Document:

Exhibit
10.3

 

RESTATED
AMD AMENDED EXCLUSIVE LICENSE AGREEMENT

 

This
Restated and Amended License
Agreement (“Agreement”) is entered into on
the date of last signature (“Effective Date”), between Michigan State University, a non-profit educational
institution of the State of Michigan (“University”)
and XG Sciences, Inc. a corporation having its principal place of business at 5020 Northwind Drive Suite 212, East Lansing, MI
48823 (“Licensee”).

 

Whereas,
the University or its designee owns shares in Licensee’s business based on the original license between the parties (MSU
reference AGR-672) with an effective date of July 27, 2007 (“Prior Agreement”) and the parties agree to a reassignment
to Michigan State University Foundation as University’s designee; and

 

Whereas,
University holds certain rights in University Invention Disclosures and desires to have the rights perfected and exploited in
commercial settings; and

 

Whereas,
this Agreement restates and amends the Prior Agreement as set forth herein and confirms the parties understanding concerning grant
of licenses, and patent costs; and

 

Whereas,
Licensee requests and University extends an Option Period, as
defined in Article 2, for Licensee
to select Invention Disclosures, to be licensed under
this Agreement within sixty (60) days of the Effective Date, and provides an additional mechanism to license other Invention
Disclosures from time to time during the Term for up to three (3) years from the Effective Date.

 

Therefore,
in consideration of the mutual obligations set forth below the University and Licensee agree as follows.

 

ARTICLE
1

  

DEFINITIONS

 

In
this Agreement:

 

“Agents”
means trustees, directors, officers, faculty, staff, students, employees, consultants, and agents;

 

“Annual
Minimum” means minimum payment due from licensee to University for each calendar year as set forth on Schedule 2;

 

“Capital
Stock” means, collectively, the aggregate issued and outstanding shares of the Licensee's Common Stock and any other
class or series of equity securities then issued and outstanding;

 

“Equivalent
Wholesale Price” means the average price for the same material for all Net Sales during a current and immediately preceding
Royalty Periods;

 

“Election
Date” means sixty (60) days from the Effective Date on which the Licensee is to elect the initial set of exclusive Patent
Rights and the nonexclusive Property Rights to be licensed from the University in accordance with Section 2.2(d);

 

“Fields”
means the fields of use described on Schedule 1;

 

“Improvements”
means (a) patent applications and patents from inventions made within the Term (i) in the course of research at University
supported by Licensee hereunder; or (ii) conceived or first reduced to practice by University employees while conducting work
for the Licensee under a private agreement that is disclosed to and approved by University consistent with the then current University
policy on outside work for pay. (Note: University will retain ownership of Improvements, if any patent application or a patent
lists a University inventor and the improvement falls under its patent policy, even if developed at Licensee's expense.)

 

    	MSUT Agreement No. AGR2010-00372	Pg. 1 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.

     

    

 

“Invention
Disclosure” means a written report describing a proprietary University Technology, which may have patent rights associated
as submitted by University researchers under University’s Patent and Copyright Policies;

 

“Licensing
Fees” means the nonrefundable licensing fee(s) in the amount(s) set forth on Schedule 2;

 

“Milestone
Payments” means the payments to be made by Licensee to University upon the occurrence of certain events, as described
on Schedule 1;

 

“Net
Sales” means all sales as defined by Generally Accepted Accounting Principles and the fair market value of all other
consideration received due to or by reason of the sale, distribution, or use of Products, less the following deductions:

 

(i)          unreimbursed
customary trade, quantity or cash discounts and rebates taken;

 

(ii)         refunds,
replacements, or credits given to purchasers for return of Products for which a royalty was paid under this Agreement;

 

(iii)        unreimbursed
freight and other transportation costs, including insurance charges, and unreimbursed duties, tariffs, sales, and excise taxes
actually paid;

 

Where
xGnP is contained as a sub-component in a Product that includes other value-added materials which are reflected in the sales price,
the Net Sales shall equal the Equivalent Wholesale Price times the Pounds Sold;

 

“Patent
Costs” means out-of-pocket expenses incurred prior to and during the Term of this Agreement in connection with the preparation,
filing, prosecution, and maintenance of the patent applications and patents under the Patent Rights. Such patent costs include
without limitation the fees and expenses of attorneys and patent agents, filing fees, and maintenance fees, but exclude costs
that may be incurred as a result of any patent infringement or other litigation;

 

“Patent
Rights” means (a) all of the University’s rights in the patent applications and patent, as well as in patent applications
and patents deriving from the Invention Disclosures as listed on Schedule 1, which may be amended from time to time in accordance
with Article 2 (b) all of the University’s rights in all divisions, continuations, reissues, renewals, re-examinations,
foreign counterparts, substitutions, or extensions thereof;

 

“Property
Rights” means all of the University’s proprietary rights in
the Technology as described by the Invention Disclosures as set forth on Schedule 1, which may be amended from time to
time in accordance with Article 2 and excluding Patent Rights;

 

“Pounds
Sold” means the amount of XGnP, calculated in terms of standard U.S. avoirdupois pounds, sold or otherwise distributed
in exchange for monetary or other remuneration by the Licensee or its subsidiaries. It is understood that one way in which the
Licensee intends to distribute XGnP is as part of other products that will consist of a mixture of materials, only one of which
might be XGnP. In such a case, the actual amount of XGnP included in the final product will be calculated on the basis of the
product formula or other engineering data, and not the total weight of the final product. Pounds sold does not include sample
materials supplied at no charge to prospective customers, research institutions, or other organizations for evaluation purposes;

 

“Produce(s)”
means any product or process or license therefor that, in whole or in part, absent the license granted hereunder, would infringe
one or more Valid Claims of the Patent Rights, and

 

(i)  any
process that uses any such product;

 

    	MSUT Agreement No. AGR2010-00372	Pg. 2 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.

     

    

 

(ii)  any product that is manufactured
by using any such process, or that, when used, practices any such
process; and

 

(iii) any
service that uses any such products or processes;

 

“Royalty
Period” means a six (6) month period during a calendar year, either beginning on January 1 and ending June 30 or beginning
on July 1 and ending December 31, except that the initial Royalty Period shall begin on the Effective Date and end on December
31 of that same calendar year;

 

“Sublicense”
means an agreement in which Licensee (i) grants or otherwise transfers any of the rights licensed to Licensee hereunder or
other rights that are relevant to designing, developing, testing, making, using, or selling Products, (ii) agrees not to assert
such rights or to sue, prevent or seek a legal remedy for the practice of same, (iii) assigns or otherwise transfers this Agreement
and/or the rights acquired by it, or (iv) is under an obligation to grant, assign or transfer any such rights or non-assertion,
or to forebear from granting or transferring such rights to any other entity, including without limitation licenses, option agreements,
right of first refusal agreements, or other agreements;

 

“Sublicensee”
means any person or entity to which a Sublicense is granted;

  

“Sublicensing
Revenues” means any and all payments, royalties and other consideration collected by Licensee from its Sublicensees.

 

“Technology”
means all of the University’s rights in know-how, that is owned and controlled by University and free of third-party
obligations, and arising from one or more Invention Disclosures, including scientific knowledge, processes, inventions, techniques,
formulae, designs, drawing, specifications, reports, studies, findings, data, methods, or other subject matter which is either
disclosed in the patent applications or patents arising from one or more Invention Disclosures;

 

“Territory”
means the territory set forth on Schedule 1;

 

“Valid
Claim” means a claim of a patent application or patent, which claim has not expired and has not been held unenforceable,
unpatentable or invalid by unappealable decision of a court or other governmental agency of competent jurisdiction;

 

“XGnP”
means the exfoliated graphite nano-platelets whether in the form of a dry powder or as part of a final product consisting
of a mixture of exfoliated graphite nano-platelets with solvents, polymers, resins, or other materials.

 

ARTICLE
2

 

GRANT
OF LICENSE

 

2.1.          Grant.
Conditioned upon Licensee’s continuing compliance with the terms and conditions of this Agreement and in consideration of
the payments to be made by Licensee to University under various provisions of this Agreement, University hereby grants to Licensee:

 

(a)          subject
to Section 2.2 and Section 5.3 below, the exclusive right to use the Patent Rights and Improvements elected in accordance with
Section 2.1 (c) and (d), to identify, develop, make, have made, use, import, export, lease,
sell, have sold, and offer for sale, Products within the Fields and within the Territory; and (ii) the non-exclusive rights
to practice the Property Rights for Products within the Fields and within the Territory; and

 

(b)          the
exclusive right to grant Sublicenses of the exclusive rights granted herein, subject to the applicable provisions of this Agreement;
and

 

    	MSUT Agreement No. AGR2010-00372	Pg. 3 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.

     

    

 

(c)          Licensee
shall provide University in writing within sixty (60) days of the Effective Date a list of Invention Disclosures, and their associated
Patent Rights selected from those initially provided in Schedule
1, which are to be governed
by this Agreement.

 

(d)          an
option to evaluate and negotiate in good faith for addition to this Agreement additional Invention Disclosures received after
the Effective Date that the University has an unfettered right to disclose to Licensee, subject to Section 2.1a, Section 2.2,
and Section 5.3 below, in order to obtain exclusive right to use existing Patent Rights or any future patent rights and
(ii) the non-exclusive rights to practice Property Rights for Products; and (iii) the exclusive right to grant sublicenses of
the rights granted, subject to the applicable provisions of this Agreement. This option will expire six (6) weeks after receipt
of any new Invention Disclosure. (“Option Period”). The parties acknowledge that available rights to new Invention
Disclosures, are limited to those rights: i) solely owned and controlled by University without third-party obligations; and ii)
the practice of which is known by the University to be directly related to XGnP that is disclosed within three (3) years from
the Effective Date; iii) lists Dr. Lawrence Drzal as an inventor; and iv) is not an Improvement.

 

(1)         If
during the Option Period Licensee wishes to license any new Invention Disclosure, Schedule 1 and Schedule 2
(for clarity, any License Fees, new Milestone Payments or other changes) are to be amended in writing in accordance with
Section 8.3 by the parties. Terms of the license shall be agreed upon within two (2) weeks
of the end of the Option Period (“License
Negotiation Period”); and

 

(2)         If
Licensee if not interested in licensing the Invention Disclosure, offered, or if no license has been executed at the end of the
License Negotiation Period, University shall be free to negotiate and grant said license to other third parties. If Licensee does
not exercise its option to receive a license hereunder within six (6) weeks of the date of the receipt, its option under this
paragraph shall be deemed terminated, but only with respect to the Invention Disclosures offered to Licensee. Any Invention Disclosures,
not licensed under this Section 2.1 shall be considered University Confidential Information as described in Article 5, Section
5.5.

 

(e)          In
the event Invention Disclosure TEC2006-0070 is elected under Section 2.1 (d) any grant to TEC2006-0070 would be nonexclusive.

 

2.2.          Reservations.

 

(a)          University
reserves the right, on behalf of itself and all other non-profit academic research institutions, to practice the Patent Rights,
and Improvements for any non-profit purpose, including sponsored research and collaborations. Notwithstanding any other provision
of this Agreement, Licensee has no right to enforce the Patent Rights and Improvements against any such institution in connection
with such institution’s use as permitted above. University and any such other institution have the right to publish any
information included in the Patent Rights and Improvements.

 

(b)          The
exclusive license specified in Section 2.1 may be subject to certain rights of the United States and/or State of Michigan government
if the Patent Rights were created or invented in the course of government-funded research. Such rights may include for example
a royalty-free license to the government and the requirement that any Product produced for sale in the United States will be manufactured
substantially in the United States as described in Section 8.7. The grant of rights under Sections 2.1 (a) and (b) above is subject
to the rights of the United States government as set forth in 35 U.S.C. Sec 200 et seq. and any other applicable laws or
regulations. MSU shall notify Licensee of all known government rights within 30 days of notification under 2.1 (c) above or under
2.1 (d) above.

 

(c)          All
rights to any Patent Rights, and Invention Disclosures and Products are licensed under this Agreement only to the extent owned
or licensed by the University.

 

    	MSUT Agreement No. AGR2010-00372	Pg. 4 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.

     

    

 

2.3.          Sublicenses.

 

(a)          Each
Sublicense (i) shall contain terms no less protective of University’s rights than those set forth in this Agreement, (ii)
shall not be in conflict with this Agreement, and (iii) shall identify University as an intended third party beneficiary of the
Sublicense. Licensee shall provide University with a complete electronic or paper copy of each Sublicense within thirty (30) days
after execution of the Sublicense. Along with the Royalty payment required by Section 3.7, Licensee shall provide a complete copy
of all Sublicenses entered into by Licensee within five (5) business days of the effective date of each Sublicense. Licensee further
agrees to provide University with a copy of each report received by Licensee from a Sublicensee pertinent to any royalties or
other sums owing to Licensee. Licensee shall not receive from Sublicensee anything of value in lieu of cash payments in consideration
for any Sublicense without (i) including the value, based on fair market value, as Net Sales or (ii) obtaining the prior written
consent of the University. Licensee shall be fully responsible to University for any breach of the terms of this Agreement by
a Sublicensee.

 

(b)          Upon
termination of this Agreement for any reason, all Sublicenses shall terminate. If a Sublicensee was in compliance with the terms
of its Sublicense in effect on the date of termination, University may grant such Sublicensee that so requests, a license with
royalty terms and such use rights and other terms as are acceptable to University. In no event shall University have any obligations
of any nature whatsoever with respect to (i) any past, current or future obligations that Licensee may have had, or may in the
future have, for the payment of any amounts owing to any Sublicensee, (ii) any past obligations whatsoever, and (iii) any future
obligations to any Sublicensee beyond those set forth in the new license between University and such Sublicensee.

 

(c)          If
Licensee is unable or unwilling to grant Sublicenses, either as suggested by University or by a potential licensee or otherwise,
then University may directly license such potential licensee as appropriate to comply with University’s obligations in connection
with federal research financing.

 

ARTICLE
3

 

COMMERCIALIZATION,
PAYMENTS AND REPORTS

 

3.1           License
Fees. Within thirty (30) days of date of invoice from University, Licensee shall pay the Licensing Fees to University.

 

3.2.          Payments
on Licensee’s Net Sales. Licensee shall pay University a royalty on Licensee’s Net Sales in the percentage set
forth on Schedule 2.

 

3.3           Payments
on Sublicensee Revenues. Licensee shall pay University the percentage set forth on Schedule 2 of all payments or other consideration
received by Licensee from Sublicensees pursuant to Sublicenses, whether such payments or other consideration result from Sublicensee’s
Net Sales or are denominated as fees or otherwise.

 

3.4.          Annual
Minimums. If the total amounts actually paid under Sections 3.2 and 3.3 for any calendar year are less than the Annual Minimum,
Licensee shall pay University an amount equal to the shortfall for that year. Such payment, if any, shall be made within forty-five
(45) days of the end of each calendar year of
this Agreement. If this Agreement terminates
for any reason during any year, the Annual Minimum for
such year shall be
reduced pro-rata.

 

3.5.          Patent
Costs. Licensee shall reimburse University for all Patent Costs as described on Schedule 2 within thirty (30) days after being
invoiced by University.

 

    	MSUT Agreement No. AGR2010-00372	Pg. 5 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.

     

    

 

3.6.          Milestone
Payments. Licensee shall make the Milestone Payments to University within thirty (30)
days after the occurrence of each relevant milestone
event set forth on Schedule 2.

 

3.7.          Calculation
and Payment of Royalties and Amounts Due.

 

(a)          Royalties
and other amounts due shall be calculated for each Royalty Period as of the last day of each such Period. Payment of royalties
and other amounts with respect to each Royalty Period, and the accompanying accounting report described in subparagraph (b) below,
shall be due within forty-five (45) days after the end of such Royalty Period, beginning with the earliest of (i) the Royalty
Period in which the first Net Sale occurs, (ii) the Royalty Period for which the first Annual Minimum is due, and (iii) the Royalty
Period in which Licensee first receives payments or other consideration from a Sublicensee other than royalty on Net Sales, as
set forth on Schedule 2.

 

(b)          At
the same time that it makes payment of royalties and other amounts due with respect to a Royalty Period, Licensee shall deliver
to University a true and complete accounting of Net Sales and other distributions of any Product and revenues from those sales
by Licensee and Sublicensees for each country of sales origin during such Royalty Period and deductions taken, with a separate
accounting for each Product of sales and revenues by country, and a detailed calculation of the payment due University for such
Royalty Period, in each case in a form similar to Exhibit A attached to this Agreement.

 

(c)          Each
Annual Minimum payment shall be accompanied by a calculation of the Annual Minimum such that University can verify the amount
of the payment.

 

3.8.          Records.
Licensee shall keep, and shall cause Sublicensees to keep, accurate records in sufficient and customary detail such that the amounts
payable under this Agreement may be verified. During the term of this Agreement and for a period of five (5) years following termination,
Licensee shall permit University or its representative, during normal business hours, to inspect, audit and copy its books and
records regarding the sale of Products. Such examination shall be made at University’s expense, except that if such examination
discloses a shortage of three percent (3%) or more in the amount of royalties and other payments due University for any Royalty
Period, then Licensee shall reimburse University for the reasonable cost of such examination, including any professional fees
and out of pocket costs incurred by University. No separate confidentiality agreement will be required to conduct such an examination,
and the results of the examination shall be treated as confidential information under Section 5.5. University or its representative
will be allowed to keep a copy of all documents provided by Licensee and all documents created by University or its representative
in connection with such examination for archival purposes.

 

3.9.          Payments.
All amounts owing to University under this Agreement shall be paid in U.S. dollars, by check or other instrument representing
immediately available funds payable to “Michigan State University” and delivered to University’s address set
forth on Schedule 2 or in a wire transfer, where are all related back fees are to be paid by Licensee, to an account described
on Schedule 2. If Licensee or any Sublicensee receives payment in a currency other than U.S. dollars, such currency will be converted
directly from the non-U.S. currency to U.S. dollars on the date initial payment was made, without intermediate conversions, and
payments will be made based on such conversion. The conversion rate shall be the applicable rate of exchange of Citibank, N.A.,
in New York, New York, on the last day of each month preceding a month during the Royalty Period during which revenues were received
by Licensee.

 

3.10.         Overdue
Payments. Payments due to the University under this Agreement, if not paid when due, shall be subject to interest of 1.5%
per month (or the maximum amount permitted by law if less) of the delinquent amount, and Licensee shall be responsible for all
costs of collection incurred by University including attorney fees and court costs. The accrual or receipt by University of interest
under this Section shall not constitute a waiver by University of any right it may otherwise have to declare a breach of or default
under this Agreement and to terminate this Agreement.

 

    	MSUT Agreement No. AGR2010-00372	Pg. 6 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.

     

    

 

3.11.         Termination
Report and Payment. Within sixty (60) days after the date of termination of this Agreement, Licensee shall make a written
report to University stating the number, description, and amount
of Products sold by Licensee or any Sublicensee,
upon which royalties are payable under
this Agreement but which were not previously reported to University, a calculation of the Wet Sales, and a calculation of the
royalty and other payments due University for such Products, all in such form and containing such substance as is required by
this Agreement and Attachment A. Concurrent with the making of such report, Licensee shall pay all outstanding amounts due University.

 

3.12.         Commercialization
and Reporting Requirements. Licensee shall, and shall require each Sublicensee to, use its best efforts to bring one or more
Products to market within the Fields and throughout the Territory and to develop such markets through a thorough, vigorous, and
diligent program for the commercial exploitation of the Patent Rights. In addition, Licensee shall meet all commercialization
and reporting requirements set forth in Schedule 2.

 

3.13.         No
Refunds or Credits. Other than as slated in this Agreement, all payments made to University under this Agreement shall be
nonrefundable, and any amount paid with respect to an obligation of Licensee under this Agreement shall not be credited against
any other amount paid with respect to any other obligation of Licensee under this Agreement.

 

3.14         Product
Transfers. If a Product is made in a country in which any of the Patent Rights exist, then Licensee shall be obligated to
pay a royalty on the sale or transfer of such Product even if such sale or transfer occurs in a country in which no patent protection
exists; and if a Product is sold in a country in which any of the Patent Rights exist, then Licensee shall be obligated to pay
a royalty on the sale or transfer of such Product even if such Product was made in a country in which no patent protection exists.

 

3.15         Stock
Ownership.

 

		(a)	In further consideration
                                         of the license under the Prior Agreement, Licensee issued to University 9,543 shares
                                         of fully paid and non-assessable Common Stock. Shares issued to University have tag-along
                                         and piggyback registration rights where Licensee shall pay all expenses of such registrations.

 

		(b)	University agrees
                                         that, in the event of a proposed change in control of the Licensee, whose control means
                                         a change in the ownership of more than fifty percent (50%) of the outstanding voting
                                         securities or voting interests of the Licensee, and providing that the payment it receives
                                         on its portion of the Capital Stock is substantially similar to that of other shareholders,
                                         it will not take any actions so as to hinder such change in control and will vote its
                                         Capital Stock, if required by management, in the same manner as the management of the
                                         Licensee with regard to approving the change in control.

 

		(c)	University requests
                                         and authorizes and Licensee agrees to cancel and reissue any and all Capital Stock Issued
                                         to Michigan State University under the Prior Agreement to University’s designee,
                                         Michigan State University Foundation within thirty (30) days of the Effective Date.

 

ARTICLE
4

 

WARRANTIES
AND INDEMNIFICATION

 

4.1.          Limited
Representation. University represents that it has the right, power and authority to enter into and perform its obligations
under this Agreement.

 

    	MSUT Agreement No. AGR2010-00372	Pg. 7 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.

     

    

 

4.2.          Disclaimer
of Warranties. The Patent Rights are licensed “AS IS.” EXCEPT AS SPECIFICALLY SET FORTH IN SECTION 4.1 ABOVE,
UNIVERSITY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND OR NATURE, WHETHER EXPRESS OR IMPLIED, RELATING TO PERFORMANCE, MARKETABILITY,
TITLE, OR OTHERWISE IN ANY RESPECT RELATED TO THE PATENT RIGHTS
OR PRODUCTS. UNIVERSITY FURTHER DISCLAIMS ANY
EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, AND DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY REGARDING INFRINGEMENT OF ANY PATENT,
COPYRIGHT, TRADEMARK, OR OTHER RIGHTS OF THIRD PARTIES IN CONNECTION WITH THE PRACTICE OF THE PATENT RIGHTS, OR THE MAKING, USING
OR SELLING OR OTHER DISTRIBUTION OF PRODUCTS BY ANY PERSON OR ENTITY. LICENSEE, AND ITS SUBLICENSEES, ASSUME THE ENTIRE RISK AND
RESPONSIBILITY FOR THE SAFETY, EFFICACY, PERFORMANCE, DESIGN, MARKETABILITY, TITLE, AND QUALITY OF ALL PRODUCTS. Without limiting
the generality of the foregoing, University does not warrant (a) the patentability of any of the Patent Rights, (b) the accuracy
of any information provided to Licensee, or (c) the accuracy, safety, or usefulness for any purpose of any of the Patent Rights
or Products. Nothing contained in this Agreement shall be construed as either a warranty or representation by University as to
the validity or scope of any Patent Rights.

 

4.3.          Limitation
of Liability. University assumes no liability in respect of any infringement of any patent or other right of third parties
due to the activities of Licensee or any Sublicensee under this Agreement. In no event shall University or its affiliates or their
respective Agents be responsible or liable for any indirect, special, punitive, incidental, or consequential damages or lost profits
to Licensee, Sublicensees, or any other individual or entity regardless of legal theory. The above limitations on liability apply
even though University or its affiliates, or any of their Agents, may have been advised of the possibility of such damage. Licensee
shall not, and shall require that Sublicensees do not, make any statements, representations, or warranties or accept any liabilities
or responsibilities whatsoever with regard to any person or entity that are inconsistent with any disclaimer or limitation included
in this Article 4.

 

4.4.          Indemnification.

 

(a)          None
of University, its affiliates, and their respective Agents (each an “Indemnified Person”) shall have any liability
or responsibility whatsoever to Licensee, any Sublicensee or any other person or entity for or on account of (and Licensee agrees,
and shall cause each Sublicensee to agree, not to sue any Indemnified Person in connection with) any injury, loss, or damage of
any kind or nature, sustained by, or any damage assessed or asserted against, or any other liability incurred by or imposed upon,
Licensee, any Sublicensee or any other person or entity, whether direct, indirect, special, punitive, incidental, consequential,
or otherwise arising under any legal theory (and further without limitation any existing or anticipated profits or opportunities
for profits lost by Licensee or any Sublicensee), arising out of or in connection with or resulting from (i) the production, use
or sale of the Products by Licensee or a Sublicensee, (ii) the use of any Patent Rights by Licensee or any Sublicensee, (iii)
any advertising or other promotional activities with respect to either of the foregoing, or (iv) the production, use or sale of
any Product identified, characterized, or otherwise developed by Licensee or any Sublicensee with the aid of the Patent Rights.
Licensee shall indemnify and hold each Indemnified Person harmless against all claims, demands, losses, damages, or penalties
(including but not limited to reasonable attorney’s fees and expenses) made against or incurred by any Indemnified Person
with respect to items (i) through (iv) above, even if such claims are groundless or without merit or basis.

 

(b)          Licensee
shall obtain and carry in full force and effect, and shall cause Sublicensees to obtain and carry in full force and effect, insurance
with coverages and limits adequate to ensure that Licensee can meet its obligations to University pursuant to this Article 4,
the nature and extent of which insurance shall be commensurate with usual and customary industry practices for similarly situated
companies, but in any event not less than the amounts set forth on Schedule 2 attached to this Agreement. Such insurance will
be written by a reputable insurance company reasonably acceptable to University and authorized to do business in the State of
Michigan, will name University as an additional insured under all general liability and product liability policies, and shall
require thirty (30) days written notice to be given to University prior to any cancellation, endorsement or other change. Licensee
will provide University or a University third party designee, for itself and on behalf of any Sublicensee, with appropriate certificates
of insurance from time to time as requested by University reflecting
the obligations of Licensee pursuant to this subsection.

 

    	MSUT Agreement No. AGR2010-00372	Pg. 8 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.

     

    

 

ARTICLE
5

 

PROSECUTION
AND MAINTENANCE OF PATENT RIGHTS

 

5.1           Prosecution
and Maintenance. Licensee shall, at Licensee’s sole expense, file, prosecute, and maintain patents applications and
patents under the Patent Rights in the United States and in any other countries for Invention Disclosures, patent applications
and patents as licensed herein in accordance with Article 2, Section 2.1. For any such Invention Disclosures, patent applications
and patents under the Patent Rights for which the Licensee elects to file, prosecute, and maintain in the United States and in
any other countries (collectively the “Licensee-Controlled Patents”), Licensee shall consult with University with
regards to the filing, prosecution, and maintenance of such Licensee-Controlled Patents. All Licensee-Controlled Patents under
this Agreement shall be assigned to the ‘‘Board of Trustees of Michigan State University, East Lansing, MI (U.S.).”
Licensee will make reasonable efforts to amend any Licensee-Controlled Patent applications to include claims requested by University.
Licensee will provide University with copies of all drafted Licensee-Controlled Patent applications along with office actions
and associated responses thirty (30) days before filing with the U.S. Patent Office. Licensee will provide copies of all substantive
correspondence between Licensee and the U.S. Patent Office and between Licensee and any international patent office within thirty
(30) days of receipt by Licensee.

 

5.2           Abandonment
of Applications. If Licensee determines to abandon any patent or patent application under the Patent Rights, it will give
University thirty (30) days advance written notice of such determination. University may elect to continue the prosecution and
maintenance of any such patent or patent application under the Patent Rights at University’s sole expense in University’s
name, and such patent application and patents shall be removed from Patents Rights in accordance with Section 8.3 in writing with
an amended Schedule 1. In such event, Licensee shall cooperate with and provide reasonable assistance to University in furtherance
of such application(s) and/or patent(s). Under no circumstance will the abandonment of any patent applications, patents or Patent
Rights under this Section 5.2 release Licensee’s obligation to pay any costs, fees, and royalties accrued, incurred or coming
due (including without limitation any Annual Minimum payments) or to perform obligations remaining unpaid or unperformed otherwise
due under the terms of this Agreement.

 

5.3           Obligation
to File Patent Applications. In consideration of the license granted herein, Licensee shall file or maintain at least one
(1) U.S. patent application for each of the Invention Disclosure under license. Failure to file within three (3) months of the
Effective Date or receipt of a new Invention Disclosure shall be considered Abandonment under Section 5.2.

 

5.4.          Interferences.
University will give Licensee written notice promptly upon the declaration of any interference involving any of the Patent Rights.
University will have the sole and exclusive right to determine whether and in what manner to proceed with respect to such interference.
If University fails to contest the interference. University will promptly notify Licensee. Licensee will not, and will not permit
any Sublicensee to, directly or indirectly, initiate, support, participate in, any interference involving any of the Patent Rights.

 

5.5.          Confidentiality.
In connection with this Agreement, each party may disclose its confidential and proprietary information to the other party. Any
such information that is first disclosed in writing, or if first disclosed orally is transmitted in written form within twenty
(20) days following the oral disclosure, and is labeled as “Confidential” is referred to in this Agreement as “Confidential
Information.”

 

(a)          Each
party shall maintain the Confidential Information of the other party in confidence, and shall not disclose or otherwise communicate
such Confidential Information to others, or use it for any purpose except pursuant to, and in order to carry out, the terms and
objectives of this Agreement, and shall exercise every reasonable precaution to prevent and restrain the unauthorized disclosure
of such Confidential
Information by any of its Agents.

 

    	MSUT Agreement No. AGR2010-00372	Pg. 9 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.

     

    

 

(b)          The
provisions of Section 5.5 shall not apply to any Confidential Information that:

 

		(i)	Either was or will
                                         be lawfully disclosed to the recipient by an independent third party rightfully in possession
                                         of the Confidential Information; or
	 	 	 

		(ii)	Either has been
                                         or will be published or generally known to the public in accordance with Article 6 or
                                         otherwise through no fault or omission by a party; or
	 	 	 

		(iii)	Was independently
                                         known to the recipient prior to receipt from the disclosing party, or was independently
                                         developed by the recipient, as demonstrably documented in written records of the recipient;
                                         or
	 	 	 

		(iv)	Is required to
                                         be disclosed by a party to comply with court orders or applicable laws, to defend or
                                         prosecute litigation, or to comply with governmental regulations, provided that such
                                         party takes reasonable and lawful actions to avoid and/or minimize the degree of such
                                         disclosure.

 

(c)          Licensee
and University acknowledge that they may have previously entered into one or more confidentiality and non-use agreements with
respect to some or all of the Patent Rights (collectively, “Confidentiality Agreements”). To the extent this
Agreement conflicts with the terms of any of the Confidentiality Agreements, this Agreement shall supersede the Confidentiality
Agreements and be binding on University and Licensee with respect to the information covered under the terms of this Article 5,
without otherwise limiting the binding nature and effect of the Confidentiality Agreements.

 

ARTICLE
6

 

INFRINGEMENT

 

6.1           Notification.
Each party shall promptly report in writing to the other party any infringement or suspected infringement of any Patent or unauthorized
use or misappropriation of the Product by a third party of which it becomes aware. The reporting party shall provide the other
party with all available evidence of the infringement, suspected infringement or unauthorized use or misappropriation.

 

6.2           Licensee
Right to Prosecute. Licensee may initiate an infringement suit or other appropriate action against any third party who at
any time has infringed or is suspected of infringing any of the Patent Rights in the Field. Licensee shall give University advance
written notice of its intent to initiate such action and the reasons therefor and shall provide University with an opportunity
to make suggestions and comments regarding such action. Licensee shall keep University promptly informed of material developments
in any such action. Licensee shall pay all expenses of such action. University shall offer reasonable assistance to Licensee in
connection with such action at no charge to Licensee except for reimbursement of reasonable out-of-pocket expenses. Recoveries,
reimbursements, damages, profits, or awards from such action shall first be applied to reimburse University for out-of-pocket
expenses not yet reimbursed by Licensee and then to reimburse Licensee for its other litigation costs. Any remaining recoveries,
reimbursements, damages, profits, or awards of whatever nature shall be treated as Net Sales under this Agreement.

 

6.3           Reimbursement
for University Costs. If University is a legally indispensable party to an infringement suit or other action as described
in Section 6.2, University may join the action as a co-plaintiff. Licensee shall reimburse University for any costs it incurs
as a co-plaintiff or other party to any action brought by Licensee or a Sublicensee.

 

    	MSUT Agreement No. AGR2010-00372	Pg. 10 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.

     

    

 

6.4           University
Right to Prosecute. In the event that Licensee does not within six (6) months (a) secure cessation of the infringement, or
(b) enter suit against the infringer, or (c) provide University with evidence of the pendency of a bona fide negotiation for the
acceptance by the infringer of a sublicense under the Patents, University shall thereafter have the right but not the obligation
to convert Licensee's exclusive license hereunder to a non-exclusive license and/or to take action against the infringer at University's
own expense. Licensee shall offer reasonable assistance to University in connection with any such action at no charge to University
except for the reimbursement of reasonable out-of-pocket expenses. Any damages, profits, or awards of whatever nature recovered
from any such action shall belong solely to University.

 

ARTICLE
7

 

TERM
AND TERMINATION

 

7.1.          Term.
The term of this Agreement (“Term”) shall commence upon the Effective Date and shall continue, unless terminated earlier
under Section 7.2 or 7.3, this Agreement shall terminate upon on the first to occur of the following:

 

(a)          expiration
or termination of all Patent Rights; or

(b)          the
twenty fifth (25) anniversary of the Effective Date.

 

7.2           University
Right to Terminate. University may terminate this Agreement, without prejudice to any of its other rights conferred on it
by this Agreement or otherwise:

 

(a)          if
Licensee defaults under this Agreement,

 

(i)          by
not paying when due any amount or other consideration or reimbursement required by this Agreement, or

 

(ii)         by
not delivering reports required under Section 3.7(b),

 

and
in either such case Licensee fails to cure the default within thirty (30) days after written notice from University of the default;

 

(b)          If
Licensee defaults on or breaches any other provision of this Agreement, including without limitation its obligations under Section
3.12, and Licensee fails to cure any such default or breach within forty-five (45) days after written notice from University;

 

(c)          If
Licensee

 

(i)          takes
any action that purports to cause any Patent Rights to be subject to any liens or encumbrances, or

 

(ii)         commences
a voluntary case as a debtor under the Bankruptcy Code of the United States or any successor statute (the “Bankruptcy Code”),
or if an involuntary case is commenced against Licensee under the Bankruptcy Code, or if an order for relief shall be entered
in such case, or if the same or any similar circumstance shall occur under the laws of any foreign jurisdiction,

 

and
Licensee fails to vacate or have such case dismissed, or to cause such purported lien or encumbrance to be removed, within thirty
days (30) of filing; or

 

(d)          If
Licensee makes any materially false report or files or takes any action to challenge any of University’s rights in the Patent
Rights.

 

    	MSUT Agreement No. AGR2010-00372	Pg. 11 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.

     

    

 

Termination
shall be effective upon expiration of the relevant cure period in the circumstances described in
subsections (a), (b), and (c) above and
shall be immediately effective upon the occurrence
of any event described in subsection (d) above.

 

7.3.          Licensee
Right to Terminate. Licensee may terminate this Agreement at any time by written notice to University effective at the end
of the Royalty Period immediately following the Royalty Period in which the notice is effective.

 

7.4.          Effect
of Termination.

 

(a)          If
this Agreement terminates for any reason, on the effective date of termination Licensee shall immediately cease and cause its
and Sublicensees immediately to cease using, making, having made, importing, exporting, leasing, selling, having sold, and offering
for sale or license the Patent Rights and Products, and shall return to University, or deliver or destroy as University directs,
the Products then in its possession.

 

(b)          Notwithstanding
the termination of the other provisions of this Agreement pursuant to Section 7.2 or 7.3, the following shall survive such termination:

 

(i)          Licensee's
obligation to pay any costs, fees, and royalties accrued, incurred or coming due (including without limitation any Annual Minimum
payments) or to perform obligations remaining unpaid or unperformed under the terms of this Agreement on the effective date of
such termination;

 

(ii)         Licensee’s
obligations under Section 3.11, Article 4, Sections 5.1, 5.2, 5.5 and, to the extent proceedings have been initiated,
Section 6.2, this Section 7.4 and Article 8 below;

 

(iii)        any
cause of action or claim of Licensee or University, accrued or to accrue, because of any breach or default of this Agreement by
the other party.

 

(iv)        MSU
Foundation or its designee shall retain Capital Stock issued under the Prior Agreement and reissued under Section 3.15(d) of this
Agreement.

 

ARTICLE 8

 

MISCELLANEOUS

 

8.1.          Assignment.
Except in the event of a merger or sale of substantially all stock or assets of Licensee, this Agreement shall not be assigned
by Licensee without the prior written consent of University, which may be granted or withheld in the sole discretion of University.
Prior to any such assignment becoming effective, all amounts due (including Patent Costs, if any), must be paid in full and a
permitted assignee must agree in writing to become bound by this Agreement.

 

8.2.          Entire
Agreement, Amendment and Waiver. This Agreement (including any attached schedules and exhibits referred to in this Agreement)
contains the entire understanding of the parties with respect to the subject matter of this Agreement and supersedes any and all
prior written or oral discussions, arrangements, courses of conduct, or agreements. This Agreement may be amended only by an instrument
in writing duly executed by the parties. The waiver of a breach of this Agreement will be effective only if in writing and signed
by the waiving party; waiver of a breach will not constitute a waiver of any other breach.

 

8.3.          Notices.
All notices required or desired to be given under this Agreement shall be delivered to the parties at the addresses set forth
on Schedule 2. Notices may be given (i) by hand, (ii) by a nationally recognized overnight delivery service, or (iii) by facsimile
transmission followed by confirmation of delivery. The date of personal
delivery, the date of deposit with the overnight delivery service for next business day delivery, or the date of sending by facsimile,
shall be the date such notice is deemed effective under this Agreement.

 

    	MSUT Agreement No. AGR2010-00372	Pg. 12 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.

     

    

 

8.4.          Governing
Law. This Agreement shall be governed by and interpreted under the laws of Michigan, excluding its conflict of laws provisions.

 

8.5.          Jurisdiction.
All actions or proceedings related to this Agreement shall be litigated in state courts of competent jurisdiction located within
the State of Michigan. Licensee (i) consents and submits to the jurisdiction of any Michigan state court with competent jurisdiction,
(ii) consents to delivery and service of process by means of the notice provisions established in this Agreement, (iii) shall
not bring any action or claim against University in any other jurisdiction, and (iv) shall require that Sublicensees agree not
to bring any action or claim against University in any other jurisdiction.

 

8.6.          Marking.
Licensee shall place in a conspicuous location on any Product (or its packaging where appropriate) a patent notice in accordance
with the laws concerning the marking of patented articles.

 

8.7.          United
States Manufacture. To the extent required by United States statute, rule, or regulation or by the terms of any grant or other
funding agreement applicable to University with respect to the Patent Rights, (a) Products for sale in the United States of America
will be manufactured or produced substantially in the United States of America, and (b) no exclusive Sublicenses will be granted
unless the Sublicensee agrees that any Products for sale in the United States of America will be manufactured or produced substantially
in the United States of America.

 

8.8.          Export
Controls.

Both
parties acknowledge that they are subject to United States laws and regulations controlling the export of technology, technical
data, computer software, laboratory prototypes, and other items (including inter alia the Arms Export Control Act, as
amended and the Export Administration Act of 1979 as amended). Each party’s
performance under this Agreement must comply with all applicable United States export laws and regulations. The
transfer of certain technology, technical data, and/or
items may require a license from the cognizant agency of the United States government and/or written assurances by a party that
the party shall not export to certain foreign countries without prior approval of such agency. The parties neither represent nor
warrant to the other that a license shall not be required nor that, if required, it will be issued. In any event, neither party
shall export or re-export any technology, technical data, or items in violation of any applicable USA laws or regulations.

 

8.9.          Implementation.
Each party shall, at the request of the other party, execute any document reasonably necessary to implement the provisions of
this Agreement.

 

8.10.         Counterparts.
This Agreement may be executed in multiple counterparts, each of which when taken together shall constitute one and the same instrument.

 

8.11.         Relationship
of Parties. The parties to this Agreement are independent contractors. There is no relationship of principal to agent, master
to servant, employer to employee, or franchiser to franchisee between the parties. Neither
party has the authority to bind the other or incur any obligation on its behalf.

 

8.12.         Headings;
References. The headings of the sections, subsections, and paragraphs of this Agreement have been added for convenience only
and shall not be deemed to be a part of this Agreement, nor shall they affect the interpretation or construction of this Agreement
in any manner. Section or subsection references in this Agreement are references to sections or subsections of this Agreement,
and references to schedules or exhibits are references to schedules or exhibits attached to this Agreement.

 

    	MSUT Agreement No. AGR2010-00372	Pg. 13 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.

     

    

 

8.13.         Advertising.
Licensee shall not use (and shall prohibit Sublicensees from using) the names, logos, or trade or service marks of University
or its affiliates or their respective Agents, or any adaptation thereof, in any commercial activity, marketing, advertising, or
sales brochures without the prior written consent of University,
which consent may be granted or withheld in University’s sole and
complete discretion. Notwithstanding the foregoing, Licensee may use the name of University in a non-misleading fashion
in (i) executive summaries, business plans, offering memoranda, and other similar documents used by Licensee for the purpose of
raising financing far the operations of Licensee or entering into commercial contracts with third parties, but only to the extent
necessary to inform a reader that the Patent Rights have been licensed by Licensee from University and to inform a reader of the
identity and published credentials of University faculty members listed as inventors of the Patent Rights, and (ii) any securities
reports required to be filed with the Securities and Exchange Commission.

 

8.4.          Conflicts.
Licensee shall disclose to University any potential conflicts of interest between the University and University employees who
may also be employees, consultants, shareholders, or directors of Licensee. Licensee shall cooperate with University with respect
to the Michigan State University Faculty Conflict of Interest Policy and Outside Work for Pay Policy, which are available at http://www.msu.edu/-biomed/COI/,
and shall work constructively with University to manage and mitigate any conflicts that may arise in the course of this and related
agreements between it and University.

 

IN WITNESS WHEREOF, the parties hereto have caused this Exclusive License Agreement to be executed by their respective duly authorized
officers or representatives on the date indicated below.

 

	University:	Michigan
    State University
	 	 	 
	 	By:	/s/
    Mary L. Mayer
	 	 
	 	Mary L.
    Mayer, Interim Executive Director
	 	 	 
	 	Date:	5/24/2010
	 	 
	Licensee:	XG Sciences,
    Inc.
	 	 	 
	 	By:	/s/
    Michael R. Knox
	 	 	 
	 	Michael
    R. Knox, CEO and President 
	 	 	 
	 	Date:	5/25/2010

 

    	MSUT Agreement No. AGR2010-00372	Pg. 14 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.

     

    

 

Schedule 1 to Exclusive License Agreement

 

“Fields”
means: all, including the following:

 

“Composites
Field” means the use of xGnP as an additive with one or more plastics, elastomers, resins, or other polymers to form a composite
material with specialized properties that are different from the original material. This includes the use of xGnP with thermoplastic
and thermoset materials, urethanes, epoxies, and other systems based on organic resins.

 

“Energy
Storage Field” means the use of xGnP in any device used to retain or store electrical energy for future use.

 

“Specialty
Liquids Field” means the use of xGnP as an additive to liquids used as lubricants, cutting fluids, grinding fluids, well
drilling fluids, machining lubricants, and similar applications.

 

“General
Other Field” means the use of xGnP in all other applications not defined elsewhere.

 

“Patent
Rights” means:

 

U.S.
Patent No. 7,550,529 (For Reference only MSU TEC2002-0038);

U.S.
Patent Application No. 11/801,261 (For Reference only MSU TEC2004-0075);

U.S.
Patent Application No. 11/435,498 (For Reference only MSU TEC2004-0088);

U.S.
Patent Application No. 12/072,460 (For Reference only MSU TEC2006-0039);

U.S.
Patent Application No. 11/435,350 (For Reference only MSU TEC2006-0054);

U.S.
Patent Application No. 11/435,471 (For Reference only MSU TEC2006-0070);

U.S.
Patent Application No. 12/515,232 (For Reference only MSU TEC2007-0072);

U.S.
Patent Application No. 11/897,692 (For Reference only MSU TEC2007-0121);

U.S.
Patent Application No. 11/897,723 (For Reference only MSU TEC2007-0122);

U.S.
Patent Application No. 12/587,645 (For Reference only MSU TEC2008-0042); and

U.S.
Patent Application No. 12/655,649 (For Reference only MSU TEC2008-0079).

 

“Invention
Disclosures” means the following:

 

TEC2002-0038
Inexpensive Method for Producing Graphite Nanoplatelets;

TEC2004-0075
Conductive Coatings Produced by Monolayer Deposition on Surfaces;

TEC2005-0088
Method for Producing Metalloic Nanoparticles on Solid Surfaces especially Carbon and Graphite

TEC2006-0039
Hybrid Micro-Nano-Composite Material and Method to Prepare Thereof;

TEC2006-0054
Continuous Process for Producing Exfoliated Nano-Graphite Platelets;

TEC2006-0070
Electro-Conductive Nylon with High Barrier Property and Method to Prepare Thereof

TEC2007-0072
Micropatterning of Low Cost and Highly Conductive Exfoliated Graphite Nanoplatelets (xGnPs) using Microcontact Printing;

TEC2007-0121
Conductive Sheet Molding Compound with Carbon Based Nanomaterials;

TEC2007-0122
Conductive Coating of Substrate with Carbon-Based Nanomaterials;

TEC2007-0139
Plasticized Cellulose as a Potential Alternative to Petroleum Based Polymers;

TEC2007-0150
Modification of the Mechanical, Thermal, and Electrical Properties of Elastomer-Based Materials by the Addition of Exfoliated
Graphite Nano-Platelets;

TEC2008-0002
High-Performance Biosensors Based on Exfoliated Graphite Nanoplatelets and Nanometal Decorations;

TEC2008-0033
Materials and Process for Sub-10 Nanometer Integrated Circuit Lines;

TEC2008-0038
Metal nanoparticle and conducting polymer nanocomposites for energy devices;

TEC2008-0039
Electrospinning ordered arrays of cellulose nitrate fibers;

 

    	MSUT Agreement No. AGR2010-00372	Pg. 15 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.

     

    

 

TEC2008-0042
Electrically Conductive, Optically Transparent Films of Exfoliated Graphite Nanoplatelets (Graphene);

TEC2008-0074
Single Graphene Sheets Decorated With Metal Nanoparticles;

TEC2008-0079
xGnP-based Lubricant;

TEC2009-0006
Polyoxometalate-based Modification of Exfoliated Graphite Nanoplatelets to Produce
Electrocatalysts;

TEC2009-0020
Fabrication of Electrically Conductive and Optically Transparent Films with Graphene NanoPlatelets or Other Nanoparticles;

TEC2009-0029
MetalOxide Nanosheet Monolayer Film Synthesis for Electrochemical Energy Storage and Photocatalytic Applications;

TEC2009-0030
Electrically Conductive Highly Aligned Multilayer Free Standing Film of Exfoliated Graphite Nanoplatelets (Graphene);

TEC2009-0031
Exfoliated Graphite Nanoplatelets (Graphene) and Conductive Polymer Multilayer Free Standing Film Electrode for Ultra and Supercapacitor
Applications;

TEC2009-0113
Exfoliated Graphite Nano Platelet (xGnP) anodes for Li-ion batteries;

TEC2010-0027
Nanostructured Electrodes for Exfoliated Graphite Nanoplateletes for Supercapacitor Applications; and

TEC2010-0047
Simple Dry Process for Scalable Production of High Surface Area, Graphene Nanoplatelets.

 

“Territory”
means; Worldwide

 

    	MSUT Agreement No. AGR2010-00372	Pg. 16 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.

     

    

 

Schedule
2 to Exclusive License Agreement

 

Article
3 Payments/Reports

 

3.1          Licensing
Fee: $10,000.00 due upon the Effective Date and $3,000,00 for each unique Invention Disclosure elected by University containing
Patent Rights and Property Rights due within thirty (30) days of date of invoice

 

3.2          Royalty
on Net Sales by Licensee and Sublicensees in a Specially Field, payable annually, within forty-five (45) days of the end of the
calendar year:

 

2.0%
if Net Sale and Sublicensing Revenues are in the Composites Field;

2.5%
if Net Sale and Sublicensing Revenues are in the Energy Storage Field;

2.0%
if Net Sale and Sublicensing Revenues are in the Specialty Liquids Field;

4.0%
if Net Sale and Sublicensing Revenues are in the General Other Field.

 

Only
one royalty (that specified in this Agreement) shall be payable to University for any Product sold, including where one or more
patents of University that are in addition to any patents licensed under this Agreement cover or are alleged to cover the Product.
In the event that two or more royalty rates apply to a given Product, the largest rate shall apply.

 

3.3          Payments
on Sublicensee Revenues:

 

All
Net Sales or use of Products by Sublicensees shall be treated as if Net Sales of Licensee for the calculation of running royalties.

 

	3.4	 	Annual Period	 	Annual Minimum	 
	 	 	 	 	 	 
		 	Year 1 (Effective Date through 12/31/2010	 	 	None	 
		 	Year 2 (1/1/2011 through 12/31/2011)	 	$	10,000.00	 
	 	 	Year 3 (1/1/2012 through 12/31/2012)	 	$	10,000.00	 
	 	 	Year 4 (1/1/2013 through 12/31/2013)	 	$	20,000.00	 
	 	 	Year 5 (1/1/2014 through 12/31/2014)	 	$	25,000.00	 
	 	 	All remaining calendar years	 	$	50,000.00	 

 

3.5           Patent
Costs.

 

Any
outstanding Patent Costs less credits due on the Patent Rights elected as of the Election Date and as shown in the table of this
Schedule 2, Section 3.5 shall be invoiced following the Election Date. Licensee shall pay within thirty (30) days after being
invoiced by University. Thereafter, Patent Costs to be invoiced by University as they are incurred.

 

	TEC2002-0038	 	$	88,648.27	 
	TEC2004-0075	 	$	23,180.38	 
	TEC2005-0088	 	$	48,436.14	 
	TEC2006-0039	 	$	7,415.88	 
	TEC2006-0054	 	$	19,254.08	 
	TEC2006-0070	 	$	12,883.77	 
	TEC2007-0072	 	 	20,188.03	 
	TEC2007-0121	 	$	14,082.10	 
	TEC2007-0122	 	$	10,530.60	 
	TEC2007-0139	 	$	0.00	 
	TEC2007-0150	 	$	0.00	 
	TEC2008-0002	 	$	0.00	 

 

    	MSUT Agreement No. AGR2010-00372	Pg. 17 of 20	Exclusive License Agreement
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	TEC2008-0033	 	$	0.00	 
	TEC2008-0038	 	$	0.00	 
	TEC2008-0039	 	$	0.00	 
	TEC2008-0042	 	$	17,528.17	 
	TEC2008-0074	 	$	0.00	 
	TEC2008-0079	 	$	2,694.06	 
	TEC2009-0006	 	$	0.00	 
	TEC2009-0020	 	$	0.00	 
	TEC2009-0029	 	$	0.00	 
	TEC2009-0030	 	$	0.00	 
	TEC2009-0031	 	$	0.00	 
	TEC2009-0113	 	$	0.00	 
	TEC2010-0027	 	$	0.00	 
	TEC2010-0047	 	$	0.00	 

 

3.6           Milestone
Payments.

 

None.

 

3.7           Payments
& AccountingDue

 

February
15 of each year (for the Royalty Period ending the prior December 31) and August 15 of each year (for the Royalty Period ending
the prior June 30)

 

3.9           Payments.

 

Submit
paper checks to:

MSU
Technologies

Attn: Finance Coordinator

325 E. Grand River, Suite 350

East Lansing, MI 48823

All
checks must be marked with the following MSU Technologies
(MSUT) identifiers:

Mark
2:      AGR2010-00372

 

Submit
wire transfers to:

Bank
of America 2600

W. Big Beaver Road

Troy, MI 48084

All
transfers must be marked with the following information,
as outlined below:

Mark
1:       For the account of the Board of Trustees, Michigan State University

Mark
2:       ABA Routing Number 0720-0080-5

Mark
3:       MSU Account Number: 1935-218139

      a.      If
originating from outside the United States, Mark “Swift
Code: MICH US 33”

Mark
4:                AGR2010-00020

Mark
5:                Dept: MSU Technologies

Mark
6:                a/c 21 -3252 (for general IP
income)   OR   a/c
21-2310 (for copyright income)

Mark
7:       MSUT Contact: Accounts Payable (517)355-2186

 

3.12         Commercialization
and Reporting Requirements.

 

		i.	Beginning in
                                         the calendar year 2011 annual sales of all Products combined with total financing received
                                         from March 1, 2010 to December 31, 2011 shall be at least one million U.S. Dollars ($1,000,000.00)

 

    	MSUT Agreement No. AGR2010-00372	Pg. 18 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.

     

    

 

		ii.	After three
                                         (3) years from the Effective Date, each patent within Patent Rights must be incorporated
                                         into a Product and sold in any given anniversary year, or the license rights granted
                                         under Article 2 hereof to that patent may, in University’s sole reasonable discretion,
                                         become non-exclusive or remove one or more Specialty Fields.

 

Article
4 Indemnification

 

4.4(b)
Insurance Requirements:

 

General
Liability: Minimums consistent with industry practice, but in any event not less than (i) $1,000,000 per occurrence, with an aggregate
minimum of $2,000,000 for personal injury or death, and (ii) $1,000,000 per occurrence, with an aggregate minimum of $2,000,000
for property damage.

 

Products
Liability: Prior to the sale or transfer to any third party of any product that requires the use of or is based on the Patent
Rights, products liability insurance in an amount consistent with industry practice, but in any event not less than $1,000,000
per occurrence and $2,000,000 in aggregate.

 

Professional
Liability: Prior to the offering or providing of any professional services that require use of or are based on the Patent Rights
to any third party, professional liability insurance and/or errors and omissions insurance, as appropriate, in an amount consistent
with industry practice, but in any event not less than $1,000,000 per occurrence and $3,000,000 in aggregate, provided that if
Licensee purchases such insurance coverage on a “claims made” basis, then Licensee must purchase tail coverage for
at least ten (10) years following the expiration or termination of the agreement under which services are provided.

 

Article 8 Miscellaneous

 

	8.3
    Notices:	 
	 	 
	(a)
    Address for All Notices MSU Technologies
	And
    Payments	Attention: Executive
    Director
	to
    University:	MSU Technologies
	 	Michigan
    State University
	 	325
    E, Grand River
	 	Suite
    350
	 	East
    Lansing, MI 48823
	(b)
    Address for Notices	 
	  to
    Licensee:	Michael R. Knox
	 	President
    and CEO
	 	XG
    Sciences, Inc.
	 	5020
    Northwind Drive
	 	Suite
    212
	 	East
    Lansing, MI 48823

 

    	MSUT Agreement No. AGR2010-00372	Pg. 19 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.

     

    

 

Exhibit A to Exclusive
License Agreement

 

Royalty
and Other Payment Report Form         ,        
to             ,        

 

Payments
and Related Information from Licensee:

 

Licensee
and Sublicensees shall report, as detailed by country of sales origin and for each Sublicensee (if sublicensed):

 

	1.	Product number and description
	 	 
	2.	Units of Product sold
	 	 
	3.	Units of Product distributed but for which no
    payment was received
	 	 
	4.	Unit gross list sales price for each of (2)
    above
	 	 
	5.	Per unit deductions (attach itemized documentation
    of all deductions taken)
	 	 
	6.	Extended sales dollars (unit price x quantity)

 

7.         
Other cash amounts and fair market value of all other consideration received (attach itemized list identifying and valuing each
other consideration)

 

	8.	Application of Section 3.9, foreign currency
    conversion rate, shown for each currency received
	 	 
	9,	Calculation of Net Sales
	 	 
	10.	Royalty Rate
	 	 
	11.	Royalty Payments due
	 	 
	12.	Annual Minimums owed, if any
	 	 
	13.	Milestone Payments owed, if any, with specific
    reference to Milestones listed on Schedule 2
	 	 
	Information
    regarding Sublicensees shall include the above plus:
	 
	1.	Name and address of each Sublicensee
	 	 
	2.	Total Amounts Owed University, with respect
    to Sublicensees only

 

    	MSUT Agreement No. AGR2010-00372	Pg. 20 of 20	Exclusive License Agreement
	 	 	XG Sciences, Inc.Exhibit 10.4

 

FIRST AMENDMENT TO RESTATED
AND AMENDED LICENSE AGREEMENT

 

THIS IS THE FIRST AMENDMENT TO THE RESTATED AND AMENDED LICENSE
AGREEMENT (herein after “First Amendment”), entered into by and between Michigan State University, a non-for-profit
corporation organized under the laws of the state of Michigan (hereinafter referred to as “University”) having an office
at 325 E. Grand River, Suite 350, East Lansing, MI 48823 and XG Sciences, Inc., a for-profit corporation having its principal office
at 5020 Northwind Drive Suite 212, East Lansing, MI 48823 (hereinafter referred to as “Licensee”).

 

WHEREAS, the parties entered into a Licensing Agreement dated
May 25, 2010 (the “Original Agreement”); and

 

WHEREAS, Licensee desires and University is willing to add additional
Technologies under this First Amendment and make other changes to the. Original Agreement with University.

 

NOW THEREFORE, University and Licensee agree to amend the Original
Agreement, as detailed in this First Amendment as follows:

 

		A.	All terms capitalized herein and not otherwise defined shall have the meaning ascribed to them in the Original Agreement.

 

		B.	Section 2.1 (a) is deleted and replaced in its entirety with the following language:

 

		(a)	subject to Section 2.2 below, (i) the exclusive right to use the Patent Rights and Improvements, to identify, develop, make,
have made, use, import, export, lease, sell, have sold, and offer for sale, Products within the Field and within the Territory;
and (ii) the non-exclusive rights to practice the Property Rights for Products within the Fields and within the Territory; and

 

		C.	Section 2.1 (c) and (e) are deleted. Section 2.1 (d) is renumbered 2.1 (c).

 

		D.	Schedule 1 and 2 are deleted and replaced in their entirety with the revised Schedules, Schedules 1 and 2 attached herein.

 

		E.	The Original Agreement as amended herein is in full force and effect

 

IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be executed by their duly authorized representative. The effective date of this First Amendment is September 13, 2010.

 

AGREED TO AND ACCEPTED:

 

Michigan State University

 

	By	/s/ Charles Hasemann	 
	 	Charles Hasemann 	 
	 	Interim Executive Director	 

 

	Date of Signature:	5-6-11	 

  

    	MUST Agreement No. AGR2010-00372
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 XG Sciences, Inc.

     

    

 

	AGREED TO AND ACCEPTED:	 
	 	 
	XG Sciences, Inc.	 
	 	 
	By:	/s/ Michael R Knox	 
	 	 	 

	Signee (print): 	Michael
    R  knox	 
	 	 	 
	Title (print): 	President & CEO	 

	 	 	 
	Date of Signature:	May 27, 2011	 

 

    	MUST Agreement No. AGR2010-00372
	 Pg. 2
                                                                                                                                                                                                                                                                                                                                              of 7	 Exclusive License Agreement
 XG Sciences, Inc.

     

    

  

Schedule 1 to Exclusive License Agreement

 

“Fields” means: all,
including the following:

 

“Composites Field”
means the use of xGnP as an additive with one or more plastics, elastomers, resins, or other polymers to form a composite material
with specialized properties that are different from the original material. This includes the use of xGnP with thermoplastic and
thermoset materials, urethanes, epoxies, and other systems based on organic resins.

 

“Energy Storage Field”
means the use of xGnP in any device used to retain .or store electrical energy for future use.

 

“Specialty Liquids Field”
means the use of xGnP as an additive to liquids used as lubricants, cutting fluids, grinding fluids, well drilling fluids, machining
lubricants, and similar applications.

 

“General Other Field”
means the use of xGnP in all other applications not defined elsewhere.

 

“Patent Rights” means:

 

U.S. Patent Application No. 12/072,460
(For Reference only MSU TEC2006-0039);

U.S. Patent Application No. 11/897,723
(For Reference only MSU TEC2007-0I22); and

U.S. Patent Application No. 12/587,645
(For Reference only MSU TEC2008-0042; TEC2009-0020;

TEC2009-0030; and TEC2009-0031),

 

“Invention Disclosures”
means the following:

 

TEC2008-0038 Metal nanoparticle
and conducting polymer nanocomposites for energy devices;

TEC2008-0074 Single Graphene Sheets Decorated With Metal Nanoparticles;

TEC2009-0029
MetalOxide Nanosheet Monolayer Film Synthesis for Electrochemical Energy Storage and Photocatalytic Applications;

TEC2009-0113 Exfoliated Graphite
Nano Platelet (xGnP) anodes for Li-ion batteries;

TEC2010-0027 Nanostructured Electrodes
for Exfoliated Graphite Nanoplateletes for Supercapacitor Applications;

TEC2010-0047 Simple Dry Process
for Scalable Production of High Surface Area, Graphene Nanoplatelets;

TEC2010-0114 pi coupling agents
for dispersion of exfoliated graphene nanoplatelets in polymers; and

TEC2011-0002 Novel thermoelectric materials based on exfoliated
graphite nanoplatelets.

 

“Territory” means: Worldwide

 

    	MUST Agreement No. AGR2010-00372
	 Pg. 3
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 XG Sciences, Inc.

     

    

  

Schedule 2 to Exclusive License
Agreement

 

Article 3 Payments/Reports

 

3.1           Licensing
Fee:       $10,000.00 due upon the Effective Date and $3,000.00 for each unique Invention Disclosure elected by University containing
Patent Rights and Property Rights due within thirty (30) days of date of invoice.

 

Licensing Fee under the First Amendment: $6,000.00 due
for the election of two (2) new Invention Disclosures under this First Amendment due within thirty (30) days of date of invoice.

 

3.2           Royalty
on Net Sales, by Licensee and Sublicensees in a Specially Field, payable annually, within forty-five (45) days of the end of the
calendar year:

 

2.0% if Net Sale and Sublicensing Revenues are in the
Composites Field;

2.5% if Net Sale and Sublicensing Revenues are in
the Energy Storage Field;

2.0% if Net Sale and Sublicensing Revenues are in the
Specialty Liquids Field;

4.0% if Net Sale and Sublicensing Revenues are in the
General Other Field.

 

Only one royalty (that specified in this Agreement)
shall be payable to University for any Product sold, including where one or more patents of University that are in addition to
any patents licensed under this Agreement cover or are alleged to cover the Product. In the event that two or more royalty rates
apply to a given Product, the largest rate shall apply.

 

		3.3	Payments on Sublicensee Revenues:

 

All Net Sales or use of Products by Sublicensees shall
be treated as if Net Sales of Licensee for the calculation of running royalties.

 

	3.4	 	Annual Period	 	 	Annual Minimum	 
	 	 	 	 	 	 	 
		 	Year 1 (Effective Date through 12/31/2010	 	 	None	 
		 	Year 2 (1/1/2011 through 12/31/2011)	 	$	10,000.00	 
		 	Year 3 (1/1/2012 through 12/31/2012)	 	$	10,000.00	 
		 	Year 4 (1/1/2013 through 12/31/2013)	 	$	20,000.00	 
		 	Year 5 (1/1/2014 through 12/31/2014)	 	$	25,000.00	 
		 	All remaining calendar years	 	$	50,000.00	 

 

		3.5	Patent Costs.

 

Any outstanding Patent Costs less credits due on the
Patent Rights elected as of the Election Date and as shown in the table of this Schedule 2, Section 3.5 shall be invoiced following
the Election Date. Licensee shall pay within thirty (30) days after being invoiced by University, Thereafter, Patent Costs to be
invoiced by University as they are incurred.

 

	TEC2006-0039	 	$	0.00	 
	TEC2007-0122	 	$	10,530.60	 
	TEC2008-0042	 	$	17,528.17	 
	TEC2009-0020	 	$	0.00	 
	TEC2009-0030	 	$	0.00	 
	TEC2009-0031	 	$	0.00	 
	TEC2008-0038	 	$	0.00	 
	TEC2008-0074	 	$	0.00	 
	TEC2009-0029	 	$	0.00	 
	TEC2009-0113	 	$	0.00	 
	TEC2010-0027	 	$	0.00	 
	TEC2010-0047	 	$	0.00	 
	TEC2010-0114	 	$	0.00	 
	TEC2011-0002	 	$	0.00	 

 

    	MUST Agreement No. AGR2010-00372
	 Pg. 4
                                                                                                                                                                                                                                                                                                                                              of 7	 Exclusive License Agreement
 XG Sciences, Inc.

     

    

  

		3.6	Milestone Payments.

 

None.

 

		3.7	Payments & Accounting Due

 

February 15 of each year (for the Royalty Period ending
the prior December 31) and August 15 of each year (for the Royalty Period ending the prior June 30)

 

		3.9	Payments.

 

At the same time that it makes payment of royalties
and other amounts due with respect to, a Royalty Period, a copy of the royalty report shall be delivered to msutagr@msu.edu.
If payment is made via check, a copy of the report shall also be attached to the. check.

 

Submit paper checks to:

MSU Technologies

Attn: Accountant

325 E. Grand River, Suite 350

East Lansing, MI 48823

All checks must
be marked with the following MSU Technologies (MSUT) identifiers:

Mark
2:     AGR2010-00372

 

Submit transfers to:

Bank of America, 2600 W. Big Beaver Road, Troy, MI
48084

All transfers must be marked with the following information:

MARK 1: For the Account of the Board of Trustees,
Michigan State University

MARK 2: Wires - 026009593 Bank Account Number: 1935-218139

(Payer is responsible for identifying and paying bank
wire fees, in addition to paying invoiced amount due.)

Swift Code - BOFAUS3N

CHIPS Code - 0959

ACH - 071000039 Bank Account Number: 1935-218139

MARK
3: University Invoice Number

MARK 4: MSU Technologies; Holly
Byrnes (517) 355-2186

MARK 5: a/c 21-3252 (if general
IP income); OR a/c 21-2310 (if copyright income)

 

		3.12	Commercialization and Reporting Requirements.

 

		i.	Beginning in the calendar year 2011 annual sales of all Products combined with total financing received from March 1, 2010
to December 31, 2011 shall be at least one million U.S. Dollars ($1,000,000.00).

 

		ii.	After three (3) years from the Effective Date, each patent within Patent Rights must be incorporated into a Product and sold
in any given anniversary year, or the license rights granted under Article 2 hereof to that patent may, in University’s sole
reasonable discretion, become non-exclusive or remove one or more Specialty Fields.

 

Article 4 Indemnification

 

4.4(b) Insurance Requirements:

 

General Liability: Minimums consistent
with industry practice, but in any event not less than (i)

$ 1,000,000 per occurrence, with an aggregate minimum
of $2,000,000 for personal injury or death, and (ii) $1,000,000 per occurrence, with an aggregate minimum of $2,000,000 for property
damage.

 

    	MUST Agreement No. AGR2010-00372
	 Pg. 5
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 XG Sciences, Inc.

     

    

  

Products Liability: Prior to the sale or transfer to
any third-party of any product that requires the use of or is based on the Patent Rights, products liability insurance in an amount
consistent with industry practice, but in any event not less than $1,000,000 per occurrence and $2,000,000 in aggregate.

 

Professional Liability: Prior to the offering or providing
of any professional services that require . use of or are based on the Patent Rights to any third party, professional liability
insurance and/or errors and omissions insurance, as appropriate, in an amount consistent with industry practice, but in any event
not less than $1,000,000 per occurrence and $3,000,000 in aggregate, provided that if Licensee purchases such insurance coverage
on a “claims made” basis, then Licensee must purchase tail coverage for at least ten (10) years following the expiration
or termination of the. agreement under which services are provided.

 

Article 8 Miscellaneous

 

8.3 Notices: 

 

	(a)	Address for All Notices	MSU Technologies
	 	And Payments	Attention: Executive Director
	 	to University:	
        MSU Technologies

        Michigan State University

        325 E. Grand River

        Suite 350

        East Lansing, MI 48823

	(b)	Address for Notices	 
	 	to Licensee:	
        Michael R. Knox

        President and CEO

        XG Sciences, Inc.

        5020 Northwind Drive

        Suite 212

        East Lansing, MI 48823

 

    	MUST Agreement No. AGR2010-00372
	 Pg. 6
                                                                                                                                                                                                                                                                                                                                              of 7	 Exclusive License Agreement
 XG Sciences, Inc.

     

    

  

Exhibit A to Exclusive License
Agreement

 

Royalty and Other Payment Report
Form _______, ___ to _______, ______

 

Payments and Related Information from Licensee:

 

Licensee and Sublicensees shall report, as detailed
by country of sales origin and for each Sublicensee (if sub licensed):

 

1.          Product
number and description

  

2.          Units
of Product sold

 

3.          Units
of Product distributed but for which no payment was received

 

4.          Unit
gross list sales price for each of (2) above

 

5.          Per
unit deductions (attach itemized documentation of all deductions taken)

 

6.          Extended
sales dollars (unit price x quantity)

 

7.          Other
cash amounts and fair market, value of all other consideration, received (attach itemized list identifying and valuing each other
consideration)

 

8.          Application
of Section 3.9, foreign currency conversion rate, shown for each currency received

 

9.          Calculation
of Net Sales

 

10.         Royalty
Rate

 

11.         Royalty
Payments due

 

12.         Annual
Minimums owed, if any

 

13.         Milestone
Payments owed, if any, with specific reference to Milestones listed on Schedule 2

 

Information regarding Sublicensees shall include the above
plus:

 

1.          Name
and address of each Sublicensee

 

2.          Total
Amounts Owed University, with respect to Sublicensees only.

 

    	MUST Agreement No. AGR2010-00372
	 Pg. 7 of 7	 Exclusive License Agreement
 XG Sciences, Inc.

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