Document:

Ex 10.26

 

xG Technology 

 

Engineering Services Agreement

 

    	1

    	 

    

 

AGREEMENT FOR ENGINEERING SERVICES

 

PARTIES

 

THIS AGREEMENT, effective the 24th
day of November, 2012, by and between xG Technology, Inc., (“XGT”) doing business at 240 South
Pineapple Avenue, Suite 701, Sarasota, Florida 34236, and Tatum Telephone Company, Inc., (hereinafter “Tatum”
or “Customer”) doing business at 170 West Sterling Price, Tatum, TX 75691. XGT and Customer are collectively referred
to as the “Parties” or each “Party” throughout this Agreement. 

 

BACKGROUND

 

WHEREAS, XGT has conducted a Preliminary
Engineering Survey & Network Estimate of the cost to design, build a high-quality, affordable wireless broadband network for
Customer;

 

WHEREAS simultaneous with this Agreement,
Customer enters into a separate Equipment Purchase Agreement for specific quantities of xMax wireless broadband equipment, which
is incorporated by reference as if fully set forth herein;

 

WHEREAS, upon successful Performance Test
Acceptance of said equipment, Customer desires XGT to perform certain work as described in this Agreement and the Addenda attached
to this Agreement, and XGT desires to perform such work and deliver such services as described in this Agreement and the Addenda
attached hereto;

 

NOW THEREFORE, in consideration of the
mutual covenants and promises hereinafter set forth, the parties hereto agree as follows:

 

AGREED TERMS

 

ARTICLE I

 

SERVICES

Customer hereby retains XGT to render the
services (the “Engineering Services”) described and defined in the Addenda from time to time and for the time being
agreed between Customer and XGT and attached to and made a part of this Agreement. XGT hereby agrees to render the services as
so described. It is understood that XGT may render such services through its own employees (“Employees”) or through
independent subcontractors under subcontract with XGT (“Subcontractors”). If XGT renders services through Subcontractors,
prior to any such services being performed, XGT will obtain a written agreement from the Subcontractors by which the Subcontractors
agree to be bound and perform services in accordance with the terms of this Agreement, including but not limited to the confidentiality
provisions provided under Article IX, in a form approved by Customer prior to its execution. Such Employees and Subcontractors
are herein referred to as “XGT’s Personnel”. If the Customer desires XGT to perform certain additional work beyond
the work already described in this Agreement and the Addenda for the time being attached to this Agreement, then Customer shall
give notice to XGT and, if the provision and terms of provision of such services are mutually agreed with XGT, such agreement shall
be reflected in a new Addendum that shall be attached to and made a part of this Agreement.

 

    	2

    	 

    

 

ARTICLE II

 

COMPENSATION

As compensation for all Engineering Services
performed in accordance with the terms and conditions of this Agreement and the Addenda hereto, Customer agrees to pay to
XGT the sums set forth in such Addenda, at the times and places, and upon the milestones (if any) set forth in the relevant Addenda.
Compensation shall be due and payable for work actually performed by XGT in accordance with this Agreement, and the sums set forth
in the relevant Addenda are the sole and entire compensation due to XGT from Customer for such Engineering Services.

 

All compensation to XGT’s Personnel,
income, FICA, VAT, sales or any other duties or taxes levied on XGT or XGT’s Personnel by reason of payments made or consideration
delivered by Customer to XGT, shall be responsibility of and borne by XGT.

 

ARTICLE III

 

REPORTING RESPONSIBILITIES

Customer may designate at the commencement
of this Agreement, and from time to time thereafter, one or more of its officers or technical managers to whom XGT shall report
and be responsible. Such Customer officer or technical manager shall designate the services to be performed by XGT as provided
by a mutually agreed Addendum, and arrange, at Customer discretion, any meetings or conferences with any other officers
or technical managers of Customer or any subsidiary or affiliate of Customer, or with third parties. All instructions
from Customer to XGT shall be made in written form and acknowledged by XGT. XGT’s Personnel shall perform work, and arrange
delivery to Customer, all services as set forth in Addenda for the time being attached to this Agreement.

 

ARTICLE IV

 

TERM, TERMINATION OF AGREEMENT AND RESCISSION OPTION

 

This Agreement is effective as of the date
first set forth above, and shall, without prejudice to any obligation or commitment incurred up until such point in time, continue
until terminated as set forth herein.

 

    	3

    	 

    

 

XGT shall commence and render services
for such term and duration hereunder as set forth in the Addenda for the time being attached to this Agreement.

 

In the event of any termination hereof,
any and all compensation due and payable to XGT shall be prorated to reflect services actually rendered and expenses incurred by
XGT to date of termination in accordance with the terms of this Agreement, and Customer’s obligation to XGT shall be limited
to compensation up to the effective date of termination.

 

Either party may elect to terminate this
Agreement for any reason upon delivery of written notice to the other party, which will be effective ninety (90) days after delivery
of the notice.

 

Either party may elect to terminate this
Agreement immediately upon delivery of written notice upon any material failure, inability or refusal by the other party to perform
its obligations under this Agreement, and such party may thereafter pursue any remedies it may have at law or otherwise.

In addition to the termination options
above, Customer shall have the right to rescind this Agreement upon thirty (30) days’ notice if XGT fails to obtain FCC approval
within One-Hundred and Twenty Days of the Effective Date of this Agreement or if the product contemplated by this Agreement is
determined, by Customer in its sole discretion, not to be commercial viable.

 

ARTICLE V

 

REPORTS/SOFTWARE

XGT agrees that XGT and XGT’s Personnel
will make all reports and present all deliverables specified in the Addenda upon completion of the tasks hereunder. XGT and XGT’s
Personnel will prepare and submit written progress reports as may be requested by Customer from time to time.

 

All reports and documents and software
prepared pursuant to this Agreement by XGT or XGT’s Personnel relating to tasks or projects hereunder shall be delivered
to Customer in accordance with the applicable Addenda. XGT agrees to maintain adequate records and files of all work and activities
of XGT and XGT’s Personnel under this Agreement.

 

ARTICLE VI

 

INDEPENDENT CONTRACTOR

XGT, XGT’s Personnel, and Customer
are independent entities. Nothing in this Agreement is intended to create the relationship of employer and employee between Customer
and XGT, or between Customer and any of XGT’s Personnel. Customer shall not make any deductions related to employer-employee
relationships. Neither XGT nor any of XGT’s Personnel shall be entitled to or qualified under any employee benefit plans,
including (but not limited to) pension, health, and insurance, provided by Customer for its employees.

 

    	4

    	 

    

 

Neither party has any authority to act
as the agent of the other, or to bind the other Party to any Agreement or undertaking whatsoever.

 

ARTICLE VII

 

INDEMNITY

Each party agrees to indemnify and hold
the other harmless from and against any liability, loss, damages (including but not limited to consequential damages, lost profits,
damage to good will, costs, and expenses) and attorney’s fees incurred as a result of the other party’s conduct , whether
the claims are based in tort or contract. XGT further indemnifies and holds Tatum harmless from and against any liability, loss,
damages (including but not limited to consequential damages, lost profits, damage to good will, costs, and or expenses) and attorney’s
fees incurred as a result of any conduct of XGT’s Personnel.

 

ARTICLE VIII

 

FORCE MAJEURE

 

XGT shall not be liable for any damage,
delays or failures to perform any obligation hereunder caused by factors beyond its reasonable ability to control, including (without
limitation) changes in government regulations, acts of God, labor shortages, strikes, slowdowns, or other combined action of workmen,
fires, floods, earthquakes, severe weather, serious accidents, epidemics, quarantines, wars, insurrections or riots, acts of civil
or military authorities, transportation embargoes, destruction of production facilities, delays, shortages or interruptions to
delivery of components and materials, , to the extent that (i) the delay extends more than thirty (30) days, (ii) was not caused
by or the result of any conduct of XGT and (iii) was not reasonably foreseeable by XGT. In the event of an concurrence under Article
VIII, XGT may in its sole discretion allocate available goods among customers as it may determine or cancel orders without liability
for any part thereof not shipped to the Customer upon refunding any allocable advance payments received for the canceled portion.

 

ARTICLE IX

 

CONFIDENTIAL AND PROPRIETARY INFORMATION

The Parties shall keep confidential and
not disclose to any third party any technical, commercial, business related, financial or company information received in relation
to this Agreement.

 

It is explicitly understood and agreed
that under no circumstances, and notwithstanding anything to the contrary contained herein, shall this Agreement including any
addenda, amendment or other instrument hereto, be interpreted to assign or otherwise transfer any industrial or intellectual property
of a Party hereto to the other.

 

    	5

    	 

    

 

Confidential Information shall mean any
information and data of a confidential nature, including but not limited to proprietary, developmental, technical, marketing, sales,
operating, performance, cost, trade secrets, know-how, policy, business, and process information, computer programming techniques,
and all record bearing media containing or disclosing such information or techniques. Confidential Information shall not be deemed
to be in the public domain merely because any part of said information is embodied in general disclosures or because individual
features, components, or combinations thereof are now or become known to the public.

 

Each party agrees not to use the other
Party’s Confidential Information for any other purpose than as specified by the other Party in writing.

 

Copies and embodiments of, and media containing,
any and all Confidential Information of a Party, its parent, subsidiaries or affiliates, including but not limited to documents,
records, notebooks, shall remain the property of such Party, its parent, subsidiaries, or affiliates, respectively, and shall be
returned to the respective owner thereof upon request, and in any event no later than any expiration or termination date of this
Agreement. Copies of, and media containing, any and all Confidential Information which is the property of third parties contracting
or engaged in research, development, or business arrangements with a Party, its parent, subsidiaries or affiliates, shall
be delivered to such Party in accordance with the instructions of such Party and in any event no later than any expiration
or termination date of this Agreement.

 

The Parties’ respective obligations
under this Article IX shall survive any termination or expiration of this Agreement. Any liabilities, damages, or remedies incurred
or limited do to material breach of this Article IX will not be limited in any manner by any other provision of this Agreement.

 

The parties shall advise all of their respective
employees, officers, agents, and representatives including any Subcontractors or XGT Personnel , of the terms and conditions of
this Agreement regarding Confidential Information, require them to observe such conditions with respect to Confidential Information.
For any Subcontractors, , prior to any such services being performed, XGT will obtain a written agreement from the Subcontractors
by which the Subcontractors agree to be bound and perform services in accordance with the terms of this Agreement, including but
not limited to the confidentiality provisions provided under this Article, in a form approved by Customer prior to its execution.

 

ARTICLE X

 

PROPRIETARY RIGHTS

 

Each Party shall continue
to own all Background Technology (meaning all intellectual property rights and know-how, technical design, engineering and test
data, manufacturing methodology, software, algorithms and other information and technology already owned or possessed by, known
to, developed by or for one of the parties independent of the contract work performed hereunder, or with respect to which a Party
may grant licenses to the other Party hereunder prior to or outside of the performance of this Agreement) it has provided to the
other Party hereunder.

 

    	6

    	 

    

 

Technology developed by XGT and which does
not to any extent contain any of Customer’s Background Technology shall be the property of XGT.

 

ARTICLE XI

 

WAIVER

Failure by any party hereto to enforce
any of the provisions of this Agreement, or any rights with respect hereto, or failure to exercise any election provided for herein,
shall in no way be considered a waiver of such provisions, rights, or elections or in any way affect the validity of this Agreement.
The failure by any party to enforce any of said provisions, rights or elections shall not prejudice such party from later enforcing
or exercising the same or any other provisions, rights, or elections it may have under this Agreement.

 

ARTICLE XII

 

NOTICES

All notices provided for in this Agreement
shall be given in writing either by personal delivery of such notice, or by certified mail, return receipt requested addressed
to the parties at the following addresses:

 

	XGT:	 	xG Technology, Inc.
	 	 	240 South Pineapple Avenue, Suite 701, 
	 	 	Sarasota,
Florida 34236, 

	 	 	 
	Customer:	 	Tatum Telephone Co., Inc.
	 	 	Attn:  	 
	 	 	170 West Sterling Price
	 	 	 Tatum, TX 75691
	 	 	 
	With copy to:	 	John T. Palter
	 	 	Riney Palter PLLC
	 	 	5949 Sherry Lane, Suite 1616
	 	 	Dallas, Texas 75225

 

ARTICLE XIII

 

MODIFICATIONS MUST BE IN WRITING

The terms and conditions of this Agreement
shall not be modified or rescinded by agreement, conduct or waiver unless specifically agreed to in writing and executed by each
of the Parties’ duly authorized representative.

 

    	7

    	 

    

 

ARTICLE XIV

 

SEVERABILITY

The invalidity or unenforceability by law
of all, or part of this Agreement shall not invalidate the remainder of the Agreement and will not affect the other provisions
hereof, and this Agreement will be construed in all respects as if such invalid or unenforceable provision were omitted.

 

ARTICLE XV

 

HEADINGS AND TITLES

All headings and titles in this Agreement
have been inserted only to facilitate reference and shall not be taken into account in the interpretation of this Agreement.

 

ARTICLE XVI

 

ASSIGNMENT

Neither party shall have the right to assign
or transfer any duties, rights or obligations due hereunder without the express written consent of the other party..

 

ARTICLE XVII

 

ENTIRE AGREEMENT

This Agreement constitutes and expresses
the entire agreement of the parties as to the services and deliveries to be provided hereunder. Except for the Non-Disclosure Agreement
signed by the parties on September 4th 2012 which remains in full force and effect, all other previous matters, agreements,
understandings and representations of whatever nature relating to this Agreement, either oral or written, are hereby superseded
or canceled. No subsequent modification shall be valid unless and until reduced to writing and signed by the parties hereto.

 

ARTICLE XVIII

 

WARRANTY AND LIABILITY FOR DEFECTS

XGT warrants
that the Services will be performed in accordance with the highest professional standards of workmanship and materially conform
to agreed specifications in accordance with federal law. XGT further warrants that during the duration of the Agreement and for
a period of two (2) years after the effective termination date, XGT will take any action reasonably necessary to rectify, correct,
repair or replace any non-conforming, defective or failing products and provide Services necessary to maintain the xMax
wireless broadband network contemplated by this Agreement . 

 

    	8

    	 

    

 

ARTICLE XIX

 

BILLING

XGT’s invoices are to be submitted
monthly in accordance with the applicable Addendum for services provided as at the date of invoice. All payments shall be made
in U. S. dollars. Terms shall net 30 days. Statements shall be addressed to:

 

xG Technology, Inc.

240 S. Pineapple Ave. Ste. 701

Sarasota, FL 34236

Attn: Roger Branton, CFO

 

ARTICLE XX

 

CHOICE OF LAW AND CONSENT TO JURISDICTION

This Agreement shall be construed and governed
by the laws of the State of Florida. Customer agrees that any action to collect payment of an invoice or enforce any of provision
of this Agreement may be brought in a court of competent jurisdiction in Sarasota County, Florida.

 

ARTICLE XXI

 

MARKETING

The Parties agree that this contract can
be publicly announced and jointly marketed for the mutual benefit of each.

 

ARTICLE XXI

 

INSURANCE

XGT shall maintain general liability insurance
in the aggregate amount of $3,000,000 and professional liability insurance in the aggregate amount of $3,000,000, which provides
errors and omissions coverage for any act or omission by XGT based on the Services contemplated by this Agreement and any related
services. XGT shall further obtain insurance providing coverage for any injury to XGT’s Personnel, including workers’
compensation insurance for its employees.

 

ARTICLE XXIII

 

ATTORNEY’S FEES. 

The prevailing Party to any dispute related
to this Agreement or the enforcement of this Agreement shall be entitled to reasonable and necessary attorney’s fees and
costs from the non-prevailing Party.

 

    	9

    	 

    

 

IN WITNESS WHEREOF, the Parties
hereto have caused this Agreement to be executed in duplicate and their signatures affixed thereto as of the day and year first
above written.

 

	xG Technology, Inc.	 	Tatum Telephone Co., Inc.
	240 South Pineapple Avenue, Suite 701	 	170 West Sterling Price 
	Sarasota, FL 34236, U.S.A.	 	Tatum, TX 75691
	 	 	 
	 	 	 
	By:	/s/ John C. Coleman	 	By:	/s/ Larry C. Townes
	 	 	 
	Title:  	CEO	 	Title:	President
	 	 	 
	Date:  11/24/2012	 	 

 

    	10

    	 

    

 

	ADDENDUM AUTHORIZATION	 	Addendum No: 01
	 	 	Date:  	 
	 

The rates, terms and conditions set forth
in this addendum and the Agreement dated 24th day of November 2012 between xG Technology, Inc. and Tatum Telephone
Company, Inc. (“Tatum”), shall apply for the tasks defined in this addendum.

 

		I.	Job Classification:     Engineering Services Contract

 

		II.	Engagement Description and General Obligations of the Parties:

 

In General:
XGT will provide engineering services to design and build an xMax wireless broadband network for the Tatum telephone
company operating in Tatum, TX.. This network will provide a wireless voice and data network for businesses and private residences
in Tatum Telephone Company service area.

 

More Specifically: 

 

		III.	Delivery of Tasks: The list of deliveries to be performed by the parties is below:

		-	Engineering Plan

		-	Inventory of tower assets and locations

		-	Preliminary coverage testing from tower locations

		-	Spectrum analysis and range testing

		-	Design of backhaul network & Internet capacity sizing

		-	Network installation

		-	Network coverage and performance testing

		-	Network training provided to Customer

		-	Network handover to Customer

		-	Warranty Service - separate agreement

		-	  

 

		IV.	Terms:          Start:     _____________
          Duration: ____________

 

		V.	Cost:

 

XGT will charge Engineering & Installations
Services at an hourly rate of

 

Program Manager/ Sr. Engineer = $180

Installation Engineer   =
$180

Network Technician = $105

Installation Technician =$100

 

    	11

    	 

    

 

Actual time and materials to be paid by
Customer following receipt from XGT from a monthly invoice for services provided up to the date of invoice and not previously billed
to, and paid by, Customer. The chart below is a preliminary estimate for the entire project.

 

	Item	 	Qty.	 	Unit Price	 	 	Ext. Price	 
	Backhaul - Redlines 5 Backhaul links	 	1	 	$	5,500	 	 	$	5,500	 
	ATAs for dial tone	 	10	 	$	30	 	 	$	300	 
	Ethernet hubs- 1 hub at all sites to bridge 3 xAPs	 	2	 	$	100	 	 	$	200	 
	Telephone pole site materials (poles not included)	 	1	 	$	2,500	 	 	$	2,500	 
	Tower Sites Materials	 	1	 	$	7,000	 	 	$	7,000	 
	New Cell Tower Materials (if required)	 	1	 	$	75,000	 	 	$	75,000	 
	Transportation	 	1	 	$	15,000	 	 	$	15,000	 
	Power service drops	 	1	 	$	2,000	 	 	$	2,000	 
	Misc equip and installation	 	1	 	 	10,000	 	 	$	10,000	 
	Installation Services Estimate	 	 	 	 	 	 	 	 	 	 
	4 man install team (labor + per diem) per man day	 	10	 	$	5,500	 	 	$	55,500	 
	Engineering Services Estimate	 	 	 	 	 	 	 	 	 	 
	Network Design & Project Management	 	1	 	 	25,000	 	 	$	25,000	 
	Network Training	 	1	 	 	25,000	 	 	$	25,000	 
	Subtotal	 	 	 	 	 	 	 	$	223,000	 

 

ACCEPTANCE AUTHORIZATION

 

	xG Technology, Inc.	Tatum Telephone Co., Inc.

 

	By	 	 	By:	/s/ Larry C. Townes	 
	 	 	 	 	 	 
	Title	 	 	Title	President	 
	 	 	 	 	 	 
	Date	 	 	Date	11/13/2012	 

 

    	12Ex 10.27

 

Engineering Services Agreement

 

xG Technology 

 

and 

 

Walnut Hill Telephone Company

 

    	 

    	 

    

 

AGREEMENT FOR ENGINEERING SERVICES

 

PARTIES

 

THIS AGREEMENT, effective the 24th
day of November, 2012, by and between xG Technology, Inc., (“XGT”) doing business at 240
South Pineapple Avenue, Suite 701, Sarasota, Florida 34236, and Walnut Hill Telephone Company, Inc., (hereinafter “Walnut
Hill” or “Customer”) doing business at 120 East First Street, P.O. Box 729 Lewisville,
AR 71845. XGT and Customer are collectively referred to as the “Parties” or each “Party” throughout this
Agreement. 

 

BACKGROUND

 

WHEREAS, XGT has conducted a Preliminary
Engineering Survey & Network Estimate of the cost to design, build a high-quality, affordable wireless broadband network for
Customer;

 

WHEREAS simultaneous with this Agreement,
Customer enters into a separate Equipment Purchase Agreement for specific quantities of xMax wireless broadband equipment, which
is incorporated by reference as if fully set forth herein;

 

WHEREAS, upon successful Performance Test
Acceptance of said equipment, Customer desires XGT to perform certain work as described in this Agreement and the Addenda attached
to this Agreement, and XGT desires to perform such work and deliver such services as described in this Agreement and the Addenda
attached hereto;

 

NOW THEREFORE, in consideration of the
mutual covenants and promises hereinafter set forth, the parties hereto agree as follows:

 

AGREED TERMS

 

ARTICLE I

 

SERVICES

Customer hereby retains XGT to render the
services (the “Engineering Services”) described and defined in the Addenda from time to time and for the time being
agreed between Customer and XGT and attached to and made a part of this Agreement. XGT hereby agrees to render the services as
so described. It is understood that XGT may render such services through its own employees (“Employees”) or through
independent subcontractors under subcontract with XGT (“Subcontractors”). If XGT renders services through Subcontractors,
prior to any such services being performed, XGT will obtain a written agreement from the Subcontractors by which the Subcontractors
agree to be bound and perform services in accordance with the terms of this Agreement, including but not limited to the confidentiality
provisions provided under Article IX, in a form approved by Customer prior to its execution. Such Employees and Subcontractors
are herein referred to as “XGT’s Personnel”. If the Customer desires XGT to perform certain additional work beyond
the work already described in this Agreement and the Addenda for the time being attached to this Agreement, then Customer shall
give notice to XGT and, if the provision and terms of provision of such services are mutually agreed with XGT, such agreement shall
be reflected in a new Addendum that shall be attached to and made a part of this Agreement.

 

    	 

    	 

    

 

ARTICLE II

 

COMPENSATION

As compensation for all Engineering Services
performed in accordance with the terms and conditions of this Agreement and the Addenda hereto, Customer agrees to pay to
XGT the sums set forth in such Addenda, at the times and places, and upon the milestones (if any) set forth in the relevant Addenda.
Compensation shall be due and payable for work actually performed by XGT in accordance with this Agreement, and the sums set forth
in the relevant Addenda are the sole and entire compensation due to XGT from Customer for such Engineering Services.

 

All compensation to XGT’s Personnel,
income, FICA, VAT, sales or any other duties or taxes levied on XGT or XGT’s Personnel by reason of payments made or consideration
delivered by Customer to XGT, shall be responsibility of and borne by XGT.

 

ARTICLE III

 

REPORTING RESPONSIBILITIES

Customer may designate at the commencement
of this Agreement, and from time to time thereafter, one or more of its officers or technical managers to whom XGT shall report
and be responsible. Such Customer officer or technical manager shall designate the services to be performed by XGT as provided
by a mutually agreed Addendum, and arrange, at Customer discretion, any meetings or conferences with any other officers
or technical managers of Customer or any subsidiary or affiliate of Customer, or with third parties. All instructions
from Customer to XGT shall be made in written form and acknowledged by XGT. XGT’s Personnel shall perform work, and arrange
delivery to Customer, all services as set forth in Addenda for the time being attached to this Agreement.

 

ARTICLE IV

 

TERM, TERMINATION OF AGREEMENT AND RESCISSION
OPTION

This Agreement is effective as of the date
first set forth above, and shall, without prejudice to any obligation or commitment incurred up until such point in time, continue
until terminated as set forth herein.

 

XGT shall commence and render services
for such term and duration hereunder as set forth in the Addenda for the time being attached to this Agreement.

 

    	 

    	 

    

 

In the event of any termination hereof,
any and all compensation due and payable to XGT shall be prorated to reflect services actually rendered and expenses incurred by
XGT to date of termination in accordance with the terms of this Agreement, and Customer’s obligation to XGT shall be limited
to compensation up to the effective date of termination.

 

Either party may elect to terminate this
Agreement for any reason upon delivery of written notice to the other party, which will be effective ninety (90) days after delivery
of the notice.

 

Either party may elect to terminate this
Agreement immediately upon delivery of written notice upon any material failure, inability or refusal by the other party to perform
its obligations under this Agreement, and such party may thereafter pursue any remedies it may have at law or otherwise.

 

In addition to the termination options
above, Customer shall have the right to rescind this Agreement upon thirty (30) days’ notice if XGT fails to obtain FCC approval
within One-Hundred and Twenty Days of the Effective Date of this Agreement or if the product contemplated by this Agreement is
determined, by Customer in its sole discretion, not to be commercially viable.

 

ARTICLE V

 

REPORTS/SOFTWARE

XGT agrees that XGT and XGT’s Personnel
will make all reports and present all deliverables specified in the Addenda upon completion of the tasks hereunder. XGT and XGT’s
Personnel will prepare and submit written progress reports as may be requested by Customer from time to time.

 

All reports and documents and software
prepared pursuant to this Agreement by XGT or XGT’s Personnel relating to tasks or projects hereunder shall be delivered
to Customer in accordance with the applicable Addenda. XGT agrees to maintain adequate records and files of all work and activities
of XGT and XGT’s Personnel under this Agreement.

 

ARTICLE VI

 

INDEPENDENT CONTRACTOR

XGT, XGT’s Personnel, and Customer
are independent entities. Nothing in this Agreement is intended to create the relationship of employer and employee between Customer
and XGT, or between Customer and any of XGT’s Personnel. Customer shall not make any deductions related to employer-employee
relationships. Neither XGT nor any of XGT’s Personnel shall be entitled to or qualified under any employee benefit plans,
including (but not limited to) pension, health, and insurance, provided by Customer for its employees.

 

Neither party has any authority to act
as the agent of the other, or to bind the other Party to any Agreement or undertaking whatsoever.

 

    	 

    	 

    

 

ARTICLE VII

 

INDEMNITY

Each party agrees to indemnify and hold
the other harmless from and against any liability, loss, damages (including but not limited to consequential damages, lost profits,
damage to good will, costs, and expenses) and attorney’s fees incurred as a result of the other party’s conduct , whether
the claims are based in tort or contract. XGT further indemnifies and holds Walnut Hill harmless from and against any liability,
loss, damages (including but not limited to consequential damages, lost profits, damage to good will, costs, and or expenses) and
attorney’s fees incurred as a result of any conduct of XGT’s Personnel.

 

ARTICLE VIII

 

FORCE MAJEURE

XGT shall not be liable for any damage,
delays or failures to perform any obligation hereunder caused by factors beyond its reasonable ability to control, including (without
limitation) changes in government regulations, acts of God, labor shortages, strikes, slowdowns, or other combined action of workmen,
fires, floods, earthquakes, severe weather, serious accidents, epidemics, quarantines, wars, insurrections or riots, acts of civil
or military authorities, transportation embargoes, destruction of production facilities, delays, shortages or interruptions to
delivery of components and materials, , to the extent that (i) the delay extends more than thirty (30) days, (ii) was not caused
by or the result of any conduct of XGT and (iii) was not reasonably foreseeable by XGT. In the event of an occurrence under Article
VIII, XGT may in its sole discretion allocate available goods among customers as it may determine or cancel orders without liability
for any part thereof not shipped to the Customer upon refunding any allocable advance payments received for the canceled portion.

 

ARTICLE IX

 

CONFIDENTIAL AND PROPRIETARY INFORMATION

The Parties shall keep confidential and
not disclose to any third party any technical, commercial, business related, financial or company information received in relation
to this Agreement.

 

It is explicitly understood and agreed
that under no circumstances, and notwithstanding anything to the contrary contained herein, shall this Agreement including any
addenda, amendment or other instrument hereto, be interpreted to assign or otherwise transfer any industrial or intellectual property
of a Party hereto to the other.

 

Confidential Information shall mean any
information and data of a confidential nature, including but not limited to proprietary, developmental, technical, marketing, sales,
operating, performance, cost, trade secrets, know-how, policy, business, and process information, computer programming techniques,
and all record bearing media containing or disclosing such information or techniques. Confidential Information shall not be deemed
to be in the public domain merely because any part of said information is embodied in general disclosures or because individual
features, components, or combinations thereof are now or become known to the public.

 

    	 

    	 

    

 

Each party agrees not to use the other
Party’s Confidential Information for any other purpose than as specified by the other Party in writing.

 

Copies and embodiments of, and media containing,
any and all Confidential Information of a Party, its parent, subsidiaries or affiliates, including but not limited to documents,
records, notebooks, shall remain the property of such Party, its parent, subsidiaries, or affiliates, respectively, and shall be
returned to the respective owner thereof upon request, and in any event no later than any expiration or termination date of this
Agreement. Copies of, and media containing, any and all Confidential Information which is the property of third parties contracting
or engaged in research, development, or business arrangements with a Party, its parent, subsidiaries or affiliates, shall
be delivered to such Party in accordance with the instructions of such Party and in any event no later than any expiration
or termination date of this Agreement.

 

The Parties’ respective obligations
under this Article IX shall survive any termination or expiration of this Agreement. Any liabilities, damages, or remedies incurred
or limited do to material breach of this Article IX will not be limited in any manner by any other provision of this Agreement.

 

The parties shall advise all of their respective
employees, officers, agents, and representatives including any Subcontractors or XGT Personnel , of the terms and conditions of
this Agreement regarding Confidential Information, require them to observe such conditions with respect to Confidential Information.
For any Subcontractors, , prior to any such services being performed, XGT will obtain a written agreement from the Subcontractors
by which the Subcontractors agree to be bound and perform services in accordance with the terms of this Agreement, including but
not limited to the confidentiality provisions provided under this Article, in a form approved by Customer prior to its execution.

 

ARTICLE X

 

PROPRIETARY RIGHTS

 

Each Party shall continue
to own all Background Technology (meaning all intellectual property rights and know-how, technical design, engineering and test
data, manufacturing methodology, software, algorithms and other information and technology already owned or possessed by, known
to, developed by or for one of the parties independent of the contract work performed hereunder, or with respect to which a Party
may grant licenses to the other Party hereunder prior to or outside of the performance of this Agreement) it has provided to the
other Party hereunder.

 

Technology developed by XGT and which does not to any extent
contain any of Customer’s Background Technology shall be the property of XGT.

 

    	 

    	 

    

 

ARTICLE XI

 

WAIVER

Failure by any party hereto to enforce
any of the provisions of this Agreement, or any rights with respect hereto, or failure to exercise any election provided for herein,
shall in no way be considered a waiver of such provisions, rights, or elections or in any way affect the validity of this Agreement.
The failure by any party to enforce any of said provisions, rights or elections shall not prejudice such party from later enforcing
or exercising the same or any other provisions, rights, or elections it may have under this Agreement.

 

ARTICLE XII

 

NOTICES

All notices provided for in this Agreement
shall be given in writing either by personal delivery of such notice, or by certified mail, return receipt requested addressed
to the parties at the following addresses:

 

	XGT:	 	xG Technology, Inc.
	 	 	240 South Pineapple Avenue, Suite 701, 
	 	 	Sarasota, Florida 34236,
	 	 	 
	Customer:	 	Walnut Hill Telephone Company
	 	 	Attn:  	 
	 	 	120 East First Street, P.O. Box 729
		 	Lewisville, AR 71845
	 	 	 
	With copy to:	 	John T. Palter
	 	 	Riney Palter PLLC
	 	 	5949 Sherry Lane, Suite 1616
	 	 	Dallas, Texas 75225

 

ARTICLE XIII

 

MODIFICATIONS MUST BE IN WRITING

The terms and conditions of this Agreement
shall not be modified or rescinded by agreement, conduct or waiver unless specifically agreed to in writing and executed by each
of the Parties’ duly authorized representative.

 

    	 

    	 

    

 

ARTICLE XIV

 

SEVERABILITY

The invalidity or unenforceability by law
of all, or part of this Agreement shall not invalidate the remainder of the Agreement and will not affect the other provisions
hereof, and this Agreement will be construed in all respects as if such invalid or unenforceable provision were omitted.

 

ARTICLE XV

 

HEADINGS AND TITLES

All headings and titles in this Agreement
have been inserted only to facilitate reference and shall not be taken into account in the interpretation of this Agreement.

 

ARTICLE XVI

 

ASSIGNMENT

Neither party shall have the right to assign
or transfer any duties, rights or obligations due hereunder without the express written consent of the other party..

 

ARTICLE XVII

 

ENTIRE AGREEMENT

This Agreement constitutes and expresses
the entire agreement of the parties as to the services and deliveries to be provided hereunder. Except for the Non-Disclosure Agreement
signed by the parties on September 4th 2012 which remains in full force and effect, all other previous matters, agreements,
understandings and representations of whatever nature relating to this Agreement, either oral or written, are hereby superseded
or canceled. No subsequent modification shall be valid unless and until reduced to writing and signed by the parties hereto.

 

ARTICLE XVIII

 

WARRANTY AND LIABILITY FOR DEFECTS

XGT warrants
that the Services will be performed in accordance with the highest professional standards of workmanship and materially conform
to agreed specifications in accordance with federal law. XGT further warrants that during the duration of the Agreement and for
a period of two (2) years after the effective termination date, XGT will take any action reasonably necessary to rectify, correct,
repair or replace any non-conforming, defective or failing products and provide Services necessary to maintain the xMax
wireless broadband network contemplated by this Agreement. 

 

    	 

    	 

    

 

ARTICLE XIX

 

BILLING

XGT’s invoices are to be submitted
monthly in accordance with the applicable Addendum for services provided as at the date of invoice. All payments shall be made
in U. S. dollars. Terms shall net 30 days. Statements shall be addressed to:

 

xG Technology

240 S. Pineapple Ave. Ste 701

Sarasota, FL 34236

Attn: Roger Branton, CFO

 

ARTICLE XX

 

CHOICE OF LAW AND CONSENT TO JURISDICTION

This Agreement shall be construed and governed
by the laws of the State of Florida. Customer agrees that any action to collect payment of an invoice or enforce any of provision
of this Agreement may be brought in a court of competent jurisdiction in Sarasota County, Florida.

 

ARTICLE XXI

 

MARKETING

The Parties agree that this contract can
be publicly announced and jointly marketed for the mutual benefit of each.

 

ARTICLE XXII

 

INSURANCE

XGT shall maintain general liability insurance
in the aggregate amount of $3,000,000 and professional liability insurance in the aggregate amount of $3,000,000, which provides
errors and omissions coverage for any act or omission by XGT based on the Services contemplated by this Agreement and any related
services. XGT shall further obtain insurance providing coverage for any injury to XGT’s Personnel, including workers’
compensation insurance for its employees.

 

ARTICLE XXIII

 

ATTORNEY’S FEES 

The prevailing Party to any dispute related
to this Agreement or the enforcement of this Agreement shall be entitled to reasonable and necessary attorney’s fees and
costs from the non-prevailing Party.

 

    	 

    	 

    

 

IN WITNESS WHEREOF, the Parties
hereto have caused this Agreement to be executed in duplicate and their signatures affixed thereto as of the day and year first
above written.

 

	xG Technology, Inc.	 	Walnut Hill Telephone Company
	240 South Pineapple Ave., Suite 701	 	120 East First Street, P.O. Box 729
	Sarasota, FL 34236, U.S.A.	 	Lewisville, AR 71845
	 	 	 
	By: 	/s/ John C. Coleman	 	By:	/s/ Larry C. Townes
	 	 	 
	Title:	  CEO	 	Title: 	President
	 	 	 
	Date:  11/24/2012	 	 

 

    	 

    	 

    

 

ADDENDUM AUTHORIZATION

 

The rates, terms and conditions set forth
in this addendum and the Agreement dated 24th day of November 2012 between xG Technology, Inc. and Walnut
Hill Telephone Company, Inc. (“Walnut Hill”), shall apply for the tasks defined in this addendum.

 

		I.	Job Classification:   Engineering Services Contract

 

		II.	Engagement Description and General Obligations of the Parties:

 

In General:
XGT will provide engineering services to design and build an xMax wireless broadband network for the Walnut Hill Telephone
Company. This network will provide a wireless voice and data network for businesses and private residences in the Walnut Hill Telephone
Company service area.

 

More Specifically: 

 

		III.	Delivery of Tasks: The list of deliveries to be performed by XGT is as follows:

 

		-	Engineering Plan

		-	Inventory of tower assets and locations

		-	Preliminary coverage testing from tower locations

		-	Spectrum analysis and range testing

		-	Design of backhaul network & Internet capacity sizing

		-	Network installation

		-	Network coverage and performance testing

		-	Network training provided to Customer

		-	Network handover to Customer

		-	Warranty Service - separate agreement

 

		IV.	Terms:       Start:     _____________     Duration:
____________

 

    	 

    	 

    

 

		V.	Cost:

 

XGT will charge Engineering & Installations
Services at an hourly rate of

 

Program Manager/ Sr. Engineer = $180

Installation Engineer   =
$180

Network Technician = $105

Installation Technician =$100

 

Actual time and materials to be paid by
Customer following receipt from XGT from a monthly invoice for services provided up to the date of invoice and not previously billed
to, and paid by, Customer. The chart below is a preliminary estimate for the entire project.

 

	Item	 	 	Qty.	 	 	Unit Price	 	 	Ext. Price	 
	Backhaul - Redlines 5 Backhaul links	 	 	1	 	 	$	5,500	 	 	$	5,500	 
	ATAs for dial tone	 	 	10	 	 	$	30	 	 	$	300	 
	Ethernet hubs- 1 hub at all sites to bridge 3 xAPs	 	 	2	 	 	$	100	 	 	$	200	 
	Tower Sites Materials	 	 	1	 	 	$	7,000	 	 	$	7,000	 
	New Cell Tower Materials (if required)	 	 	0	 	 	$	75,000	 	 	$	0	 
	Transportation	 	 	1	 	 	$	15,000	 	 	$	15,000	 
	Power service drops	 	 	1	 	 	$	2,000	 	 	$	2,000	 
	Misc equip and installation	 	 	1	 	 	 	10,000	 	 	$	10,000	 
	Installation Services Estimate	 	 	 	 	 	 	 	 	 	 	 	 
	4 man install team (labor + per diem) per man day	 	 	5	 	 	$	5,500	 	 	$	27,500	 
	Engineering Services Estimate	 	 	 	 	 	 	 	 	 	 	 	 
	Network Design & Project Management	 	 	1	 	 	 	25,000	 	 	$	25,000	 
	Network Training	 	 	1	 	 	 	25,000	 	 	$	25,000	 
	TOTAL	 	 	 	 	 	 	 	 	 	$	117,500	 

 

ACCEPTANCE AUTHORIZATION

 

	xG Technology, Inc.	 	Walnut Hill Telephone Company	 
	 	 	 	 	 	 
	By	 	 	By:	/s/ Larry C. Townes	 
	 	 	 	 	 
	Title	 	 	Title	President	 
	 	 	 	 	 
	Date	 	 	Date	11/13/2012

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