Document:

Exhibit
10.11

 

Master Lease Agreement

 

Dated and effective as of March
18, 2013 (“Effective Date”), this MASTER LEASE AGREEMENT
(“Agreement”) is entered into by and between Aspen Advanced Opportunity Fund, LP, a Delaware limited
partnership with offices at 1740 Persimmon Drive, Naples, Florida 34109, (together with any successor
or assignee, “Lessor”) and the Lessee indicated
below (together with any successor or permitted assignee, “Lessee”).

   

	LESSEE:	LEGAL NAME: XG Sciences, Inc.
	 	TRADE NAME (if any): [_______________]
	 	ADDRESS: 3101 Grand Oak Drive
	 	Lansing, Ml 48911
	 	 
	 	CONTACT and TELEPHONE:CEO, 517-703-1110
	 	LEGAL ENTITY Type: Corporation
	 	State of Organization: Michigan
	 	Date of Establishment: May, 2006

 

LEASE
TERMS AND CONDITIONS:

 

1.  LEASING.
Subject to the terms of this Agreement, Lessor agrees to lease to Lessee and Lessee agrees to lease from Lessor the equipment
(collectively, the “Equipment” and
individually a “unit of Equipment”)
described in any equipment schedule (a “Schedule”)
signed by Lessee and approved by Lessor. Schedules may also include a description of software (“Software”)
to be financed pursuant to the terms of this Agreement. Each Schedule will incorporate all the terms of this Agreement and
will constitute a separate agreement for lease of the Equipment and, if applicable, for the payment of any software licensing
fee being financed (“Software License Fee”)
pursuant to this Agreement (each Schedule, collectively with any attachments, riders and related documents, is
referred to as, a “Lease”). With
respect to each Lease, capitalized terms not defined in this Agreement will have the meanings stated in the applicable Schedule.
Unless it purchases the Equipment under Section 14 hereof (“Options”),
Lessee does not have any right or interest in the Equipment except as a lessee. This Agreement is effective from
the Effective Date, and will continue until all Leases have terminated or expired.

 

2.  NET
LEASE. EACH LEASE IS A NET LEASE AND ALL PAYMENTS HEREUNDER ARE NET TO LESSOR. LESSEE IS UNCONDITIONALLY OBLIGATED TO PAY MONTHLY
RENT AND OTHER AMOUNTS DUE UNDER SUCH LEASE REGARDLESS OF ANY DEFECT OR DAMAGE TO EQUIPMENT OR SOFTWARE, OR LOSS OF POSSESSION,
USE OR DESTRUCTION FROM ANY CAUSE WHATSOEVER. LESSEE’S OBLIGATIONS CONTINUE UNTIL SPECIFICALLY TERMINATED AS PROVIDED IN SUCH LEASE.
LESSEE’S OBLIGATION WILL DISCONTINUE UPON RECEIPT OF FUNDS THROUGH A CASUALTY AND OR INSURANCE PAYMENT THAT SATISFIES THE LEASE
OBLIGATION AS PROVIDED IN SUCH LEASE.

 

3.  PURCHASE
OF EQUIPMENT; LICENSE OF SOFTWARE; SERVICE FINANCING.  (a)  In addition to the satisfaction of the conditions
precedent to the effectiveness of this Agreement set forth in Section 15, Lessor is not obligated to purchase or lease a unit
of Equipment or advance the Software License Fee to the licensor (“Licensor”) unless before each funding date:
(i) Lessor receives from Lessee a fully signed and completed Schedule and such other documents as Lessor may require; (ii) Lessee
has irrevocably accepted the unit of Equipment for lease from Lessor and the related Software by properly signing and delivering
to Lessor a Certificate of Acceptance in a form and substance satisfactory to Lessor; (iii) Lessor has received from Supplier
and/or Lessee, if applicable, clear and unencumbered title to the Equipment; (iv) there is no Default; and (v) in Lessor’s
reasonable discretion, no Material Adverse Change has occurred or is reasonably likely to occur. “Material
Adverse Change” means a material adverse change in (A) Lessee’s or the Lessee Group’s business,
operations, properties, prospects, assets or condition (financial or otherwise), (ii) Lessee’s ability to perform its obligations
under this Agreement or any Lease in accordance with its terms, or Lessor’s ability to enforce any of its rights and remedies
with respect to any Lease in accordance with the terms of this Agreement or any other document, instrument or agreement executed
in connection with any Lease, or (iii) the Equipment or the Lessor’s ownership interest in the Equipment. If Lessor has
accepted an assignment of a purchase order but the Lease does not commence, Lessor may reassign the Purchase Order and the Equipment
to Lessee without recourse or warranty and Lessee will reimburse Lessor for all expenses incurred on or behalf of Lessor, plus
interest at the Overdue Rate. So long as no Default has occurred, Lessor appoints Lessee its agent to inspect and accept the Equipment
from Supplier and the Software from Licensor simultaneously with acceptance of the Equipment for lease. For each Schedule, Lessee
irrevocably authorizes Lessor to adjust Lessor’s Capitalized Cost (as such term is defined in the Schedule) to account for
equipment change orders or returns, invoicing errors and similar matters, and agrees to any resulting adjustments in the TRANSACTION
TERMS stated in the applicable Schedule. Lessor will send Lessee a written notice stating the final Total Equipment Cost, Total
Software Cost and Total Price and TRANSACTION TERMS, if different from those stated in the applicable Schedule.

 

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(b)  Lessee
acknowledges that any Software listed on any Schedule, or incorporated as a component of any Equipment listed on a Schedule, is
furnished to Lessee under separate software licenses with the Licensor, which governs Lessee’s rights to the Software. Upon
the occurrence of a Default, in addition to the remedies specified below, Lessor shall be entitled to direct Lessee to cease further
use of the Software. Lessee hereby agrees to immediately cease use of the Software upon receipt of direction from Lessor. Lessee
further agrees that the detriment that Lessor will suffer as a result of a breach by Lessee of the obligation contained in the
foregoing sentence cannot be adequately compensated by monetary damages, and therefore Lessor shall be entitled to injunctive
and other equitable relief to enforce this Section 3.

 

(c)  Additionally,
the Equipment description may include some items of installation, training and services related to the Equipment or Software (“Services”).
Lessee acknowledges that all such Services are provided by the Supplier identified in the Schedule, and that Lessor is financing
the costs of such Services under the terms of the applicable Lease.

 

(d)  Lessee’s
obligation to pay all amounts hereunder shall not be affected by any inadequacy of the Software or Services, by the bankruptcy
of any Licensor or any Supplier, by the failure of Licensor to support the Software or the like. Lessee shall look solely to the
Licensor for any and all claims related to the Software and to the Supplier for any and all claims related to the Services.

 

4.  TERM,
RENT AND TITLE. (a) The Initial Term Start Date and the Lease Commencement Date are set forth and defined in the applicable
Schedule. The Monthly Rent accrues from the Lease Commencement Date. The Monthly Rent amounts specified and defined in the applicable
Schedule are payable on the same day of each month as the Initial Term Start Date. Lessor shall, at its option, have the right
to automatically transfer funds from the Lessee’s bank account to pay the Monthly rental and any other amounts due hereunder
on the date such amounts become due. Lessee shall, at Lessor’s request, execute such documents as Lessor, or Lessee’s
bank, may reasonably request in order to implement such transfer. Rental per day for the period from the Lease Commencement Date
specified in the Schedule to the Initial Term Start Date shall be equal to 1/30th of the Lease Rental Payment [defined in the Schedule?]
and shall be due in advance of the Initial Term Start Date. If Monthly Rent is not paid within ten (10) days of its due date, Lessee
agrees to pay a late charge of ten cents ($0.10) per dollar on, and in addition to, such Monthly Rent, but not exceeding the lawful
maximum, if any. Advance Rent, if any, as specified and defined in the Schedule is applied to the first Monthly Rent due and then
to the final Monthly Rents or, at Lessor’s option, to the payment of any overdue obligation of Lessee. Lessor is not required to:
(i) pay any interest on Advance Rent; or (ii) keep Advance Rent in a separate account. If Lessor shall at any time accept Rent
after it shall become due or shall accept less than the total amount due, such acceptance shall not constitute a release or an
accord and satisfaction of any greater sum due, nor shall such acceptance be construed as a waiver of any or all of Lessor’s
rights hereunder.

 

(b)  This
is an agreement of lease only. Lessee shall have no right, title or interest in or to the Equipment lease hereunder, except as
to the use thereof subject to the terms and conditions of this Agreement. The Equipment is and shall remain the sole and exclusive
property of Lessor or its assignees, unless purchased by Lessee pursuant to the terms hereof. Lessor and Lessee intend that the
Equipment is to remain personal property of Lessor.

 

(c)  In
the event of a Default, until Lessee has complied with Section 6(d) (“Use,
Operation, Return of Equipment”) Lessee shall pay Lessor Monthly Rent, as liquidated damages for lost rentals
and not as a penalty, such payment to be computed on a daily basis (with one day’s rent being 1/30th of the Monthly Rent)
until the Equipment is returned. Lessee’s obligations and all other provisions of this Lease continue until such time.

 

5.  TAXES.
Lessee agrees to pay promptly as additional rent all license and registration fees and all taxes (excluding taxes on Lessor’s
net income) together with penalties and interest (collectively, “Taxes”) assessed against Lessor, Lessee, the
applicable Lease, the Equipment, the Software, the purchase (including purchase by Lessee), sale, ownership, delivery, leasing,
possession, use, operation or return of the Equipment or its proceeds (such additional rent, together with Monthly Rent and Advance
Rent is hereinafter collectively referred to as “Rent”).
Where permitted by applicable law Lessee will report all Taxes. Lessee will reimburse Lessor on demand for any
Taxes paid by Lessor. If such taxes or fees are levied against the Lessor, or if Lessee fails to make any payment required hereby,
the Lessor shall have the right, but not the obligation, to pay such taxes or fees, whether levied against the Lessor or the Lessee.
In such event the Lessee shall reimburse the Lessor therefore within five (5) days after the receipt of an invoice and for the
failure to make such reimbursement when due the Lessor shall have all remedies provided herein with respect to the nonpayment
of Rent hereunder. Lessee shall give Lessor immediate notice of any attachment or other judicial process, liens, or encumbrances
affecting the Equipment and shall indemnify and save Lessor harmless from any loss or damage caused thereby.

 

6.  USE,
OPERATION, RETURN OF EQUIPMENT. (a) Lessee agrees at its own expense to: (i) maintain the Equipment in condition suitable for
certification by the manufacturer (if certification is available) and in any event in good operating condition; (ii) use the Equipment
and Software solely for business purposes, in the manner for which it was intended and in compliance with all applicable laws and
manufacturer requirements or recommendations; (iii) pay all expenses, fines, and penalties related to the use, operation, condition
or maintenance of the Equipment and Software; and (iv) comply with all license and copyright requirements of any Software.

 

(b)  Lessee
may affix or install any accessory, addition, upgrade, equipment or device on the Equipment or Software (“Additions”)
provided that such Additions (i) can be removed without causing damage to the Equipment or Software, (ii) do not
reduce the value of the Equipment or Software and (iii) are obtained from the manufacturer or an approved affiliate and are not
subject to the interest of any third party other than Lessor. Any other Additions may not be installed without Lessor’s
prior written consent with such consent not to be unreasonably withheld.-At the end of the Initial Term or the Renewal Term (as
applicable, the “Term”), Lessee shall remove any Additions which (i) were not leased by Lessor and (ii) are
readily removable without causing damage or impairment of the intended function, use, or value of the Equipment or Software and
Lessee shall restore the Equipment to its original configurations. Any Additions, which are not so removable, will become the
Lessor’s property, free and clear of all claims, liens and encumbrances of any nature whatsoever. Lessee agrees to pay all
costs for parts, alterations, and additions to the Equipment and Software (including those required by law), all of which will
become the property of Lessor. Lessee agrees not to install any Equipment or Software, if any, inside any other personal property
of Lessee. Lessee will not relocate any unit of Equipment from the Equipment Location stated on a Schedule without the prior written
approval of Lessor (which shall not be unreasonably withheld).) Lessor may inspect the Equipment during normal business hours.
At Lessor’s request, Lessee will attach identifying labels supplied by Lessor showing Lessor’s ownership in a prominent
position on each unit of Equipment.

 

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(c)  Provided
that there is no Default, Lessee is authorized on behalf of Lessor to enforce in its own name (and at its own expense) any warranty,
indemnity or right to damages related to the Equipment and Software which Lessor has against the Supplier.

 

(d)  At
the end of the Initial Term of the Lease as set forth and defined in the applicable Schedule or any Renewal Term as set forth and
defined in the applicable Schedule, or upon any early termination of the Lease (whether upon a Default or otherwise), Lessee agrees,
at its own expense and risk, (i) to pay for any repairs and to replace any parts required to place the Equipment in the same condition
as when received by Lessee, reasonable wear and tear excepted and to provide certification from the manufacturer or a manufacturer
approved maintenance provider acceptable to Lessor that the Equipment (a) has been tested and is operating in accordance with the
manufacturer’s specifications (together with a report detailing the condition of the Equipment), the results of such tests
and inspections and all repairs that were performed after such tests and inspections and (b) that the Equipment qualifies for the
manufacturer’s used equipment maintenance program, (ii) to pay for any cleaning and treatment to the Equipment for damage or otherwise,
all in accordance with the manufacturer’s recommendations and consistent with the best practices of dealers in used equipment that
is similar to the Equipment, (iii) to cause the removal of all Lessee installed markings or labels which are not necessary for
the operation, maintenance or repair of the Equipment, (iv) to ensure that the Equipment is in compliance with all applicable laws,
rules and regulations, (v) to cause the Equipment to be disassembled, deinstalled and packed in accordance with the manufacturer’s
recommendations by or under the supervision of the manufacturer or any other person acceptable to Lessor (without limitation, Lessee
shall cause ail internal fluids to be drained and disposed of or filled and secured in accordance with the manufacturer’s
recommendations and in accordance with all laws, rules and regulations), and (vi) to deliver the Equipment freight and insurance
prepaid, to a carrier selected by Lessor and to otherwise provide for the transportation of the Equipment in a manner consistent
with the manufacturer’s recommendations and practices to any location within the continental United States as Lessor shall
direct and to have the Equipment unloaded at such location on a date specified by Lessor. Each item of Equipment shall match the
description and serial numbers set forth on the applicable Schedule.

 

(e)  If
Lessee notifies Lessor that it intends to return the Equipment pursuant to Section 14, Lessee shall include with such notice the
following: (i) a detailed inventory of the Equipment (including the model and serial number of each major component thereof), including,
without limitation, all internal circuit boards and software features; (ii) complete Equipment configurations, setup and operation
diagrams, maintenance records and other data that may be reasonably requested by Lessor concerning the configuration and operation
of the Equipment; and (iii) not later than sixty (60) days prior to the expiration or other termination of the Lease, and upon
Lessor’s request, Lessee shall make the Equipment available for on-site operational inspection by persons designated by Lessor.

 

If
a Lease is terminated as a result of a Default, Lessee shall also, upon Lessor’s request, return all copies of the Software
to the Licensor (or any other party designated by Lessor).

 

7.  DISCLAIMER.
LESSEE AGREES THAT: (1) LESSOR IS NOT THE MANUFACTURER OR SUPPLIER OR LICENSOR OF THE EQUIPMENT OR SOFTWARE (IF ANY) OR THE REPRESENTATIVE
OF ANY OF THEM; (2) LESSOR IS NOT REQUIRED TO ENFORCE ANY MANUFACTURER’S WARRANTIES ON BEHALF OF ITSELF OR OF LESSEE; (3) LESSOR
IS NOT OBLIGATED TO INSPECT THE EQUIPMENT OR SOFTWARE; (4) LESSOR DOES NOT MAKE, AND HAS NOT MADE, ANY WARRANTY OR REPRESENTATION,
EITHER EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING WITHOUT LIMITATION, THE DESIGN, COMPLIANCE WITH SPECIFICATIONS,
OPERATION OR CONDITION OF, OR AS TO THE QUALITY OF THE MATERIAL, EQUIPMENT OR WORKMANSHIP OR SOFTWARE; (5) LESSOR DOES NOT MAKE
ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF, OR AS TO TITLE TO, OR ANY OTHER REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, WITH RESPECT TO THE EQUIPMENT OR SOFTWARE. LESSEE FURTHER AGREES THAT LESSOR SHALL NOT BE LIABLE FOR ANY LIABILITY,
LOSS OR DAMAGE CAUSED DIRECTLY OR INDIRECTLY BY THE EQUIPMENT OR SOFTWARE OR BY ITS INADEQUACY OR BY ANY EQUIPMENT OR SOFTWARE
DEFECT, WHETHER OR NOT LESSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LIABILITY, LOSS OR DAMAGE. LESSOR SHALL NOT HAVE ANY
LIABILITY TO LESSEE OR ANY OTHER PERSON AND LESSEE AGREES NOT TO ASSERT ANY CLAIM AGAINST LESSOR WITH RESPECT TO ANY OF THE FOLLOWING:
(1) THE USE, OPERATION OR PERFORMANCE OF THE EQUIPMENT OR SOFTWARE; (2) ANY INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR ANTICIPATED
PROFITS OR LOSS OF GOODWILL OR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OR ANY OTHER COMMERCIAL OR ECONOMIC LOSSES
OF ANY KIND WHICH ARE ATTRIBUTABLE TO THE EQUIPMENT OR SOFTWARE; OR (3) THE DELIVERY, SERVICING, MAINTENANCE, REPAIR, IMPROVEMENT
OR REPLACEMENT OF THE EQUIPMENT OR SOFTWARE.

 

8.  LOSS
OR DAMAGE; CASUALTY VALUE. Lessee assumes the risk of any disappearance of or damage to any part of the Equipment or
Software from any cause whatsoever. Within ten (10) days of learning of any condemnation or other circumstance where the
Equipment or Software is, in Lessee’s reasonable opinion, irreparably damaged or permanently unfit for use (“Casualty”) Lessee
will provide Lessor full details of the Casualty and will pay to Lessor an amount equal to (i) the sum of all unpaid and
future Monthly Rents under the applicable Lease, with each such payment discounted to its net present value at a simple
interest rate equal to six percent (8%) per annum (or if not permitted by applicable law, the lowest permitted rate) from the
due date of each such payment to the Monthly Rent payment date immediately preceding the date of the Casualty; plus
(ii) Lessor’s residual interest in such Equipment (herein agreed to be the greater of the fair market value of the
Equipment at the expiration of the Lease or twenty (15%) percent of Lessor’s Capitalized Cost plus any other amounts
due Lessor or its assignee (“Casualty
Value”). Monthly Rent will continue to accrue without abatement untill Lessor receives the Casualty
Value and all other amounts (including Monthly Rent payments) then due under the applicable Lease, at which time the Lease
will terminate. Upon payments pursuant to this Section, together with payment of all other sums owing on said Lease to and
including such payment date, Lessor will transfer title to the affected Equipment to Lessee “as is”, “where
is”, “with all faults”, and without warranty, express or implied.

 

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9.  INSURANCE.
Lessee agrees, at its own expense, to keep the Equipment insured with companies acceptable to Lessor and to maintain primary coverage
consisting of (i) actual cash value all risk insurance on the Equipment, naming Lessor and its assigns as loss payee and (ii) single
limit public liability and property damage insurance of not less than $1,000,000 per occurrence (or such other amounts as Lessor
may require by notice to Lessee) naming Lessee as insured and Lessor and its assigns as additional insured. The insurance will
provide for not less than thirty (30) days notice to Lessor of material changes in or cancellation of the policy. Lessee will deliver
evidence of such insurance to Lessor upon request, and will promptly provide to Lessor all information pertinent to any occurrence
which may become the basis of a claim. Lessee will not make claim adjustments with insurers except with Lessor’s prior written
consent, such consent to be granted or withheld in Lessor’s sole discretion. Unless Lessee provides satisfactory evidence of the
insurance coverage required herein, Lessor may, but is not required to. purchase insurance at Lessee’s expense to protect
Lessor’s interest in the Equipment. This insurance may, but need not, protect Lessee’s interests. The coverage that
Lessor purchases may not pay any claim that Lessee makes or any claim that is made against Lessee in connection with the Equipment.
If Lessor elects to purchase insurance for the Equipment, Lessee will be responsible for the costs of that insurance, including
the insurance premium, interest, fees, charges and a profit to the Lessor and its agents for providing such coverage until the
effective date of cancellation or expiration of the insurance. The costs of the insurance may be more than the cost of insurance
Lessee may be able to obtain on its own. The insurance coverage Lessor obtains may be through an insurance carrier which may be
affiliated with Lessor. If Lessor obtains such insurance coverage, each month Lessee shall pay, together with the Monthly Rent
the pro-rated portion of the insurance premium. At the end of the Initial Term Lessee must pay Lessor any remaining portion of
the premium.

 

10.  REPRESENTATIONS
AND WARRANTIES OF LESSEE. Lessee represents and warrants to Lessor that as of the date hereof and each Lease Commencement Date:

 

(a)  Lessee
has adequate power and capacity to enter into the Lease, any documents relative to the purchase of the Equipment leased under such
Lease, the licensing of any Software and any other documents required to be delivered in connection with this Lease (collectively,
the “Documents”);
the Documents have been duly authorized, executed and delivered by Lessee and constitute valid, legal and binding agreements, enforceable
in accordance with their terms; there are no proceedings presently pending or threatened against Lessee which will impair its ability
to perform under the Lease; and all information supplied to Lessor is accurate and complete.

 

(b)  Lessee’s
entering into the Lease, leasing the Equipment, and agreeing to have Lessor finance a license to the Software does not and will
not: (i) violate any judgment, order, or law applicable to the Lease, Lessee or Lessee’s certificate of incorporation or by-laws,
partnership or operating agreement, as applicable, nor constitute an event of default under any material agreement by which it
is bound; or (ii) result in the creation of any lien, security interest or other encumbrance upon the Equipment or Software.

 

(c)  All
financial data of Lessee or of any consolidated group of companies of which Lessee is a member (“Lessee
Group”), delivered to Lessor have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis with prior periods and fairly present the financial position and results from operations of Lessee,
or of the Lessee Group, as of the stated date and period(s). Since the date of the most recently delivered financial data, there
has been no Material Adverse Change.

 

(d)  Lessee
is and will be validly existing and in good standing under laws of the state of its formation and any other state in which the
conduct of its business requires it to be so qualified; the persons signing the Lease are acting with the full authority of its
board of directors, partners or members, as applicable, and hold the offices indicated below their signatures, which are genuine.

 

11.  FILING
AND OTHER LESSEE’S AGREEMENTS. (a) Lessee hereby authorizes Lessor to file this Agreement, any Schedule, any financing statements
and amendments thereto, security agreements, applications or other documents under certificate of title laws with respect to any
or all of the Equipment or any collateral pledged by Lessee without the signature of Lessee thereon, and if Lessee’s signature
is required thereon by law, Lessee appoints Lessor as its attorney-in-fact to execute any such instruments and documents. Lessee
shall execute such supplemental instruments, financing statements, and other documents of any kind as Lessor deems to be necessary
or advisable to carry out the purposes of this Lease and any Schedule hereunder and shall otherwise cooperate to defend the title
of the Lessor by filing or otherwise. Lessee, upon demand, shall promptly pay all filing costs and fees incurred in the preparation
and filing of such documents. If and to the extent that the Lease is deemed a security agreement under the Uniform Commercial Code,
and otherwise for precautionary purposes only, Lessee grants Lessor a first priority security interest in its interest in the Equipment
and in all Equipment leased pursuant to any Schedule. Such security interest shall secure Lessee’s obligations with respect to
all Schedules, Leases and agreements between Lessee and Lessor. Lessee will notify Lessor in writing, with full particulars, within
ten (10) days after it learns of the attachment of any lien to any Equipment and of the Equipment’s location.

 

(b)  Lessee
agrees that it will keep the Equipment and Software free and clear from all claims, liens and encumbrances and will not assign,
sublet, or grant a security interest in the Equipment or Software or in this Lease without Lessor’s prior written consent, such
consent to be granted or withheld in Lessor’s sole discretion.

 

(c)  Lessee
agrees to notify Lessor immediately in writing of any change in Lessee’s corporate or business name or in the location of its chief
executive office.

 

(d)  Lessee
will not take or fail to take any action which Lessor determines will result in the disqualification of any Equipment for, or the
recapture of, all or any portion of the accelerated cost recovery deductions permitted by the Internal Revenue Code of 1986, as
amended.Lesseewill indemnify Lessor for any loss in Lessor’s after tax economic yields and cash flows caused by Lessee’s
acts or failures to act.

 

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(e)  WITHOUT
THE PRIOR WRITTEN CONSENT OF LESSOR, LESSEE SHALL NOT ASSIGN, TRANSFER PLEDGE OR HYPOTHECATE THIS AGREEMENT, ANY LEASE, ANY EQUIPMENT
OR ANY INTEREST IN THIS AGREEMENT, ANY LEASE, OR IN AND TO THE EQUIPMENT OR PERMIT ITS RIGHTS UNDER THIS AGREEMENT TO BE SUBJECT
TO ANY LIEN, CHARGE OR ENCUMBRANCE OF ANY NATURE. LESSEE’S INTEREST HEREIN IS NOT ASSIGNABLE AND SHALL NOT BE ASSIGNED OR TRANSFERRED
BY OPERATION OF LAW. LESSOR SHALL HAVE THE RIGHT TO ASSIGN THIS AGREEMENT, ITS INTEREST IN ANY LEASE OR EQUIPMENT OR ANY PART
THEREOF OR ANY INTEREST THEREIN OR PROCEEDS DUE IT PURSUANT TO AN END OF TERM OPTION OR AGREEMENT, IF ANY. LESSEE WAIVES AND AGREES
NOT TO ASSERT AGAINST ANY ASSIGNEE ANY DEFENSE, SET OFF, RECOUPMENT, CLAIM OR COUNTERCLAIM WHICH LESSEE HAS OR MAY AT ANY TIME
HAVE AGAINST LESSOR FOR ANY REASON WHATSOEVER.

 

(f)  Each
year within one hundred five (105) days after Lessee’s fiscal year end, Lessee shall deliver in a form satisfactory to Lessor
and its assignees true, correct, and complete annual audited consolidated financial statements with an unqualified opinion [including
all schedules if financial statements are unaudited]. Lessee will also deliver its quarterly consolidated financial statements
(which shall be in a form satisfactory to Lessor and its assignees) within forty-five (45) days after the end of each of its fiscal
quarters. Lessee shall, and shall cause any guarantor(s) of this Lease to, furnish to Lessor within five (5) days of any request
thereof by Lessor any credit or financial information of the Lessee or such guarantor(s) (including, without limitation,
their respective most recent financial statements, balance sheets, and income statements) as Lessor shall request from time to
time.

 

(g)  Lessee
agrees to execute such instruments and documents and take such other actions as Lessor may require to carry out the purpose and
intent of this Agreement, any Lease and all other documentation related hereto.

 

12.  INDEMNIFICATION.
Lessee agrees to indemnify, defend and keep harmless Lessor, its officers, employees, agents, successors and assigns, from and
against any all losses, damages, penalties, claims and actions, including legal expenses, arising out of or in connection with
(i) this Agreement, the Leases and any other document related hereto, including but not limited to, the selection, manufacture,
purchase, acceptance or rejection of Equipment or Software, the ownership of Equipment or Software during the term of a Lease,
and the delivery, lease, possession, maintenance, use, condition, return or operation of Equipment or Software or (ii) the condition
of Equipment or Software sold or disposed of after or as a result of use by Lessee or any permitted sublessee of Lessee.

 

13.  DEFAULT
AND REMEDIES. (a) Lessor may declare a Lease in default (a “Default”)
if, with respect to such Lease any of the following circumstances exists, and is not cured by Lessee within thirty
(30) days after Lessee’s receipt of written notice that such circumstances exist: (i) Lessor has not received any Rent or
other amount due hereunder within five (5) days after its due date (or such other period as is required by applicable law); or
(ii) Lessee or any guarantor violates or fails to perform any obligation of any term of this Agreement, a Lease, any term of a
guaranty or under any other agreement between Lessor and Lessee or any guarantor and fails to correct such violation or failure
to perform within ten (10) days after written notice from Lessor; or (iii) Lessee violates the terms of any license or agreement
for Software; or (iv) Lessee or any guarantor becomes unable to pay its debts as they mature or becomes insolvent, is liquidated
or dissolved, stops doing business, transfers substantially all of its stock or assets or assigns its rights or property for the
benefit of creditors; or (v) a petition is filed by or against Lessee or any guarantor under Title 11 of the United States Code
or any successor or similar law; or (vi) (for individuals) Lessee or any guarantor dies or a guardian is appointed for Lessee’s
or guarantor’s person; or (vii) Lessee (or any affiliate) or any guarantor (or any affiliate) is in default of or fails
to fulfill the terms of any other agreement between Lessee and Lessor or any affiliate of either; or (viii) any representation
or warranty of Lessee or any guarantors in this Agreement or in any document executed by Lessee or any guarantor in connection
herewith shall prove to be untrue in any material respect when made; or (ix) seizure of any Equipment under legal process; or
(x) the filing by or against Lessee or any guarantor of a petition for reorganization of liquidation under the Bankruptcy Code
or any amendment thereto or under any other insolvency law providing for the relief of debtors; or (xi) Lessee is acquired, merged
or formed into a separate entity, without the prior written consent of the Lessor, such consent to be granted or withheld in Lessor’s
sole discretion; or (xii) the subjection of any part of the Equipment to any lien or security interest other than in favor of
Lessor; or (xiii) Lessee shall be in default under the terms of any contract with any other person or entity requiring the payment
of money by Lessee in an amount greater than $500,000.

 

(b)  At
any time after a Default, Lessor may declare a default under any other Lease or agreement between Lessee (and any affiliate) and
Lessor or its affiliate and Lessor shall have the right to exercise any one or more of the following remedies as Lessor in its
sole discretion shall elect; (a) upon written notice to Lessee terminate or cancel this Agreement and Lessee’s rights hereunder;
(b) declare all sums due and to become due hereunder immediately due and payable; (c) without terminating the Lease(s), require
Lessee to promptly deliver the Equipment in the manner specified in Section 6 hereof; (d) without terminating the Lease, to directly
or by its agent, and without notice or liability or legal process enter upon any premises where any Equipment may be located,
take possession of such Equipment, and either store it on said premises without charge or remove same, all without liability to
Lessor or its agents for such entry, or for damage to property or otherwise (LESSEE HEREBY VOLUNTARILY, INTELLIGENTLY AND KNOWINGLY
WAIVES ITS RIGHTS TO NOTICE, LEGAL PROCESS, PRIOR JUDICIAL HEARING AND DAMAGE FOR TRESPASS); (e) without terminating the Lease(s),
terminate any purchase option and sell any or all of the Equipment at public or private sale, with or without notice to Lessee
or advertisement, or otherwise dispose of, hold, use, operate, lease to others or keep idle such Equipment all free and clear
of any rights of Lessee and without any duty to account to Lessee for such action, Lessor shall apply the net proceeds of such
sale or release of the Equipment to Lessee’s obligations hereunder corresponding to the date of default, after deducting
from such proceeds all costs and expenses of repossession and disposition, and attorneys’ fees; (f) exercise any other rights
or remedy which may be available to it in law or in equity; and (g) rescind any purchase option previously granted to Lessee.
Lessee shall promptly pay, any. resulting deficiency; together with interest at the highest rate provided by law (and if there
is no legal limit, then one and one-half (1.5%) percent per month), and Lessor’s attorneys’ fees if legal action or
services are required to collect such deficiency. If Lesser is unable to repossess the Equipment for any reason, the Equipment
shall be deemed a total loss and Lessee shall pay to Lessor the amount due pursuant to Section 8. No termination, repossession
or other act by Lessor after default shall relieve Lessee from any of its obligations hereunder unless Lessor releases Lessee
in writing. In addition to all other charges hereunder, Lessee shall pay to Lessor on demand all fees, costs and expenses incurred
by Lessor as a result of such default, including without limitation, attorneys’, appraisers’, and brokers’ fees
and expenses and costs of removal, storage, transportation, insurance and disposition of the Equipment (except to the extent deducted
as aforesaid) and of enforcement of any of Lessor’s rights pursuant to any of the instruments given as security herefor
as set forth in any Schedule. In the event that any court of competent jurisdiction determines that any provision of this Section
is invalid or unenforceable in whole or in part such determination shall rot prohibit Lessor from establishing its damages sustained
as a result of any breach of this Lease in any action or proceeding in which Lessor seeks to recover such damages. TO THE EXTENT
PERMITTED BY LAW, LESSEE HEREBY WAIVES TRIAL BY JURY IN ANY ACTION BETWEEN LESSOR AND LESSEE. 

 

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(c)  Lessor’s
remedies for Default may be exercised instead of or in addition to each other or any other legal or equitable remedies. Lessor
has the right to set-off any sums received from any source (including insurance proceeds) against Lessee’s obligations under
each Lease. Lessee waives its right to object to the notice of the time or place of sale or lease and to the manner and place
of any advertising. Lessee waives any defense based on statutes of limitations or laches in actions for damages. Lessor’s
waiver of any Default is not a waiver of its rights with respect to a different or later Default.

 

(d)  Lessor
may recover as liquidated damages for loss and not as penalty all past due amounts as well as an amount equal to the present value
of monies to be paid by the Lessee during the remaining term of the lease or any successive periods then in effect calculated
by discounting at the rate of eight percent (8.0%) per annum compounded monthly, which payment shall become immediately due and
payable.

 

(e)  Upon
the occurrence of an Event of Default and if such Event of Default is continuing, the parties agree that Lessor shall have the
right to participate as a visitor in all meetings and teleconferences of the Board of Directors of the Lessee, any guarantors
and/or any parent company of the Lessee. Lessee agrees that it will give Lessor at least three (3) days written notice of all
such Board of Director’s meetings or teleconference, which notice shall include the date, time and proposed agenda for such
meeting. Lessee further agrees that it will forward to Lessor any materials prepared for the Board of Directors for any such Board
Meetings where Lessor has the rights to attend/participate as a visitor. Notwithstanding the foregoing, Lessee agrees that Lessor
shall have such Board visitation rights if there has been a payment default as described in Section 13(a) even if Lessor has not
declared such an event of default in writing.

 

14.  OPTION.
So long as no Default has occurred, Lessee has the option to (i) purchase all but not less than all of the Equipment under
a Lease at the end of the Initial Term or any Renewal Term on an AS-IS WHERE-IS basis without representation or warranty, for
a cash purchase price equal to the Equipment’s Fair Market Value (plus any applicable sales taxes) determined as of the
end of such Term; or (ii) renew the Term of a Lease for a minimum period of six months at the then Fair Market Rental of the Equipment
or (iii) return all but not less than all of the Equipment in accordance with Section 6. Lessee must give irrevocable written
notice to Lessor at least one hundred twenty (120) days before the end of the Initial Term or any Renewal Term that it will purchase
the Equipment or extend the Initial Term or the Renewal Term or return the Equipment. If the Lease is renewed, Lessee’s
obligations (other than the amount of Monthly Rent to be paid) will remain unchanged. If Lessee fails to timely notify Lessor
of its election of one of such options on or before ninety (90) days prior to the expiration of the Initial Term of the Lease
or fails to timely exercise the elected option by providing payment to Lessor of the purchase option price no later than the expiration
date of the Initial Term, the Lease will automatically continue on the same periodic basis in effect at such time with Monthly
Rent payable in the same amount and frequency in effect at such time until the Equipment is returned or purchased in accordance
with the terms hereof. Lessee’s obligations and ail other provisions of the Lease shall continue until such time. Lessee
will pay Lessor for any loss in value resulting from the failure to maintain the Equipment in accordance with the Lease and for
damages incurred in shipping and handling. “Fair
Market Value” or “Fair
Market Rental” shall mean the fair market value or fair market rental value of the Equipment “in place”
which shall be the amount expressed in terms of money that may reasonably be expected to be exchanged between a willing buyer
and a willing seller or a willing lessor and a willing lessee, as the case may be, neither under any compulsion to buy or sell
or to lease, as the case may be and both fully aware of all relevant facts, as to the termination or expiration of the Lease and
taking into account installation and the contribution of the item to the operating facility; provided, however, the Lessor agrees
that in no case shall the Fair Market Value of any equipment on any Schedule be deemed to be in excess of fifteen percent (15%)
of the original equipment costs on such Schedule. This value presupposes the continued utilization of the Equipment in connection
with all other installed items of equipment at the operating facility. If Lessor and Lessee cannot agree as to the Fair Market
Value or Fair Market Rental of the Equipment at least sixty (60) days prior to expiration of the Initial Term or any Renewal Term,
Lessor shall appoint an independent appraiser, reasonably acceptable to Lessee, to determine Fair Market Value or Fair Market
Rental. The independent appraiser’s determination shall be final and Lessee and Lessor shall each pay 50% of all costs associated
with such appraisal.

 

15.  EARLY
BUYOUT. The Lessee shall have the right to terminate any Schedule hereunder early and buyout the equipment on such Schedule
by delivering an amount in cash equal to the present value of monies to be paid by the Lessee during the remaining term of such
Lease Schedule or any successive periods then in effect assuming an end of lease buyout payment of fifteen percent (15%) of the
original amount of such Lease Schedule, calculated by discounting at the rate of eight percent (8.0%) per annum compounded monthly.
In the event, the Lessee exercises such early buyout provision, the Lessor agrees to issue a bill of sale and transfer all right
and title to such equipment to the Lessee after receipt of payment therefor.

 

    	Page 6
                                                                                                                                                                                                                                               of 8	Lessee Initials	 

    	 

    

 

16.  RIGHTS
TO PAY AND RECEIVE RENT IN THE FORM OF SECURITIES. The Lessee, at its option, shall have the right to pay the non-sales
and use tax related portion of any Lease Rental Payments with Series A Convertible Preferred Stock (“Series A
Stock”) until December 31, 2014 at a price per share equal to the then effective Series A Original Issue Price
(as defined in the Lessee’s Certificate of Designations of Series A Convertible Stock) (hereafter referred to as the
“Issuance Pricen). The Lessor, at its option and upon written notice to the Lessee, shall have the right to
receive all or any part of the non-sales and use tax related portion of any Lease Rental Payments during the term of any
Schedule in Series A Stock valued at the Issuance Price then in effect. All portions of any Lease Rental Payments not
otherwise paid in shares of Series A Stock shall be paid monthly in cash.

 

17.  CONDITIONS
PRECEDENT. Lessor’s obligation to enter into this Agreement shall be subject to the condition precedent that Lessor shall
have received all of the following, in form and substance satisfactory to Lessor: (a) A certificate of Lessee’s Secretary
or Assistant Secretary certifying (i) the resolutions of the board of directors authorizing the execution, delivery and performance
of this Agreement, and any related documents, (ii) Lessee’s bylaws or other governance documents, (iii) Lessee’s certificate
or articles of incorporation or organization (as applicable) and (iv) the signatures of the officers or agents of Lessee authorized
to execute and deliver this Agreement, each Schedule, and other instruments, agreements and certificates on behalf of Lessee; (b)
executed copies of any transaction documents contemplated in that certain Purchase Agreement, dated March 18, 2013, between the
Lessor and the Lessee; and (c) such other documents or items reasonably required by Lessor (including, without limitation, evidence
of the insurance required to be maintained by Lessee pursuant to Section 9, and landlord waivers in form and substance satisfactory
to Lessor in its sole discretion with respect to ail locations not owned by Lessee where all or a portion of the Equipment is to
be located).

 

18.  MISCELLANEOUS.
(a) Time is of the essence of each Lease. Lessor’s failure at any time to require that Lessee strictly perform its obligations
under any Lease will not prevent Lessor from later requiring such performance. Lessee agrees, upon Lessor’s request, to sign any
document presented by Lessor from time to time to protect Lessor’s rights in the Equipment. Lessee also agrees to pay Lessor’s
attorneys’ fees and out-of-pocket expenses in protecting or enforcing its rights under a Lease. Lessee will pay attorney’s
fees and costs of collection, up to the amount permitted by law.

 

(b)  All
required notices will be considered to have been given if sent by registered or certified mail or overnight courier service to
the Lessor at the address stated above and to the Lessee at its address stated in the Lease, or at such other place as such addressee
may have designated in writing.

 

(c)  So
long as there is no Default, Lessor shall not interfere with Lessee’s quiet enjoyment of the Equipment or Software. If a
provision of a Lease is declared invalid under law, the affected provision will be considered omitted or modified to conform to
applicable law. All other provisions will remain in full force and effect.

 

(d)  If
Lessee fails to comply with any provision of a Lease, Lessor has the right, but is not obligated, to have such provision brought
into compliance. This right is in addition to the Lessor’s right to declare a Default. All expenses incurred by Lessor in
bringing about such compliance will be considered Rent which is due to Lessor within five (5) days after the date Lessor sends
to Lessee a written request for payment.

 

(e)  All
overdue payments will bear interest at the Overdue Rate, which is the lower of fifteen percent (15%) per annum or the maximum
rate allowed by law. Interest will accrue daily until payment in full is received.

 

(f)
All of Lessor’s rights (including indemnity rights) under a Lease survive the Lease’s expiration or termination, and are
enforceable by Lessor, its successors and assigns.

 

(g)  ARTICLE
2A: EACH LEASE IS A “FINANCE” LEASE AS DEFINED IN ARTICLE 2A OF THE UNIFORM COMMERCIAL CODE. To the extent permitted
by applicable law, Lessee hereby waives all rights and remedies conferred upon a Lessee by Article 2A (sections 506-522) of the
Uniform Commercial Code, including but not limited to Lessee’s rights to: (i) cancel or repudiate the Lease; (ii) reject,
revoke acceptance or accept partial delivery of the Equipment or “cover”; (iii) recover damages from Lessor for any
breach of warranty or for any other reason; and (iv) grant a security interest in any Equipment in Lessee’s possession.
To the extent permitted by applicable law, Lessee also hereby waives any rights now or hereafter conferred by statute or otherwise
that may limit or modify any of Lessor’s rights or remedies hereunder. Any action by Lessee against Lessor for any default
under any Lease, including breach of warranty or indemnity, shall be commenced within one (1) year after any such cause of action
accrues.

 

(h)  THIS
AGREEMENT SHALL BE BINDING AND EFFECTIVE WHEN ACCEPTED BY LESSOR AT ITS OFFICES IN MICHIGAN. THIS AGREEMENT SHALL BE DEEMED TO
BE MADE IN MICHIGAN AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH MICHIGAN LAW. LESSEE AGREES THAT ALL LEGAL ACTIONS
IN CONNECTION WITH THIS AGREEMENT, AT LESSOR’S OPTION, SHALL TAKE PLACE IN THE FEDERAL OR STATE COURTS SITUATED IN MICHIGAN.

 

[Signature page to follow]

 

    	Page 7
                                                                                                                                                                                                                                               of 8	Lessee Initials	 

    	 

    

 

THIS
AGREEMENT AND ANY LEASE AND ANNEXES THERETO CONSTITUTE THE ENTIRE AGREEMENT OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF.
THIS AGREEMENT IS EFFECTIVE AS OF THE EFFECTIVE DATE UPON SIGNING BY BOTH LESSOR AND LESSEE. A LEASE MAY NOT BE CHANGED EXCEPT
BY WRITTEN AGREEMENT SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE PARTY AGAINST WHOM IT IS TO BE ENFORCED. LESSEE IRREVOCABLY
AUTHORIZES LESSOR TO PREPARE AND SIGN ON BEHALF OF LESSEE ANY INSTRUMENT NECESSARY OR EXPEDIENT FOR FILING, RECORDING OR PERFECTING
THE INTEREST OF LESSOR IN EACH LEASE, THE RELATED EQUIPMENT AND THE PROCEEDS OF BOTH.

 

	LESSOR: Aspen Advanced Opportunity Fund, LP	 	LESSEE: XG
        Sciences, Inc. 

	 	 	 
	By:	/s/
    Steven     C. Jones	 	By:	/s/ Michael R.
    Knox
	 	 	 	 
	Name:	Steven
    C. Jones	 	Name:
    Michael R. Knox
	 		 	 
	Title:	Managing Member	 	Title:
    President and CEO
	 	AA XGS, LLC	 	 
	 	The
    General Partner	 	 
	 	 	 	 
	Date:	3/18/2013	 	 Date:
    March 18, 2013

 

    	Page 8 of 8	Lessee Initials	 

     

    

  

LEASE
SCHEDULE NO. 1 

to
Master Lease Agreement, dated March 18, 2013 (the “Master Lease”) 

between
Aspen Advanced Opportunity Fund, LP (“Lessor”) 

and
XG Sciences, Inc. (“Lessee”)

 

	EQUIPMENT:	 	Certain manufacturing equipment as more fully described on Exhibit A hereto.
	 	 	 
	EQUIPMENT
    LOCATION:	 	3101
        Grand Oak Drive

        Lansing
        Ml 48911
	or	4055
        English Oak, Suite B

        Lansing,
        Ml 48911

	 	 	 
	 	 	Actual location of each piece of Equipment is specified on Exhibit A. Lessee agrees that it will notify Lessor to the extent it moves any of the Equipment from the location specified on Exhibit A to a new location.
	 	 	 
	LESSOR’S CAPITALIZED COST:	 	$578,779.62
	 	 	 
	 	 	“Lessor’s Capitalized Cost” shall mean the sum of the purchase price of the Equipment, sales and/or use tax if applicable, installation costs, delivery costs, and buy-out of a previous lease if applicable.
	 	 	 
	LEASE COMMENCEMENT DATE:	 	The term of this Lease Schedule shall begin on the earlier of i) the date Lessee executes any Certificate of Understanding with respect to any of the Equipment hereunder or ii) the date Lessee executes a Certificate of Acceptance with respect to the Equipment hereunder (the “Lease Commencement Date”) and shall continue from such Lease Commencement Date until a period of forty-eight (48) months has lapsed from January 1, 2014 (the “Initial Payment Term Start Date”).
	 	 	 
	INITIAL PAYMENT TERM:	 	48 months
	 	 	 
	MONTHLY RENTAL PAYMENT:	 	$16,108.02 plus applicable taxes (if any) per month
	 	 	 
	 	 	Lessee shall pay the Monthly Rental Payment on the Equipment during the Initial Payment Term on the same day of each month as the Initial Payment Term Start Date. If applicable, interim rent covering the period from the Lease Commencement Date until the Initial Payment Term Start Date, shall accrue at the rate of 2.7831% per month (the “Monthly Lease Factor”) of any amounts funded by the Lessor to any suppliers of the Equipment prior to the Initial Payment Term Start Date. Interim rent for any partial months shall accrue at a rate equal to 1/30th of the amounts funded by the Lessor giving rise to such interim rent multiplied by the Monthly Lease Factor for each day that lapses from the date on which the Lessor provides any such funding to a supplier of the Equipment. Such interim rent shall be due and payable on the Initial Term Start Date or within five (5) days of receipt of an invoice for such interim rent.
		 	 
	OPTION TO PAY RENTAL PAYMENTS IN SECURITIES:	 	Pursuant to Paragraph 16 of the Master Lease, Lessee, at its option, shall have the right to pay the non-sales and use tax related portion of any Monthly Rental Payments with its Series A Convertible Preferred Stock (“Series A Stock”) until December 31, 2014 at a price per share equal to the then effective Series A Original Issue Price (as defined in the Lessee’s Certificate of Designations of Series A Convertible Stock) (hereafter referred to as the “Issuance Price”). The Lessor, at its option and upon written notice to the Lessee, shall have the right to receive all or any part of the non-sales and use tax related portion of any Monthly Rental Payments in Series A Stock valued at the Issuance Price then in effect. All portions of any Monthly Rental Payments not otherwise paid in shares of Series A Stock shall be paid in cash.

 

    	 	1	 

     

    

  

	PURCHASE OPTION:	 	At the end of the Initial Term of this Lease Schedule, Lessee shall have the options for the disposition of the Equipment as more fully described in Paragraph 14 of the Master Lease. Upon proper notification under the Master Lease, the Lessee shall have the option to purchase all but not less than all of the Equipment for the then Fair Market Value (as defined in the Master Lease) provided the Lessee has satisfactorily met all the terms and conditions specified for the exercise of the purchase option.
	 	 	 
	EARLY BUYOUT:	 	Lessee shall have the right to effect an Early Buyout of the Equipment in accordance with the terms of Paragraph 15 of the Master Lease. An Early Buyout will also be subject to any and all applicable state and federal tax laws.
	 	 	 
	EQUIPMENT
    DISCLAIMER AND AGREEMENT:	 	Lessee hereby
acknowledges that it is aware of and understands its obligations with respect to the Master Lease, and that it agrees to enforce
in its own name all warranties, agreements, or representations, if any, which may be made by any supplier with respect to the
Equipment. LESSEE FURTHER AGREES AND ACKNOWLEDGES THAT LESSOR MAKES NO EXPRESSED OR IMPLIED WARRANTIES AS TO ANY MATTER WHATSOEVER
REGARDING THE EQUIPMENT, INCLUDING WITHOUT LIMITATION THE CONDITION OF THE EQUIPMENT AND ITS MERCHANTABILITY OR ITS FITNESS FOR
ANY PARTICULAR PURPOSE. NO DEFECT OR UNFITNESS OF EQUIPMENT SHALL RELEASE LESSEE OF THE OBLIGATION TO PAY RENTAL PAYMENTS OR OF
ANY OTHER OBLIGATIONS UNDER THE MASTER LEASE OR THIS LEASE SCHEDULE.

 

This Lease
Schedule is issued pursuant to the Master Lease identified hereon. All the terms, conditions, representations, and warranties of
the Master Lease are hereby incorporated herein and made a part hereof as if they were expressly set forth in this Lease Schedule,
and this Lease Schedule constitutes a separate lease with respect to the Equipment described herein.

 

IN WITNESS
WHEREOF, the parties below have caused this Lease Schedule to be executed by their duly authorized representatives as of this 20th
day of December 2013.

 

	LESSOR:	 	LESSEE:
	 	 	 
	ASPEN ADVANCED OPPORTUNITY FUND, LP	 	XG SCIENCES, INC.
	 	 	 
	/s/ Steven C. Jones	 	/s/ Michael R Knox
	Authorized Signature	 	Authorized Signature
	 	 	 	 	 
	Name:	Steven C. Jones	 	Name: 	Michael R Knox
	 	 	 	 	 
	Title:	Managing Member	 	Title:	CEO
	 	AA XGS, LLC	 	 	 
	 	The General Partner	 	 	 

  

    	 	2	 

     

    

 

Exhibit
A 

to
Lease Schedule No. 1 

to
Master Lease Agreement, dated March 18, 2013 (the “Master Lease”) 

between
Aspen Advanced Opportunity Fund, LP (“Lessor”) and 

XG
Sciences, Inc. (“Lessee”)

 

This Exhibit
A list of Equipment and any and all attachments hereto are part of the Master Lease and Lease Schedule referenced above. Lessee
hereby confirms it has received all of said Equipment and has executed a Certificate of Acceptance therefor.

 

	Item
    #	 	Item
    Name / Description	 	Manufacturer	 	Model
    #	 	XGS
    Application Area	 	XGS
    Location	 	Total
    Purchase
 Amount	 
	#1	 	Pneumatic Transfer Conveyor	 	Vac-U-Max	 	Z71821A/01	 	xGnPTM Bake Oven	 	3101 Grand Oak Dr	 	$	11,830.00	 
	 	 	Vacuum Receiver with controls to provide material conveyance.
    Integral 7/8 HP electric blower 115V/1P/60 A. Offset Cone Receiver with 4” outlet x 12” diameter top opening.	 	 	 	 
	#2	 	Pneumatic Transfer Conveyor	 	Vac-U-Max	 	Z71821A/01	 	xGnPTM Packaging	 	3101 Grand Oak Dr	 	$	11,830.00	 
	 	 	Vacuum Receiver with controls to provide material conveyance.
    Integral 7/8 HP electric blower 115V/1P/60 A. Offset Cone Receiver with 4” outlet x 12” diameter top opening.	 	 	 	 
	#3	 	Pneumatic Transfer Conveyor	 	Vac-U-Max	 	MDL105201	 	XG LeafR Processing	 	3101 Grand Oak Dr	 	$	14,862.22	 
	 	 	Vacuum Receiver with controls to provide material conveyance,
    Integral 3 phase TEFC motor, 2 HP, 230/460 V, Offset Cone Receiver with 6” outlet x 16” diameter top opening.	 	 	 	 
	#4	 	Pneumatic Transfer Conveyor	 	Vac-U-Max	 	Z71821A/01	 	XG LeafR Processing	 	3101 Grand Oak Dr	 	$	11,866.00	 
	 	 	Vacuum Receiver with controls to provide material conveyance.
    Integral 7/8 HP electric blower 115V/1P/60 A. Offset Cone Receiver with 4” outlet x 12” diameter top opening.	 	 	 	 
	#5	 	Calender	 	Magnet Fairview	 	3 Roll	 	XG Leaf Processing	 	3101 Grand Oak Dr	 	$	158,455.00	 
	 	 	Hydralic operated Calender with three (3) 12” diameter
    x 26” face double shell spiral baffled rolls. Capable of 2,000 pli.	 	 	 	 
	#6	 	Calender	 	Magnet Fairview	 	3 Roll	 	XG LeafR Processing	 	3101 Grand Oak Dr	 	$	175,950.00	 
	 	 	Hydralic operated Calender with two (2) 14” diameter
    x 26” face double shell spiral baffled rolls and One (1) 14” diameter x 26” face composite covered roll. Capable of 4,500
    pli.	 	 	 	 
	#7	 	Infrared Oven	 	Blasdel	 	8’ X 24"	 	XG LeafR Processing	 	3101 Grand Oak Dr	 	$	54,545.00	 
	 	 	Infrared Oven with stainless steel belt, Constructed
    of structural steel with heating elements providing 25 watt per sq. Inch power. Oven will include a single zone control and
    panel.	 	 	 	 
	#8	 	Dual Conveyor Infrared Oven	 	Blasdel	 	14’ 2-Belt	 	XG LeafR Processing	 	3101 Grand Oak Dr	 	$	63,258.00	 
	 	 	Constructed of structural steel with heating elements
    providing 20 watt per sq. Inch power. Additional bottom heaters will have a neoceran glass on heaters. Oven will include dual
    zone controls and panel. Designed with two mess steel belts driven by Independent drives.	 	 	 	 
	#9	 	Ultrasonic Cleaner	 	Hessonic	 	HS-3317-SP	 	XG LeafR Processing	 	3101 Grand Oak Dr	 	$	12,355.97	 
	 	 	Ultrasonic filtration membrane cleaner with 500 watts
    input operating at 40 KHz. Tank constructed of 14 gauge type 304 stainless steel.	 	 	 	 
	#10	 	Tubular Conveyor	 	Cablevey	 	Conveying System	 	xGnPTM Conveying	 	3101 Grand Oak Dr	 	$	47,615.94	 
	 	 	6” Stainless Steel Tubular Conveyor with coated cables,
    Drive, Brush box, and cleanout.	 	 	 	 
	#11	 	Planetary Mixer Model #YRXJ-10L	 	Shanghai New Energy Eq & Technology Co., ltd.	 	Mixer	 	Dispersion Lab	 	4055 English Oak, Suite B	 	$	16,211.49	 
	 	 	Planetary Mixer with high speed
    dispersers + twist blades with vacuum capability	 	 	 	 
	 	 	TOTAL	 	 	 	 	 	 	 	 	 	$	578,779.62	 

 

     

     

    

  

CERTIFICATE OF ACCEPTANCE

 

Lease Schedule No. 1 (the “Lease
Schedule)

under Master Lease Agreement dated March
18, 2013 (the “Master Lease”)

between Aspen Advanced Opportunity Fund,
LP (“Lessor”)

and XG Sciences, Inc. (“Lessee”)

 

LESSEE HEREBY CERTIFIES that all
items of Equipment described in Exhibit A to the Lease Schedule have been received and inspected by the Lessee as of the date below
and are in good order and condition and are acceptable to the Lessee where is, as is. The decals and/or labels, if required by
the Lessor and supplied to the Lessee, have been affixed each item of Equipment.

 

Lessee hereby acknowledges that Lessor
did not select, manufacture or supply the equipment and Lessor acquired the equipment in connection with the Master Lease and the
Lease Schedule.

 

Lessee represents and warrants that it
has arranged for insurance on the Equipment consistent with the terms of Paragraph 9 of the Master Lease.

 

Lessee hereby approves and all payments
made by the Lessor to any supplier of the Equipment on the Lease Schedule made either i) prior to the date hereof pursuant to an
Certificate of Understanding executed by the Lessee, or ii) on or after the date hereof. Lessee hereby certifies that the Lessor
has fully and satisfactorily performed all covenants and conditions to be performed by it under the Lease with respect to this
Lease Schedule.

 

LESSEE HEREBY ACKNOWLEDGES THAT IT UNDERSTANDS
THAT THE LESSOR IS RELYING UPON THIS CERTIFICATE OF ACCEPTANCE OR ANY CERTIFICATE OF UNDERSTANDING MADE PRIOR TO THE DATE HEREOF
IN MAKING PAYMENT TO ANY SUPPLIER OF EQUIPMENT ON THIS LEASE SCHEDULED.

 

	 	Date:    December 20, 2013
	 	 
	 	LESSEE:
	 	 
	 	/s/ Michael R Knox
	 	Authorized Signature
	 	 
	 	Michael R Knox
	 	Name
	 	 
	 	CEO
	 	Title

 

     

     

    

  

LEASE SCHEDULE NO.
2

to Master Lease Agreement,
dated March 18, 2013 (the “Master Lease”)

between Aspen Advanced
Opportunity Fund, LP (“Lessor”)

and XG Sciences, Inc.
(“Lessee”)

 

	EQUIPMENT:	Certain
    R&D equipment as more fully described on Exhibit A hereto.
	 	 
	EQUIPMENT LOCATION:	4055 English Oak, Suite B

        Lansing, MI 48911

         

        Actual location of each piece of Equipment
        is specified on Exhibit A. Lessee agrees that it will notify Lessor to the extent it moves any of the Equipment from the
        location specified on Exhibit A to a new location.

	 	 
	LESSOR’S CAPITALIZED COST:	$56,990.11

         

        “Lessor’s Capitalized Cost”
        shall mean the sum of the purchase price of the Equipment, sales and/or use tax if applicable, installation costs, delivery
        costs, and buy-out of a previous lease if applicable.

	 	 
	LEASE COMMENCEMENT DATE:	The term of this
    Lease Schedule shall begin on the earlier of i) the date Lessee executes any Certificate of Understanding with respect to
    any of the Equipment hereunder or ii) the date Lessee executes a Certificate of Acceptance with respect to the Equipment hereunder
    (the “Lease Commencement Date”) and shall continue from such Lease Commencement Date until a period of forty-eight
    (48) months has lapsed from January 1, 2014 (the “Initial Payment Term Start Date”).
	 	 
	INITIAL PAYMENT TERM:	48 months
	 	 
	MONTHLY RENTAL PAYMENT:	$1,586.09 plus applicable taxes (if
        any) per month

         

        Lessee shall pay the Monthly Rental
        Payment on the Equipment during the Initial Payment Term on the same day of each month as the Initial Payment Term Start
        Date. If applicable, interim rent covering the period from the Lease Commencement Date until the Initial Payment Term
        Start Date, shall accrue at the rate of 2.7831% per month (the “Monthly Lease Factor”) of any amounts funded
        by the Lessor to any suppliers of the Equipment prior to the Initial Payment Term Start Date. Interim rent for any partial
        months shall accrue at a rale equal to 1/30th of the amounts funded by the Lessor giving rise to such interim rent multiplied
        by the Monthly Lease Factor for each day that lapses from the date on which the Lessor provides any such funding to a
        supplier of the Equipment. Such interim rent shall be due and payable on the Initial Term Start Date or within five (5)
        days of receipt of an invoice for such interim rent.

	 	 
	 	 
	OPTION TO PAY RENTAL PAYMENTS IN SECURITIES:	Pursuant to Paragraph
    16 of the Master Lease, Lessee, at its option, shall have the right to pay the non-sales and use tax related portion of any
    Monthly Rental Payments with its Series A Convertible Preferred Stock (“Series A Stock”) until December 31, 2014
    at a price per share equal to the then effective Series A Original Issue Price (as defined in the Lessee’s Certificate
    of Designations of Series A Convertible Stock) (hereafter referred to as the “Issuance Price”). The Lessor, at
    its option and upon written notice to the Lessee, shall have the right to receive all or any part of the non-sales and use
    tax related portion of any Monthly Rental Payments in Series A Stock valued at the Issuance Price then in effect. All portions
    of any Monthly Rental Payments not otherwise paid in shares of Series A Stock shall be paid in cash.

 

    	 	1	 

     

    

 

	PURCHASE OPTION:	At the
    end of the Initial Term of this Lease Schedule, Lessee shall have the options for the disposition of the Equipment as more
    fully described in Paragraph 14 of the Master Lease. Upon proper notification under the Master Lease, the Lessee shall have
    the option to purchase all but not less than all of the Equipment for the then Fair Market Value (as defined in the Master
    Lease) provided the Lessee has satisfactorily met all the terms and conditions specified for the exercise of the purchase
    option.
	 	 
	EARLY BUYOUT:	Lessee shall have
    the right to effect an Early Buyout of the Equipment in accordance with the terms of Paragraph 15 of the Master Lease. An
    Early Buyout will also be subject to any and all applicable state and federal tax laws.
	 	 
	EQUIPMENT DISCLAIMER AND AGREEMENT:	Lessee hereby acknowledges
    that it is aware of and understands its obligations with respect to the Master Lease, and that it agrees to enforce in its
    own name all warranties, agreements, or representations, if any. which may be made by any supplier with respect to the Equipment.
    LESSEE FURTHER AGREES AND ACKNOWLEDGES THAT LESSOR MAKES NO EXPRESSED OR IMPLIED WARRANTIES AS TO ANY MATTER WHATSOEVER
    REGARDING THE EQUIPMENT, INCLUDING WITHOUT LIMITATION THE CONDITION OF THE EQUIPMENT AND ITS MERCHANTABILITY OR ITS FITNESS
    FOR ANY PARTICULAR PURPOSE. NO DEFECT OR UNFITNESS OF EQUIPMENT SHALL RELEASE LESSEE OF THE OBLIGATION TO PAY RENTAL PAYMENTS
    OR OF ANY OTHER OBLIGATIONS UNDER THE MASTER LEASE OR THIS LEASE SCHEDULE.

 

This Lease Schedule is issued pursuant to
the Master Lease identified hereon. All the terms, conditions, representations, and warranties of the Master Lease are hereby
incorporated herein and made a part hereof as if they were expressly set forth in this Lease Schedule, and this Lease Schedule
constitutes a separate lease with respect to the Equipment described herein.

 

IN WITNESS WHEREOF, the parties below have
caused this Lease Schedule to be executed by their duly authorized representatives as of this 20th day of December 2013.

 

	LESSOR:	 	LESSEE:
	 	 	 
	ASPEN ADVANCED OPPORTUNITY FUND,
    LP	 	XG SCIENCES, INC.
	 	 	 
	/s/
     Steven C. Jones	 	/s/
    Michael R Knox
	Authorized Signature	 	Authorized Signature
	 	 	 	 	 
	Name: 	Steven
    C. Jones	 	Name: 	Michael
    R Knox
	 	 	 	 	 
	Title:	Managing
    Member	 	Title:	CEO
	 	AAX65, LLC	 	 	 
	 	The General Partner	 	 	 

 

    	 	2	 

     

    

 

Exhibit
A

to
Lease Schedule No. 2

to
Master Lease Agreement, dated March 18, 2013 (the “Master Lease”)

between
Aspen Advanced Opportunity Fund, LP (“Lessor”) and

XG
Sciences, Inc. (“Lessee”)

 

This Exhibit
A list of Equipment and any and all attachments hereto are part of the Master Lease and Lease Schedule referenced above. Lessee
hereby confirms it has received all of said Equipment and has executed a Certificate of Acceptance therefor.

 

Lease Schedule #2
Equipment

 

	Item #	 	Item Name/ Description	 	Manufacturer	 	Model #	 	XGS Application Area	 	XGS Location	 	Total Purchase
 Amount	 
	#1	 	Battery Tester	 	Arbin Instruments	 	BT2000	 	R&D Battery Testing	 	4055 English Oak, Suite B	 	$	56,990.11	 
	 	 	Testing station designed for cell and battery modules.	 	 	 	 
		 	TOTAL	 	$	56,990.11	 

 

     

     

    

 

CERTIFICATE
OF ACCEPTANCE

 

Lease Schedule No.
2 (the “Lease Schedule)

under Master Lease Agreement dated March
18, 2013 (the “Master Lease”)

between Aspen Advanced Opportunity Fund,
LP (“Lessor”)

and XG Sciences, Inc. (“Lessee”)

  

LESSEE HEREBY CERTIFIES that all items
of Equipment described in Exhibit A to the Lease Schedule have been received and inspected by the Lessee as of the date below
and are in good order and condition and are acceptable to the Lessee where is, as is. The decals and/or labels, if required by
the Lessor and supplied to the Lessee, have been affixed each item of Equipment.

 

Lessee hereby acknowledges that Lessor did
not select, manufacture or supply the equipment and Lessor acquired the equipment in connection with the Master Lease and the
Lease Schedule.

 

Lessee represents and warrants that it has
arranged for insurance on the Equipment consistent with the terms of Paragraph 9 of the Master Lease.

 

Lessee hereby approves and all payments made
by the Lessor to any supplier of the Equipment on the Lease Schedule made either i) prior to the date hereof pursuant to an Certificate
of Understanding executed by the Lessee, or ii) on or after the date hereof. Lessee hereby certifies that the Lessor has fully
and satisfactorily performed all covenants and conditions to be performed by it under the Lease with respect to this Lease Schedule.

 

LESSEE HEREBY ACKNOWLEDGES THAT IT UNDERSTANDS
THAT THE LESSOR IS RELYING UPON THIS CERTIFICATE OF ACCEPTANCE OR ANY CERTIFICATE OF UNDERSTANDING MADE PRIOR TO THE DATE HEREOF
IN MAKING PAYMENT TO ANY SUPPLIER OF EQUIPMENT ON THIS LEASE SCHEDULE.

 

	 	Date: December 20, 2013
	 	 
	 	LESSEE:
	 	 
	 	/s/ Michael
    R Knox
	 	Authorized Signature
	 	 
	 	Michael
    R Knox
	 	Name
	 	 
	 	CEO
	 	TitleExhibit 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 

  

    	 	2	 

     

    

  

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

  

    	 	3	 

     

    

 

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

 

    	 	4	 

     

    

  

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 

 

    	 	6	 

     

    

 

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

  

    	 	7	 

     

    

 

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-Compete and Non-Solicitation
Agreement

 

Executive Initials

 

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