xG Technology Inc. - Update on Sale of xMax Market Exclusivity

March 6, 2012

xG Technology, Inc.

("xG", "xG Technology" or the "Company")

Update on Sale of xMax Market Exclusivity

xG Technology announces that, further to its announcement on February 1, 2012 concerning the xMax Market Exclusivity agreement with Care21 Limited ("Care21"), the Company has extended the cure period whilst further discussions with Care 21 are being held regarding the $1,560,000 payment that was originally scheduled to be received on January 25, 2012.

It is expected that a further announcement regarding the payment and the market agreement will be made in the near future.

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ABOUT xG TECHNOLOGY

xG Technology is a leading developer of innovative and disruptive communications technologies for wireless networks. Its (Euronext: ALITS.NX - news) patented intellectual property portfolio covers a broad 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 (Berlin: A3QA.BE - news) and dynamic interference mitigation capabilities. The Company's xMax products have been successfully tested and trialed 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 www.xgtechnology.com.