Document:

Exhibit 10.25

 

SECOND AMENDED AND RESTATED INTELLECTUAL
PROPERTY SECURITY

AGREEMENT

 

This
Second Amended and Restated Intellectual Property Security Agreement (this “IP Security Agreement”)
is made as of January 15, 2014 by and between XG Sciences, Inc., a Michigan corporation (“Pledgor”), Aspen
Capital Advisors, LLC, a Florida limited liability corporation, as Agent (the
“Agent”) for the undersigned lenders (“Lenders”) from time to time holding
secured convertible notes issued by the Pledgor, and the Lenders listed on the signature page hereto.

 

RECITALS

 

A.           Pledgor
and Lenders are parties to those certain Secured Convertible Promissory Notes issued pursuant to those certain purchase agreements
between the Pledgor and the Lenders as the same notes have been and may be modified, amended, supplemented, restated or superseded
from time to time (the “Secured Notes”). Capitalized terms used but not
defined herein shall have the meanings given to them in the Secured Notes or the Purchase Agreement (as defined below), as applicable.

 

B.           Pledgor
entered into that certain Second Amended and Restated Purchase Agreement, dated January 15, 2014, with Aspen Advanced Opportunity
Fund, LP (the “Purchase Agreement”).

 

C.           Pledgor
and SVIC No. 15 New Technology Business Investment L.L.P. (“Samsung”) entered into that certain Purchase Agreement,
dated January 15, 2014 (the “Samsung Purchase Agreement”, and together with the Purchase, Agreement, Secured Notes
and the IP Security Agreement, the “Loan Documents”).

 

D.           Pledgor
is the owner of the intellectual property collateral described herein.

 

E.           It
is a condition to the Lenders’ entering into the Purchase Agreement and purchasing the Secured Notes that the Pledgor grants to
the Agent a lien on and security interest in the collateral described herein.

 

NOW, THEREFORE,
in consideration of the mutual promises and covenants set forth herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby conclusively acknowledged, the parties hereto agree as follows:

 

AGREEMENT

 

1.          Collateral
Assignment, Patent Mortgage, and Grant of Security Interest. As collateral security for the
prompt and complete payment and performance of: (i) all obligations of the Pledgor under the Secured Notes, (ii) all obligations
of Pledgor hereunder and under any other documents related to and including the Purchase Agreement to which it is a party and (iii)
all obligations of Pledgor under any other documents related to and including the Samsung Purchase Agreement (collectively, the
“Secured Obligations”). Pledgor (i) hereby acknowledges, agrees and confirms
that Agent shall continue to have a security interest in and, (ii) to the extent not otherwise granted to Agent, hereby grants
a first priority security interest and mortgage to Agent for the benefit of the Lenders, as collateral security, in and to Pledgor’s
entire right, title and interest in, to and under the following, now or hereafter existing, created, acquired, held or controlled
by Pledgor (all of which shall collectively be called the “Intellectual Property Collateral”):

 

     

     

    

  

(a)          Any
and all copyright rights, copyright applications, copyright registrations, copyright recordings and like protections in each work
of authorship and derivative work thereof, whether registered or unregistered or published or unpublished and whether or not the
same also constitutes a trade secret, held pursuant to the laws of the United States, any State thereof or of any other country
or political subdivision thereof (collectively, the “Copyrights”);

 

(b)          any
and all know-how including any and all information not covered by a patent or patent application, including but not limited to
materials, trade secrets, information, experience and data, formulae, procedures, results and specifications, regulatory filings,
clinical and pre-clinical data, in written or electronic form, including, without limitation, those set forth on Exhibit A attached
hereto and incorporated herein by this reference (collectively, the “Know-How”);

 

(c)          any
and all design rights which may be available to Pledgor;

 

(d)          any
and all (i) letters patent, including, without limitation, utility patents, design patents, industrial designs and utility model
registrations, of the United States or any other country, or any political subdivision thereof, and all reissues and extensions
thereof, (ii) applications (including but not limited to provisional applications) for letters patent of the United States or any
other country, or any political subdivision thereof, and all divisions, continuations, continuations-in-part, and continuing applications
thereof, and (iii) rights to obtain any reissues, reexaminations or extensions thereof (collectively, the “Patents”)
and any and all agreements, whether written or oral, providing for the grant by or to the Pledgor of any right to make, use, sell,
offer to sell, or import any invention covered in whole or in part by one or more of the Patents and all renewals and extensions
thereof (collectively, the “Patent Licenses”),
including, without limitation, the Patents and Patent Licenses set forth on Exhibit A
attached hereto and incorporated herein by this reference;

 

(e)          any
and all trademarks, trade names, corporate names, company names, business names, trade styles, service marks, logos, other source
or business identifiers, prints and labels on which any of the foregoing have appeared or appear, designs and general intangibles
of like nature, all registrations and recordings thereof, and any applications in connection therewith, including, without limitation,
registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency
of the United States, any State thereof or any other country or any political subdivision thereof, and the entire goodwill of the
business of Borrower connected with and symbolized by all such trademarks, including, without limitation, those set forth on Exhibit
A attached hereto and incorporated herein by this reference (collectively, the “Trademarks”);

 

(f)          any
and all income, royalties, damages, claims, and payments now and hereafter due and payable, including, without limitation, all
claims for damages and payments by way of past, present and future infringement, misappropriation, or dilution of any of the rights
included above, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the
intellectual property rights identified above;

 

(g)          all
licenses or other rights to use any of the Copyrights, Patents, Know-How, or Trademarks (collectively, the “Intellectual
Property”) and all license fees and royalties arising from such use to the extent permitted
by such license or rights and not prohibited by applicable law;

 

    Second Amended and Restated Intellectual Property Security Agreement
 
 

     

    

  

(h)          all
amendments, continuations, renewals, and extensions of any of the Intellectual Property;

 

(i)          all
proceeds and products of the foregoing, including, without limitation, all payments under insurance or any indemnity or
warranty payable in respect of any of the foregoing; and

 

(j)          all
membership and any and all other equity ownership interests held by the Pledgor in and to XG Sciences IP, LLC.

 

Notwithstanding
any of the foregoing, the term “Intellectual Property Collateral” shall
not include any general intangibles of Pledgor (whether owned or held as licensee or lessee, or otherwise), to the extent that:
(i) such general intangibles are not assignable or capable of being encumbered as a matter of law or under the terms of the license,
lease or other agreement applicable thereto (but solely to the extent that any such restriction shall be enforceable under applicable
law), without the consent of the licensor or lessor thereof or other applicable party thereto; and (ii) such consent has not been
obtained; provided, however, that the grant of security interest herein shall extend to, and the term “Intellectual Property
Collateral” shall include, (A) any and all proceeds of any general intangibles (“Proceeds”)
which are otherwise excluded to the extent that the assignment or encumbrance of such Proceeds is not so restricted, (B) upon obtaining
the consent of any such licensor, lessor or other applicable party’s consent with respect to any such otherwise excluded
general intangibles, such general intangibles as well as any and all Proceeds thereof that might theretofore have been excluded
from such a grant of a security interest and the term “Intellectual Property Collateral” and (C) any general intangible
which is an account receivable or proceed of or otherwise related to the enforcement or collection of any account receivable or
goods which are the subject of any account receivable. Notwithstanding anything contained herein to the contrary, the term “Intellectual
Property Collateral” does not and shall not include any Patent Rights within the meaning
of that certain Restated and Amended Exclusive License Agreement (the “MSU License”)
between Michigan State University (“Licensor”) and Pledgor; provided, however, that the Pledgor agrees to use commercially
reasonable best efforts to obtain the consent of Licensor to permit inclusion of the MSU License as Intellectual Property Collateral
hereunder.

 

2.           Authorization
and Request. Pledgor authorizes and requests that the Register of Copyrights and the Commissioner
of Patents and Trademarks record this conditional assignment.

 

3.           Covenants
and Warranties. Pledgor represents, warrants, covenants, and agrees as follows:

 

(a)          Pledgor
or XG Sciences IP, LLC is now the sole owner of the Intellectual Property Collateral;

 

(b)          all
of the Patents and Trademarks owned by Pledgor or XG Sciences IP, LLC or in which Pledgor or XG Sciences IP, LLC has any right,
title, or interest are described on Exhibit A;

 

(c)          performance
of this IP Security Agreement does not conflict with or result in a breach of any agreement to which Pledgor is a party or by which
Pledgor is bound;

 

    Second Amended and Restated Intellectual Property Security Agreement
 
 

     

    

  

(d)          during
the term of this IP Security Agreement, Pledgor will not sell, transfer, assign, or otherwise encumber any interest in the Intellectual
Property Collateral, except for (i) licenses granted by Pledgor in the ordinary course of its business as now conducted or as set
forth in this IP Security Agreement or that do not, in the aggregate, impair the Intellectual Property Collateral or result in
a Material Adverse Effect; and (ii) subject to Pledgor’s execution of appropriate documents, in form acceptable to Agent,
to perfect or continue the perfection of Agent’s interest in the intellectual Property Collateral, transfers to affiliates
of Pledgor;

 

(e)          Except
as disclosed on Exhibit A, to its knowledge; (i) each of the Patents (that is not
listed as abandoned) is valid and enforceable, and there is no Intellectual Property (that is not listed as abandoned or pending)
which has been judged invalid or unenforceable, in whole or in part; and (ii) no claim has been made that any part of the Intellectual
Property Collateral (that is not listed as abandoned or pending) violates the rights of any third party;

 

(f)          Pledgor
shall promptly advise Agent of any material changes in the composition of the Intellectual Property Collateral, including but not
limited to any subsequent ownership right of Pledgor in or to any Intellectual Property not specified in this IP Security Agreement;

 

(g)          Pledgor
shall: (i) protect, defend, and maintain the validity and enforceability of the Intellectual Property (other than property listed
as abandoned), except where the failure to so protect, defend, and maintain would not, in the aggregate, result in a Material Adverse
Effect; (ii) use all commercially reasonable efforts to detect infringements of the Intellectual Property (other than property
listed as abandoned) and promptly advise Agent in writing of infringements detected and (iii) not allow any of its Intellectual
Property (other than property listed as abandoned) to be abandoned, forfeited, or dedicated to the public without the written consent
of Agent which shall not be unreasonably withheld;

 

(h)          Pledgor
shall, from time to time, execute and file such instruments, and take such further actions as Agent may request from time to time
to perfect or continue the perfection of Agent’s interest in the Intellectual Property Collateral;

 

(i)          Except
for the MSU License, Pledgor is not party, nor will it, without the prior written consent of Agent, become party in the future,
to any license or contract included in the Intellectual Property Collateral which, pursuant to its terms is not assignable (except
in the case of Pledgor’s customer contracts) or capable of being encumbered;

 

(j)          this
IP Security Agreement creates, and in the case of after acquired Intellectual Property Collateral, will create at the time
Pledgor first has rights in such after acquired Intellectual Property Collateral, in favor of Agent a valid and (upon taking
appropriate actions) perfected first priority security interest in the Intellectual Property Collateral in the United States
securing the payment and performance of all present or future Secured Obligations;

 

(k)          to
its knowledge, except for, and upon, the filings with, as applicable, (1) the United States Patent and Trademark Office, (2) the
Register of Copyrights, and (3) the UCC Division of the applicable office of the Secretary of State, necessary to perfect the security
interests and assignment created hereunder, and except as has been already made or obtained, no authorization, approval or other
action by, and no notice to or filing with, any United States governmental authority or United States regulatory body is required
either, (a) for the grant by Pledgor or maintenance of the security interest granted hereby or for the execution, delivery, or
performance of this IP Security Agreement by Pledgor in the United States, or (b) for the perfection in the United States or the
exercise by Agent of its rights and remedies hereunder;

 

    Second Amended and Restated Intellectual Property Security Agreement
 
 

     

    

  

(l)          all
information heretofore, herein, or hereafter supplied to Agent by or on behalf of Pledgor with respect to the Intellectual Property
Collateral is accurate and complete in all material respects;

 

(m)          Pledgor
shall not enter into any agreement that would impair or conflict with Pledgor’s obligations hereunder. For purposes of this
subsection, Pledgor’s entering into license agreements in the ordinary course of business shall not be deemed to impair or
conflict with Pledgor’s obligations hereunder. Pledgor shall not, without the prior written consent of Agent, permit the
inclusion in any contract to which it becomes a party of any provisions that could or might in any way prevent the creation of
a security interest in Pledgor’s rights and interests in any property included within the definition of the Intellectual
Property Collateral acquired under such contracts, except that certain contracts may contain anti-assignment provisions that could
in effect prohibit the creation of a security interest in such contracts; and

 

(n)          upon
any executive officer of Pledgor’s obtaining actual knowledge thereof,Pledgor willpromptly notify Agent in writing
of any event that materially adversely affects the value of any Intellectual Property Collateral, the ability of Pledgor to dispose
of any Intellectual Property Collateral or the rights and remedies of Agent in relation thereto, including the levy of any legal
process against any of the Intellectual Property Collateral.

 

(o)          Pledgor
is the sole holder of all equity securities of XG Sciences IP, LLC.

 

(p)          Prior
to or contemporaneously with entering into any definitive purchase agreement with Samsung regarding the issuance of any Secured
Notes, Pledgor shall have formed XG Sciences IP, LLC and shall have assigned all of intellectual property that is set forth on
Exhibit B to XG Sciences IP, LLC, and such assignment of and manner of holding such intellectual property shall be deemed
to be in compliance with this Agreement.

 

(q)          Pledgor
and/or XG Sciences IP, LLC shall maintain a list of their material identifiable trade secrets, which list shall include information
regarding the location of documentation for each trade secret and which employees have access to the trade secret (the “Trade
Secret List”). Pledgor shall provide a copy of the Trade Secret List to its primary legal counsel from time to time to be
held in escrow by such legal counsel. Pledgor shall direct such legal counsel to disclose the Trade Secret List to the Agent upon
the Agent’s request following the delivery of a “foreclosure notice” in accordance with the Second Amended and
Restated Intercreditor Agreement among the Lenders dated as of January 15, 2014.

 

4.            Agent’s
Rights.

 

(a)          Agent
shall have the right, but not the obligation, to take, at Pledgor’s sole expense, any actions that Pledgor is required under
this IP Security Agreement to take but which Pledgor fails to take, after ten (10) calendar days’ written notice to Pledgor.
Pledgor shall reimburse and indemnify Agent and Lenders for all costs and expenses incurred in the exercise of its rights under
this Section 4.

 

    Second Amended and Restated Intellectual Property Security Agreement
 
 

     

    

  

(b)          Each
Lender agrees to appoint Aspen Capital Advisors, LLC as its Agent for purposes of this IP Security Agreement. Each Lender hereby
authorizes the Agent to take such action and to exercise such powers hereunder as provided herein or as requested to or consented
by the Lenders (acting together), together with such powers as are reasonably incidental thereto. Subject to the provisions of
this Agreement, the Agent will not take any action contrary to the express written instructions of the Lenders (acting together)
and will take any lawful action prescribed in express written instructions of the Lenders (acting together). The Agent may decline
to take any action except upon the express written instructions of the Lenders (acting together) and the Agent may request a written
ratification by the Lenders (acting together) of any action taken by it under this Agreement, which ratification shall not be unreasonably
withheld, conditioned or delayed. The Agent shall not be obligated to take any action, or engage in any course of conduct, if the
Lenders are not in agreement as to such action or course of conduct. The Agent may employ agents and attorneys-in-fact in connection
herewith and shall not be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it in
good faith.

 

(c)          The
Agent shall be entitled to resign at any time upon written notice to the Lenders and the Agent may be removed at any time for cause
a vote of the Lenders holding a majority of the principal amounts of the secured indebtedness which is secured by a pledge of the
Intellectual Property Collateral hereunder. Except as provided above, upon any such resignation or removal, the Lenders shall have
the right to appoint a successor Agent by the vote of the Lenders holding a majority of the principal amounts of the secured indebtedness
which is secured by a pledge of the Intellectual Property Collateral hereunder. If no successor Agent shall have been so appointed
by such Lenders, and shall have accepted such appointment, within thirty (30) days after the retiring Agent’s giving of notice
of resignation or the Lenders’ removal of the retiring Agent, then the retiring Agent may, on behalf of the Lenders, appoint
a successor Agent. Upon the acceptance of any appointment as the Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations as the Agent under this Agreement. After any retiring or the Agent’s
resignation or removal hereunder as the Agent, the provisions of this Section 4 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was the Agent under this Agreement.

 

(d)          Subject
to and upon the other terms and conditions contained herein that limit the obligations or duties of the Agent, the duties and obligations
of the Agent under this Agreement shall be those of a “collateral agent” and shall consist of and be limited to: (i)
acquiring, holding and enforcing the security interest granted by the Pledgor in the Collateral under this Agreement; (ii) selling,
releasing, surrendering, realizing upon or otherwise dealing with, in any manner and in any order, all or any portion of the Collateral,
(iii) exercising (or refraining from exercising) any rights, remedies or powers of the Agent under this Agreement, the Loan Documents
and other agreements contemplated therein, or under applicable law in respect of all or any portion of the Collateral, (iv) making
any demands or giving any notices hereunder or under the other transaction documents, and (v) effecting amendments to or granting
waivers or consents hereunder or under the other transaction documents.

 

(e)          Each
of the Lenders hereby covenants and agrees to reimburse, indemnify and hold the Agent harmless from and against any and all claims,
actions, judgments, damages, losses, liabilities, costs, transfer or other taxes, and expenses (including, without limitation,
reasonable attorneys’ fees and expenses) incurred or suffered without any bad faith, gross negligence or willful misconduct
by the Agent, arising out of or incident to Agent’s actions or inactions as Agent with regard to its duties under or administration
of this IP Security Agreement. Each Lender further agrees that any reimbursements or indemnity payments to the Agent shall be made
according to each Lender’s pro rata share of the total aggregate principal amount outstanding under the Secured Notes at
the time of the event that gave rise to such reimbursement or indemnity claim by the Agent.

 

    Second Amended and Restated Intellectual Property Security Agreement
 
 

     

    

  

5.            Further
Assurances; Attorney in Fact.

 

(a)          Pledgor
agrees to deliver to Agent, upon the request of Agent, a report, in form acceptable to Agent and certified by an officer of Pledgor,
which lists all material Intellectual Property owned by Pledgor, including, without limitation, all titles, names or marks together
with all relevant registration and/or application numbers and registration and/or filing dates.

 

(b)          On
a continuing basis for the purpose of perfecting and maintaining the perfection and priority of Agent’s security interest
in all Intellectual Property, Pledgor will make, execute, acknowledge and deliver, and file and record in the proper filing and
recording places in the United States, all such instruments, including appropriate financing and continuation statements and collateral
agreements and filings with the United States Patent and Trademark Office and the Register of Copyrights, and take all such action
as may be necessary or advisable, or as requested by Agent, and otherwise to carry out the intent and purposes of this IP Security
Agreement, or for assuring and confirming to Agent the grant, priority, or perfection of a security interest in all Intellectual
Property Collateral.

 

(c)          Pledgor
hereby irrevocably appoints Agent as Pledgor’s attorney-in-fact, with full authority in the place and stead of Pledgor and
in the name of Pledgor, from time to time in Agent’s discretion, to take any action and to execute any instrument which Agent
may deem necessary or advisable to accomplish the purposes of this IP Security Agreement, including (i) to modify, in its discretion,
this IP Security Agreement without first obtaining Pledgor’s approval of or signature to such modification by amending Exhibit
A to include reference to any right, title or interest in or to any Intellectual Property acquired
by Pledgor after the execution hereof or to delete any reference to any right, title or interest in or to any Intellectual Property
in which Pledgor no longer has or claims any right, title or interest, (ii) to file, in its discretion, one or more financing or
continuation statements and amendments thereto, relative to any of the Intellectual Property Collateral without the signature of
Pledgor where permitted by law and (iii) to transfer the Intellectual Property Collateral into the name of Agent or a third party
to the extent permitted under the UCC provided that Agent agrees that it shall not exercise its powers as attorney-in-fact under
this Section 5 except upon the occurrence and during the continuation of a IP Security
Agreement Event of Default (as hereinafter defined).

 

    Second Amended and Restated Intellectual Property Security Agreement
 
 

     

    

  

6.            Consent
and Waiver; Obligations Not Impaired.

 

(a)          Pledgor
waives: (i) promptness, diligence, and notice of acceptance of this IP Security Agreement and notice of the incurring of any obligation,
indebtedness, or liability to which this IP Security Agreement applies or may apply and waives presentment for payment, notice
of nonpayment, protest, demand, notice of protest, notice of intent to accelerate, notice of acceleration, notice of dishonor,
diligence in enforcement and indulgences of every kind; and (ii) the taking of any other action by Agent or any Lender, including
without limitation giving any notice of default or any other notice to, or making any demand on, the Pledgor, any guarantor of
all or any part of the Secured Obligations or any other party, provided, that Pledgor does not waive any notices that Agent has
expressly agreed to give to it in the Second Amended and Restated Security Agreement, dated as of January 15, 2014, by and among
the Pledgor, the Lenders and the Agent (the “Security Agreement”).

 

(b)          Agent and any Lender may at any time and from time to time,
without the consent of or notice to Pledgor, without incurring responsibility to Pledgor and without impairing, releasing or reducing
the obligations of Pledgor hereunder: (i) change the place of payment of all or any part of the Secured Obligations; (ii) release,
surrender, or subordinate any collateral for all or any part of the Secured Obligations or this IP Security Agreement; (iii) neglect,
delay, omit, fail or refuse to take or prosecute any action for the collection of all or any part of the Secured Obligations or
this IP Security Agreement or to take or prosecute any action in connection with the Loan Documents; (iv) exercise or refrain from
exercising any rights against the Pledgor or others, or otherwise act or refrain from acting; (v) settle or compromise all or any
part of the Secured Obligations and subordinate the payment of all or any part of the Secured Obligations to the payment of any
obligations, indebtedness or liabilities which may be due or become due by Pledgor to Agent, any Lender or others; (vi) apply any
deposit balance, fund, payment, collections through process of law or otherwise or other collateral of Pledgor to the satisfaction
and liquidation of the indebtedness or obligations of the Pledgor to Agent and Lenders not secured under this IP Security Agreement,
if any, subject to the terms of the applicable agreements; and (vii) apply any sums paid to Agent or Lenders by Pledgor to the
Secured Obligations in such order and manner as Agent, in its sole discretion, may determine.

 

(c)          Should
Agent seek to enforce the obligations of Pledgor hereunder by action in any court or otherwise, Pledgor waives any requirement,
substantive or procedural, that (i) Agent first enforce any rights or remedies against any other person or entity liable to Agent
or any Lender for all or any part of the Secured Obligations, including without limitation that a judgment first be rendered against
any other person or entity, or that any other person or entity should be joined in such cause, or (ii) Agent first enforce rights
against any collateral which shall ever have been given to secure all or any part of the Secured Obligations or this IP Security
Agreement. Such waiver shall be without prejudice to Agent’s right, at its option, to proceed against any other person or
entity, whether by separate action or by joinder.

 

(d)          In
addition to any other waivers, agreements, and covenants of Pledgor set forth herein, Pledgor hereby further waives and releases
all claims, causes of action, defenses, and offsets for any act or omission of Agent and any Lender, and such Person’s directors,
officers, employees, representatives, or agents in connection with Agent’s and such Lender’s administration of the
Secured Obligations, except for Agent’s or such Lender’s willful misconduct and gross negligence.

 

    Second Amended and Restated Intellectual Property Security Agreement
 
 

     

    

  

(e)          Pledgor
agrees that its obligations hereunder shall not be released, diminished, impaired, or reduced by the occurrence of any one or more
of the following events: (i) the lack of corporate power of Pledgor, or any other guarantor of all or any part of the Secured Obligations,
(ii) any receivership, insolvency, bankruptcy, or other proceedings affecting Pledgor, or any other guarantor of all or any part
of the Secured Obligations, or any of their respective property; (iii) the partial or total release or discharge of any guarantor
of all or any part of the Secured Obligations, or any other person or entity from the performance of any obligation contained in
any instrument or agreement evidencing, governing or securing all or any part of the Secured Obligations, whether occurring by
reason of law or otherwise; (iv) the taking or accepting of any collateral for all or any part of the Secured Obligations or this
IP Security Agreement; (v) the taking or accepting of any other guaranty for all or any part of the Secured Obligations; (vi) any
failure by Agent to acquire, perfect, or continue any lien or security interest on collateral securing all or any part of the Secured
Obligations or this IP Security Agreement; (vii) the impairment of any collateral securing all or any part of the Secured Obligations
or this IP Security Agreement (including without limitation the negligent impairment); (viii) any failure by Agent to sell any
collateral securing all or any part of the Secured Obligations or this IP Security Agreement in a commercially reasonable manner
or as otherwise required by law; (ix) any invalidity or unenforceability of or defect or deficiency in the Loan Documents; or (x)
any other act or circumstance which might otherwise constitute a defense available to, or discharge of, Pledgor, or any other guarantor
of all or any part of the Secured Obligations.

 

(f)          This
IP Security Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment of all or
any part of the Secured Obligations is rescinded or must otherwise be returned by Agent or any Lender upon the insolvency, bankruptcy,
or reorganization of Pledgor, any other guarantor of all or any part of the Secured Obligations, or otherwise, all as though such
payment had not been made.

 

(g)          None
of the following shall affect Pledgor’s liability hereunder: (i) the unenforceability of all or any part of the Secured Obligations
against Pledgor by reason of the fact that the Secured Obligations exceed the amount permitted by law; (ii) the act of creating
all or any part of the Secured Obligations is ultra vires; or (iii) the individual or individuals creating all or any part of the
Secured Obligations acted in excess of their authority.

 

7.            IP
Security Agreement Events of Default. The occurrence of any of the following shall constitute
a “IP Security Agreement Event of Default” under this IP Security Agreement:

 

(a)          An
Event of Default occurs under the Loan Documents; or

 

(b)          Pledgor
breaches any warranty or agreement made by Pledgor in this IP Security Agreement.

 

8.            Remedies.
Upon the occurrence and during the continuance of a IP Security Agreement Event of Default, Agent shall have the right to exercise
all the remedies of a secured party under the UCC, including, without limitation, the right to require Pledgor to assemble the
Intellectual Property Collateral and any tangible property in which Agent has a security interest and to make it available to Agent
at a place designated by Agent. Agent shall have a nonexclusive, royalty free license or other right, solely pursuant to the provisions
of this Section 8, to use, without charge, the Intellectual Property and any property of a similar nature as it pertains to the
Intellectual Property Collateral, to the extent necessary to permit Agent to exercise its rights and remedies pursuant to this
Section 8. including, without limitation, the completion of production, advertising
for sale and the sale of any Intellectual Property Collateral and, in connection with Agent’s exercise of its rights hereunder,
Pledgor’s rights under all licenses and all franchise agreements which constitute Intellectual Property Collateral shall
inure to the benefit of Agent. Pledgor will pay any expenses (including reasonable attorneys’ fees) incurred by Agent or
any Lender in connection with the exercise of any of Agent’s rights hereunder, including, without limitation, any expense
incurred in disposing of the Intellectual Property Collateral. All of Agent’s rights and remedies with respect to the Intellectual
Property Collateral shall be cumulative.

 

    Second Amended and Restated Intellectual Property Security Agreement
 
 

     

    

  

9.          Indemnity.
Pledgor agrees to defend, indemnify and hold harmless Agent and Lenders and their respective directors, officers, employees, attorneys
and agents against (a) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with
the transactions contemplated by this IP Security Agreement and (b) all losses or expenses in any way suffered, incurred, or paid
by Agent or any Lender as a result of or in any way arising out of, following or consequential to transactions between or among
Agent, any Lender, and Pledgor, whether under this IP Security Agreement or otherwise (including, without limitation, reasonable
attorneys’ fees and reasonable expenses), except for losses arising from or out of Agent’s gross negligence or willful
misconduct. If Agent obtains recovery of any of the amounts that Pledgor has paid to it pursuant to the indemnity set forth in
the section, then Agent shall promptly pay to Pledgor the amount of such recovery. PLEDGOR AND AGENT EXPRESSLY INTEND
THAT THE FOREGOING INDEMNITY SHALL COVER, AND THAT PLEDGOR SHALL INDEMNIFY AND HOLD THE INDEMNIFIED PARTIES HARMLESS FROM AND AGAINST,
COSTS, EXPENSES AND LOSSES SUFFERED AS A RESULT OF THE NEGLIGENCE OF ANY INDEMNIFIED PARTY.

 

10.         Successors
and Assigns. This IP Security Agreement and all obligations of Pledgor hereunder shall be binding
upon the successors and assigns of Pledgor, and shall, together with the rights and remedies of Agent hereunder, inure to the benefit
of Agent, Lenders, and their respective successors and assigns. No sales of participations, other sales, assignments, transfers
or other dispositions of any agreement governing or instrument evidencing the indebtedness secured hereby or any portion thereof
or interest therein shall in any manner affect the security interest created herein and granted to Agent hereunder.

 

11.         Reassignment.
At such time as Pledgor shall completely satisfy all of the Secured Obligations and no commitment on the part of any Lender to
make loans to Pledgor is continuing, Agent shall execute and deliver to Pledgor all deeds, assignments, and other instruments as
may be necessary or proper to revest in Pledgor full title to the property assigned hereunder, subject to any disposition thereof
which may have been made by Agent pursuant hereto.

 

12.         No
Failure or Delay. No failure or delay on the part of Agent in the exercise of any power, right
or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof.

 

13.         Costs
and Expenses. Pledgor will upon demand pay to Agent the amount of any and all costs and expenses
(including without limitation, reasonable attorneys’ fees and expenses), which Agent may incur in connection with (i) the
perfection and preservation of the security interests granted under the Loan Documents, (ii) the administration of the Loan Documents,
(iii) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, the Intellectual
Property Collateral, (iv) the exercise or enforcement of any of the rights of Agent hereunder, or (vi) the failure by Pledgor to
perform or observe any of the provisions hereof.

 

14.         Amendments.
Except as otherwise provided herein, this IP Security Agreement may be amended only by a written instrument signed by both parties
hereto.

 

15.         Counterparts.
This IP Security Agreement may be executed in any number of counterparts, each of which when so delivered shall be deemed an original,
but all such counterparts shall constitute but one and the same instrument.

 

    Second Amended and Restated Intellectual Property Security Agreement
 
 

     

    

  

16.         Governing
Law; Jurisdiction. THIS IP SECURITY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF MICHIGAN, WITHOUT REFERENCE TO THE RULES THEREOF RELATING TO CONFLICT OF LAWS. PLEDGOR HEREBY IRREVOCABLY SUBMITS
ITSELF TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN INGHAM COUNTY, MICHIGAN, AND AGREES AND CONSENTS THAT SERVICE
OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL PROCEEDING RELATING TO THIS IP SECURITY AGREEMENT OR ANY OTHER RELATIONSHIP BETWEEN
OR AMONG AGENT, ANY LENDER, AND PLEDGOR BY ANY MEANS ALLOWED UNDER STATE OR FEDERAL LAW. ANY LEGAL PROCEEDING ARISING OUT OF OR
IN ANY WAY RELATED TO THIS IP SECURITY AGREEMENT OR ANY OTHER RELATIONSHIP BETWEEN OR AMONG AGENT, ANY LENDER, AND PLEDGOR SHALL
BE BROUGHT AND LITIGATED EXCLUSIVELY IN ANY ONE OF THE STATE OR FEDERAL COURTS LOCATED IN INGHAM COUNTY, MICHIGAN, HAVING JURISDICTION
UNLESS AGENT SHALL ELECT OTHERWISE. THE PARTIES HERETO HEREBY WAIVE AND AGREE NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR
OTHERWISE, THAT ANY SUCH PROCEEDING BROUGHT IN INGHAM COUNTY, MICHIGAN IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE THEREOF
IS IMPROPER.

 

17.         Jury
Trial Waiver. PLEDGOR AND AGENT HEREBY (A) IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS IP SECURITY AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR ASSOCIATED HEREWITH; (B) IRREVOCABLY WAIVE, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE,
OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (C) CERTIFY THAT NO PARTY HERETO NOR ANY REPRESENTATIVE
OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (D) ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS IP
SECURITY AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED
IN THIS PARAGRAPH.

 

18.         Conflict.
In the event of a conflict between any term and/or provision contained in this IP Security Agreement with any term and/or provision
contained in the Loan Documents, the term and/or provision of this IP Security Agreement shall govern.

 

19.         Termination.
This IP Security Agreement and Pledgor’s obligations hereunder shall terminate upon the date that the Secured Obligations
are paid in full, provided, that this IP Security Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Secured Obligations is rescinded or otherwise must be returned by Agent or any Lender,
as though such payment has not been made.

 

20.         Entire
Agreement. This IP Security Agreement (together which each Annex hereto) and the Security
Agreement contain the entire agreement and understanding by and between the parties hereto with respect to the subject matter
hereof and their resulting obligations to each other, as herein described; and it supersedes all prior agreements and understandings
between the parties to this IP Security Agreement relating to the subject matter hereof. No change or modification of this IP
Security Agreement shall be valid or binding unless the same is in writing and signed by the party intended to be so bound. No
waiver of any provision of this IP Security Agreement shall be valid unless the same is in writing and signed by the party against
whom such waiver is sought to be enforced. Moreover, no valid waiver of any provision of this IP Security Agreement, at any time,
shall be deemed to be a waiver of any other provision of this IP Security Agreement at such time, or shall be deemed to be a valid
waiver of such provision at any other time.

 

[Signature page
follows.]

 

    Second Amended and Restated Intellectual Property Security Agreement
 
 

     

    

 

IN WITNESS WHEREOF, the undersigned party
hereto has executed this Second Amended and Restated IP Security Agreement on the day and year first above written.

 

	 	 	XG SCIENCES, INC.
	 	 	 	 
	 	 	By: 	/s/ Michael R. Knox
	 	 	Name: Michael R. Knox
	 	 	Title: Chief Executive Officer
	 	 	 
	Notarization:	 	 
	 	 	 
	STATE OF MICHIGAN	)	 
	 	) ss:	 
	COUNTY OF INGHAM	)	 

 

The foregoing instrument was sworn to, subscribed
and acknowledged before me this 10th day of January, 2014, by Michael R. Knox, in his/her capacity as the Chief Executive
Officer of XG Sciences, Inc., who is [        ] personally known to me or [ü] who has produced
Michigan Driverse License (type of identification) as identification.

 

	 	/s/ Kelly A. LaGrave
	 	NOTARY PUBLIC, STATE OF MICHIGAN
	 	 
	 	Kelly A. LaGrave
	 	(Print, Type of Stamp Commissioned Name of Notary Public)

 

KELLY A LAGRAVE

NOTARY PUBLIC STATE OF MICHIGAN

Eaton County, Acting in Ingham County 

My Commission Expires April 15, 2018

 

    Second Amended and Restated Intellectual Property Security Agreement
 
 

     

    

 

IN WITNESS WHEREOF, the undersigned party
hereto has executed this Second Amended and Restated IP Security Agreement on the day and year first above written.

 

	 	 	AGENT:
	 	 	 
	 	 	ASPEN CAPITAL ADVISORS, LLC
	 	 	 	 
	 	 	By: 	/s/ Steven
    C. Jones
	 	 	Name: Steven C. Jones
	 	 	Title: Managing Member
	 	 	 
	Notarization:	 	 
	 	 	 
	STATE OF FLORIDA	)	 
	 	) ss:	 
	COUNTY OF MIAMI – DADE	)	 

 

The foregoing instrument was sworn to,
subscribed and acknowledged before me this 15th day of January, 2014, by Steven C. Jones, in his/her capacity as
the Managing Member of Aspen Capital Advisors, LLC, who is [ü] personally
known to me or [  ] who has produced ________________ (type
of identification) as identification.

 

	 	/s/ Charles Gamble
	 	NOTARY PUBLIC, STATE OF FLORIDA
	 	 
	 	Charles Gamble
	 	(Print, Type of Stamp Commissioned Name of Notary Public)

 

	 	
        CHARLES GAMBLE

        Notary Public, State of Florida

        Commission #EE860043

        My Commission Expires Nov. 7, 2016

 

    Second Amended and Restated Intellectual Property Security Agreement
 
 

     

    

 

IN WITNESS WHEREOF, the undersigned party
hereto has executed this Second Amended and Restated IP Security Agreement on the day and year first above written.

 

	 	 	LENDER:
	 	 	 
	 	 	ASPEN ADVENCED OPPORTUNITY
    FUND, LP 
	 	 	 	 
	 	 	By:	AA XGS, LLC
	 	 	Its:	General Partner
	 	 	 	 
	 	 	By:	/s/ Steven C. Jones
	 	 	Name: Steven C. Jones
	 	 	Title: Managing Member
	 	 	 
	Notarization:	 	 
	 	 	 
	STATE OF FLORIDA	)	 
	 	) ss:	 
	COUNTY OF MIAMI – DADE	)	 

 

The foregoing instrument was sworn
to, subscribed and acknowledged before me this 15th day of January, 2014, by Steven C. Jones, in his/her capacity
as the Managing Member of Aspen Advanced Opportunity Fund, LP, who is [ü]
personally known to me or [  ] who has produced ________________ (type of identification) as identification.

 

	 	/s/ Charles Gamble
	 	NOTARY PUBLIC, STATE OF FLORIDA
	 	 
	 	Charles Gamble
	 	(Print, Type of Stamp Commissioned Name of Notary Public)

 

	 	
        CHARLES GAMBLE

        Notary Public, State of Florida

        Commission #EE860043

        My Commission Expires Nov. 7, 2016

 

    Second Amended and Restated Intellectual Property Security Agreement
 
 

     

    

 

IN WITNESS WHEREOF, the undersigned party
hereto has executed this Second Amended and Restated IP Security Agreement on the day and year first above written.

 

	 	 	LENDER:
	 	 	 
	 	 	MICHAEL R. KNOX
	 	 	 	 
	 	 	By:  	/s/ Michael R. Knox
	 	 	Name: Michael R. Knox
	 	 	 
	Notarization:	 	 
	 	 	 
	STATE OF MICHIGAN	)	 
	 	) ss:	 
	COUNTY OF INGHAM	)	 

 

The foregoing instrument was sworn to, subscribed
and acknowledged before me this 10th day of January, 2014, by Michael R. Knox, who is [      ] personally known to me or
[ü] who has produced Michigan Driverse License (type of identification) as identification.

 

	 	/s/ Kelly A LaGrave
	 	NOTARY PUBLIC, STATE OF MICHIGAN
	 	 
	 	Kelly A. LaGrave
	 	(Print, Type of Stamp Commissioned Name of Notary Public)

 

KELLY A LAGRAVE

NOTARY PUBLIC STATE OF MICHIGAN

Eaton County, Acting in Ingham County 

My Commission Expires April 15, 2018

 

    Second Amended and Restated Intellectual Property Security Agreement
 
 

     

    

 

IN WITNESS WHEREOF, the undersigned party
hereto has executed this Second Amended and Restated IP Security Agreement on the day and year first above written.

 

	 	 	LENDER:
	 	 	 
	 	 	XGS II, LLC
	 	 	 	 
	 	 	By: 	/s/ David G. Pendell
	 	 	Name: David G. Pendell
	 	 	Title: Managing Member
	 	 	 
	Notarization:	 	 
	 	 	 
	STATE OF FLORIDA	)	 
	 	) ss:	 
	COUNTY OF COLLIER	)	 

 

The
foregoing instrument was sworn to, subscribed and acknowledged before me this 24 day of January, 2014, by David G, Pendell, in
his/her capacity as the Managing Member of XGS II, LLC, who is [        ] personally known
to me or [ü]
who has produced FLDL (type of identification) as identification.

 

	 	/S/ Ryan Sommerville
	 	NOTARY PUBLIC, STATE OF FLORIDA
	 	 
	 	 
	 	(Print, Type of Stamp Commissioned Name of Notary Public)

 

	 	 	
        RYAN SOMMERVILLE

        Notary Public - State of Florida

        My Comm. Expires Mar 30, 2014

        Commission # DD 977037

 

    Second Amended and Restated Intellectual Property Security Agreement
 
 

     

    

 

IN WITNESS WHEREOF, the undersigned party
hereto has executed this Second Amended and Restated IP Security Agreement on the day and year first above written.

 

	 	 	LENDER:
	 	 	 
	 	 	SVIC NO. 15 NEW TECHNOLOGY BUSINESS
INVESTMENT L.L.P.
	 	 	By: Samsung Venture Investment Corporation, its Partner
	 	 	 
	 	 	 	 
	 	 	By:	/s/ Seonjong Lee
	 	 	Name: SEONJONG LEE
	 	 	Title: C.E.O.
	 	 	 
	Notarization:	 	 
	 	 	 
	STATE OF ___________	)	 
	 	) ss:	 
	COUNTY OF _____________	)	 

 

The foregoing instrument was sworn to, subscribed
and acknowledged before me this ____ day of _________, 2013, by _________________, in his/her capacity as the _____________ of
No. 15 New Technology Business Investment L.L.P. who is [        ] personally known to
me or [  ] who has produced ________________ (type of identification) as identification.

 

	 	 
	 	NOTARY PUBLIC, STATE OF __________
	 	 
	 	 
	 	(Print, Type of Stamp Commissioned Name of Notary Public)

 

    Second Amended and Restated Intellectual Property Security Agreement
 
 

     

    

 

EXHIBIT
A

 

In
November of 2011, the Company entered into a license agreement between the Company and Cabot Corporation (“Cabot”),
a copy of which has been supplied to AAOF (the “License Agreement”). Subsequent to the execution of the License Agreement,
Michigan State University (“MSU”) expressed concern regarding the form of the License Agreement, including whether
any MSU technology might have been included in the License Agreement. After discussions among Cabot, MSU, and the Company, Cabot
drafted a First Amendment to the License Agreement between Cabot and the Company (the “Amendment”). The Amendment contains
warranties, attested by both the Company and its Chief Scientist, Dr. Lawrence Drzal, asserting that no MSU technology had been
improperly transferred to Cabot. The Company executed the Amendment on January 29, 2013, and has provided a copy to AAOF. The Company
understood that this matter was closed when it provided the Amendment to AAOF. However, the Company subsequently learned that Cabot
has not yet signed the Amendment because a new Vice President had been appointed. Additionally, the Company received a letter from
MSU dated March 20, 2013 stating that MSU wanted to review this issue. The Company, Cabot, and MSU are currently renegotiating
the Amendment.

 

		1)	Patents and Patent Licenses

 

See
attached.

 

		2)	Trademarks

 

XG
Sciences (Design Plus Words)

xGnP

XG
Sciences The Material Difference (Design Plus Words)

XG
Leaf (Application Pending)

 

    Second Amended and Restated Intellectual Property Security Agreement
 
 

     

    

 

EXHIBIT
B

 

All
“Intellectual Property” as defined in the Assignment of Intellectual Property dated effective as of January
15, 2014 between the Company and XG Sciences IP, LLC, including without limitation the following:

 

Patents:

 

	Patent

        Application

        Number
	Application

    Date	Description
	13/474,860	5/18/2012	Process of Dry Milling Particulate Materials Milled Graphene/Metal Nano Composites
	61/786,735	3/15/2013	Graphene Carbon Compositions
	13/686,961	11/28/2012	Single Mode Microwave Device for Producing Exfoliated Graphite
	13/610,934	9/12/2012	Cloud Mixer and Method of Minimizing Agglomeration of Particulates
	13/435,260	3/30/2012	Mechanical Exfoliation Apparatus
	61/786,745	3/15/2013	Electrodes for Capacitors from Mixed Carbon Compositions
	14079057	11/13/2013	Silicon-Graphene Nanocomposites for Electrochemical Applications

 

 Trademarks:  

 

XG Sciences
(Design Plus Words)

xGnP

XG Sciences
The Material Difference (Design Plus Words)

XG Leaf (Application
Pending)

 

    Second Amended and Restated Intellectual Property Security AgreementExhibit 10.26 

 

SECOND AMENDED AND RESTATED
INTERCREDITOR AGREEMENT

 

THIS SECOND
AMENDED AND RESTATED INTERCREDITOR AGREEMENT (the “Agreement”)
is entered into as of this 15th day of January, 2014 by and among XG Sciences, Inc., a Michigan corporation (“XG”
or “Borrower”), Aspen
Advanced Opportunity Fund, LP, a Delaware limited partnership (“Aspen”), XGS II,
LLC, a Florida limited liability company (“XGS
II”), SVIC No. 15 New Technology Business Investment L.L.P., a limited liability partnership under the Republic
of Korea Amended Commercial Code (“Samsung”),
and Michael Knox, an individual (“Knox,”
with Knox, Samsung, XGS II and Aspen, each hereinafter referred to individually as a “Creditor,”
and collectively as the “Creditors”).
This Agreement amends and restates, in its entirety, the Amended and Restated Intercreditor Agreement, dated as of July 12, 2013,
among XG, Aspen, and Knox.

 

RECITALS:

 

WHEREAS,
as of the date hereof, each of the Creditors has entered into secured convertible note transactions and other agreements
with the Borrower in the amounts set forth on Exhibit
A of this Agreement pursuant to certain purchase agreements, security agreements and related loan documentation (collectively
the “Creditor Agreements”);
and

 

WHEREAS,
pursuant to the Second Amended and Restated Security Agreement between the Creditors and the Borrower, of even date
herewith (the “General Security
Agreement”) and the Second Amended and Restated Intellectual Property Security Agreement, of even date herewith (the
"IP Security Agreement”
and, together with the General Security Agreement, the “Security
Agreements”), the Borrower has granted or will grant a first priority lien in all of its assets, subject to certain
permitted liens (the “Collateral”),
to the Agent specified in such Security Agreements, on behalf of each specific Creditor; provided, however, that each of the Creditor
Agreements stipulates that each such Creditor will share such first priority lien in the Collateral with each other Creditor on
a pari passu basis; and

 

WHEREAS,
as of the date hereof, the Borrower has entered into lease financing arrangements with Aspen in the amount of $635,769.73
(the “Current Lease Amount”)
for certain equipment purchased by the Borrower under various lease schedules to that certain Master Lease Agreement between Aspen
and Borrower, dated March 18, 2013; and Aspen may provide up to an additional $2,364,230.27 of lease financing to the Company pursuant
to the Aspen Creditor Agreements (the total amount lease funding provided by Aspen to the Borrower at any time, hereafter, the
“Total Lease Amount”);
and

 

WHEREAS,
under the Creditor Agreements, the Company is authorized to grant permitted liens on all purchased money indebtedness
for new equipment purchases, which includes any lease financing provided by Aspen and other lessors, and thus none of the equipment
acquired by the Company under lease financing arrangements is included in the Collateral; and

 

     

    	 

    

 

WHEREAS,
as of the date hereof, the Borrower issued secured convertible notes to the Creditors with initial principal, excluding
any accrued interest that may have been capitalized into
the balance of such notes, totaling $8,300,000 in the aggregate (the “Current Note Amount”) and there is currently
$100,000 of principal of other short term secured indebtedness outstanding to Knox (the “Knox Short Term Debt”
and together with the Current Note Amount, the “Current Secured Amount”); and

 

WHEREAS,
pursuant to the Creditor Agreements, the Borrower has reserved the right to issue up to an aggregate of $14,800,000
of principal amount of secured indebtedness, exclusive of any capitalized interest which may become part of any such secured indebtedness,
consisting of up to $14,700,000 of initial principal of secured convertible notes (the “Notes”)
to the Creditors with such amount being reduced by the Total Lease Amount outstanding at any time and up to $100,000 of principal
of Knox Short Term Debt; and

 

WHEREAS,
it is presently contemplated that the Knox Short Term Debt will be paid off within the next few months and the Creditors
have all agreed that their respective Notes will all mature on the same day, which shall be March 18, 2018 (the “Maturity
Date”); and

 

WHEREAS,
the Creditors desire to clarify and stipulate the agreements between them with respect to any principal payments or
foreclosure on the Collateral as a result of any uncured Events of Default (as such term may be defined in the Creditor Agreements)
that may exist hereafter in any of the Creditor Agreements with respect to the Borrower.

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and promises contained herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

AGREEMENT:

 

1.          Incorporation
of Recitals. The Recitals portion of this Agreement is hereby incorporated by this reference as though it were
fully set forth and rewritten herein, and the affirmative statements therein contained shall be deemed to be representations of
the Borrower and the Creditors which are hereby confirmed.

 

2.          Acknowledgement
of Creditors With Respect to Potential Future Secured Financings. The Creditors acknowledge and agree that as of
the date of this Agreement, the Borrower may in the future obtain up to $5,764,230.27 of additional financing through the issuance
of additional Notes, with such amount of additional Notes being reduced by any additional lease financing provided by Aspen, provided
that such additional financing does not carry a maturity date prior to the Maturity Date (the “Remaining
Secured Amount”). The Creditors also agree that the Borrower may grant a first priority security interest in
the Collateral as part of any future secured convertible note transactions with the Creditors up to the Remaining Secured Amount
(hereinafter referred to as “Future
Secured Financings”), provided that such first priority security interest is granted on a pari
passu basis with the security interests in the Collateral of the Creditors.

 

     

    	 

    

 

3.          Acknowledgement
of Borrower With Respect to Potential Future Secured Financings. Except as otherwise set forth herein, the Borrower
acknowledges and agrees that it will not enter into any Future Secured Financings with any of the Creditors or any new lenders
to the Company on such terms that are more favorable than those contained in each of the Creditor Agreements, and in the event
that any such Future Secured Financings contain any terms that are more favorable than those contained in the Creditor Agreements,
the Borrower will promptly amend each such Creditor Agreement to grant the Creditors such more favorable terms as well. The Borrower
further agrees that as a condition precedent to the execution of any agreements for Future Secured Financings, it will require
that any such future lenders, who have not already become a party to this agreement, will enter into and be made a part of this
Agreement. The Borrower further agrees that any granting of a security interest in the Collateral to any future lenders as part
of any Future Secured Financings will be on terms no more favorable than a pari
passu security interest in the Collateral with the security interests of the Creditors.

 

4.          Priorities.
The Creditors agree that regardless of the date that each such Creditor advanced funds to the Borrower or entered into
its Creditor Agreement with the Borrower, each such Creditor’s respective security interests in the Borrower’s Collateral
shall be pari passu with the security
interests of all the Creditors.

 

5.          Rights
of Recovery on Principal Payments. The Creditors agree that to the extent that any Creditors elect not to convert
the principal amount of their Notes on or before the Maturity Date, and require the Company to repay such principal in cash (the
aggregate amount of all such required cash principal payments by all Creditors hereinafter referred to as the “Required
Cash Payments”), then each such Creditor who has elected such a cash payment shall be entitled to recover no
more than an amount equal to its pro rata share of the Required Cash Payments (as measured by each creditor’s total indebtedness
that is secured by the Collateral held at such time including all principal and accrued, but unpaid interest due at such time
(such amount, a Creditor’s “Total
Secured Amount”) to the Total Secured Amount held by all Creditors entitled to a Required Cash Payment) from
the amount of cash available for repayment with the Borrower retaining sufficient cash for working capital needs. The Borrower
specifically acknowledges the existence of this provision and agrees to use its best efforts to ensure that any payments of the
Required Cash Payments that might for any reason be made in amounts that are less than the total Required Cash Payments, will
be made in such a way as to ensure that all of the Creditors electing such cash payments, will be paid an amount of cash equal
to their pro rata percentage of the Required Cash Payments multiplied by the total cash available for such purposes from the Company
at such time.

 

6.          Notices
of Default. Each Creditor agrees that in the event that it declares an Event of Default under any of the Creditor
Agreements, it will provide a copy of any written notices that it sends to the Borrower to all of the other Creditors at the same
time such notice is provided to the Borrower.

 

     

    	 

    

 

7.          Standby
Provisions Prior to Exercising Foreclosure Rights and Formation of Creditors Committee. The Creditors agree that
in the event there is any uncured Event of Default in any of the Creditor Agreements and any Creditor becomes eligible to foreclose
on the Collateral under the Creditor Agreements, then such Creditor desiring to exercise its foreclosure rights will so notify
all other Creditors of such intention and provide no less than fifteen (15) business days of notice (the “Foreclosure
Notice”) prior to exercising any rights of foreclosure (the “Standby
Period”) with the Borrower. At any time during the Standby Period, any other Creditor may also serve a Foreclosure
Notice (all Creditors who serve a timely Foreclosure Notice shall be referred to as “Foreclosing
Creditors”). Prior to the expiration of the Standby Period, the Foreclosing Creditors agree that they will use
their best efforts to form a committee (the “Foreclosing
Creditors Committee”) for the purpose of coordinating the foreclosure of the Collateral. The Creditors agree
that they will not take any actions against the Borrower or the Collateral independent of the Foreclosing Creditors Committee,
and that the Foreclosing Creditors Committee shall be comprised of at least one representative of each Creditor. The Foreclosing
Creditors agree that the Agent shall, in its discretion and according to its business judgment, have the power and authority to
exercise the rights and powers set forth in the Security Agreements. The Agent shall consult with the Foreclosing Creditors Committee,
and shall act in accordance with the wishes of the Foreclosing Creditors as determined by a majority vote of the then-voting members
of the Foreclosing Creditors Committee, with each members’ vote being weighted by their pro rata percentage of the Total
Secured Amount held by all then-voting members of the Foreclosing Creditors Committee. No votes of the Foreclosing Creditors Committee
may take place unless a quorum of at least half the Total Secured Amount held by the Foreclosing Creditors is present and participates
in the voting (whether by acceptance, rejection, or abstention). The Foreclosing Creditors further agree that the Agent will be
entitled to retain counsel or other professionals on behalf of the Agent and or incur fees and expenses on behalf of the Agent
acting for the Creditors (collectively, the “Creditor
Expenses”), and that each Creditor who serves a Foreclosure Notice will fund a pro rata percentage of the Creditor
Expenses based on their percentage of the Total Secured Amount held by all such Foreclosing Creditors at the time the Agent requests
funding for such Creditor Expenses or such other amounts which may be mutually agreed upon. Any Creditor who does not serve a
Foreclosure Notice within the Standby Period shall forbear and refrain from taking any action against the Borrower or the Collateral
without the express prior written consent of both the Agent and the Foreclosing Creditors Committee. The Creditors agree that
the provisions set forth in this Section shall be their sole recourse and method for enforcing their claims against the Borrower
and the Collateral.

 

8.          Rights
of Recovery Upon any Foreclosure of the Collateral; Credit Bidding. The
Creditors agree that in the event of any foreclosure of the Collateral and resultant sale of such Collateral (the dollar
value of any such cash recovered from the sale of Collateral hereinafter referred to as a “Cash
Recovery”), each Foreclosing Creditor will only be entitled to receive its pro rata percentage of such Cash
Recovery after deducting any reasonable unpaid Creditor Expenses, based on their percentage of the Total Secured Amount held
by them at the time the Foreclosing Creditors Committee is formed. The Borrower agrees that to the extent it is in any way
involved in such foreclosure and sales of assets and the resultant distribution of any Cash Recovery, it will make payments
to the Foreclosing Creditors in accordance with the procedures outlined in the previous sentence, and prior to such due
distribution, shall hold any and all Cash Recovery in trust for the benefit of Foreclosing Creditors. If the Foreclosing
Creditors have any right to credit bid at any foreclosure or other sale of the Collateral, then any Foreclosing Creditor may
do so up to the amount of the total indebtedness due to it; provided, however, that in the event such Foreclosing Creditor
makes a winning bid, it must pay the other Foreclosing Creditors the same percentage of the total indebtedness due to the
other Foreclosing Creditors as the total indebtedness due to it represented by the winning bid (the “True-Up
Payment”). For purposes of illustration, if a Foreclosing Creditor has a total indebtedness from the
Borrower of $2,000,000.00, and submits a winning bid of $1,000,000.00, that Foreclosing Creditor must make a True-Up Payment
to each Foreclosing Creditor in the amount of 50% of the total indebtedness due to each non-winning Foreclosing Creditor.
Each Creditor further agrees that no auction shall be final until any required True-Up Payment is made, that all True-up
Payments must be made no later than two (2) days after any auction, that in the event the True-Up Payment is not timely made
the auction will be reopened but that a Foreclosing Creditor who fails to make a True-Up Payment shall not be eligible to bid
in any subsequent auction.

 

     

    	 

    

 

9.          Amendments
to Documents. Each Creditor may at any time or times, in its discretion, (i) renew or extend the time of payment
of any obligations or indebtedness owing to it by Borrower; (ii) waive or release any collateral or guaranties which may be held
therefor, or (iii) modify or amend the documents evidencing its financing arrangement with Borrower (its “Documents”)
in any manner, in each case without further consent from the other Creditors or any other person, and without impairing or affecting
this Agreement or any of its rights hereunder. The Borrower agrees that in the event that it and any Creditor so modify such Creditor’s
Documents in any way that is more favorable to the Creditor than the terms and provisions contained in the Creditor Agreements,
each of the Creditors’ Creditor Agreements shall be simultaneously modified in a similar fashion.

 

10.         Representations
Concerning Borrower; Liability of Creditors. No Creditor, nor any of its respective directors, officers, agents
or employees, shall be responsible to any other Creditor or to any other person for (i) Borrower’s solvency, financial condition
or ability to repay its obligations or indebtedness to any Creditor; (ii) any oral or written statements of Borrower or (iii)
the validity, sufficiency or enforceability of such indebtedness, any of its Creditor Agreements or Documents or the security
interest and liens granted by Borrower. Each Creditor has entered into its financing arrangements with Borrower based upon its
own independent investigation, and makes no warranty or representation to any other Creditor, nor does it rely on any warranty
or representation of any other Creditor with respect to the matters referred to in this Section 10.

 

11.         Licensing
Rights Restrictions. In the event that any of the Creditors, or their respective affiliates, obtains ownership,
possession or control over any of the Intellectual Property Collateral (as such term is defined in the IP Security Agreement )
prior to a sale or transfer of such Collateral in accordance with the terms of this Agreement, such Creditor shall have no rights
or license to use any such Intellectual Property Collateral in any commercial activities other than as may be specifically provided
for in the contemplated Joint Development Agreement between the Company and an affiliate of Samsung which such parties intend
to enter into by June 30, 2014 that is expected to provide for joint ownership by the Borrower and such Samsung affiliate of certain
jointly developed intellectual property related to advanced battery materials.

 

12.         Specific
Performance. Each of the parties hereto acknowledges and agrees that each of the other parties would be irreparably
damaged if any provision of this Agreement is not performed in accordance with its specific terms and that any breach of such
provisions by a party could not be adequately compensated in all cases by monetary damages alone. Accordingly, in addition to
any other right or remedy to which each party may be entitled, at law or in equity, it shall be entitled to enforce any provision
of this Agreement by a decree of specific performance and to temporary, preliminary and permanent injunctive relief to prevent
breaches or threatened breaches of any of the provisions of this Agreement by any other party, without posting any bond or other
undertaking.

 

     

    	 

    

 

13.         Miscellaneous

 

(a)          The
validity of this Agreement, its construction, interpretation and enforcement, and the rights of the parties hereunder shall be
determined under, governed by, and construed in accordance with the laws of the State of Michigan.

 

(b)          Any
notice, declaration, demand, request or other communication which by any provision of this Agreement is required or permitted to
be given to or served on any party hereto shall be given in writing and shall be deemed to have been sufficiently given or served
for all purposes when (i) delivered personally; (ii) sent by overnight mail; (iii) sent by registered or certified mail, return
receipt requested, postage prepaid, or (iv) sent by facsimile, to the address or facsimile number set forth for such party below,
or at such other address as one party may indicate from time to time in writing to the other:

 

	If to Borrower:	XG Sciences, Inc.
	 	3101 Grand Oak Drive
	 	Lansing, MI 48911
	 	Attention:	President
	 	Telephone:	(517) 703-1110
	 	Facsimile:	(517) 703-1113
	 	 
	If to Aspen:	Aspen Advanced Opportunity Fund, LP
	 	1740 Persimmon Drive, Suite 100
	 	Naples, FL 34109
	 	Attention:	Steven C. Jones
	 	Telephone:	(239) 598-0964
	 	Facsimile:	(239) 594-5964
	 	 	 
	If to XGS II:	XGS II, LLC	
	 	5500 Lake Grove Trail
	 	Petoskey, MI 49770
	 	Attention:	David G. Pendell
	 	Telephone:	(239) 450-5097
	 	Facsimile:	 

 

	If to Samsung:	SVIC No. 15 New Technology Business Investment L.L.P.
	 	c/o Samsung Venture Investment Corporation
	 	 29th F1., Samsung Electronics Bldg.

	 	1320-10, Seocho2-dong, Seocho-gu
	 	Seoul, Korea 137-857
	 	Fax: 	82.2.2255.0288
	 	Attention:
	 	Telephone:
	 	 

     

    	 

    

 

 

	If to Knox:	Mr. Michael Knox
	 	5337 Panda Bear Circle
	 	East Lansing, MI 48823
	 	Telephone:	(517) 351 -4813
	 	Facsimile:	(517) 703-1113

 

Notices
sent in accordance with the foregoing shall be deemed effective when so delivered personally; the next business day if sent by
overnight mail; when confirmed in writing by the sender’s facsimile device if sent by facsimile, or, if mailed, five (5)
days after being sent by United States mail.

 

(c)          Each
of the Creditors represents and warrants to the other Creditors that it has not assigned its security interests in the Borrower’s
Collateral. Any assignment entered into after the date of this Agreement shall be made expressly subject to the terms of this Agreement,
and the party so assigning shall give written notice to the other parties to this Agreement at least ten (10) business days prior
to such an assignment, provided that failure to give such notice shall not affect the validity of such assignment, and further
provided that notice shall be required for the assignment by any party to an affiliate of such party, but the notice need not be
given ten (10) business days prior to the assignment.

 

(d)          This
Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings between
the parties relating to the subject matter hereof. This Agreement may not be changed orally, but only by an agreement in
writing and signed by the party against whom enforcement of any waiver, change, modification or discharge is sought.

 

(e)          The
headings of the various sections of this Agreement have been inserted for convenience only and shall not be deemed to be part
of this Agreement.

 

(f)          This
Agreement shall be binding upon and inure to the benefit of each of the Creditors and their respective successors, permitted assigns
and affiliates. This Agreement shall remain in full force and effect and enforceable pursuant to its terms in accordance with Section
510(a) of the United States Bankruptcy Code, and all references herein to the Borrower shall be deemed to apply to the Borrower
as debtor in possession and to any trustee in bankruptcy for the estate of the Borrower.

 

     

    	 

    

 

(g)          If
any term, restriction or covenant of this Agreement is deemed illegal or unenforceable, all other terms, restrictions and
covenants, and the application thereof to all persons and circumstances subject thereto, shall remain unaffected to the
extent permitted by law; and if any
application of any term, restriction or covenant to any person or circumstance is deemed illegal, the application of such
term, restriction or covenant to the persons and circumstances shall remain unaffected to the extent permitted by
law.

 

(h)          The
knowledge by any Creditor of any breach or other non-observance by any other Creditor of the terms of this Agreement shall not
constitute a waiver thereof or of any obligations to be performed by such breaching or non-observing Creditor hereunder.

 

(i)          Except
as provided herein, the agreements and priorities set forth hereinabove shall remain in full force and effect regardless of whether
any party hereto in the future seeks to rescind, amend or terminate or reform by litigation or otherwise, its respective agreements
with the Borrower until such time as any and all obligations due to the Creditors have been paid in full and the Creditor Agreements
and any related Documents have been terminated or until the Borrower and the Creditors or their respective heirs or assigns shall
have agreed to a written termination hereof,

 

(j)          Nothing
contained in the provisions of this Agreement is intended to or shall impair, as between the Borrower and each of the
Creditors, the obligations of the Borrower to each such Creditor, which are absolute and unconditional, to pay to the
Creditors when due the amounts due pursuant to the Creditor Agreements and any related Documents, or is intended to or shall
affect the relative rights of the Creditors of the Borrower.

 

(k)          This
Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but which when taken
together shall constitute one and the same instrument. Facsimile signatures shall have the same force and effect as original
signatures.

 

**SIGNATURES
ON FOLLOWING PAGE**

 

     

    	 

    

 

IN
WITNESS WHEREOF, the Creditors have signed this Second Amended and Restated Intercreditor Agreement as of the date first
set forth above.

 

	 	Aspen
    Advanced Opportunity Fund, LP, a Delaware limited partnership
	 	 	 
	 	By:	AA XGS, LLC
	 	Its:	General Partner
	 	 	 
	 	By:	/s/ Steven C. Jones
	 	Name: Steven C. Jones
	 	Title: Managing Member
	 	 
	 	XGS
    II, LLC, a Florida limited liability company
	 	 	 
	 	By:	/s/ David G. Pendell
	 	Name: David G. Pendell
	 	Title: Managing Member
	 	 
	 	SVIC NO. 15 NEW TECHNOLOGY BUSINESS INVESTMENT L.L.P.
	 	 
	 	By: Samsung Venture Investment Corporation, its Partner
	 	 
	 	By:	/s/ Seonjong Lee 
	 	Name:  	SEONJONG LEE
	 	Its:	C.E.O
	 	 
	 	Michael
    R. Knox, an individual 
	 	 	 
	 	By:	/s/ Michael
    R. Knox

 

CONSENT

 

Borrower
hereby consents to all of the terms and conditions of the foregoing Second Amended and Restated Intercreditor Agreement, and agrees
to be bound in all respects thereof:

 

	 	BORROWER:
	 	XG Sciences, Inc., a Michigan corporation
	 	 	 
	 	By:	/s/Michael R. Knox
	 	Name: Michael R. Knox
	 	Title: Chief Executive Officer

 

     

    	 

    
 

	STATE OF MICHIGAN	)	 
	 	)	SS:
	COUNTY OF INGHAM	)	 

 

The
foregoing instrument was acknowledged before me this 10th day of January, 2014 by Michael R. Knox, as President of
XG Sciences, Inc., a Michigan corporation, on behalf of XG Sciences, Inc. He has produced a driver’s license as identification.

 

	 	/s/ Kelly A. LaGrave
	 	Notary Public, State of
    Michigan
	 	Print Name: 	Kelly A. LaGrave

	 	My Commission Expires:	4-15-2018
	 	 
	 	[NOTARIAL SEAL]

 

KELLY
A LAGRAVE 

NOTARY PUBLIC-STATE OF MICHIGAN

Eaton County, Acting in Ingham
County

My Commission Expires April
15, 2018

 

     

    	 

    

 

EXHIBIT
A

 

Principal
Amounts Outstanding of Secured Indebtedness that is Secured by the Collateral

As
of January 15, 2014

 

	Aspen Advanced Opportunity Fund, LP(1)	 	$	3,909,425.00	 
	 	 	 	 	 
	Samsung Venture Investment Company	 	$	3,000,000.00	 
	 	 	 	 	 
	Michael Knox (2)	 	$	800,000.00	 
	 	 	 	 	 
	XGS II(3)	 	$	690,575.00	 
	 	 	 	 	 
	Total                    	 	$	8,400,000.00	 

 

(1)         Aspen
amount excludes $268,905.92 of accrued interest which has been capitalized into the balance of the Aspen Notes as of January
15, 2014.

 

(2)         Knox
amounts include $700,000 of initial principal of secured convertible notes and $100,000 of remaining principal on the Knox Short Term Debt. Secured Convertible Note balance excludes $72,998.15 of accrued interest
which has been capitalized into the balance of the Knox Notes as of January 15, 2014.

 

(3)         XGS
II amount excludes $48,774.83 of accrued interest which has been capitalized into the balance of the XGS II Notes as of January
15, 2014.

 

Second
Amended and Restated Intercreditor Agreement

 

    A-1

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