Exhibit 10.1


 





First Amendment
to SECURITY AGREEMENT


 


THIS First
Amendment to SECURITY AGREEMENT dated as of October 21, 2013 (this “Amendment”), is by and among
Axion International Holdings, Inc., a Colorado corporation (“Debtor”), Axion International, Inc. a Delaware
corporation (the “Subsidiary” and collectively with Debtor, the “Pledgors”), and the holders
of Debtor’s Convertible Notes (as defined below) (individually and collectively, the “Secured Party”).


 


WHEREAS, pursuant to
the Note Purchase Agreement (the “Note Purchase Agreement”), dated as of August 24, 2012, among Debtor and the
Secured Party, Debtor agreed to issue to the Secured Party an aggregate of up to $10,000,000 of Debtor’s 8% convertible promissory
notes (the “Convertible Notes”);


 


WHEREAS, in connection
with the entry into the Note Purchase Agreement, Debtor, the Subsidiary and the Secured Party entered into that certain Security
Agreement (the “Security Agreement”), dated as of August 24, 2012, pursuant to which Debtor and the Subsidiary
granted to the Secured Party a security interest in all of their assets and rights to secure the obligations of Debtor under the
Convertible Notes;


 


WHEREAS, (i) on the
date hereof, the Secured Party has loaned Debtor an aggregate of approximately $603,000 (other than the loans made on the date
hereof in consideration for Convertible Notes), and in consideration of such loans, Debtor proposes to issue to each such Secured
Party a secured promissory note, and (ii) it is contemplated that following the date hereof, the Secured Party shall loan Debtor
an aggregate of up to an additional $3,000,000, and in consideration of such loans, Debtor proposes to issue to each such Secured
Party a secured promissory note (the secured promissory notes referred to in (i) and (ii) are hereinafter collectively referred
to as the “Secured Notes”), and each such Secured Note shall be exchanged on a future date for a Convertible
Note and warrants to purchase shares of Debtor’s common stock;


 


WHEREAS, Debtor, the
Subsidiary, and the Secured Party making the loans referenced in the foregoing recital desire for Debtor’s obligations under
the Secured Notes to be secured pursuant to the Security Agreement; and


 


WHEREAS, Debtor, the
Subsidiary and the Secured Party desire to amend the Security Agreement on the terms set forth herein.


 


NOW, THEREFORE, Debtor,
the Subsidiary and the Secured Party hereby amend the Security Agreement by this Amendment, as follows:


 


		1.	Amendments. The parties hereby amend the Security Agreement, effective as of the date hereof,
as follows:



 


		(a)	The defined term “Notes” as used in the Security Agreement is hereby amended
and restated to mean Debtor’s (i) 8% convertible promissory notes (the “Convertible Notes”), as issued
from time to time pursuant to the Note Purchase Agreement dated as of August 24, 2012, among Debtor and the Secured Party, as amended
from time to time, and (ii) secured promissory notes issued from time to time in contemplation of exchanging such notes on a future
date for Convertible Notes and warrants to purchase shares of Debtor’s common stock.



 






    	 



    	 



    

 


		(b)	The defined term “Secured Party” as used in the Security Agreement is hereby
amended and restated to mean, both individually and collectively, holders of the Notes.



 


		(c)	Section 2 of the Security Agreement is hereby amended and restated as follows to reflect the grant
of a security interest by the Pledgors to secure the obligations under both the Convertible Notes and the Secured Notes:



 


“Section
2Grant of Security. To secure the prompt and complete payment, observance and performance when due (whether at stated
maturity, by acceleration or otherwise) of all of the Obligations, each of the Pledgors hereby collaterally assigns and pledges
to the Secured Party, and grants to the Secured Party a security interest and Lien in and to, the Collateral. The Secured Party
acknowledges and agrees that the attachment of its security interest and Lien in any commercial tort claim as original collateral
is subject to the Debtor’s compliance with Section 4(a).”


 


		2.	Consent to Reincorporation. Pursuant to Section 5 of the Security Agreement, each Secured
Party hereby (i) consents to the reincorporation of Debtor from the State of Colorado to the State of Delaware, subject to the
approval of same at the annual meeting of Debtor’s shareholders to be held on November 19, 2013, and (ii) waives the notice
requirements set forth in Section 5 of the Security Agreement with respect to such reincorporation.



 


		3.	Effect on Security Agreement. Except as expressly provided in this Amendment, the Security
Agreement, as amended by this Amendment, shall remain in full force and effect.



 


		4.	Governing Law. All questions concerning the construction, validity, enforcement and interpretation
of this Amendment shall be governed by the internal laws of the State of Delaware, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of Delaware.



 


		5.	Counterparts. This Amendment may be executed in two or more identical counterparts, each
of which shall be deemed an original and all of which shall be considered one and the same agreement; provided that a facsimile
signature and a signature delivered electronically (including by delivery via electronic mail of a signature page in “pdf”
format) shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if
the signature were an original, not a facsimile or electronic signature.



 


[Signature page follows]


 






    	 



    	 



    

 


 


IN WITNESS WHEREOF,
each of the Pledgors and the Secured Party has caused this First Amendment to Security Agreement to be duly executed and delivered
as of the date first above written.


 





	 	PLEDGORS:	 
	 	 	 	 
	 	AXION INTERNATIONAL HOLDINGS, INC.	 
	 	 	 	 
	 	 	 	 
	 	By: 	/s/ Steve Silverman	 
	 	Name: 	Steve Silverman	 
	 	Title: 	CEO	 







 





	 	AXION INTERNATIONAL, INC.	 
	 	 	 	 
	 	 	 	 
	 	By: 	/s/ Donald W. Fallon	 
	 	Name: 	Donald W. Fallon	 
	 	Title: 	CFO	 
	 	 	 	 










 


 


 





Signature
page to First Amendment to Security Agreement







 




    	 



    	 



    

 


 





	 	SECURED PARTY:
	 	 	 
	 	MLTM Lending, LLC
	 	 	 
	 	By:	TM Investments, LP
	 	 	its administrative member
	 	 	 
	 	By:	CF Holdings, Inc.,
	 	 	its general partner







 





	 	By: 	/s/ Melvin Lenkin	 
	 	Name: 	Melvin Lenkin	 
	 	Title: 	President	 
	 	 	 	 
	 	 	 	 
	 	/s/ Edward Lenkin	 
	 	Edward Lenkin	 







 


 








	 	Judy Lenkin Lerner Revocable Trust	 
	 	 	 	 
	 	 	 	 
	 	By: 	/s/ Judy Lenkin Lerner	 
	 	Name: 	Judy Lenkin Lerner	 
	 	Title: 	Trustee	 




 





	 	 	/s/ Samuel Rose	 
	 	 	Samuel Rose	 
	 	 	 	 
	 	 	 	 
	 	 	/s/ Allen Kronstadt	 
	 	 	Allen Kronstadt	 




 


 


 





Signature
page to First Amendment to Security Agreement