Exhibit 10.2

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (the “Security Agreement”), dated as of November 9,
2011, among AXION INTERNATIONAL HOLDINGS, INC., a Colorado corporation
(“Borrower”) and SAMUEL G. ROSE, an individual resident of the State of Florida
(the “Lender”).
 
RECITALS
 
Whereas, Borrower and Lender, concurrently herewith, have entered into that
certain Revolving Credit Agreement (the “Credit Agreement”), a Revolving Credit
Note, UCC financing statements, and other documents and agreements, providing
for a revolving loan from Lender to Borrower of up to $2 Million.
 
Whereas, pursuant to the Credit Agreement, Borrower has agreed to grant a
security interest in certain assets of Borrower to Lender to secure Borrower’s
obligations to Lender.
 
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
parties hereto, intending to be legally bound, hereby agree as follows:
 
Definitions. All capitalized terms used herein without definitions shall have
the respective meanings provided therefore in the Credit Agreement.  The term
“State,” as used herein, means the State of Maryland.  All terms defined in the
Uniform Commercial Code of the State and used herein shall have the same
definitions herein as specified therein.  However, if a term is defined in
Article 9 of the Uniform Commercial Code of the State differently than in
another Article of the Uniform Commercial Code of the State, the term has the
meaning specified in Article 9.
 
Grant of Security Interest. The Borrower hereby grants to the Lender, to secure
the payment and performance in full of all of the Secured Obligations, a
security interest in and pledge and assign to the Lender the following
properties, assets and rights of the Borrower, wherever located, whether now
owned or hereafter acquired or arising, and all proceeds and products thereof
(all of the same being hereinafter called the “Collateral”): all Inventory and
Accounts.
 
Authorization to File Financing Statements. The Borrower hereby irrevocably
authorizes the Lender at any time and from time to time to file in any filing
office in any Uniform Commercial Code jurisdiction any initial financing
statements and amendments thereto with respect to the Collateral.
 
Other Actions as to any and all Collateral. The Borrower agrees, upon request of
the Lender and at the Lender’s option, to take any and all other actions as the
Lender may determine to be necessary or useful for the attachment and perfection
of, and the ability of the Lender to enforce, the Lender’s security interest in
any and all of the Collateral, including, without limitation, (a) executing,
delivering and, where appropriate, filing financing statements and amendments
relating thereto under the Uniform Commercial Code, to the extent, if any, that
the Borrower’s signatures thereon is required therefore, (b) causing the
Lender’s name to be noted as secured party on any certificate of title for a
titled good if such notation is a condition to attachment, perfection or
priority of, or ability of the Lender to enforce, the Lender’s security interest
in such Collateral, (c) complying with any provision of any statute, regulation
or treaty of the United States as to any Collateral if compliance with such
provision is a condition to attachment, perfection or priority of, or ability of
the Lender to enforce, the Lender’s security interest in such Collateral, (d)
obtaining governmental and other third party waivers, consents and approvals in
form and substance satisfactory to the Lender, including, without limitation,
any consent of any licensor, lessor or other person obligated on Collateral, (e)
obtaining waivers from mortgagees and landlords in form and substance
satisfactory to the Lender and (f) taking all actions under any earlier versions
of the Uniform Commercial Code or under any other law, as reasonably determined
by the Lender to be applicable in any relevant Uniform Commercial Code or other
jurisdiction, including any foreign jurisdiction.
 
Covenants Concerning Borrower’s Legal Status. Borrower covenants with the Lender
as follows: without providing at least 30 days’ prior written notice to the
Lender, (a) Borrower will not change its name, its place of business or, if more
than one, chief executive office, or its mailing address or organizational
identification number if it has one, (b) if Borrower does not have an
organizational identification number and later obtains one, Borrower will
forthwith notify the Lender of such organizational identification number, and
(c) Borrower will not change its type of organization, jurisdiction of
organization or other legal structure.

 
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Collateral Protection Expenses; Preservation of Collateral.  In the Lender’s
discretion, if the Borrower fails to do so, the Lender may discharge taxes and
other encumbrances at any time levied or placed on any of the Collateral, make
repairs thereto and pay any necessary filing fees or insurance premiums.  The
Borrower agrees to reimburse the Lender on demand for all expenditures so
made.  The Lender shall have no obligation to the Borrower to make any such
expenditures, nor shall the making thereof be construed as a waiver or cure any
Default or Event of Default.
 
Notification to Account Debtors and Other Persons Obligated on Collateral. If a
Default or an Event of Default shall have occurred and be continuing, the
Borrower shall, at the request and option of the Lender, notify account debtors
and other persons obligated on any of the Collateral of the security interest of
the Lender in any account or other Collateral and that payment thereof is to be
made directly to the Lender or to any financial institution designated by the
Lender as the Lender’s agent therefore, and the Lender may itself, if a Default
or an Event of Default shall have occurred and be continuing, without notice to
or demand upon the Borrower, so notify account debtors and other persons
obligated on Collateral.  After the making of such a request or the giving of
any such notification, the Borrower shall hold any proceeds of collection of
accounts and other Collateral received by the Borrower as trustee for the Lender
without commingling the same with other funds of the Borrower and shall turn the
same over to the Lender in the identical form received, together with any
necessary endorsements or assignments.  The Lender shall apply the proceeds of
collection of accounts and other Collateral received by the Lender to the
Secured Obligations, such proceeds to be immediately credited after final
payment in cash or other immediately available funds of the items giving rise to
them.
 
Power of Attorney.
 
Appointment and Powers of Lender. The Borrower hereby irrevocably constitutes
and appoints the Lender and any officer or agent thereof, with full power of
substitution, as its true and lawful attorneys-in-fact with full irrevocable
power and authority in the place and stead of the Borrower or in the Lender’s
own name, for the purpose of carrying out the terms of this Security Agreement,
to take any and all appropriate action and to execute any and all documents and
instruments that may be necessary or useful to accomplish the purposes of this
Security Agreement and, without limiting the generality of the foregoing, hereby
gives said attorneys the power and right, on behalf of the Borrower, without
notice to or assent by the Borrower, to do the following:
 
upon the occurrence and during the continuance of a Default or an Event of
Default, generally to sell, transfer, pledge, make any agreement with respect to
or otherwise dispose of or deal with any of the Collateral in such manner as is
consistent with the Uniform Commercial Code of the State and as fully and
completely as though the Lender were the absolute owner thereof for all
purposes, and to do, at the Borrower’s expense, at any time, or from time to
time, all acts and things which the Lender deems necessary or useful to protect,
preserve or realize upon the Collateral and the Lender’s security interest
therein, in order to effect the intent of this Security Agreement, all no less
fully and effectively as the Borrower might do; and
 
to the extent that the Borrower’s authorization given in §3 is not sufficient,
to file such financing statements with respect hereto, with or without the
Borrower’s signatures, or a photocopy of this Security Agreement in substitution
for a financing statement, as the Lender may deem appropriate and to execute in
the Borrower’s name such financing statements and amendments thereto and
continuation statements which may require the Borrower’s signature.
 
Ratification by Borrower. To the extent permitted by law, the Borrower hereby
ratifies all that said attorneys shall lawfully do or cause to be done by virtue
hereof. This power of attorney is a power coupled with an interest and is
irrevocable.
 
No Duty on Lender. The powers conferred on the Lender hereunder are solely to
protect its interests in the Collateral and shall not impose any duty upon it to
exercise any such powers.  The Lender shall be accountable only for the amounts
that it actually receives as a result of the exercise of such powers, and
neither it nor any of its officers, directors, employees or agents shall be
responsible to the Borrower for any act or failure to act, except for the
Lender’s own gross negligence or willful misconduct.
 
Rights and Remedies. If an Event of Default shall have occurred and be
continuing, the Lender, without any other notice to or demand upon the Borrower,
shall have in any jurisdiction in which enforcement hereof is sought, in
addition to all other rights and remedies, the rights and remedies of a secured
party under the Uniform Commercial Code of the State and any additional rights
and remedies as may be provided to a secured party in any jurisdiction in which
Collateral is located, including, without limitation, the right to take
possession of the Collateral, and for that purpose the Lender may, so far as the
Borrower can give authority therefore, enter upon any premises on which the
Collateral may be situated and remove the same therefrom.  The Lender may in its
discretion require the Borrower to assemble all or any part of the Collateral at
such location or locations within the jurisdiction(s) of the Borrower’s
principal office or at such other locations as the Lender may reasonably
designate.  Unless the Collateral is perishable or threatens to decline speedily
in value or is of a type customarily sold on a recognized market, the Lender
shall give to the Borrower at least five (5) Business Days’ prior written notice
of the time and place of any public sale of Collateral or of the time after
which any private sale or any other intended disposition is to be made.  The
Borrower hereby acknowledges that five (5) Business Days’ prior written notice
of such sale or sales shall be reasonable notice.  In addition, the Borrower
waives any and all rights that it may have to a judicial hearing in advance of
the enforcement of any of the Lender’s rights and remedies hereunder, including,
without limitation, its right following an Event of Default to take immediate
possession of the Collateral and to exercise its rights and remedies with
respect thereto.

 
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No Waiver by Lender, etc.  The Lender shall not be deemed to have waived any of
its rights and remedies in respect of the Secured Obligations or the Collateral
unless such waiver shall be in writing and signed by the Lender.  No delay or
omission on the part of the Lender in exercising any right or remedy shall
operate as a waiver of such right or remedy or any other right or remedy.  A
waiver on any one occasion shall not be construed as a bar to or waiver of any
right or remedy on any future occasion.  All rights and remedies of the Lender
with respect to the Secured Obligations or the Collateral, whether evidenced
hereby or by any other instrument or papers, shall be cumulative and may be
exercised singularly, alternatively, successively or concurrently at such time
or at such times as the Lender deems expedient.
 
Governing Law; Consent to Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF MARYLAND.  THE BORROWER
HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY UNITED STATES DISTRICT COURT
OR MARYLAND STATE COURT SITTING IN MONTGOMERY COUNTY, MARYLAND, FOR THE PURPOSES
OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.  THE BORROWER IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND
ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.  THE BORROWER AND THE LENDER HEREBY IRREVOCABLY WAIVE, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.  THIS PROVISION IS A MATERIAL INDUCEMENT TO
THE LENDER TO ENTER INTO THE FINANCING TRANSACTION.  IT SHALL NOT IN ANY WAY
AFFECT, WAIVE, LIMIT, AMEND OR MODIFY THE LENDER’S  ABILITY TO PURSUE ITS
REMEDIES INCLUDING, BUT NOT LIMITED TO, ANY CONFESSION OF JUDGMENT OR COGNOVIT
PROVISION CONTAINED HEREIN OR ANY OTHER DOCUMENT RELATED HERETO OR THERETO.
 
Miscellaneous. The headings of each section of this Security Agreement are for
convenience only and shall not define or limit the provisions thereof.  This
Security Agreement and all rights and obligations hereunder shall be binding
upon the Borrower and their successors and assigns, and shall inure to the
benefit of the Lender and its successors and assigns.  If any term of this
Security Agreement shall be held to be invalid, illegal or unenforceable, the
validity of all other terms hereof shall in no way be affected thereby, and this
Security Agreement shall be construed and be enforceable as if such invalid,
illegal or unenforceable term had not been included herein.  The Borrower
acknowledges receipt of a copy of this Security Agreement.
 
[Balance of page intentionally left blank.  Signature page follows.]

 
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IN WITNESS WHEREOF, intending to be legally bound, the Borrower has caused this
Security Agreement to be duly executed as of the date first above written.
 
AXION INTERNATIONAL HOLDINGS, INC.
a Colorado corporation

 
By:
/s/ Steve Silverman
Print Name:
Steve Silverman
Title:
Chief Executive Officer

 
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IN WITNESS WHEREOF, intending to be legally bound, the Lender has caused this
Security Agreement to be duly executed as of the date first above written.

/s/ Samuel G. Rose
Samuel G. Rose

 
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