	 	36" CL150	 	220
	Hastex 0.090" - 2	 	ASME/ANSI B16.5 FLG	 	180
	Hastex 0.090" - 3	 	Spiral Wound Gasket -	 	1
	Hastex, 0.125", (1/8)	 	60" CL150	 	1
	Hastex, 0.25" thk	 	ASME/ANSI B16.5 FLG	 	3
	(1/4")	 	Hastelloy Sheet,58"L x	 	2
	Hex Head Cap	 	9"W x 0.060"-0.066"thk	 	1
	Screw, 1/2"-13 x	 	3.75" x 36" x 0.090"thk	 	1
	1"L	 	Hastex Sheet	 	1
	Hex Nut, 1-1/4"-8	 	10" x 50" x 0.090"thk	 	1
	Hex Nut, 3/4"-10	 	Hastex Sheet	 	2
	Hex Nut, 7/8"-9	 	36" x 19.750" x	 	1
	Hex Nut. 1/2"-13 x	 	0.090"thk Hastex	 	1
	3/4"W	 	Sheet,	 	1
	HR-120 Plate,	 	Hast-X Sheet, 0.125" thk, X 36"W x 54"L	 	1
	1"thk	 	Hast-X Sheet, 1/4" thk x 48"L x 28"W	 	 
	HX063 x 10" x 23" HX063 x 10' x 3'	 	316SS Hex Head Cap	 	 
	HX063 x 10.5" x	 	Screw 1/2"-13x1"	 	 
	39"	 	Grade 2H Heavy Hex Nut, Hot Dipped Galvanized Steel,	 	 
	HX063 x 10.75" x	 	1-1/4"-8 Thread Size	 	 
	24"	 	Grade 2H Heavy Hex Nut, Hot Dipped Galvanized Steel,	 	 
	HX063 x 10.75" x	 	3/4"-10 Thread Size	 	 
	31"	 	Grade 2H Heavy Hex Nut, Hot Dipped Galvanized Steel,	 	 
	HX063 x 12" x 120"	 	7/8"-9 Thread Size	 	 
	HX063 x 12" x 36" HX063 x 12" x 81" HX063 x
    13" x	 	316SS Hex Nut,	 	 
	38.75"	 	1/2"-13x3/4"W, 7/16"H	 	 
	HX063 x 13.25" x	 	HR-120 Plate 34.5" x	 	 
	36"	 	34.5" x 1"thk	 	 
	HX063 x 15" x	 	Hastex Sheet,	 	 
	53.5"	 	0.063"thk, x 10" x 23"	 	 
	HX063 x 20.5" x	 	Hastex Sheet,	 	 
	53.25"	 	0.063"thk, x 10' x 3'	 	 
	 	 	Hastex Sheet,	 	 
	 	 	0.063"thk, x 10.5" x 39"	 	 
	 	 	Hastex Sheet,	 	 
	 	 	0.063"thk, x 10.75" x	 	 
	 	 	24"	 	 
	 	 	Hastex Sheet,	 	 
	 	 	0.063"thk, x 10.75" x	 	 
	 	 	31"	 	 
	 	 	Hastex Sheet,	 	 
	 	 	0.063"thk, x 12" x 120" (10')	 	 
	 	 	Hastex Sheet,	 	 
	 	 	0.063"thk, x 12" x 36"	 	 
	 	 	Hastex Sheet,	 	 
	 	 	0.063"thk, x 12" x 81"	 	 
	 	 	Hastex Sheet,	 	 
	 	 	0.063"thk, x 13" x	 	 
	 	 	38.75"	 	 
	 	 	Hastex Sheet,	 	 
	 	 	0.063"thk, x 13.25" x	 	 
	 	 	36"	 	 
	 	 	Hastex Sheet,	 	 
	 	 	0.063"thk, x 15" x 53.5"	 	 
	 	 	Hastex Sheet,	 	 
	 	 	0.063"thk, x 20.5" x	 	 
	 	 	53.25"	 	 

 

    	16

    	 

    

 

	Item	 	Description	 	Quantity
	HX063 x 23.25" x	 	Hastex Sheet,	 	1
	36"	 	0.063"thk, x 23.25" x	 	1
	HX063 x 24" x 32" HX063 x 24" x 39" HX063 x
    3' x 3' HX063 x 3' x 32.5" HX063 x 4" x 15.5" HX063 x 4" x 19" HX063 x 5'-7" x 3' HX063 x 5.75"
    x	 	36"	 	1
	12.5"	 	Hastex Sheet,	 	5
	HX063 x 7.5" x	 	0.063"thk, x 24" x 32"	 	1
	38.75"	 	Hastex Sheet,	 	1
	HX063 x 8.5" x	 	0.063"thk, x 24" x 39"	 	1
	12.75"	 	Hastex Sheet,	 	1
	HX063 x 9.75" x	 	0.063"thk, x 3' x 3'	 	1
	36"	 	Hastex Sheet,	 	1
	HX066 x 11.5" x	 	0.063"thk, x 3' x 32.5"	 	1
	83"	 	Hastex Sheet,	 	1
	HX066 x 3' x 3' HX066 x 3'-1" x 3'	 	0.063"thk, x 4" x 15.5"	 	1
	HX066 x 34.5" x	 	Hastex Sheet,	 	1
	37"	 	0.063"thk, x 4" x 19"	 	1
	HX066 x 7" x	 	Hastex Sheet,	 	1
	12.75"	 	0.063"thk, x 5'-7" x 3'	 	1
	HX066 x 8.5" x	 	Hastex Sheet,	 	1
	29.25"	 	0.063"thk, x 5.75" x	 	1
	HX066 x 9" x 20.5" HX066 x 9" x 55" HX066 x
    9.5" x	 	12.5"	 	1
	69.25"	 	Hastex Sheet,	 	1
	KMQXL-125U-104	 	0.063"thk, x 7.5" x	 	2
	KMQXL-125U-113	 	38.75"	 	2
	KMQXL-125U-12	 	Hastex Sheet,	 	13
	KMQXL-125U-122	 	0.063"thk, x 8.5" x	 	2
	KMQXL-125U-129	 	12.75"	 	2
	KMQXL-125U-138	 	Hastex Sheet,	 	2
	KMQXL-125U-144	 	0.063"thk, x 9.75" x 36"	 	1
	KMQXL-125U-148	 	Hastex Sheet,	 	1
	KMQXL-125U-156	 	0.066"thk, x 11.5" x 83"	 	1
	KMQXL-125U-157	 	Hastex Sheet,	 	3
	KMQXL-125U-168	 	0.066"thk, x 3' x 3'	 	1
	KMQXL-125U-180	 	Hastex Sheet,	 	2
	 	 	0.066"thk, x 3'-1" x 3'	 	 
	 	 	Hastex Sheet,	 	 
	 	 	0.066"thk, x 34.5" x 37"	 	 
	 	 	Hastex Sheet,	 	 
	 	 	0.066"thk, x 7" x 12.75"	 	 
	 	 	Hastex Sheet,	 	 
	 	 	0.066"thk, x 8.5" x	 	 
	 	 	29.25"	 	 
	 	 	Hastex Sheet,	 	 
	 	 	0.066"thk, x 9" x 20.5"	 	 
	 	 	Hastex Sheet,	 	 
	 	 	0.066"thk, x 9" x 55"	 	 
	 	 	Hastex Sheet,	 	 
	 	 	0.066"thk, x 9.5" x	 	 
	 	 	69.25"	 	 
	 	 	Thermocouple, 104" Length x 0.125" thk, (K-type TC)	 	 
	 	 	Thermocouple, 113" Length x 0.125" thk, (K-type TC)	 	 
	 	 	Thermocouple, 12" Length x 0.125" thk, (K-type TC)	 	 
	 	 	Thermocouple, 122" Length x 0.125" thk, (K-type TC)	 	 
	 	 	Thermocouple, 129" Length x 0.125" thk, (K-Type TC)	 	 
	 	 	Thermocouple, 138" Length x 0.125" thk, (K-type TC)	 	 
	 	 	Thermocouple, 144" Length x 0.125" thk, (K-type TC)	 	 
	 	 	Thermocouple, 148" Length x 0.125" thk, (K-type TC)	 	 
	 	 	Thermocouple, 156" Length x 0.125" thk, (K-type TC)	 	 
	 	 	Thermocouple, 157" Length x 0.125" thk, (K-type TC)	 	 
	 	 	Thermocouple, 168" Length x 0.125" thk, (K-type TC)	 	 
	 	 	Thermocouple, 180" Length x 0.125" thk,	 	 

 

    	17

    	 

    

 

	Item	 	Description	 	Quantity
	KMQXL-125U-24	 	Thermocouple, 24" Length x 0.125" thk, (K-type TC)	 	6
	KMQXL-125U-84	 	Thermocouple, 84" Length x 0.125" thk, (K-type TC)	 	3
	KMQXL-125U-94	 	Thermocouple, 94" Length x 0.125" thk, (K-type TC)	 	1
	KMQXL-125U-96	 	Thermocouple, 96" Length x 0.125" thk, (K-type TC)	 	4
	KQXL-14U-12	 	Thermocouple, 12" Length x 0.250" thk, (K-type TC)	 	5
	KQXL-14U-24	 	Thermocouple, 24" Length x 0.250" thk, (K-type TC)	 	2
	NB11-CAXL-18U-1	 	Weatherhead, 0.125" thk x 12" Length (TC w/ min aluminum
    head)	 	5
	2	 	Weatherhead, 0.125" thk x 14" Length (TC w/ min aluminum
    head)	 	1
	NB11-CAXL-18U-1	 	Solar Recuperator	 	57
	4	 	Cores	 	30
	Solar - Recuperators	 	Thermocouple ferules,	 	1
	T-FER-1/8	 	0.125"ID, Teflon	 	1
	VF(SparePcs)	 	Material	 	7
	VF4226400164	 	24"dia.x18"Height; Cut from Combustor VF. Remnant of
    Stub Pup Assy	 	3
	VF4226400168	 	I-2600 Shape DWG#	 	3
	VF4226400169	 	1030202-JR3	 	7
	VF4226400170	 	I-2600 Sleeve per	 	2
	VF4226400171	 	D1030201-AR5	 	1
	VF4226460001-Si	 	I-2600 Sleeve per	 	0
	VF4226460002-Si	 	D1030201-BR5	 	1
	VF4226460003-Si VF4226460004-Si VF4226460005-Si	 	I-2600 Sleeve per	 	0
	VFpcs-Spare1	 	D1030201-CR5	 	1
	Total	 	I-2600 Sleeve per	 	 
	 	 	D1030201-DR5	 	4538
	 	 	I-2600 Sleeve per D1030201-AR5; Silica Treated	 	 
	 	 	I-2600 Sleeve per	 	 
	 	 	D103...; Silica Treated	 	 
	 	 	I-2600 Sleeve per D1030201-DR5; Silica Treated	 	 
	 	 	I-2600 Sleeve per D1030201-CR5; Silica Treated	 	 
	 	 	I-2600 Sleeve per D1030202-JR3; Silica Treated	 	 
	 	 	24"dia. VF Piece x 18" Height (Spare/Remant)	 	 

 

 

    	18

    	 

    

 

SCHEDULE 2

 

Agreements

 

SCHEDULE 2 - AGREEMENTS

 

1. All agreements to which right, title or interest was contributed,
assigned, transferred or conveyed to FlexEnergy, LLC, a Delaware limited liability company now known as FlexEnergy, Inc., a Delaware
corporation, from FlexEnergy, Inc., a California corporation now known as Edan Prabhu, Inc.

2. Contribution Agreement, between FlexEnergy, Inc., a California
corporation now known as Edan Prabhu, Inc., and FlexEnergy, LLC, a Delaware limited liability company now known as FlexEnergy,
Inc., dated April 9, 2008

3. Master Purchase and Re-Sale Agreement between FlexEnergy,
Inc. and EECT (R.A. van Eden Holding B.V.) (11/7/2011)

4. Subcontract Number S09-003 between Southern Research Institute
and FlexEnergy, LLC, as amended

5. Consulting Agreement with Stephen L. Johnson dated July
6, 2010

6. Consulting Agreement with Dr. Ephraim Gutmark dated April
1, 2009

7. Consulting Agreement with Bill Treece dated June 10, 2009

8. Consulting Agreement with Dr. Richard Martin dated June
16, 2009

9. Consulting Agreement with Banks Engineering dated May 22,
2008

10. Consulting Agreement with Sheldon Schultz dated May 30,
2011

11. Executive Employment Agreement with Boris Maslov dated
January 16, 2011

  

    	19

    	 

    

 

SCHEDULE 3

 

Intellectual Property

 

SCHEDULE 3 - INTELLECTUAL PROPERTY

 

Patents

 

	Application
    Number	 	Country
    Name	 	File
    Date	 	Patent
    Number	 	Issue
    Date	 	Application
    Title
	61/007,917	 	USA	 	10/23/2007	 	 	 	 	 	Gradual Oxidizer for a Gas Turbine
	61/007,924	 	USA	 	10/26/2007	 	 	 	 	 	Management of Fuel Leaks in a Flex-Turbine
	61/174,857	 	USA	 	5/1/2009	 	 	 	 	 	Oxidizer
	12/050,734	 	USA	 	3/18/2008	 	 	 	 	 	Oxidizing Fuel
	12/288,238	 	USA	 	10/17/2008	 	 	 	 	 	Managing Leaks in a Gas Turbine
    System
	12/330,151	 	USA	 	12/8/2008	 	 	 	 	 	Oxidizing Fuel in Multiple Operating
    Modes
	WO0192702	 	PCT	 	5/30/2000	 	 	 	 	 	Oxidizing Fuel in Multiple Operating
    Modes
	12/772,622	 	USA	 	5/3/2010	 	 	 	 	 	Distributing Fuel Flow in a Reaction
    Chamber
	09/713,574	 	USA	 	11/14/2000	 	6,393,821	 	5/28/2002	 	Method for Collection and Use of
    Low-Level Methane Emissions
	12/870,021	 	USA	 	8/27/2010	 	 	 	 	 	Heating a Reaction Chamber
	61/313,995	 	USA	 	 	 	 	 	 	 	Oxidizing Fuel Mixed with Water
	PCT/US12/46112	 	PCT	 	7/10/2012	 	 	 	 	 	Speed Controls for Turbine
	13/289,989	 	USA	 	11/4/2011	 	 	 	 	 	Controls for Multi-Combustor Turbine
    with Gradual Oxidizer
	13/289,996	 	USA	 	11/4/2011	 	 	 	 	 	Multi-Combustor Turbine with Gradual
    Oxidizer
	13/115,910	 	USA	 	5/25/2011	 	 	 	 	 	Integrated Gasifier Power Plant
	 	 	USA	 	 	 	 	 	 	 	Boosting Power in a Turbine with
    Water
	13/048,796	 	USA	 	3/15/2011	 	 	 	 	 	Processing Fuel and Water
	PCT/US11/28547	 	PCT	 	3/15/2011	 	 	 	 	 	Processing Fuel and Water
	13/115,902	 	USA	 	5/25/2011	 	 	 	 	 	Gasifier Power Plant with Management of Wastes
	PCT/US2011/037,974	 	PCT	 	5/25/2011	 	 	 	 	 	Gasifier Power Plant with Management of Wastes
	200980155514.1	 	China	 	7/27/2011	 	 	 	 	 	Method of Operating a Fuel Oxidizer in Multiple
    Operating Modes and Fuel Oxidizer System
	09764677.2	 	EPO	 	6/27/2011	 	 	 	 	 	Method of Operating a Fuel Oxidizer in Multiple
    Operating Modes and Fuel Oxidizer System

 

    	20

    	 

    

 

	 	 	India	 	 	 	 	 	 	 	Method of Operating a Fuel Oxidizer
    in Multiple Operating Modes and Fuel Oxidizer System
	 	 	Japan	 	 	 	 	 	 	 	Oxidizing Fuel in Multiple Operating Modes
	 	 	South Korea	 	 	 	 	 	 	 	Method of Operating a Fuel Oxidizer in Multiple
    Operating Modes and Fuel Oxidizer System
	 	 	Russia	 	 	 	 	 	 	 	Method of Operating a Fuel Oxidizer in Multiple
    Operating Modes and Fuel Oxidizer System
	13/417,129	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation with Heat Transfer
	13/417,140	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation with Heat Transfer
	13/417,142	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation with Heat Transfer
	13/417,149	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation with Heat Control
	13/417,027	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation with Heat Control
	13/417,050	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation with Heat Control
	13/417,095	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation with Heat Control
	13/417,105	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation with Heat Control
	13/417,134	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation with Heat Control
	13/417,060	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation with Heat Exchange Media
	13/417,074	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation with Reciprocating Engine
	13/417,083	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation with Reciprocating Engine
	13/417,090	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation with Flue Gas
	13/417,162	 	USA	 	3/9/2012	 	 	 	 	 	Staged Gradual Oxidation
	13/417,164	 	USA	 	3/9/2012	 	 	 	 	 	Staged Gradual Oxidation
	13/417,165	 	USA	 	3/9/2012	 	 	 	 	 	Hybrid Gradual Oxidation
	13/417,167	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation Below Flameout Temperature
	13/417,094	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation with Adiabatic Temperature
    Above Flameout Temperature
	13/417,100	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation Below Flameout Temperature
	13/417,110	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation with Adiabatic Temperature
    Above Flameout Temperature
	13/417,048	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation with Gradual Oxidizer Warmer

 

    	21

    	 

    

 

	13/417,122	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation and Autoignition
    Temperature Controls
	13/417,125	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation and Autoignition Temperature
    Controls
	13/417,132	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation and Multiple Flow Paths
	13/417,130	 	USA	 	3/9/2012	 	 	 	 	 	Gradual Oxidation and Multiple Flow Paths
	PCT/US12/46115	 	PCT	 	7/10/2012	 	 	 	 	 	Multi-Combustor Turbine
	PCT/US2011/028547	 	EPO	 	9/14/2012	 	 	 	 	 	Processing Fuel and Water

 

Licensed Trademarks

FLEX POWERSTATION

FLEX OXIDIZER

FLEX BOILER

 

    	22

    	 

    

 

SCHEDULE 4

 

Certain Assumed Liabilities

 

SCHEDULE 4 - ASSUMED LIABILITIES

 

100% of the Accounts Payable for the Following Oxidizer
Business Vendor Accounts:

 

	Vendor Account	 	Total Known
 Current

    Payable
 Amount	 
	A T & T Mobility	 	$	135.99	 
	Adam Robinson	 	$	2,457.72	 
	Allied Electronics Inc.	 	$	204.77	 
	Aramark	 	$	197.65	 
	Automation Direct	 	$	1,494.50	 
	Bank of America Corp. CC	 	$	9,158.96	 
	BOLE	 	$	831.26	 
	Chris Nishi	 	$	175.69	 
	CMI of Southern California	 	$	15,000.00	 
	Commercial Air & Refrigeration	 	$	1,081.66	 
	DME Inc.	 	$	2,195.58	 
	Douglas Hamrin	 	$	4,153.46	 
	Dynamic Fabrication Inc	 	$	21,650.00	 
	Environmental Alliance Group	 	$	747.16	 
	GKD-USA,Inc. SolidWEAVE	 	$	9,310.00	 
	Grainger	 	$	162.02	 
	Haynes International	 	$	175.00	 
	Industrial Ceramics Solutions, LLC	 	$	3,600.00	 
	L. A. Valves & Automation Inc.	 	$	4,118.11	 
	McMaster Carr	 	$	4,533.61	 
	Merrimac Industrial Sales	 	$	1,660.76	 
	Milco Wire EDM Inc.	 	$	810.00	 
	Pacific Mechanical Supply	 	$	1,561.13	 
	Paul Fukumoto	 	$	147.47	 
	Penn Stainless Products Inc.	 	$	897.45	 
	Robinson Huang	 	$	1,057.57	 
	Royal Wholesale Electric	 	$	2,257.91	 
	Specialized Welding & Fabrication, Inc.	 	$	2,010.00	 
	Swagelok	 	$	297.42	 
	TelePacific Communications	 	$	596.33	 
	Thermal Ceramics Inc	 	$	6,190.92	 
	Watlow Los Angeles	 	$	2,061.43	 
	 	 	$	100,931.53	 

 

    	23

    	 

    

 

	100% of the PTO Liability Related
    to the Following
 Personnel, all of which will be terminated by FlexEnergy and
 hired by FPG:	 	$	83,365.91	 
	Boris Maslov	 	 	(as of October 31, 2012)	 
	Constance Rogers	 	 	 	 
	Paul Fukumoto	 	 	 	 
	Mike Levin	 	 	 	 
	Su Huang	 	 	 	 
	Chris Nishi	 	 	 	 
	Steve Lampe	 	 	 	 
	Joe Zembles	 	 	 	 
	Robinson Huang	 	 	 	 
	Dian Mladenov	 	 	 	 
	Peter Vaupel	 	 	 	 
	Doug Hamrin	 	 	 	 
	Dave Berman	 	 	 	 
	Rich Gilleland	 	 	 	 
	Shawn Maghzi	 	 	 	 
	Adam Robinson	 	 	 	 
	Randeep Sandhu	 	 	 	 
	Celia Genovese	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	100% of the Accrued Payroll-Related Liability
    for the
 Following Personnel, all of which will be terminated by
 FlexEnergy and hired by FPG:	 	 	 	 
	Boris Maslov	 	 	 	 
	Constance Rogers	 	 	 	 
	Paul Fukumoto	 	 	 	 
	Mike Levin	 	 	 	 
	Su Huang	 	 	 	 
	Chris Nishi	 	 	 	 
	Steve Lampe	 	 	 	 
	Joe Zembles	 	 	 	 
	Robinson Huang	 	 	 	 
	Dian Mladenov	 	 	 	 
	Peter Vaupel	 	 	 	 
	Doug Hamrin	 	 	 	 
	Dave Berman	 	 	 	 
	Rich Gilleland	 	 	 	 
	Shawn Maghzi	 	 	 	 
	Adam Robinson	 	 	 	 
	Randeep Sandhu	 	 	 	 
	Celia Genovese	 	 	 	 

 

	100% of the Following Other Accrued and Ongoing
    Fee Liabilities for Oxidizer Business:	 	 	 	 
	Ephraim Gutmark	 	$	5,000.00	per
                                                                                                                                       month
	Stephen Johnson	 	$	5,000.00	per
                                                                                                                                                     month
	Fluor	 	$	20,000.00	Oxidizer
                                                                                                                                                      Study

 

 

    	24

    	 

    

 

SCHEDULE 5

 

Reimbursement Obligations

 

	SCHEDULE 45 - REIMBURSEMENT OBLIGATIONS	 

 

	1/3 of the Severance Payment Obligations for the Following

    Former Employees (with FlexEnergy remaining responsible

    for the remaining 2/3):	 	Estimated 

    Obligations 
 Remaining	 
	Bruce Rosen	 	$	20,833.36	 
	Joseph Perry	 	$	109,375.02	 
	 	 	 	 	 
	Estimated Total Payment Obligations	 	$	130,208.38	 
	 	 	 	 	 
	Estimated Total 1/3 FPG Reimbursement Obligation	 	$	43,402.79	 

 

26.737121% of the Current Payable Amounts for the

Following Shared Vendor Accounts (with the remaining

73.262879% remaining with FlexEnergy or FEES, as

applicable):

 

	Vendor Account	 	Total Known

 Current

 Payable

    Amount	 
	Bank of America Corp. CC	 	$	8,784.62	 
	Beacon Resources	 	$	16,200.00	 
	Charles Packard	 	$	45,000.00	 
	Citrix Online (GO TO MEETING)	 	$	272.99	 
	City of Irvine	 	$	50.00	 
	Copley Consulting Group	 	$	4,142.50	 
	CPA Global	 	$	-2,455.56	 
	Dell Lease	 	$	14,247.28	 
	EBA Inc.	 	$	4,658.22	 
	Edan Prabhu Inc.	 	$	10,000.00	 
	FedEx	 	$	20.52	 
	Fennemore Craig, P.C.	 	$	31,771.84	 
	Grant Thornton	 	$	3,089.00	 
	John Ryan	 	$	47,500.00	 
	Kenneth Foley	 	$	157.46	 
	Louisiana Sustainability Fund, A Louisiana Limited Part.	 	$	97,671.24	 
	Martin's Janitorial	 	$	520.00	 
	McDermott, Will & Emery LLP	 	$	132,187.95	 
	OakLeaf Landscape	 	$	800.00	 
	RNS Flex, LLC	 	$	2,678.08	 
	Sail Venture Partners	 	$	2,678.08	 
	Southern California Edison	 	$	2,636.06	 
	Squar, Milner, Peterson, LLP	 	$	-1,125.49	 
	Stephen Johnson	 	$	47,500.00	 
	Steve Lampe	 	$	4,365.51	 
	Steven Krablin	 	$	47,500.00	 
	Verizon Wireless	 	$	5,299.75	 
	Welsh Flaxman & Gitler LLC	 	$	3,582.00	 
		 	 	 	 
	 	 	 	 	 
	Estimated Total Payment Obligations	 	$	529,732.05	 
	 	 	 	 	 
	Estimated Total 26.737121% FPG Reimbursement
    Obligation	 	$	141,635.10	 

 

    	25

    	 

    

 

	1/3 of all Liabilities under the Standard

    Industrial/Commercial Single-Tenant Lease—Gross, dated

    May 26, 2011, between FlexEnergy and Meehan Holdings,

    LLC for 9400 Toledo Way, Irvine, California (with FlexEnergy

 remaining responsible for the remaining 2/	 	Estimated

 Lease

    Payment

 Obligations

 Remaining	 
	 	 	 	 
	Estimated Total Payment Obligations	 	$	1,352,000.00	 
	 	 	 	 	 
	Estimated Total 1/3 FPG Reimbursement Obligation	 	$	450,666.67	 

 

 

    	26

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