XGT22 Dec 2011 07:50
Purchase of exclusive right to deploy xMax in Miami and Fort Lauderdale markets
xG, 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.
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