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xG Technology, Inc.: Purchase of Exclusive Right to Deploy xMax in Miami and Fort Lauderdale Markets

SARASOTA, FL — (Marketwire) — 12/22/11 — xG (“xG”, “xG Technology” or the “Company”) (AIM: XGTU), the developer of a portfolio of wireless communications technologies, including cognitive radio networks, is pleased to announce that the Company has entered into an agreement (the “Market Agreement”) with Care21 Limited (“Care21”) granting exclusivity for the deployment of xMax, the Company-s wireless cognitive cellular network system, in the Broward and Miami-Dade Counties of Florida, United States (the “Territory”). The Market Agreement, which Care21 is signing on behalf of an international investor group led by Markus Losada, the founder of Care21, is for a term of five years and provides for payment of a market exclusivity fee of a total of $15 million (the “Fee”).

The Fee is payable in stage payments over the next 19 months as set out below:

$440,000 payable immediately;

$1,560,000 to be paid on January 25, 2012;

$2,200,000 to be paid on February 25, 2012

$800,000 to be paid on March 25, 2012;

$5,000,000 to be paid in five consecutive monthly installments of $1,000,000 commencing on April 25, 2012; and

$5,000,000 to be paid in ten consecutive monthly installments of $500,000 commencing on September 25, 2012.

The first payment of $440,000 has already been received by the Company.

The investor group has extensive experience of operating and investing in the telecoms sector, particularly in network infrastructure solutions. The Market Agreement grants Care21 exclusive use of xG-s xMax technology in all fields of use within the Territory, other than in the military market, utilizing the free, unlicensed 902-928MHz and 5,725-5,825MHz bands.

Pursuant to the Market Agreement, Care21 has the option whether to deploy and operate an xMax network within the Territory. Alternatively, Care21 can assign the Market Agreement to MB Technology Holdings, LLC (“MBTH”), xG-s parent company, in consideration for shares in MBTH. MBTH, in turn, has the right to re-assign the Market Agreement to xG in consideration for shares in xG at prices per xG share ranging from $1.00 to $6.00, depending on the date of any re-assignment. In the event that MBTH re-assigns the Market Agreement to xG, the total consideration payable by xG to MBTH shall equal 110% of the aggregate amount of the Fee paid to xG by Care21 and/or MBTH (if Care21 has assigned the Market Agreement to MBTH), and received by xG, as at the date of such re-assignment.

“The ability for xMax to utilize free wireless frequencies and deliver carrier grade services presented us with a unique investment opportunity in this high growth wireless market,” said Markus Losada, spokesman for the investment group and founder of Care21. “The demand for mobile services is expanding rapidly and incumbent mobile service providers are having difficulty meeting this demand and offering low cost services to its customers. xMax is well positioned to help meet this growing demand with low cost services and having exclusivity to deploy xMax in a Tier 1 market like Miami and Fort Lauderdale offers us an attractive investment opportunity.”

Given MBTH-s shareholding in the Company, entering into the Market Agreement is considered to be a related party transaction pursuant to Rule 13 of the AIM Rules for Companies. The Company-s directors who are not connected with MBTH (being John Coleman, James Woodyatt, Mats Wennberg and Palmi Sigmarsson), having consulted with the Company-s nominated adviser, Allenby Capital Limited, consider that the terms of the Market Agreement are fair and reasonable insofar as the Company-s shareholders are concerned.

xG Technology is a developer of innovative and disruptive communications technologies for wireless networks. Its patented intellectual property portfolio covers a range of applications including cognitive radio networks. The Company has commercialized some of these technologies to create xMax, the World-s first carrier-class cognitive radio network.

xMax-s standards-based IP architecture minimizes network deployment, management and operational costs while simplifying the delivery of profitable fixed and mobile services. Using field-proven cognitive radio technology, xMax enables the delivery of these mobile services in both licensed and unlicensed bands. In its initial commercial offering, the xMax cognitive radio system enables carriers and other operators to monetize profitably the free unlicensed spectrum in the 900MHz ISM band.

xMax also offers unique capabilities to enterprises, utilities, government agencies and others who require advanced wireless communications to support business operations and mission critical applications.

xG offers turnkey xMax network solutions including base stations, mobile switching centres, network management systems, deployment tools, end-user equipment and customer support.

xG has deployed a 32 square mile xMax network in Fort Lauderdale, Florida to showcase its cognitive radio, mobile VoIP and dynamic interference mitigation capabilities. The Company-s xMax products have been successfully tested and trialled by the US Army at two of its US bases. Based in the USA, xG has over 60 US and more than 130 international patents and pending patent applications. For more information, please visit .

The investor group, led by Markus Losada, comprises a broad based international group of investors who invest in global opportunities in the telecoms and other sectors. While Care21 is signatory to the Market Agreement, the intention is that the investor group will novate the agreement to a new investment vehicle company once established.

John Coleman
Chief Executive Officer
+1 212 651 4219

Roger Branton
Chief Financial Officer
+1 212 651 4219

James Woodyatt
Investor Relations
+1 954 572 0395

Brian Stockbridge
+44 20 3328 5656

Mark Connelly
+44 20 3328 5656

Chris Crawford
+44 20 3002 2073

Heather Lukens
+1 212 651 4227