INTELLECTUAL PROPERTY SECURITY AGREEMENT

Exhibit 10.3

INTELLECTUAL PROPERTY SECURITY AGREEMENT

Intellectual Property Security Agreement, dated as of __________, by XG Sciences IP, LLC, a Michigan limited liability company, of 3101 Grand Oak Drive, Lansing, Michigan 48911 and XG Sciences, Inc., a Michigan corporation, of 3101 Grand Oak Drive, Lansing, Michigan 48911 (“Debtors”), in favor of The Dow Chemical Company, of 2030 Dow Center, Midland, Michigan 48674 for itself and as agent for the benefit of all other affiliates of Secured Party (each, an “Affiliate”) pursuant to the Security Agreement (in such capacity, “Secured Party”).

WITNESSETH:

Whereas, the Debtors are parties to Security Agreements dated as of __________ (the “Security Agreements”), in favor of the Secured Party pursuant to which the Debtors are required to execute and deliver this Intellectual Property Security Agreement;

Now, Therefore, in consideration of the premises, the Debtors hereby agree with the Secured Party as follows:

SECTION 1.          Defined Terms. Unless otherwise defined herein, terms defined in the Security Agreements and used herein have the meaning given to them in the Security Agreements.

SECTION 2.          Grant of Security Interest in Intellectual Property Collateral. The Debtors hereby pledge and grant to the Secured Party a lien on and security interest in and to all of its right, title and interest in, to and under all the following Collateral of the Debtors:

SECTION 3.          Security Agreement. The security interest granted pursuant to this Intellectual Property Security Agreement is granted in conjunction with the security interest granted to the Secured Party pursuant to the Security Agreements and Debtors hereby acknowledge and affirm that the rights and remedies of the Secured Party with respect to the security interest in the Patents and Trademarks made and granted hereby are more fully set forth in the Security Agreements, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event that any provision of this Intellectual Property Security Agreement is deemed to conflict with the Security Agreements, the provisions of the Security Agreements shall control unless the Secured Party shall otherwise determine.

SECTION 4.          Termination. Upon the payment in full and termination of the Security Agreements, the Secured Party shall execute, acknowledge and deliver to the Debtors an instrument in writing, prepared by debtors, in recordable form releasing the collateral pledge, grant, assignment, lien and security interest in the Patents and Trademarks under this Intellectual Property Security Agreement.

SECTION 5.          Counterparts. This Intellectual Property Security Agreement may be executed in any number of counterparts, all of which constitute one and the same instrument, and any party hereto may execute this Intellectual Property Security Agreement by signing and delivering one or more counterparts.

SECTION 6.          Governing Law. This Intellectual Property Security Agreement and the transactions contemplated hereby, and all disputes between the parties under or relating to this Intellectual Property Security Agreement or the facts or circumstances leading to its execution, whether in contract, tort or otherwise, shall be construed in accordance with and governed by the laws (including statutes of limitation) of the State of Michigan, without regard to conflict of law principles that would require the application of laws of another jurisdiction.

[Signature page follows.]

In Witness Whereof, the Debtors have caused this Intellectual Property Security Agreement to be executed and delivered by its duly authorized officers as of the date first set forth above.

SCHEDULE A

TO

INTELLECTUAL PROPERTY SECURITY AGREEMENT

GRANTED PATENTS AND PATENT APPLICATIONS

U.S. Granted Patents

U.S. Patent Applications

Foreign Granted Patents

Foreign Patent Applications

SCHEDULE B

TO

INTELLECTUAL PROPERTY SECURITY AGREEMENT

REGISTERED TRADEMARKS AND TRADEMARK APPLICATIONS

Registered Trademarks

Trademark Applications