Document:

Exhibit
10.7

 

SECOND
AMENDMENT TO LEASE AGREEMENT

 

This
Second Amendment shall be a part of the Lease Agreement with an effective date of August 1, 2011, between DART CONTAINER OF MICHIGAN
LLC, a Michigan limited liability company (“Landlord”), and XG SCIENCES, INC., a Michigan corporation (“Tenant”),
covering the premises known as Lot 29, Oakwood Executive Park, more commonly known as 3101 Grand Oak Drive, Lansing, Michigan
48911. The Lease Agreement has a Commencement Date of September 1, 2011, and has a Termination Date of August 31, 2021.

 

Landlord
and Tenant agree that, from January 1, 2013, through December 31, 2017 (the “Expansion Term”), the Premises as defined
in the Lease Agreement shall be deemed to include Lot 27, Suite B, in the Oakwood Executive Park, more commonly known as 4055
English Oak Drive, Suite B, Lansing, Michigan 48911 (the “Expansion Space”), which is deemed to be comprised of 14,314
square feet and is shown on Exhibit A, attached hereto and made a part hereof.

 

Due
to this expansion of the Premises and by mutual agreement, Landlord and Tenant agree that during the Expansion Term the Base Rent
as defined in the Lease Agreement shall be increased by the following amounts:

 

$6,667.00
per month from January 1, 2013 through December 31, 2013.

 

$6,871.00
per month from January 1,2014 through December 31, 2014.

 

$7,074.00
per month from January 1, 2015 through December 31, 2015.

 

$7,288.00
per month from January 1, 2016 through December 31, 2016.

 

$7,503.00
per month from January 1, 2017 through December 31, 2017.

 

The
Common Cost Estimates for the Expansion Space for the calendar year of 2013 are deemed to be $2,147.00 per month. The Common Cost
Estimates shall be adjusted each subsequent year during the Expansion Term as described in Sec. 4 of the Lease Agreement.

 

During
the Expansion Term, for the Expansion Space, Tenant’s employees and visitors shall be entitled to park in common with other
tenants in any valid parking space within the Park. There will be no assigned parking unless Landlord determines that allocation
of parking spaces among tenants is appropriate, except that Tenant shall be allowed up to two (2) dedicated visitor parking spaces
located in front of the lab entry door of the Expansion Space. For these visitor parking spaces, Tenant, at Tenant’s expense,
shall provide and install “VISITOR PARKING” signs of a kind similar to and to be installed in a manner similar to
the “VISITOR PARKING” sign located outside of Lot 27, Suite A.

 

Provided
that Tenant shall not be in default of any provision of the Lease, Tenant, beginning upon January 1, 2016, shall have the right
to terminate its lease of the Expansion Space upon six (6) months’ prior written notice to Landlord.

 

Within
10 calendar days after its signing of this Second Amendment, Tenant shall provide Landlord with an amended version of the Letter
of Credit described in Sec. 5 of the Lease Agreement which, for the duration of the Expansion Term, extends the Letter of Credit
to cover both the original Premises and the Expansion Space.

 

     

     

    

 

Tenant
accepts the Expansion Space and all equipment therein in “as is” condition. For the purposes of the preceding sentence,
the word “equipment” includes all chemical fume hoods, chemical storage facilities, chemical and air handling equipment,
vent and fume hood duct work, fans, controllers, sensors, and wiring, chemical benches, carts, racks, countertops, shelves, and
casework. The care, maintenance, and replacement of all of this equipment is the responsibility of Tenant, although the equipment
shall at all times remain the sole property of Landlord and shall remain in the Expansion Space and, upon the expiration or earlier
termination of the Expansion Term, shall be returned to Landlord in the same condition as received, normal wear and tear excepted.

 

Tenant
shall be solely responsible for all improvements to the Expansion Space, except that Landlord at its sole expense shall be responsible
for the removal of the cold storage room and the removal of the benches, all as noted on Exhibit A.

 

Utilities
for the Expansion Space are metered in common with the neighboring Suite A. Landlord will maintain all utility accounts in Landlord’s
name and will pay the providers directly. Tenant shall be responsible for its portion of the utilities as billed by Landlord.
Beginning upon January 1, 2013, Landlord will invoice Tenant monthly at the annual rate of $1.50 per square foot for natural gas,
electric, water and sewer (14,314 square feet x $1.50 = $21,471 / 12 = $1,789.25 per month), with each such invoice to be paid
within ten (10) days of Tenant’s receipt. Following the ninth full month of Tenant’s occupancy of the Expansion Space
(which comprises 47% of the combined area of Suites A and B) and annually thereafter, all utility bills will be reviewed in order
to estimate actual usage and adjust the allocation as necessary, including, retroactively, those months already paid by Tenant.
If an adjustment is appropriate, then Landlord shall give Tenant notice stating whether the aggregate amount of the installments
of Tenant’s utility payments previously paid are more or less than the aggregate amount of the installments due, and (i)
if there is a deficiency, then within ten (10) days after the Tenant receives notification of the deficiency, Tenant shall pay
the amount of such deficiency, (ii) if there was an overpayment, then Landlord shall credit Tenant in the amount thereof toward
the subsequent installments of utilities, and (iii) on the first day of the next month and monthly thereafter, Tenant shall be
invoiced at the revised monthly utility rate, with the revised rate to be based upon a reasonable allocation of estimated usage
to be negotiated and agreed to by Landlord and Tenant. The new allocation will be negotiated and agreed to by Landlord and Tenant.
In no event will Tenant’s total utility costs exceed $1.75 per square foot, except for and to the extent of any unit price
increase of any of the utilities.

 

All
other terms and conditions of the original Lease Agreement shall remain in effect as first written and previously amended.

 

The
effective date of this Second Amendment shall be November 16, 2012, regardless of the date written below.

 

Each
party executing this Amendment warrants that it has the requisite power and authority to do so.

 

     

     

    

 

	 	 	XG SCIENCES, INC.,
		 	a Michigan corporation (Tenant)
	WITNESS	 	 
	 	 	 
	/s/ Corinne
    Lyon	 	/s/ Michael
R. Knox
	[signature]	 	BY: Michael R. Knox
	 	 	ITS: Chief Executive Officer
	CORINNE
    LYON	 	 
	[print name]	 	DATE: 11-27-2012
	 	 	 
	 	 	DART CONTAINER OF MICHIGAN LLC,
	WITNESS	 	a Michigan corporation (Landlord)
	 	 	 
	/s/ Diana
    C. Vanderwall	 	/s/ Kevin
M. Fox
	[signature]	 	BY: Kevin M. Fox
	 	 	ITS: Authorized Signer
	Diana
    C. Vanderwall	 	 
	[print name]	 	DATE: 12-5-2012

 

    

     

    

 

EXHIBIT A

 

 

 

 

NoneExhibit 10.12

 

EXECUTION

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT (“Agreement”)
is made this 16th day of December, 2013 by and between XG Sciences, Inc. a Michigan corporation (“XGS” or the
“Employer” and collectively with any entity that is wholly or partially owned by XGS, the “Company”)
located at 3101 Grand Oak Drive, Lansing, MI 48911 and Philip L. Rose, (“Executive”), an individual who resides
at 1628 Ashford Oaks Ct., Wildwood, MO 63038.

 

RECITALS:

 

WHEREAS, the
Company is engaged in the business of researching, developing, manufacturing, and selling graphene nanoplatelets and certain other
value-added products that contain graphene nanoplatelets; and

 

WHEREAS, XGS
desires to employ Executive as an officer in the capacity of Chief Executive Officer, and Executive desires to be employed by XGS
in such capacity, in accordance with the terms, covenants, and conditions as set forth in this Agreement.

 

NOW, THEREFORE,
in consideration of the mutual promises set forth herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Employer and Executive agree as follows:

 

1.            Employment
Period. Subject to the terms and conditions set forth herein and unless sooner terminated as hereinafter provided, XGS
shall employ Executive as an officer, and Executive agrees to serve as an officer and accepts such employment beginning on January
6, 2014 (the “Effective Date”). This Agreement shall remain in effect until either party delivers a written
notice of a termination pursuant to Section 5 hereof. For purposes of this Agreement, the period from the Effective Date until
the termination of Executive’s employment shall hereinafter be referred to as the “Term”. Executive’s
employment pursuant to this Agreement shall be “at will” as such term is construed under Michigan law.

 

2.            Title
and Duties. During the period from the Effective Date through the Term, XGS shall employ Executive as its Chief
Executive Officer (“CEO”), and Executive accepts employment in such capacity. Executive will report to and
be subject to the general supervision and direction of the Board of Directors of the Company (“Board”), If
requested, Executive will serve in similar capacities for each or any subsidiary of XGS without additional compensation. Executive
shall perform such duties as are customarily performed by someone holding the title of CEO in the same or similar businesses or
enterprises as that engaged in by the Company and such other duties as the Board may assign from time to time. The Company agrees
that it will appoint Executive to its Board of Directors at the first regularly scheduled vote of shareholders after the Effective
Date. Executive agrees that upon his termination from the Company, he will be deemed to have automatically resigned from the Board
on the same date, unless the Company otherwise agrees in writing.

 

3.            Compensation
and Benefits of Executive. The Company shall compensate Executive for Executive's services rendered under this Agreement
as follows:

 

		a.	Base Salary. Unless
                                         otherwise adjusted by the Compensation Committee of the Board (the “Compensation
                                         Committee”), the Company shall pay Executive an annualized base salary of $275,000
                                         (the “Base Salary”), payable in equal installments at such times as
                                         is consistent with normal Company payroll policy.

 

Executive Initials 

 

    	 	1	 

     

    

 

EXECUTION

 

		b.	Bonus. Executive
                                         will be eligible for a performance-based bonus as a participant in the Company's Management
                                         Incentive Plan (“MIP”), which shall set annual target incentives for
                                         the Executive and other senior ranking employees that are determined by the Compensation
                                         Committee. The Company will target an annual bonus of 30% of the Executive’s Base
                                         Salary (the “Target Bonus”). Executive understands and acknowledges
                                         that he must be an employee of the Company on December 31st of any given fiscal
                                         year in order to be eligible to receive all or any portion of a bonus for such fiscal
                                         year. Upon meeting the performance thresholds established by the Compensation Committee
                                         in the MIP for any such year, the actual bonus payout for such year will be no less than
                                         100% of the Target Bonus. However, the Executive shall be eligible to receive up to 150%
                                         of the Target Bonus in the event that the Company’s and/or the Executive’s
                                         performance exceeds the thresholds set for the Target Bonus.

 

		c.	Benefits. Subject to the eligibility requirements, and enrollment provisions of the
Company’s employee benefit plans, Executive may, to the extent he so chooses, participate in any and all of the Company’s
employee benefit plans for qualified members of Executive’s family at the Company’s expense. All Company benefits are
identified in the Employee Handbook and are subject to change without notice or explanation. In addition, subject to the eligibility
requirements and enrollment provisions of the Company’s executive benefit programs, Executive shall also be eligible to participate
in any and all other benefits programs established for officers of the Company.

 

		d.	Stock Options. On the Effective Date, Executive will be granted an option to purchase
220,000 shares of the Company’s common stock (the “Options”) on the terms and conditions listed below. Such
Options will have a strike price equal to $12.00 per share which is the fair market value of the common stock as of the date of
this Agreement based upon recently completed and currently contemplated capital raising activities with disinterested third parties.
The vesting provisions of such Options shall be as outlined below. These Options shall be treated as incentive stock options (ISOs)
to the maximum extent permitted under applicable law, and the remainder of the Options, if any, shall be treated as non-qualified
stock options. The grant of these Options will be made pursuant to the Company’s stock option plan (the “Plan”)
and will be evidenced by a separate “Option Agreement” to be executed by the Company and Executive, which will
contain all the terms and conditions of the Options (including, but not limited to, the provisions set forth in this Section 3(d)).
So long as Executive remains employed by the Company, such Options will have an eight-year term before expiration. Nothing herein
shall preclude XGS from granting Executive additional equity compensation under the Plan or its successor.

 

 1.)          Time-based Options - 160,000 of such Options will be time-based options and will vest according to the following schedule:

 

		40,000	shares will vest on the first anniversary of the Effective Date; and

 

		3,333	shares will vest each month beginning on the 13th monthly anniversary of the Effective
Date and continuing on each monthly anniversary thereafter until the 47th monthly anniversary of the Effective Date;
and

 

		3,345	will vest on the 48th monthly anniversary of the Effective Date.

 

 2.)          Provisional Time-based Options - 40,000 of such Options, or a pro rata portion thereof, will be time-based and will vest in the event the Company has more than 3,220,000 fully diluted shares, options and warrants outstanding on the earlier of (a) the day before the date on which the Securities and Exchange Commission (“SEC”) declares an S-1 Registration Statement Effective, or (b) December 31, 2014 (such date, the “Trigger Date”).

 

Executive Initials 

  

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EXECUTION

 

In the event that there are more
than 3,220,000 fully diluted shares outstanding (inclusive of the Executive’s Options) on the Trigger Date, then a percentage
(the “Vesting Percentage” as defined below) of the these provisional time-based options shall vest according
to the passage of time. The Vesting Percentage, which shall not be greater than 100%, will be determined by the following formula
as of the Trigger Date. The numerator will be the amount of fully-diluted shares in excess of 3,220,000 shares, and the denominator
shall be 800,000.

 

		10,000	shares multiplied by the Vesting Percentage will vest on the first anniversary of the Effective
Date; and

 

		833	shares multiplied by the Vesting
                                         Percentage will vest on the 13th monthly anniversary of the Effective Date
                                         and continuing on each monthly anniversary thereafter until the 47th monthly
                                         anniversary of the Effective Date; and

 

		845	shares multiplied by the Vesting Percentage will vest on the 48th monthly anniversary
of the Effective Date.

 

3.)          Performance-based
Options - 20,000 of such Options will be performance-based options and will vest according to the following schedule.
Executive understands and acknowledges that if any of the performance metrics are not met, then such Options shall be forfeited
and the Board is under no obligation to replenish such Options.

 

		5,000	shares will vest on the date on which the SEC declares an initial Registration Statement of the
Company on Form S-1 as being “Effective”, or such other performance metric as may be established by the Compensation
Committee and mutually agreed upon with the Executive; and

 

		5,000	shares will vest on the date on which the Company consummates at least $15 million of aggregate
equity financing from parties other than Samsung Venture Investment Company; Aspen Advanced Opportunity Fund, LP; XGS II, LLC or
any of the existing shareholders of the Company as of the Effective Date, or such other performance metric as may be established
by the Compensation Committee and mutually agreed upon with the Executive; and

 

		5,000	shares will vest on the date on which the Company completes all of the development activities specified
in the Joint Development Agreement that the Company contemplates entering into with Samsung SDI if such development activities
are completed by December 31, 2015, or such other performance metric as may be established by the Compensation Committee and mutually
agreed upon with the Executive; and

 

		5,000	shares will vest if the Company is able to book aggregate GAAP revenue of $12 million from the
sale of products between January 1, 2014 and December 31, 2015, or such other performance metric as may be established by the Compensation
Committee and mutually agreed upon with the Executive.

 

Executive Initials

  

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EXECUTION

 

Executive understands that, pursuant
to the Plan, upon termination of his employment, he will only have ninety (90) days to exercise any vested portion of the Options.
All Options awarded pursuant to this Section 3(d) will contain a provision in the Option Agreement that allows for immediate vesting
of any unvested portion of the Options in the event of a change of control of the Company.

 

		e.	Temporary Commuting Allowance. The Company agrees to reimburse Executive for up to
$36,000 in the aggregate for commuting and temporary housing expenses incurred prior to the earlier of (i) Executive’s permanent
relocation to the greater Lansing, MI area, or (ii) December 31, 2015 (the “Temporary Commuting Allowance”).
Expenses reimbursable under the Temporary Commuting Allowance include pre-move travel (between Wildwood, MO and Lansing, MI), related
lodging and meal expenses, and other related transition expenses, and will be reimbursed after receipts are submitted for such
expenses in accordance with the Company’s policy for expense reimbursement.

 

		f.	Permanent Relocation Expenses. The Company agrees to reimburse Executive for up to
$25,000 in the aggregate for any expenses incurred in connection with Executive’s permanent relocation to the greater Lansing,
MI area; provided, that such expenses are incurred prior to December 31, 2015 or such other mutually agreed upon date (the “Permanent
Relocation Assistance”). Any relocation expenses incurred by Executive after December 31, 2015 will not be reimbursable
by the Company unless otherwise mutually agreed upon in writing by the Executive and the Company. The Company will require two
(2) quotes from vendors prior to payment for moving expenses. Executive understands and acknowledges that he will forfeit any unused
Permanent Relocation Assistance after December 31, 2015.

 

		g.	Personal Time-Off and
                                         Holidays. Executive’s personal time-off (“PTO”)
                                         and holidays shall be consistent with the standards set forth in the Company’s
                                         Employee Handbook, as revised from time to time or as otherwise published by the Company.
                                         Notwithstanding the previous sentence, Executive will be eligible for one hundred forty
                                         four (144) hours of PTO/year, which will accrue on a pro-rata basis throughout the year,
                                         provided, however, that it is the Company’s policy that no more than sixteen hours
                                         (16) hours of PTO can be accrued beyond this annual limit for any employee at any time.
                                         Thus, when accrued PTO reaches one hundred sixty (160) hours, Executive will cease accruing
                                         PTO until accrued PTO is one hundred forty four (144) hours or less, at which point Executive
                                         will again accrue PTO until he reaches one hundred sixty (160) hours. In addition to
                                         PTO, there are also nine (9) paid national holidays and one (1) “floater”
                                         day available to Company employees. Executive agrees to schedule such PTO so that it
                                         minimally interferes with the Company’s operations. Executive further understands
                                         and acknowledges that pursuant to Company policy, the Company does not pay out unused
                                         PTO to employees upon their termination for any or no reason.

 

		h.	Reimbursement of Normal Business Expenses. The Company will reimburse all reasonable
business expenses of Executive, including, but not limited to, cell phone expenses and business related travel, meals and entertainment
expenses in accordance with the Company’s polices for such reimbursement.

 

4.          Best
Efforts of the Executive and Minimum Time Commitments of Employment. Executive agrees to perform all of the duties pursuant
to the express and implicit terms of this Agreement to the reasonable satisfaction of the Employer. Executive further agrees to
perform such duties faithfully and to the best of his ability, talent, and experience and, unless otherwise agreed upon with the
Company in writing, to render his full working time and attention to the Company.

 

Executive Initials

 

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EXECUTION

 

5.         Termination.
The parties agree that any termination of the Executive under this Agreement will be governed as follows:

 

		a.	By the Company
                                         for Cause. The Company shall have the right to terminate this Agreement
                                         and to discharge the Executive for Cause (as defined below), at any time during the Term.
                                         For the purposes of this Agreement, the Company shall have “Cause” to terminate
                                         the Executive’s employment hereunder upon:

 

(i)            failure to materially perform
and discharge the duties and responsibilities of Executive under this Agreement after receiving written notice and allowing Executive
ten (10) business days to create a plan to cure such failure(s), such plan being acceptable to the Board of Directors, and a further
thirty (30) days to cure such failure(s), if so curable, provided, however, that after one such notice has been
given to Executive and the thirty (30) day cure period has lapsed, the Company is no longer required to provide time to cure subsequent
failures of the same or substantially similar type having occurred within twelve (12) months of the first instance under this
provision, or

 

(ii)          any breach by Executive
of the material provisions of this Agreement; or

 

(iii)         felony conviction involving
the personal dishonesty or moral turpitude of Executive; or a determination by the Board, after consideration of all available
information, that Executive has willfully and knowingly violated Company policies or procedures involving discrimination, harassment,
or work place violence or any other activities that would potential subject the Company to criminal or civil liabilities; or

 

(iv)         engagement in illegal drug
use or abuse of alcohol or prescription drugs that, in the good faith opinion and sole discretion of the Board, prevents Executive
from performing his duties, or

 

(v)          any misappropriation, embezzlement
or conversion of the Company’s opportunities or property by the Executive; or

 

(vi)         willful misconduct, recklessness
or gross negligence by the Executive in respect of the duties or obligations of the Executive under this Agreement and/or the Confidentiality,
Non-Solicitation or Non-Competition Agreement.

 

Any termination for Cause pursuant
to this Section shall be given to the Executive in writing and shall set forth in detail all acts or omissions upon which the Company
is relying to terminate the Executive for Cause. If an Executive is terminated for Cause, the Executive shall only be entitled
to receive his accrued and unpaid Salary, bonus and other benefits pursuant to Section 3(c) through the termination date and the
Company shall have no further obligations under this Agreement from and after the date of termination.

 

Executive Initials 

 

    	 	5	 

     

    

 

EXECUTION

 

		b.	Termination by Company Without
                                         Cause. At any time during the Term, the Company shall have the right to terminate
                                         this Agreement and to discharge the Executive without Cause effective upon delivery of
                                         written notice to the Executive. If the Company terminates the Executive without “Cause”
                                         for any or no reason, then the Company agrees that for a period of six (6) months from
                                         the date of notice of termination (the “Severance Period”), it will
                                         pay as severance (i) the Executive’s Base Salary in accordance with Section 3(a)
                                         at such times as the normally recurring payroll payments (“Severance Payments”);
                                         and (ii) 100% of the COBRA premiums for the Executive’s and Executive’s family
                                         health insurance benefits, as permitted by COBRA and under the policy provisions as they
                                         then may apply. The Company also agrees that it will pay to the Executive at the next
                                         such time that annual bonuses are paid by the Company to employees generally, the pro
                                         rata portion of any bonus that would be due for the year in which the termination occurs
                                         up to the date of written notice of termination (such pro rata bonus amounts together
                                         with the amount of any payments due after a termination without Cause for COBRA premiums,
                                         collectively the “Benefit Consideration”). The pro rata portion of any such
                                         bonus that would be due and payable for the year in which termination occurs shall be
                                         calculated by annualizing any financial metrics of the Company (e.g., revenue, adjusted
                                         EBITDA, or net income) that may be specified as Company performance metrics in the MIP
                                         up to the most recent full month prior to the written notice of termination and comparing
                                         such annualized figures to the performance thresholds for the Executive outlined in the
                                         MIP that was in effect for such year at the time the written notice of termination was
                                         delivered to the Executive. Executive understands and acknowledges that he would not
                                         have any obligation or authority to represent the Company in any way during the Severance
                                         Period.

 

Executive further agrees that in
the event that he obtains employment during the Severance Period, he will promptly notify the Company. Provided that such employment
does not violate the terms of the Confidentiality, Non-Solicitation and Non-Competition Agreement, the Severance Payments will
continue to be paid. Other than the Severance Payments, and the Benefit Consideration which is conditioned as described above,
the Company shall have no further obligation to the Executive after the date of termination.

 

The Executive acknowledges and
agrees that any and all Severance Payments to which he may be entitled under this Section 5(b) following a termination without
Cause are conditioned upon and subject to his execution of a general waiver and release, in such reasonable form as counsel for
the Company shall determine, of all claims the Executive has or may have against the Company.

 

		c.	By Resignation of the Executive. The Executive may terminate his employment hereunder
with or without cause, upon giving sixty (60) days written notice to the Company. Executive’s “Resignation for Cause”
shall mean, without Executive’s consent, the occurrence of any of the following circumstances:

 

		(i)	A material diminution of Executive’s Base Salary;

		(ii)	A change in Executive’s title or position within XGS or its successor, where such change
represents a material diminution of Executive’s level of responsibility, duties or authority; or

		(iii)	A material breach by XGS of the terms of this Agreement.

 

In the event Executive’s
Resignation is With Cause, Company shallpay to Executive the Severance Payments as set out in Section 5(b).

 

The Executive agrees that during
such sixty (60) day period no more than one week of unused PTO may be utilized without the Company’s written consent. In
the event of such a termination, the Executive shall comply with any reasonable request of the Company to assist in providing for
an orderly transition of authority, but such assistance shall not delay the Executive’s termination of employment longer
than sixty (60) days beyond the Executive’s original notice of termination. Upon such a Resignation Without Cause, the Executive
shall become entitled to any accrued but unpaid salary, and other benefits pursuant to Section 3(c) through the termination date,
and the Company shall have no further obligations under this Agreement from and after the date of termination.

 

Executive Initials 

 

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EXECUTION

 

		d.	Disability of the Executive. This Agreement may be terminated by the Company upon
the Disability of the Executive. “Disability” shall mean any mental or physical illness, condition, disability or
incapacity which prevents the Executive from reasonably discharging his duties and responsibilities under this Agreement for a
period of ninety (90) days in any one hundred eighty (180) day period. In the event that any disagreement or dispute shall arise
between the Company and the Executive as to whether the Executive suffers from any Disability, then, in such event, the Executive
shall submit to the physical or mental examination of a physician licensed under the laws of the State of Michigan, who is agreeable
to the Company and the Executive, and such physician shall determine whether the Executive suffers from any Disability. In the
absence of fraud or bad faith, the determination of such physician shall be final and binding upon the Company and the Executive.
The entire cost of such examination shall be paid solely by the Company. In the event the Company has purchased disability insurance
for Executive, the Executive shall be deemed disabled if he is disabled as defined by the terms of the disability policy. In the
event Company has purchased a disability policy, Executive shall be entitled to the payments thereunder, subject and pursuant to
the Company’s contract with the disability insurance carrier. In addition, on the date that the Executive is deemed to have
a Disability, this Agreement will be deemed to have been terminated and the Executive shall be entitled to receive from the Company
his accrued and unpaid Base Salary, bonus, and other benefits pursuant to Section 3(c) through the termination date. Other than
as set forth in this subsection 5(d), the Company shall have no further obligations under this Agreement from and after the date
of termination due to Disability.

 

		e.	Death of the Executive. In the event of the death of Executive, the employment of
the Executive by the Company shall automatically terminate on the date of the Executive’s death and the Company shall be
obligated to pay Executive’s estate, or if written instructions signed by the Executive have been provided to the Company
prior to the Executive’s death which designates his specific next of kin, pay such designated next of kin (i) the Executive’s
accrued and unpaid Base Salary, bonus, and other benefits pursuant to Section 3(c) through the termination date and shall pay for
Executive’s family health insurance for a period of six (6) months thereafter, subject to and in accordance with the provisions
of COBRA. Other than as set forth in this subsection 5(e), the Company shall have no further obligations under this Agreement from
and after the date of termination due to the death of the Executive.

 

6.          Confidentiality,
Non-Compete & Non-Solicitation Agreement. Executive agrees to the terms of the Confidentiality, Non-Solicitation and
Non-Compete Agreement attached hereto as Addendum A (the “Confidentiality Agreement”) and has signed that Agreement.
Such Confidentiality Agreement is hereby incorporated into and made a part of this Agreement.

 

7.          Importance
of Certain Clauses. Executive and Employer agree that the covenants contained in the Confidentiality Agreement are material
terms of this Agreement and all parties understand the importance of such provisions to the ongoing business of the Employer. As
such, because the Employer’s continued business and viability depend on the protection of Confidential Information (as such
term is defined in the Confidentiality Agreement), non-solicitation and non-competition, as well as the other provisions in the
Confidentiality Agreement, these clauses are interpreted by the parties to have applicability as may be allowed by law and Executive
understands and acknowledges his understanding of same.

 

Executive Initials

  

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EXECUTION

 

8.          Consideration.
Executive acknowledges and agrees that the provision of employment under this Agreement with the compensation and benefits specified
in Section 3 hereof and the execution by the Employer of this Agreement constitute full, adequate and sufficient consideration
to Executive for the Executive’s duties, obligations and covenants under this Agreement and under the Confidentiality Agreement
incorporated into this Agreement.

 

9.         Acknowledgement
of Post Termination Obligations. Upon the effective date of termination of Executive’s employment (unless due to
Executive’s death), if requested by the Employer, Executive shall participate in an exit interview with the Employer and
certify in writing that Executive has complied with his contractual obligations and intends to comply with his continuing obligations
under this Agreement, including, but not limited to, the terms of the Confidentiality Agreement. To the extent it is known or applicable
at the time of such exit interview, Executive shall also provide the Employer with information concerning Executive’s subsequent
employer and the capacity in which Executive will be employed. Executive’s failure to comply with this provision shall be
a material breach of this Agreement, for which the Employer, in addition to any other civil remedy, may in its sole discretion,
s, (i) subject to then-current and applicable law, discontinue any Benefit Consideration to which the Executive may otherwise be
entitled, or (ii) seek equitable relief, without the necessity of posting bond.

 

10.        Withholding.
All payments made to Executive shall be made net of any applicable withholding for income taxes and Executive’s share
of FICA, FUTA or other employment taxes. The Company shall withhold such amounts from such payments to the extent required by applicable
law and remit such amounts to the applicable governmental authorities in accordance with applicable law.

 

11.        Representations
of Executive. Executive represents and warrants to Company that to the best of Executive’s knowledge and judgment
(a) nothing in his past legal and/or work and/or personal experiences, which if became broadly known in the marketplace, would
impair his ability to serve as the Chief Executive Officer of a publicly-traded company or materially damage his credibility with
public shareholders; (b) there are no restrictions, agreements, or understandings whatsoever to which he is a party which would
prevent or make unlawful his execution of this Agreement or employment hereunder, (c) Executive’s execution of this Agreement
and employment hereunder shall not constitute a breach of any contract, agreement or understanding, oral or written, to which he
is a party or by which he is bound, (d) Executive is free and able to execute this Agreement and to continue employment with Company,
and (e) Executive has not used and will not use confidential information or trade secrets belonging to any prior employers to perform
services for the Company.

 

12.        Effect
of Partial Invalidity. The invalidity of any portion of this Agreement shall not affect the validity of any other provision.
In the event that any provision of this Agreement is held to be invalid, the parties agree that the remaining provisions shall
remain in full force and effect.

 

13.        Entire
Agreement. This Agreement, together with the other documents referenced herein, reflects the complete agreement between
the parties regarding the subject matter identified herein and shall supersede all other previous agreements, either oral or written,
between the parties. The parties stipulate that neither of them, nor any person acting on their behalf has made any representations
except as are specifically set forth in this Agreement and each of the parties acknowledges that it or he has not relied upon any
representation of any third party in executing this Agreement, but rather have relied exclusively on it or his own judgment in
entering into this Agreement.

 

Executive Initials

 

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EXECUTION

 

14.         Assignment.
Employer may assign its interest, obligations, and rights under this Agreement at its sole discretion and without approval of Executive
to a successor in interest by the Employer’s merger, consolidation or other form of business combination with or into a third
party where the Employer’s stockholders before such event do not control a majority of the resulting business entity after
such event. All rights and entitlements arising from this Agreement, including but not limited to those protective covenants and
prohibitions set forth in the Confidentiality, Non-Solicitation and Non-Compete Agreement attached as Addendum A and incorporated
into this Agreement shall inure to the benefit of any purchaser, assignor or transferee of this Agreement and shall continue to
be enforceable to the extent allowable under applicable law. Neither this Agreement, nor the employment status conferred with its
execution is assignable or subject to transfer in any manner by Executive.

 

15.         Notices.
All notices, requests, demands, and other communications shall be in writing and shall be given by registered or certified mail,
postage prepaid, a) if to the Employer, at the Employer’s then current headquarters location, and b) if to Executive, at
the most recent address on file with the Company for Executive or to such subsequent addresses as either party shall so designate
in writing to the other party.

 

16.          Remedies.
If any action at law, equity or in arbitration, including an action for declaratory relief, is brought to enforce or interpret
the provisions of this Agreement, the prevailing party may, if the court or arbitrator hearing the dispute, so determines, have
its reasonable attorneys’ fees and costs of enforcement recouped from the non-prevailing party.

 

17.          Amendment/Waiver.
No waiver, modification, amendment or change of any term of this Agreement shall be effective unless it is in a written agreement
signed by both parties. No waiver by the Employer of any breach or threatened breach of this Agreement shall be construed as a
waiver of any subsequent breach unless it so provides by its terms.

 

18.         Governing
Law, Venue and Jurisdiction. This Agreement and all transactions contemplated by this Agreement shall be governed by, construed,
and enforced in accordance with the laws of the State of Michigan without regard to any conflicts of laws, statutes, rules, regulations
or ordinances. Executive consents to personal jurisdiction and venue in the Circuit Court in and for Ingham County, Michigan regarding
any action arising under the terms of this Agreement and any and all other disputes between Executive and Employer.

 

19.         Arbitration.
Any and all controversies and disputes between Executive and Employer arising from this Agreement or regarding any other matter
whatsoever shall be submitted to arbitration before a single unbiased arbitrator skilled in arbitrating such disputes under the
American Arbitration Association, utilizing its employment rules. The process for selecting a single unbiased arbitrator shall
be decided between Employer and Executive. Any arbitration action brought pursuant to this section shall be heard in Lansing, Michigan.
The Circuit Court in and for Lansing, Michigan shall have concurrent jurisdiction with any arbitration panel for the purpose of
entering temporary and permanent injunctive relief, but only with respect to any alleged breach of the Confidentiality, Non-Solicitation
and Non-Compete Agreement

 

20.         Headings.
The titles to the sections of this Agreement are solely for the convenience of the parties and shall not affect in any way the
meaning or interpretation of this Agreement.

 

21.         Miscellaneous
Terms. The parties to this Agreement declare and represent that:

 

		a.	They have read and understand this Agreement;

 

		b.	They have been given the opportunity to consult with an attorney if they so desire;

 

Executive Initials

 

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EXECUTION

 

		c.	They intend to be legally bound by the promises set forth in this Agreement and enter into it freely,
without duress or coercion; and

 

		d.	They have retained signed copies of this Agreement for their records.

 

22.         Counterparts.
This Agreement may be executed in counterparts and by facsimile, or by pdf, each of which shall be deemed an original for all intents
and purposes.

  

Signatures appear on the
following page.

 

Executive Initials

 

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EXECUTION

 

IN WITNESS WHEREOF, the parties
have executed this Agreement as of the date first written

above.

 

	 	XG SCIENCES, INC., a Michigan Corporation
	 	 	 
	 	By:	/s/ Iris K. Linder
	 	Name:	Iris K. Linder
	 	Title:	Chairperson, Compensation Committee
	 	 	 
	 	 	EXECUTIVE:
	 	 	 
	 	 	/s/ Philip L. Rose
	 	 	Philip L. Rose, Ph.D.

 

Executive Initials 

 

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EXECUTION

 

Addendum A

 

CONFIDENTIALITY, NON-SOLICITATION
AND NON-COMPETE AGREEMENT

 

This Confidentiality,
Non-Solicitation and Non-Compete Agreement (the “Agreement”) dated this 16th day of December, 2013 is
entered into by and between Philip L. Rose, (“Employee”) and XG Sciences, Inc., a Michigan corporation
(“Employer” and collectively with any entity that is wholly or partially owned by the Employer or otherwise
affiliated with the Employer, the “Company”). Hereinafter, each of the Employee or the Company may be
referred to as a “Party” and together be referred to as the “Parties”.

 

RECITALS:

 

WHEREAS, the
Parties have entered into that certain Employment Agreement, of even date herewith, that creates an employment relationship between
the Employer and Employee (the “Employment Agreement”); and

 

WHEREAS, pursuant
to the Employment Agreement, the Employee agreed to enter into the Company’s Confidentiality, Non-Solicitation and Non-Compete
Agreement; and

 

WHEREAS, the
Company desires to protect and preserve its Confidential Information and its legitimate business interests by having the Employee
enter into this Agreement as part of the Employment Agreement; and

 

WHEREAS, the
Employee desires to establish and maintain an employment relationship with the Company and as part of such employment relationship
desires to enter into this Agreement with the Company; and

 

WHEREAS, the
Employee acknowledges that the terms of the Employment Agreement including, but not limited to the Company’s commitments
to the Employee with respect to base salary, fringe benefits and stock options are sufficient consideration to the Employee for
the entry into this Agreement.

 

WHEREAS, the
Employee acknowledges that substantial cost and expense has been or will be incurred by the Company in connection with the Employee’s
employment by the Company, and Employee’s employment will require the disclosure of certain Company confidential and proprietary
information, trade secrets and customer and supplier relationships.

 

WHEREAS, the
Employee has been employed in the advanced and electronic materials field for 24 years and has extensive knowledge of advanced
and electronic materials, which the Company believes will be of benefit in the continuing development of the Company’s business.

 

WHEREAS, the
Company has been involved in research, development, manufacture and sale of graphene nanoplatelets as evidenced, in part, by its
website and numerous published scientific papers on the subject of graphene nanoplatelets.

 

NOW, THEREFORE,
in consideration of the mutual promises set forth herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties agree as follows:

 

	 	EMPLOYEE’S INITIALS
	 	/s/ Philip Rose

 

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1.          Term.   Employee agree(s) that the term of this Agreement is effective upon the Employee’s first day of employment with the Company
and shall survive and continue to be in force and effect for four (4) years following the termination of any employment relationship
between the Parties (“Term”), whether termination is by the Company with or without cause, or for any
or no reason whatsoever, or by the Employee unless an exception is specifically provided in certain situations in any such Restrictive
Covenants.

 

2.          Definitions.

 

a.           The
term “Confidential Information” as used herein shall include information, including a formula, pattern,
compilation, program, device, method, technique or process, or business practices that: (i) derives independent economic value,
actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who
can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances
to maintain its secrecy. Confidential Information also includes, but is not limited to, files, letters, memoranda, reports, records,
computer disks or other computer storage medium, data, models or any photographic or other tangible materials containing such information,
Customer lists and names and other information, Customer contracts, other corporate contracts, computer programs, proprietary manufacturing
practices and technical information, strategies, sales, promotional or marketing plans or strategies, programs, techniques, practices,
any expansion plans (including existing and entry into new geographic and/or product markets), pricing information, product or
service offering specifications or plans thereof, business plans, financial information and other financial plans, data pertaining
to the Company’s operating performance, employee lists, salary information, all information the Company receives from customers
or other third parties that is not generally known to the public or is subject to a confidentiality agreement, training manuals,
and other materials and business information of a similar nature, including information about the Company itself or any affiliated
entity, which Employee acknowledges and agrees has been compiled by the Company's expenditure of a great amount of time, money
and effort, and that contains detailed information that could not be created independently from public sources. Further, all data,
spreadsheets, reports, records, know-how, verbal communication, proprietary and technical information and/or other confidential
materials of similar kind transmitted by the Company to Employee or developed by the Employee on behalf of the Company as Work
Product (as defined in Paragraph 7) are expressly included within the definition of “Confidential Information.” The
Parties further agree that the fact the Company may be seeking to complete a business transaction is “Confidential Information”
within the meaning of this Agreement, as well as all notes, analysis, Work Product or other material derived from Confidential
Information. Nevertheless, Confidential Information shall not include any information of any kind which (1) is in the possession
of the Employee prior to the date of this Agreement, as shown by the Employee’s files and records, or (2) prior or after
the time of disclosure becomes part of the public knowledge or literature, not as a result of any violation of this Agreement,
any violation of any similar agreement with any other party or inaction or action of the receiving party, or (3) is rightfully
received from a third party without any obligation of confidentiality; or (4) independently developed after termination without
reference to the Confidential Information or materials based thereon; or (5) is disclosed pursuant to the order or requirement
of a court, administrative agency, or other government body; or (6) is approved for release by the non-disclosing party. It is
the intent of the definition to include confidential information related to the research, development, manufacture and sale of
graphene nanoplatelets which is not generally known to the public and to exclude information with Employee otherwise has developed
or obtained through his education, experience, and work in the field of advanced and electronic materials.

 

b.           The
term “Customer” shall mean any person or entity which has purchased or ordered goods, products or services
from the Company and/or entered into any contract for products or services with the Company within the two (2) years immediately
preceding the termination of the Employee’s employment with the Company.

 

	 	EMPLOYEE’S INITIALS
	 	/s/
    Philip Rose

 

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EXECUTION

 

c.           The
term “Prospective Customer” shall mean any person or entity which has evidenced an intention to order
products or services with the Company within one year immediately preceding the termination of the Employee’s employment
with the Company.

 

d.           The
term “Restricted Area” shall include any geographical location anywhere in the United States as well
as those countries listed on Exhibit A attached hereto. If the Restricted Area specified in this Agreement should be judged unreasonable
in any proceeding, then the Restricted Area shall be reduced so that the restrictions may be enforced as is judged to be reasonable.

 

e.           The
phrase “directly or indirectly” shall include the Employee either on his/her own account, or as a partner,
owner, promoter, joint venturer, employee, agent, consultant, advisor, manager, executive, independent contractor, officer, director,
or a stockholder of 5% or more of the voting shares of an entity in the Business of Company.

 

f.            The
term “Business” shall mean the business of researching, developing, manufacturing, or selling graphene
nanoplatelets and value-added products developed, manufactured or sold by the Company which contain graphene nanoplatelets.

 

3.          Duty
of Confidentiality.

 

a.           All
Confidential Information is considered highly sensitive and strictly confidential. The Employee agrees that at all times during
the Term of this Agreement and after the termination of employment with the Company for as long as such information remains non-public
information, the Employee shall (i) hold in confidence and refrain from disclosing to any other party all Confidential Information,
whether written or oral, tangible or intangible, concerning the Company and its business and operations unless such disclosure
is accompanied by a non-disclosure agreement executed by the Company with the party to whom such Confidential Information is provided,
(ii) use the Confidential Information solely in connection with his or her employment with the Company and for no other purpose,
(iii) take all reasonable precautions necessary to ensure that the Confidential Information shall not be, or be permitted to be,
shown, copied or disclosed to third parties, without the prior written consent of the Company, (iv) observe all security policies
implemented by the Company from time to time with respect to the Confidential Information, and (v) not use or disclose, directly
or indirectly, as an individual or as a partner, joint venturer, employee, agent, salesman, contractor, officer, director or otherwise,
for the benefit of himself or herself or any other person, partnership, firm, corporation, association or other legal entity, any
Confidential Information, unless expressly permitted by this Agreement. Employee agrees that protection of the Company’s
Confidential Information constitutes a legitimate business interest justifying the restrictive covenants contained herein. Employee
further agrees that the restrictive covenants contained herein are reasonably necessary to protect the Company’s legitimate
business interest in preserving its Confidential Information

 

b.           In
the event that the Employee is ordered to disclose any Confidential Information, whether in a legal or regulatory proceeding or
otherwise, such disclosure shall be limited to the narrowest disclosure, as practically as possible, so required and, except to
the extent prohibited by law, Employee shall give the Company at least two (2) weeks’ notice, if practicable, of the basis
for any such compelled disclosure of Confidential Information and shall reasonably cooperate with the Company in limiting disclosure
and obtaining suitable confidentiality protections.

 

	 	EMPLOYEE’S INITIALS
	 	/s/
    Philip Rose

 

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EXECUTION

 

c.           Employee
acknowledge(s) that this "Confidential Information" is of value to the Company by providing it with a competitive advantage
over their competitors, is not generally known to competitors of the Company, and is not intended by the Company for general dissemination.
Employee acknowledges that this "Confidential Information" derives independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use, and is the subject of reasonable efforts to maintain its secrecy. Therefore, the Parties agree that
all "Confidential Information" under this Agreement constitutes “Trade Secrets” under Section
445.1902 of the Michigan Statutes.

 

4.          Limited
Right of Disclosure. Except as otherwise permitted by this Agreement, Employee shall limit disclosure of pertinent Confidential
Information to Employee’s attorney, if any (“Representative(s)"). for the sole purpose of evaluating Employee’s
relationship with the Company. Paragraph 3 of this Agreement shall bind all such Representative(s).

 

5.          Return
of Company Property and Confidential Materials. All tangible property, including cell phones, laptop computers and other
Company purchased property, as well as all Confidential Information, Customer and Prospective Customer information and property,
provided to Employee is the exclusive property of the Company and must be returned to the Company in accordance with the instructions
of the Company either upon termination of the Employee’s employment or at such other time as is requested by the Company.
Employee agree(s) that upon termination of employment for any or no reason whatsoever Employee shall return all copies, in whatever
form or media, including hard copies and electronic copies, of Confidential Information to the Company, and Employee shall delete
any copy of the Confidential Information on any computer file or database maintained by Employee and shall certify in writing that
he/she has done so. In addition to returning all Confidential Information to the Company as described above, Employee will destroy
any analysis, notes, work product or other materials relating to or derived from the Confidential Information.

 

6.          Agreement
Not To Circumvent. Employee agrees not to pursue any transaction or business relationship that is directly competitive
to the Business of the Company that makes use of any Confidential Information during the Term of this Agreement, other than through
the Company or on behalf of the Company. It is further understood and agreed that, after the Employee’s employment with the
Company has been terminated, the Employee will direct all communications and requests from any third parties regarding Confidential
Information or Business opportunities which use Confidential Information through the Company’s then chief executive officer
or president. Employee acknowledges that any violation of this covenant may subject Employee to the remedies identified in Paragraph
9 in addition to any other available remedies.

 

7.          Title
to Work Product. Employee agrees that all work products (including strategies, manufacturing processes, products and planned
products for competing in the graphene industry, technical materials and diagrams, computer programs, financial plans and other
written materials, websites, presentation materials, course materials, advertising campaigns, slogans, videos, pictures and other
materials) created or developed by the Employee for the Company during the term of the Employee’s employment with the Company
or any successor to the Company until the date of termination of the Employee (collectively, the “Work Product”),
shall be considered a work made for hire and that the Company shall be the sole owner of all rights, including copyright, in
and to the Work Product.

 

	 	EMPLOYEE’S INITIALS
	 	/s/
    Philip Rose

 

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If the Work Product,
or any part thereof, does not qualify as a work made for hire, the Employee agrees to assign, and hereby assigns, to the Company
for the full term of the copyright and all extensions thereof all of its right, title and interest in and to the Work Product.
All discoveries, inventions, innovations, works of authorship, computer programs, improvements and ideas, whether or not patentable
or copyrightable or otherwise protectable, conceived, completed, reduced to practice or otherwise produced by the Employee in the
course of his or her services to the Company in connection with or in any way relating to the Business of the Company or capable
of being used or adapted for use therein or in connection therewith shall forthwith be disclosed to the Company and shall belong
to and be the absolute property of the Company unless assigned by the Company to another entity.

 

Employee hereby
assigns to the Company all right, title and interest in all of the discoveries, inventions, innovations, works of authorship, computer
programs, improvements, ideas and other work product; all copyrights, trade secrets, and trademarks in the same; and all patent
applications filed and patents granted worldwide on any of the same for any work previously completed on behalf of the Company
or work performed under the terms of this Agreement or the Employment Agreement. Employee, if and whenever required to do so (whether
during or after the termination of his or her employment), shall at the expense of the Company apply or join in applying for copyrights,
patents or trademarks or other equivalent protection in the United States or in other parts of the world for any such discovery,
invention, innovation, work of authorship, computer program, improvement, and idea as aforesaid and execute, deliver and perform
all instruments and things necessary for vesting such patents, trademarks, copyrights or equivalent protections when obtained and
all right, title and interest to and in the same in the Company absolutely and as sole beneficial owner, unless assigned by the
Company to another entity. Notwithstanding the foregoing, work product conceived by the Employee, which is not related to the Business
of the Company, will remain the property of the Employee.

 

8.          Restrictive
Covenant. The Company and its affiliated entities are engaged in the Business of researching, developing, manufacturing,
and selling graphene nanoplatelets and value-added products which contain graphene nanoplatelets. The covenants contained in this
Paragraph 8 (the “Restrictive Covenants”) are given and made by Employee to induce the Company to employ
Employee under the terms of the Employment Agreement, and Employee acknowledges sufficiency of consideration for these Restrictive
Covenants. Employee expressly covenants and agrees that, during his or her employment and for a period of two (2) years following
termination of such employment (such period of time is hereinafter referred to as the "Restrictive Period"),
he/she will abide by the following restrictive covenants unless an exception is specifically provided, in writing signed by
Company, in certain situations in such Restrictive Covenants.

 

a.     Non-Solicitation.
Employee agrees and acknowledges that, during the Restrictive Period, he/she will not, directly or indirectly, in one or a
series of transactions, as an individual or as a partner, joint venturer, employee, agent, salesperson, contractor, officer, director
or otherwise, for the benefit of himself or herself or any other person, partnership, firm, corporation, association or other
legal entity:

 

(i)          solicit
or induce, or attempt to solicit or induce, any Customer or Prospective Customer of the Company to patronize or do business with
any other company (or business) that is in the Business conducted by the Company in the Restricted Area; or

 

(ii)         request
or advise any Customer, supplier or vendor, or any Prospective Customer, prospective supplier or prospective vendor, of the Company,
who was a Customer, Prospective Customer, supplier, prospective supplier, vendor or prospective vendor within one (1) year immediately
preceding the termination of the Employee’s employment with the Company, to withdraw, curtail, cancel or refrain from doing
business with the Company in any capacity; or

 

	 	EMPLOYEE’S INITIALS
	 	/s/
    Philip Rose

 

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EXECUTION

 

(iii)        manage,
operate, be connected with, employed by, or on behalf of, in any manner, any Customer, or Prospective Customer, of the Company
in any capacity related to the Business, either myself or on behalf of any other entity that may employ, engage or associate with
me in any fashion.

 

(iv)        sell
goods related to the Business to, or perform services related to the Business for, or on behalf of, in any manner, any Customer,
or Prospective Customer, of the Company either myself or on behalf of any other entity that may employ, engage or associate with
me in any fashion.

 

(v)         recruit,
solicit or otherwise induce any proprietor, partner, stockholder, lender, director, officer, employee, sales agent, joint venturer,
investor, lessor, supplier, Customer, agent, representative or any other person which has a business relationship with the Company
or any affiliated entity to discontinue, reduce or detrimentally modify such employment, agency or business relationship with the
Company; or

 

(vi)        employ
or solicit, or attemptto employ or solicit, for employment any person or agent who is then (or was at any time within twelve
(12) months prior to the date Employee or any entity related to Employee seeks to employ such person) employed or retained by the
Company. Notwithstanding the forgoing, to the extent the Employee works for a firm or corporation after his or her termination
from the Company and he or she does not have any personal knowledge and/or control over the solicitation of or the employment of
a Company employee or agent, then this provision shall not be enforceable as it relates to that employee.

 

(vii)       This
provision is not intended to prohibit Employee from returning to employment in the field of advanced and electronic materials,
in which he has been involved for the past 24 years. It is intended to prohibit Employee from soliciting and working with Customers
and Prospective Customers in areas relating to the Business as set forth herein.

 

b.     Non-Competition.
Employee agrees and acknowledges that, during the Restrictive Period, he or she will not, directly or indirectly, for himself,
or on behalf of others, as an individual on Employee's own account, or as a partner, joint venturer, employee, agent, salesman,
contractor, officer, director or otherwise, for him/herself or any other person, partnership, firm, corporation, association or
other legal entity, enter into, engage in, accept employment from, or provide any services to, or for, any
business that is in the Business of the Company, or engage in any activity that is competitive with the Company, in the Restricted
Area. The parties agree that this non-competition provision is intended to cover situations where a future business opportunity
in which the Employee is engaged or a future employer of the Employee is selling the same or similar products and services in
a Business which may compete with the Company’s products and services to Customers and Prospective Customers of the Company
in the Restricted Area. This provision shall not cover future business opportunities or employers of the Employee that sell different
types of products or services in the Restricted Area so long as such future business opportunities or employers are not in the
Business of the Company or if the Employee is not involved in the activities of the future employer or related to the Business
of the Company. This provision is not intended to prohibit Employee from returning to employment in the field of advanced and
electronic materials, in which he has been involved for the past 24 years. It is intended to prohibit Employee from accepting
employment in a business that directly competes with Business of the Company.

 

	 	EMPLOYEE’S INITIALS
	 	/s/
    Philip Rose

 

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9.          Acknowledgements
of Employee.

 

a.    The
Employee understands and acknowledges that any violation of this Agreement shall constitute a material breach of this Agreement
and the Employment Agreement, and it may cause irreparable harm and possible loss to the Company for which monetary damages may
be an insufficient remedy. Therefore, the Parties agree that in addition to any other remedies available, the Company will be entitled
to the relief identified in Paragraph 10 below.

 

b.    The
Restrictive Covenants shall be construed as agreements independent of any other provision in this Agreement and the existence of
any claim or cause of action of Employee against the Company shall not constitute a defense to the enforcement of these Restrictive
Covenants.

 

c.    Employee
agrees that the Restrictive Covenants are reasonably necessary to protect the legitimate business interests of the Company.

 

d.    Employee
agrees that this Agreement may be enforced by the Company’s successor in interest by way of merger, business combination
or consolidation where a majority of the surviving entity is not owned by Company’s shareholders who owned a majority of
the Company’s voting shares prior to such transaction and Employee acknowledges and agrees that successors are intended beneficiaries
of this Agreement.

 

e.    Employee
agrees that if any portion of the Restrictive Covenants is held by a court of competent jurisdiction to be unreasonable, arbitrary
or against public policy for any reason, such shall be modified accordingly as to time, geographic area and line of business so
as to be enforceable to the fullest extent possible as to time, area and line of business.

 

f.    Employee
acknowledges that any violations of the Agreement will be a material breach of this Agreement and may subject the Employee, and/or
any individual(s), partnership, corporation, joint venture or other type of business with whom the Employee is then affiliated
or employed, to monetary and other damages.

 

g.    Employee
agrees that any failure of the Company to enforce the Restrictive Covenants against any other employee, for any reason, shall not
constitute a defense to enforcement of the Restrictive Covenants against the Employee.

 

10.         Specific
Performance; Injunction. The Parties agree and acknowledge that the restrictions contained in Paragraphs 1-8 are reasonable
in scope and duration and are necessary to protect the Company. If any provision of Paragraphs 1-8 as applied to any party or to
any circumstance is judged by a court to be invalid or unenforceable, the same shall in no way affect any other circumstance or
the validity or enforceability of any other provision of this Agreement. If any such provision, or any part thereof, is held to
be unenforceable because of the duration of such provision or the area covered thereby, the court making such determination shall
have the power to reduce the duration and/or area of such provision, and/or to delete specific words or phrases, and in its reduced
form, such provision shall then be enforceable and shall be enforced.

 

	 	EMPLOYEE’S INITIALS
	 	/s/
    Philip Rose

 

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Any
unauthorized use or disclosure of Confidential Information in violation of Paragraphs 2-7 above or violation of the
Restrictive Covenant in Paragraph 8 shall constitute a material breach of this Agreement and may cause irreparable harm and
potential loss to the Company for which monetary damages may be an insufficient remedy. Therefore, in addition to any other
remedy available, the Company will be entitled to all available civil remedies, including:

 

a.    Temporary
and permanent injunctive relief, without the necessity of posting a bond, restraining Employee or Representatives and any other
person, partnership, firm, corporation, association or other legal entity acting in concert with Employee from any actual or threatened
unauthorized disclosure or use of Confidential Information, in whole or in part, or from rendering any service to any other person,
partnership, firm, corporation, association or other legal entity to whom such Confidential Information in whole or in part, has
been disclosed or used or is threatened to be disclosed or used; and

 

b.    Temporary
and permanent injunctive relief, without the necessity of posting a bond, restraining the Employee from violating, directly or
indirectly, the restrictions of the Restrictive Covenant in any capacity identified in Paragraph 8, supra, and restricting third
parties from aiding and abetting any violations of the Restrictive Covenant; and

 

c.    Compensatory
damages, including actual loss from misappropriation and unjust enrichment, and any and all legal fees, including without limitation,
all attorneys’ fees, court costs, and any other related fees and/or costs incurred by the Company in enforcing this Agreement.

 

Notwithstanding the
forgoing, the Company acknowledges and agrees that the Employee will not be liable for the payment of any damages or fees owed
to the Company through the operation of Paragraph 10c above, unless and until a court of competent jurisdiction has determined
that the Company or any successor is entitled to such recovery.

 

Nothing in this Agreement
shall be construed as prohibiting the Company from pursuing any other legal or equitable remedies available to it for actual or
threatened breach of the provisions of Paragraphs 1 – 8 of this Agreement, and the existence of any claim or cause of action by
Employee against the Company shall not constitute a defense to the enforcement by the Company of any of the provisions of this
Agreement. The Company and its affiliates have fully performed all obligations entitling it to the covenants of Paragraphs 1 –
8 of this Agreement and therefore such prohibitions are not executory or otherwise subject to rejection under the bankruptcy code.

 

11.         Duty
to Disclose Agreement and to Report New Employer. Employee acknowledges that the Company has a legitimate business purpose
in the protection of its Confidential Information. Employee also recognizes and agrees that the Company has the right to such information
as is reasonably necessary to inform the Company whether the terms of this Agreement are being complied with. Accordingly, Employee
agrees that Employee will promptly notify any new employer of his/her obligations contained here. Employee also will provide the
Company with the identity of his/her new employer(s) and a description of the services being provided by him/her in sufficient
detail to allow the Company to reasonably determine whether such activities fall within the scope of activities prohibited by the
provisions of this Agreement

 

12.         Representations
as to Prior or Other Agreements. Employee represents and warrants that he/she is able to perform the contemplated duties
of employment without being in breach of confidentiality agreements or disclosing proprietary information of any third party, and
that no proprietary information of any third party shall be disclosed to the Company. Employee further represents and warrants
that he/she is not prohibited from entering into this Agreement or performing services under it by any non-competition, non-solicitation,
anti-piracy agreement, relationship agreement, or any other restrictions. Employee agrees to indemnify and hold the Company harmless
from all claims or causes of action by any person or entity against the Company arising out of any alleged breach by Employee of
any such agreement or any other restrictions inconsistent with the foregoing representations.

 

	 	EMPLOYEE’S INITIALS
	 	/s/
    Philip Rose

 

    	 	19	 

     

    

 

EXECUTION

 

13.         Company
Use of Employee Name, Image and Voice. The Company may use and publish Employee’s name and picture, including audio
or video tape recordings, for purposes relating to its business without a specific release from Employee.

 

14.         Termination.
Employee agrees to bring any claims that he/she may have against the Company within one hundred eighty (180) days of the day
that Employee knew, or should have known, of the facts giving rise to the cause of action and waives any longer, but not shorter,
statutory or other limitations periods. This includes, but is not limited to, the initial filing of a charge with the Equal Employment
Opportunity Commission and/or state equivalent civil rights agency. However, Employee understands that he/she will thereafter have
the right to pursue any claim in the manner prescribed in any right to sue letter that is issued by an agency.

 

15.         Nondisparagement.
Employee shall not make any disparaging or defamatory comments about the Company, whether true or not, except to comply with
any summons, court order or subpoena. Company shall not make any disparaging or defamatory comments about the Company, whether
true or not, except to comply with any summons, court order or subpoena.

 

16.         Waiver
of Jury Trial. THE COMPANY AND EMPLOYEE EACH WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS AGREEMENT OR UNDER ANY INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED IN CONNECTION HEREWITH OR HEREAFTER OR
RELATED IN ANY FASHION TO EMPLOYEE’S EMPLOYMENT WITH COMPANY.

 

17.         Governing
Law, Venue and Personal Jurisdiction. This Agreement shall be governed by, construed and enforced in accordance with the
laws of state of Michigan without regard to any statutory or common-law provision pertaining to conflicts of laws. The parties
agree that courts of competent jurisdiction in Ingham County, Michigan and the United States District Court for the Western District
of Michigan shall have concurrent jurisdiction for purposes of entering temporary, preliminary and permanent injunctive relief
and with regard to any action arising out of any breach or alleged breach of this Agreement. Employee waives personal service of
any and all process upon Employee and consents that all such service of process may be made by certified or registered mail directed
to Employee at the address stated in the signature section of this Agreement, with service so made deemed to be completed upon
actual receipt thereof. Employee waives any objection to jurisdiction and venue of any action instituted against Employee as provided
herein and agrees not to assert any defense based on lack of jurisdiction or venue. Employee further agrees that any action arising
out of this Agreement or the relationship between the parties established herein shall be brought only in courts of competent jurisdiction
in Ingham County, Michigan or the United States District Court for the Western District of Michigan.

 

18.         Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and may not be assigned
by Employee. This Agreement shall inure to the benefit of Company’s successors.

 

	 	EMPLOYEE’S INITIALS
	 	/s/
    Philip Rose

 

    	 	20	 

     

    

  

EXECUTION

 

19.         Entire
Agreement. This Agreement is the entire agreement of the Parties with regard to the matters addressed herein, and
supersedes all prior negotiations, preliminary agreements, and all prior and contemporaneous discussions and understandings
of the signatories in connection with the subject matter of this Agreement, except however, that this Agreement shall be read in
pari materia with the Employment Agreement executed by Employee. This Agreement may be modified only by written
instrument signed by the Company and Employee.

 

20.         Severability.
In case any one or more provisions contained in this Agreement shall, for any reason, be held invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof and this Agreement
shall be construed as if such invalid, illegal were unenforceable provision had not been contained herein.

 

21.         Waiver.
The waiver by the Company of a breach or threatened breach of this Agreement by Employee cannot be construed as a waiver of
any subsequent breach by Employee unless such waiver so provides by its terms. The refusal or failure of the Company to enforce
any specific restrictive covenant in this Agreement against Employee, or any other person for any reason, shall not constitute
a defense to the enforcement by the Company of any other restrictive covenant provision set forth in this Agreement.

 

22.         Consideration.
Employee acknowledges and agrees that the execution by the Company of the Employment Agreement with the Employee constitutes
full, adequate and sufficient consideration to Employee for the covenants of Employee under this Agreement.

 

23.         Notices.
All notices required by this Agreement shall be in writing, shall be personally delivered or sent by U.S. Registered or Certified
Mail, return receipt requested, and shall be addressed to the signatories at the addresses shown on the signature page of this
Agreement.

 

24.         Acknowledgements.
Employee acknowledge(s) that he or she has reviewed this Agreement prior to signing it, that he or she knows and understands
the contents, purposes and effect of this Agreement, and that he or she has been given a signed copy of this Agreement for his
or her records. Employee further acknowledges and agrees that he or she has entered into this Agreement freely, without any duress
or coercion.

 

25.         Captions.
Captions to paragraphs and sections of this Agreement have been included solely for the sake of convenient reference and are
entirely without substantive effect.

 

26.         Counterparts.
This Agreement may be executed in counterparts, by facsimile or Adobe Acrobat pdf file each of which shall be deemed an original
for all intents and purposes.

 

[Signatures
Appear on the Following Page]

 

	 	EMPLOYEE’S INITIALS
	 	/s/
    Philip Rose

 

    	 	21	 

     

    

  

EXECUTION

 

IN WITNESS WHEREOF,
THE UNDERSIGNED STATE THAT THEY HAVE CAREFULLY READ THIS AGREEMENT AND KNOW AND UNDERSTAND THE CONTENTS THEREOF AND THAT THEY AGREE
TO BE BOUND AND ABIDE BY THE REPRESENTATIONS, COVENANTS, PROMISES AND WARRANTIES CONTAINED HEREIN.

 

	By:	/s/
    Philip Rose	12/17/13	 
	 	Employee
    Signature	Date	 

 

	Employee Name:	Philip Rose	 
	Employee Address:	1628
    Ashford Oaks Ct	 
	 	Wildwood, MO  63038	 

 

	XG Sciences, Inc.
	3101 Grand Oak Drive 
	Lansing, MI 48911

 

	By:	/s/ Iris K. Linder	12/16/2013	 
	 	 	Date	 
	Name:
    	Iris K. Linder	 	 
	Title: 	Chair person,
Compensation Committee	 

  

	 	EMPLOYEE’S INITIALS
	 	/s/
    Philip Rose

 

    	 	22	 

     

    

 

EXECUTION

 

EXHIBIT A

 

Countries Covered Under Definition of
Restricted Area in Section 2(d)

 

The following list of countries is deemed
to include any dependent territories or other areas recognized as a constituent country or municipality of each of the countries
listed

 

	Asia	 
	Bahrain	Oman
	Brunei	Philippines
	China (including Hong Kong & Taiwan)	Qatar
	Cyprus	Russia
	Georgia	Saudi Arabia
	India	Singapore
	Indonesia	South Korea
	Israel	Thailand
	Japan	Turkey
	Kuwait	United Arab Emirates
	Malaysia	Vietnam
	 	 
	Europe	 
	Austria	Latvia
	Belgium	Lithuania
	Bulgaria	Luxembourg
	Croatia	Malta
	Cyprus	Monaco
	Czech Republic	Montenegro
	Denmark	Netherlands
	Estonia	Poland
	Finland	Portugal
	France	Romania
	Germany	Slovakia
	Greece	Slovenia
	Hungary	Spain
	Iceland	Sweden
	Ireland	United Kingdom
	Italy	 
	 	 
	South America	 
	Argentina	Paraguay
	Brazil	Peru
	Chile	Uruguay
	Columbia	Venezuela
	Ecuador	 

 

	 	EMPLOYEE’S INITIALS
	 	/s/
    Philip Rose

 

    	 	23	 

     

    

  

EXECUTION

 

	North America, Central America & Caribbean	 
	Antigua & Barbuda	Honduras
	Bahamas	Jamaica
	Barbados	Mexico
	Belize	Nicaragua
	Canada	Panama
	Costa Rica	Saint Kitts & Nevis
	Dominica	Saint Lucia
	Dominican Republic	Saint Vincent and the Grenadines
	El Salvador	Trinidad and Tobago
	Grenada	United States of America
	Guatemala	 
	 	 
	Africa	 
	Canary Islands	 
	Egypt	 
	Morocco	 
	 South Africa	 
	 	 
	Oceania	 
	Australia 	 
	New Zealand	 

 

	 	EMPLOYEE’S INITIALS
	 	/s/
    Philip Rose

 

    	 	24

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