Document:

EXHIBIT 10.8

 

SECURITY
AGREEMENT

 

 

DATE
AND PARTIES. The date of this Security Agreement (Agreement) is November 15, 2013. The parties and their addresses are:

 

SECURED
PARTY:

THE
COMMUNITY BANK

113
N Fifth Street

Suite
101

Zanesville,
OH 43701

 

DEBTOR:

AXION
INTERNATIONAL, INC.

a
Delaware Corporation

180
South Street, Suite 104

New
Providence, NJ 07974

 

The pronouns
"you" and "your" refer to the Secured Party. The pronouns "I," "me" and "my"
refer to each person or entity signing this Agreement as Debtor and agreeing to give the Property described in this Agreement as
security for the Secured Debts.

 

Where the
owner of the Property is different from the obligor or guarantor whose obligation this Agreement secures, "Debtor" refers
to each person or entity who is an owner of the Property and "Obligor" or "Guarantor," as applicable, refer
to such parties as designated in the SECURED DEBTS section.

 

1.  SECURED
DEBTS. The term "Secured Debts" includes and this Agreement will secure each of the following:

 

A.
Specific Debts. The following debts and all extensions, renewals, refinancings, modifications and replacements. A promissory
note or other agreement, No. 2312398, dated November 15, 2013, from Axion Recycled Plastics Incorporated (Obligor) to you, in the
amount of $1,000,000.00.

 

B.
All Debts. All present and future debts from Obligor to you, even if this Agreement is not specifically referenced, the future
debts are also secured by other collateral, or if the future debt is unrelated to or of a different type than this debt. If more
than one person signs this Agreement, each agrees that it will secure debts incurred either individually or with others who may
not sign this Agreement. Nothing in this Agreement constitutes a commitment to make additional or future loans or advances. Any
such commitment must be in writing.

 

This
Agreement will not secure any debt for which you fail to give any required notice of the right of rescission. This Agreement will
not secure any debt for which a non-possessory, non-purchase money security interest is created in "household goods"
in connection with a "consumer loan," as those terms are defined by federal law governing unfair and deceptive credit
practices. In addition, this Agreement will not secure any other debt if, with respect to such other debt, you fail to fulfill
any necessary requirements or limitations of Sections 19(a), 32 or 35 of Regulation Z or if, as a result, the other debt would
become subject to Section 670 of the John Warner National Defense Authorization Act for Fiscal Year 2007.

 

C.
Sums Advanced. All sums advanced and expenses incurred by you under the terms of this Agreement.

 

Loan Documents
refer to all the documents executed in connection with the Secured Debts.

 

2.  NON-OBLIGATED
OWNER. Any one of us, who is not also identified as an Obligor in the Secured Debts section of this Agreement and who
signs this Agreement, is defined as a cosigner for purposes of the Equal Credit Protection Act and the Consumer Financial
Protection Bureau's Regulation B, 12 C.F.R. 1002.7(d)(4) and is referred to herein as a Non-Obligated Owner. By signing this
Agreement, I, as a Non-Obligated Owner, do grant a security interest, and assign my rights and interests, in the Property to
secure payment of the Secured Debts, to create a valid lien, to pass clear title, to waive inchoate rights and to assign
earnings or rights to payment under any lease or rent of the Property. However, I, as a Non-Obligated Owner, am not
personally liable for the Secured Debts.

 

3.  SECURITY
INTEREST. To secure the payment and performance of the Secured Debts, I grant you a security interest in all of the Property
described in this Agreement that I own or have sufficient rights in which to transfer an interest, now or in the future, wherever
the Property is or will be located, and all proceeds and products from the Property (including, but not limited to, all parts,
accessories, repairs, replacements, improvements, and accessions to the Property). Property is all the collateral given as security
for the Secured Debts and described in this Agreement, and includes all obligations that support the payment or performance of
the Property. "Proceeds" includes cash proceeds, non-cash proceeds and anything acquired upon the sale, lease, license,
exchange, or other disposition of the Property; any rights and claims arising from the Property; and any collections and distributions
on account of the Property.

 

This Agreement
remains in effect until terminated in writing, even if the Secured Debts are paid and you are no longer obligated to advance funds
to me under any loan or credit agreement.

 

4.  PROPERTY
DESCRIPTION. The Property is described as follows:

 

A.
Specific Property. See attached Exhibit A.

 

5.  WARRANTIES
AND REPRESENTATIONS. I make to you the following warranties and representations which will continue as long as this Agreement
is in effect:

 

A.
Power. I am duly organized, and validly existing and in good standing in all jurisdictions in which I operate. I have the power
and authority to enter into this transaction and to carry on my business or activity as it is now being conducted and, as applicable,
am qualified to do so in each jurisdiction in which I operate.

 

B.
Authority. The execution, delivery and performance of this Agreement and the obligation evidenced by this Agreement are within
my powers, have been duly authorized, have received all necessary governmental approval, will not violate any provision of law,
or order of court or governmental agency, and will not violate any agreement to which I am a party or to which I am or any of my
property is subject.

 

C.
Name and Location. My name indicated in the DATE AND PARTIES section is my exact legal name. I am an entity organized and registered
under the laws of Ohio. I will provide verification of registration and location upon your request. I will provide you with at
least 30 days notice prior to any change in my name, address, or state of organization or registration.

 

D.
Business Name. Other than previously disclosed in writing to you I have not changed my name or principal place of business
within the last 10 years and have not used any other trade or fictitious name. Without your prior written consent, I do not and
will not use any other name and will preserve my existing name, trade names and franchises.

 

	Axion
    Recycled Plastics Incorporated	 	 
	Ohio
    Security Agreement	 	Initials_____
	OH/4XXCHRISO00000000000665020N	Wolters Kluwer Financial
    Services ©1996, 2013 Bankers SystemsTM	Page 1

 

 

    	 

    	 

    

 

E.
Ownership of Property. I represent that I own all of the Property. I represent that the vehicle portion of the Property is
not a vehicle seized pursuant to any federal, state or local forfeiture law. Your claim to the Property is ahead of the claims
of any other creditor, except the Ohio Department of Development and except as disclosed in writing to you prior to any advance
on the Secured Debts. I represent that I am the original owner of the Property and, if I am not, that I have provided you with
a list of prior owners of the Property.

 

6.  DUTIES
TOWARD PROPERTY.

 

A.
Protection of Secured Party's Interest. I will defend the Property against any other claim. I agree to do whatever you require
to protect your security interest and to keep your claim in the Property ahead of the claims of other creditors. I will not do
anything to harm your position.

 

I
will keep books, records and accounts about the Property and my business in general. I will let you examine these and make copies
at any reasonable time. I will prepare any report or accounting you request which deals with the Property.

 

B.
Use, Location, and Protection of the Property. I will keep the Property in my possession and in good repair. I will use it
only for commercial purposes. I will not change this specified use without your prior written consent. You have the right of reasonable
access to inspect the Property and I will immediately inform you of any loss or damage to the Property. I will not cause or permit
waste to the Property.

 

I
will keep the Property at my address listed in the DATE AND PARTIES section unless we agree I may keep it at another location.
If the Property is to be used in other states, I will give you a list of those states. The location of the Property is given to
aid in the identification of the Property. It does not in any way limit the scope of the security interest granted to you. I will
notify you in writing and obtain your prior written consent to any change in location of any of the Property. I will not use the
Property in violation of any law. I will notify you in writing prior to any change in my address, name or, if an organization,
any change in my identity or structure.

 

Until
the Secured Debts are fully paid and this Agreement is terminated, I will not voluntarily grant a security interest in any of the
Property without your prior written consent. I will pay all taxes and assessments levied or assessed against me or the Property
and provide timely proof of payment of these taxes and assessments upon request.

 

C.
Selling, Leasing or Encumbering the Property. I will not sell, offer to sell, lease, or otherwise transfer or encumber the
Property without your prior written permission which shall not be unreasonably withheld. Any disposition of the Property contrary
to this Agreement will violate your rights. Your permission to sell the Property may be reasonably withheld without regard to the
creditworthiness of any buyer or transferee. I will not permit the Property to be the subject of any court order affecting my rights
to the Property in any action by anyone other than you

 

7.  INSURANCE.
I agree to keep the Property insured against the risks reasonably associated with the Property. I will maintain this insurance
in the amounts you reasonably require. This insurance will last until the Property is released from this Agreement. I may choose
the insurance company, subject to your approval, which will not be unreasonably withheld.

 

I will have
the insurance company name you as loss payee on any insurance policy. I will give you and the insurance company immediate notice
of any loss. You may apply the insurance proceeds toward what is owed on the Secured Debts. You may require added security as a
condition of permitting any insurance proceeds to be used to repair or replace the Property.

 

If you acquire
the Property in damaged condition, my right to any insurance policies and proceeds will pass to you to the extent of the Secured
Debts.

 

I will immediately
notify you of cancellation or termination of insurance. If I fail to keep the Property insured, you may obtain insurance to protect
your interest in the Property and I will pay for the insurance on your demand. You may demand that I pay for the insurance all
at once, or you may add the insurance premiums to the balance of the Secured Debts and charge interest on it at the rate that applies
to the Secured Debts. This insurance may include coverages not originally required of me, may be written by a company other than
one I would choose, and may be written at a higher rate than I could obtain if I purchased the insurance. I acknowledge and agree
that you or one of your affiliates may receive commissions on the purchase of this insurance.

 

8.  AUTHORITY
TO PERFORM. I authorize you to do anything you deem reasonably necessary to protect the Property, and perfect and continue
your security interest in the Property. If I fail to perform any of my duties under this Agreement or any other Loan Document,
you are authorized, without notice to me, to perform the duties or cause them to be performed.

 

These authorizations
include, but are not limited to, permission to:

 

A.
pay and discharge taxes, liens, security interests or other encumbrances at any time levied or placed on the Property.

 

B.
order and pay for the repair, maintenance and preservation of the Property.

 

C.
file any financing statements on my behalf and pay for filing and recording fees pertaining to the Property.

 

D.
take any action you feel necessary to realize on the Property, including performing any part of a contract or endorsing it in my
name.

 

E.
handle any suits or other proceedings involving the Property in my name.

 

F.
prepare, file, and sign my name to any necessary reports or accountings.

 

G.
make an entry on my books and records showing the existence of this Agreement.

 

If you perform
for me, you will use reasonable care. If you exercise the care and follow the procedures that you generally apply to the collection
of obligations owed to you, you will be deemed to be using reasonable care. Reasonable care will not include: any steps necessary
to preserve rights against prior parties; the duty to send notices, perform services or take any other action in connection with
the management of the Property; or the duty to protect, preserve or maintain any security interest given to others by me or other
parties. Your authorization to perform for me will not create an obligation to perform and your failure to perform will not preclude
you from exercising any other rights under the law or this Agreement. All cash and non-cash proceeds of the Property may be applied
by you only upon your actual receipt of cash proceeds against such of the Secured Debts, matured or unmatured, as you determine
in your sole discretion.

 

If you come
into actual or constructive possession of the Property, you will preserve and protect the Property. For purposes of this paragraph,
you will be in actual possession of the Property only when you have physical, immediate and exclusive control over the Property
and you have affirmatively accepted that control. You will be in constructive possession of the Property only when you have both
the power and the intent to exercise control over the Property.

 

9.  DEFAULT.
I will be in default if any of the following events (known separately and collectively as an Event of Default) occur:

 

A.
Payments. I or Obligor fail to make a payment in full when due after a 10 day notice and grace period.

 

B.
Insolvency or Bankruptcy. The death, dissolution or insolvency of, appointment of a receiver by or on behalf of, application
of any debtor relief law, the assignment for the benefit of creditors by or on behalf of, the voluntary or involuntary termination
of existence by, or the commencement of any proceeding under any present or future federal or state insolvency, bankruptcy, reorganization,
composition or debtor relief law by or against me, Obligor, or any co-signer, endorser, surety or guarantor of this Agreement or
any other obligations Obligor has with you.

 

C.
Business Termination. I merge, dissolve, reorganize, end my business or existence, or a partner or majority owner dies or is
declared legally incompetent.

 

	Axion
    Recycled Plastics Incorporated	 	 
	Ohio
    Security Agreement	 	Initials_____
	OH/4XXCHRISO00000000000665020N	Wolters
    Kluwer Financial Services ©1996, 2013 Bankers SystemsTM	Page 2

 

 

    	 

    	 

    

 

D.
Failure to Perform. I fail to perform any condition or to keep any promise or covenant of this Agreement which is not cured
within 30 days after written notice.

 

E.
Other Documents. A default occurs under the terms of any other Loan Document which is not cured within 30 days after written
notice.

 

F.
Other Agreements. I am in default on any other debt or agreement I have with you which is not cured within 30 days after written
notice.

 

G.
Misrepresentation. I make any verbal or written statement or provide any financial information that is untrue, inaccurate,
or conceals a material fact at the time it is made or provided.

 

H.
Forfeiture. The Property is used in a manner or for a purpose that threatens confiscation by a legal authority.

 

I.
Name Change. I change my name or assume an additional name without notifying you before making such a change.

 

J.
Property Transfer. I transfer all or a substantial part of my money or property without your consent, which shall not be unreasonably
withheld.

 

K.
Property Value. You determine in good faith that the value of the Property has declined or is materially impaired.

 

L.
Material Change. Without first notifying you, there is a material change in my business, including ownership, management, and
financial conditions.

 

M.
Insecurity. You determine in good faith that a material adverse change has occurred in Borrower's financial condition from
the conditions set forth in Borrower's most recent financial statement before the date of this Agreement or that the prospect for
payment or performance of the Secured Debts is materially impaired for any reason.

 

10.  DUE
ON SALE OR ENCUMBRANCE. You may, at your option, declare the entire balance of this Agreement to be immediately due and payable
upon the creation of, or contract for the creation of, any superior lien or encumbrance on the Property, other than the Ohio Department
of Development, or the transfer or sale of all or any part of the Property. This right is subject to the restrictions imposed by
federal law (12 C.F.R. 591), as applicable.

 

11. REMEDIES.
After I default, you may at your option do any one or more of the following.

 

A.
Acceleration. You may make all or any part of the amount owing by the terms of the Secured Debts immediately due.

 

B.
Sources. You may use any and all remedies you have under state or federal law or in any Loan Document.

 

C.
Insurance Benefits. You may make a claim for any and all insurance benefits or refunds that may be available on my default.

 

D.
Payments Made On My Behalf. Amounts advanced on my behalf will be immediately due and may be added to the Secured Debts.

 

E.
Assembly of Property. You may require me to gather the Property and make it available to you in a reasonable fashion.

 

F.
Repossession. You may repossess the Property so long as the repossession does not involve a breach of the peace. You may sell,
lease or otherwise dispose of the Property as provided by law. You may apply what you receive from the disposition of the Property
to your expenses, your attorneys' fees and legal expenses (where not prohibited by law), and any debt I owe you. If what you receive
from the disposition of the Property does not satisfy the debt, I will be liable for the deficiency (where permitted by law). In
some cases, you may keep the Property to satisfy the debt.

 

Where
a notice is required, I agree that ten days prior written notice sent by first class mail to my address listed in this Agreement
will be reasonable notice to me under the Ohio Uniform Commercial Code. If the Property is perishable or threatens to decline speedily
in value, you may, without notice to me, dispose of any or all of the Property in a commercially reasonable manner at my expense
following any commercially reasonable preparation or processing.

 

If
any items not otherwise subject to this Agreement are contained in the Property when you take possession, you may hold these items
for me at my risk and you will not be liable for taking possession of them.

 

G.
Use and Operation. You may enter upon my premises and take possession of all or any part of my property for the purpose of
preserving the Property or its value, so long as you do not breach the peace. You may use and operate my property for the length
of time you feel is necessary to protect your interest, all without payment or compensation to me.

 

H.
Waiver. By choosing any one or more of these remedies you do not give up your right to use any other remedy. You do not waive
a default if you choose not to use a remedy. By electing not to use any remedy, you do not waive your right to later consider the
event a default and to use any remedies if the default continues or occurs again.

 

12. WAIVER
OF CLAIMS. I waive all claims for loss or damage caused by your acts or omissions where you acted reasonably and in good faith.

 

13. PERFECTION
OF SECURITY INTEREST AND COSTS. I authorize you to file a financing statement and/or security agreement, as appropriate, covering
the Property. I will comply with, facilitate, and otherwise assist you in connection with obtaining perfection or control over
the Property for purposes of perfecting your security interest under the Uniform Commercial Code. I agree to pay all taxes, fees
and costs you pay or incur in connection with preparing, filing or recording any financing statements or other security interest
filings on the Property. I agree to pay all actual costs of terminating your security interest.

 

14. APPLICABLE
LAW. This Agreement is governed by the laws of Ohio, the United States of America, and to the extent required, by the laws
of the jurisdiction where the Property is located, except to the extent such state laws are preempted by federal law. In the event
of a dispute, the exclusive forum, venue and place of jurisdiction will be in Ohio, unless otherwise required by law.

 

15. JOINT
AND INDIVIDUAL LIABILITY AND SUCCESSORS. Each Debtor's obligations under this Agreement are independent of the obligations
of any other Debtor. You may sue each Debtor individually or together with any other Debtor. You may release any part of the Property
and I will still be obligated under this Agreement for the remaining Property. Debtor agrees that you and any party to this Agreement
may extend, modify or make any change in the terms of this Agreement or any evidence of debt without Debtor's consent. Such a change
will not release Debtor from the terms of this Agreement. If you assign any of the Secured Debts, you may assign all or any part
of this Agreement without notice to me or my consent, and this Agreement will inure to the benefit of your assignee to the extent
of such assignment. You will continue to have the unimpaired right to enforce this Agreement as to any of the Secured Debts that
are not assigned. This Agreement shall inure to the benefit of and be enforceable by you and your successors and assigns and any
other person to whom you may grant an interest in the Secured Debts and shall be binding upon and enforceable against me and my
personal representatives, successors, heirs and assigns.

 

16. AMENDMENT,
INTEGRATION AND SEVERABILITY. This Agreement may not be amended or modified by oral agreement. No amendment or modification
of this Agreement is effective unless made in writing and executed by you and me. This Agreement and the other Loan Documents are
the complete and final expression of the understanding between you and me. If any provision of this Agreement is unenforceable,
then the unenforceable provision will be severed and the remaining provisions will still be enforceable.

 

17. INTERPRETATION.
Whenever used, the singular includes the plural and the plural includes the singular. The section headings are for convenience
only and are not to be used to interpret or define the terms of this Agreement.

 

	Axion
    Recycled Plastics Incorporated	 	 
	Ohio
    Security Agreement	 	Initials_____
	OH/4XXCHRISO00000000000665020N	Wolters
    Kluwer Financial Services ©1996, 2013 Bankers SystemsTM	Page 3

 

 

    	 

    	 

    

 

18.  NOTICE
AND ADDITIONAL DOCUMENTS. Unless otherwise required by law, any notice will be given by delivering it or mailing it by first
class mail to the appropriate party's address listed in the DATE AND PARTIES section, or to any other address designated in writing.
Notice to one Debtor will be deemed to be notice to all Debtors. I will inform you in writing of any change in my name, address
or other application information. I will provide you any other, correct and complete information you request to effectively grant
a security interest on the Property. I agree to sign, deliver, and file any additional documents or certifications that you may
consider necessary to perfect, continue, and preserve my obligations under this Agreement and to confirm your lien status on any
Property. Time is of the essence.

 

19.  WAIVER
OF JURY TRIAL. All of the parties to this Agreement knowingly and intentionally, irrevocably and unconditionally, waive any and
all right to a trial by jury in any litigation arising out of or concerning this Agreement or any other Loan Document or related
obligation. All of these parties acknowledge that this section has either been brought to the attention of each party's legal counsel
or that each party had the opportunity to do so.

 

CONFESSION
OF JUDGMENT. If I default, I authorize any attorney to appear in a court of record and confess judgment against me in favor of
you. The confession of judgment may be without process and for any amount due on the Secured Debts including collection costs and
reasonable attorneys' fees. This is in addition to other remedies. 

 

SIGNATURES.
By signing, I agree to the terms contained in this Agreement. I also acknowledge receipt of a copy of this Agreement.

 

WARNING:
BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN
AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU
MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.

 

	 	 	DEBTOR:	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Axion International, Inc.	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By	/s/ Steven L. Silverman	 	 	Date	11/15/2013	 
	 	 	 	 	Steven L. Silverman, CEO	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	SECURED PARTY:	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	The Community Bank	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	By	/s/ Chris Olney	 	 	Date	11/15/2013	 
	 	 	 	Chris Olney, Chief Credit Officer	 	 	 	 	 

 

	Axion
    Recycled Plastics Incorporated	 	 
	Ohio
    Security Agreement	 	Initials_____
	OH/4XXCHRISO00000000000665020N	Wolters
    Kluwer Financial Services ©1996, 2013 Bankers SystemsTM	Page 4EXHIBIT 10.9

 

	
	SECURITY AGREEMENT

 

DATE
AND PARTIES. The date of this Security Agreement (Agreement) is November 15, 2013. The parties and their addresses are:

 

SECURED
PARTY:

THE
COMMUNITY BANK 

113
N Fifth Street

Suite
101

Zanesville,
OH 43701

 

DEBTOR:

AXION
RECYCLED PLASTICS INCORPORATED

an
Ohio Corporation

4005
All American Way

Zanesville,
OH 43701

 

The pronouns
"you" and "your" refer to the Secured Party. The pronouns "I," "me" and "my"
refer to each person or entity signing this Agreement as Debtor and agreeing to give the Property described in this Agreement as
security for the Secured Debts.

 

1.  SECURED
DEBTS. The term "Secured Debts" includes and this Agreement will secure each of the following:

 

A. 
Specific Debts. The following debts and all extensions, renewals, refinancings, modifications and replacements. A promissory
note or other agreement, No. 2312398, dated November 15, 2013, from me to you, in the amount of $1,000,000.00.

 

B. 
All Debts. All present and future debts from me to you, even if this Agreement is not specifically referenced, the future
debts are also secured by other collateral, or if the future debt is unrelated to or of a different type than this debt. If more
than one person signs this Agreement, each agrees that it will secure debts incurred either individually or with others who may
not sign this Agreement. Nothing in this Agreement constitutes a commitment to make additional or future loans or advances. Any
such commitment must be in writing.

 

This
Agreement will not secure any debt for which you fail to give any required notice of the right of rescission. This Agreement will
not secure any debt for which a non-possessory, non-purchase money security interest is created in "household goods"
in connection with a "consumer loan," as those terms are defined by federal law governing unfair and deceptive credit
practices. In addition, this Agreement will not secure any other debt if, with respect to such other debt, you fail to fulfill
any necessary requirements or limitations of Sections 19(a), 32 or 35 of Regulation Z or if, as a result, the other debt would
become subject to Section 670 of the John Warner National Defense Authorization Act for Fiscal Year 2007.

 

C. 
Sums Advanced. All sums advanced and expenses incurred by you under the terms of this Agreement.

 

Loan Documents
refer to all the documents executed in connection with the Secured Debts.

 

2.  SECURITY
INTEREST. To secure the payment and performance of the Secured Debts, I grant you a security interest in all of the Property
described in this Agreement that I own or have sufficient rights in which to transfer an interest, now or in the future, wherever
the Property is or will be located, and all proceeds and products from the Property (including, but not limited to, all parts,
accessories, repairs, replacements, improvements, and accessions to the Property). Property is all the collateral given as security
for the Secured Debts and described in this Agreement, and includes all obligations that support the payment or performance of
the Property. "Proceeds" includes cash proceeds, non-cash proceeds and anything acquired upon the sale, lease, license,
exchange, or other disposition of the Property; any rights and claims arising from the Property; and any collections and distributions
on account of the Property.

 

This Agreement
remains in effect until terminated in writing, even if the Secured Debts are paid and you are no longer obligated to advance funds
to me under any loan or credit agreement.

 

3. 
PROPERTY DESCRIPTION. The Property is described as follows:

 

A.
Specific Property. See attached Exhibit A.

 

4. WARRANTIES
AND REPRESENTATIONS. I make to you the following warranties and representations which will continue as long as this Agreement
is in effect:

 

A.
Power. I am duly organized, and validly existing and in good standing in all jurisdictions in which I operate. I have the
power and authority to enter into this transaction and to carry on my business or activity as it is now being conducted and, as
applicable, am qualified to do so in each jurisdiction in which I operate.

 

B.
Authority. The execution, delivery and performance of this Agreement and the obligation evidenced by this Agreement are within
my powers, have been duly authorized, have received all necessary governmental approval, will not violate any provision of law,
or order of court or governmental agency, and will not violate any agreement to which I am a party or to which I am or any of
my property is subject.

 

C.
Name and Location. My name indicated in the DATE AND PARTIES section is my exact legal name. I will provide verification of
registration and location upon your request. I will provide you with at least 30 days notice prior to any change in my name, address,
or state of organization or registration.

 

D.
Business Name. Other than previously disclosed in writing to you I have not changed my name or principal place of business
within the last 10 years and have not used any other trade or fictitious name. Without your prior written consent, I do not and
will not use any other name and will preserve my existing name, trade names and franchises.

 

E.
Ownership of Property. I represent that I own all of the Property. I represent that the vehicle portion of the Property
is not a vehicle seized pursuant to any federal, state or local forfeiture law. Your claim to the Property is ahead of the
claims of any other creditor, except the Ohio Department of Development and except as disclosed in writing to you prior to
any advance on the Secured Debts. I represent that I am the original owner of the Property and, if I am not, that I have
provided you with a list of prior owners of the Property.

 

5.  DUTIES
TOWARD PROPERTY.

 

A.
Protection of Secured Party's Interest. I will defend the Property against any other claim. I agree to do whatever you require
to protect your security interest and to keep your claim in the Property ahead of the claims of other creditors. I will not do
anything to harm your position.

 

	Axion
    Recycled Plastics Incorporated

    Ohio Security Agreement	 	Initials
               
	OH/4XXCHRISO00000000000665015N	Wolters Kluwer Financial
    Services ©1996, 2013 Bankers SystemsTM	Page 1

 

 

    	 

    	 

    

 

I
will keep books, records and accounts about the Property and my business in general. I will let you examine these and make copies
at any reasonable time. I will prepare any report or accounting you request which deals with the Property.

 

B.
Use, Location, and Protection of the Property. I will keep the Property in my possession and in good repair. I will use it
only for commercial purposes. I will not change this specified use without your prior written consent. You have the right of reasonable
access to inspect the Property and I will immediately inform you of any loss or damage to the Property. I will not cause or permit
waste to the Property.

 

I
will keep the Property at my address listed in the DATE AND PARTIES section unless we agree I may keep it at another location.
If the Property is to be used in other states, I will give you a list of those states. The location of the Property is given to
aid in the identification of the Property. It does not in any way limit the scope of the security interest granted to you. I will
notify you in writing and obtain your prior written consent to any change in location of any of the Property. I will not use the
Property in violation of any law. I will notify you in writing prior to any change in my address, name or, if an organization,
any change in my identity or structure.

 

Until
the Secured Debts are fully paid and this Agreement is terminated, I will not voluntarily grant a security interest in any of the
Property without your prior written consent. I will pay all taxes and assessments levied or assessed against me or the Property
and provide timely proof of payment of these taxes and assessments upon request.

 

C. 
Selling, Leasing or Encumbering the Property. I will not sell, offer to sell, lease, or otherwise transfer or encumber the
Property without your prior written permission which shall not be unreasonably withheld. Any disposition of the Property contrary
to this Agreement will violate your rights. Your permission to sell the Property may be reasonably withheld without regard to the
creditworthiness of any buyer or transferee. I will not permit the Property to be the subject of any court order affecting my rights
to the Property in any action by anyone other than you.

 

6.  INSURANCE.
I agree to keep the Property insured against the risks reasonably associated with the Property. I will maintain this insurance
in the amounts you reasonably require. This insurance will last until the Property is released from this Agreement. I may choose
the insurance company, subject to your approval, which will not be unreasonably withheld.

 

I will have
the insurance company name you as loss payee on any insurance policy. I will give you and the insurance company immediate notice
of any loss. You may apply the insurance proceeds toward what is owed on the Secured Debts. You may require added security as a
condition of permitting any insurance proceeds to be used to repair or replace the Property.

 

If you acquire
the Property in damaged condition, my right to any insurance policies and proceeds will pass to you to the extent of the Secured
Debts.

 

I will immediately
notify you of cancellation or termination of insurance. If I fail to keep the Property insured, you may obtain insurance to protect
your interest in the Property and I will pay for the insurance on your demand. You may demand that I pay for the insurance all
at once, or you may add the insurance premiums to the balance of the Secured Debts and charge interest on it at the rate that applies
to the Secured Debts. This insurance may include coverages not originally required of me, may be written by a company other than
one I would choose, and may be written at a higher rate than I could obtain if I purchased the insurance. I acknowledge and agree
that you or one of your affiliates may receive commissions on the purchase of this insurance.

 

7.  AUTHORITY
TO PERFORM. I authorize you to do anything you deem reasonably necessary to protect the Property, and perfect and continue
your security interest in the Property. If I fail to perform any of my duties under this Agreement or any other Loan Document,
you are authorized, without notice to me, to perform the duties or cause them to be performed.

 

These authorizations
include, but are not limited to, permission to:

 

A. 
pay and discharge taxes, liens, security interests or other encumbrances at any time levied or placed on the Property.

 

B.
 order and pay for the repair, maintenance and preservation of the Property.

 

C.
 file any financing statements on my behalf and pay for filing and recording fees pertaining to the Property.

 

D.
 take any action you feel necessary to realize on the Property, including performing any part of a contract or endorsing it in my
name.

 

E.
 handle any suits or other proceedings involving the Property in my name.

 

F.
 prepare, file, and sign my name to any necessary reports or accountings.

 

G.
 make an entry on my books and records showing the existence of this Agreement.

 

If you perform
for me, you will use reasonable care. If you exercise the care and follow the procedures that you generally apply to the collection
of obligations owed to you, you will be deemed to be using reasonable care. Reasonable care will not include: any steps necessary
to preserve rights against prior parties; the duty to send notices, perform services or take any other action in connection with
the management of the Property; or the duty to protect, preserve or maintain any security interest given to others by me or other
parties. Your authorization to perform for me will not create an obligation to perform and your failure to perform will not preclude
you from exercising any other rights under the law or this Agreement. All cash and non-cash proceeds of the Property may be applied
by you only upon your actual receipt of cash proceeds against such of the Secured Debts, matured or unmatured, as you determine
in your sole discretion.

 

If you come
into actual or constructive possession of the Property, you will preserve and protect the Property. For purposes of this paragraph,
you will be in actual possession of the Property only when you have physical, immediate and exclusive control over the Property
and you have affirmatively accepted that control. You will be in constructive possession of the Property only when you have both
the power and the intent to exercise control over the Property.

 

8.  DEFAULT.
I will be in default if any of the following events (known separately and collectively as an Event of Default) occur:

 

A.
 Payments. I fail to make a payment in full when due after a 10 day notice and grace period.

 

B. 
Insolvency or Bankruptcy. The death, dissolution or insolvency of, appointment of a receiver by or on behalf of, application
of any debtor relief law, the assignment for the benefit of creditors by or on behalf of, the voluntary or involuntary termination
of existence by, or the commencement of any proceeding under any present or future federal or state insolvency, bankruptcy, reorganization,
composition or debtor relief law by or against me, Obligor, or any co-signer, endorser, surety or guarantor of this Agreement or
any other obligations Obligor has with you.

 

C. 
Business Termination. I merge, dissolve, reorganize, end my business or existence, or a partner or majority owner dies
or is declared legally incompetent. 

 

D. 
Failure to Perform. I fail to perform any condition or to keep any promise or covenant of this Agreement which is not cured
within 30 days after written notice. 

 

E. 
Other Documents. A default occurs under the terms of any other Loan Document which is not cured within 30 days after written
notice. 

 

F. 
Other Agreements. I am in default on any other debt or agreement I have with you which is not cured within 30 days after
written notice. 

 

G. 
Misrepresentation. I make any verbal or written statement or provide any financial information that is untrue, inaccurate,
or conceals a material fact at the time it is made or provided.

 

H.  Forfeiture. The Property is used in a manner or for a purpose that threatens confiscation by a legal authority.

 

	Axion
    Recycled Plastics Incorporated

    Ohio Security Agreement	 	Initials
               
	OH/4XXCHRISO00000000000665015N	Wolters Kluwer Financial
    Services ©1996, 2013 Bankers SystemsTM	Page 2

 

 

    	 

    	 

    

 

I. 
Name Change. I change my name or assume an additional name without notifying you before making such a change.

 

J. 
Property Transfer. I transfer all or a substantial part of my money or property without your consent, which shall not be
unreasonably withheld.

 

L. 
Property Value. You determine in good faith that the value of the Property has declined or is impaired.

 

M. 
Material Change. Without first notifying you, there is a material change in my business, including ownership, management,
and financial conditions.

 

N. 
Insecurity. You determine in good faith that a material adverse change has occurred in my financial condition from the conditions
set forth in my most recent financial statement before the date of this Agreement or that the prospect for payment or performance
of the Secured Debts is materially impaired for any reason.

 

9.  DUE
ON SALE OR ENCUMBRANCE. You may, at your option, declare the entire balance of this Agreement to be immediately due and payable
upon the creation of, or contract for the creation of, any superior lien or encumbrance on the Property, other than the Ohio Department
of Development, or the transfer or sale of all or any part of the Property. This right is subject to the restrictions imposed by
federal law (12 C.F.R. 591), as applicable.

 

10.  REMEDIES.
After I default, you may at your option do any one or more of the following.

 

A.
 Acceleration. You may make all or any part of the amount owing by the terms of the Secured Debts immediately due.

 

B.
 Sources. You may use any and all remedies you have under state or federal law or in any Loan Document.

 

C.
 Insurance Benefits. You may make a claim for any and all insurance benefits or refunds that may be available on my default.

 

D.
 Payments Made On My Behalf. Amounts advanced on my behalf will be immediately due and may be added to the Secured Debts.

 

E.
 Assembly of Property. You may require me to gather the Property and make it available to you in a reasonable fashion.

 

F.
 Repossession. You may repossess the Property so long as the repossession does not involve a breach of the peace. You may sell,
lease or otherwise dispose of the Property as provided by law. You may apply what you receive from the disposition of the Property
to your expenses, your attorneys' fees and legal expenses (where not prohibited by law), and any debt I owe you. If what you receive
from the disposition of the Property does not satisfy the debt, I will be liable for the deficiency (where permitted by law). In
some cases, you may keep the Property to satisfy the debt.

 

Where
a notice is required, I agree that ten days prior written notice sent by first class mail to my address listed in this Agreement
will be reasonable notice to me under the Ohio Uniform Commercial Code. If the Property is perishable or threatens to decline speedily
in value, you may, without notice to me, dispose of any or all of the Property in a commercially reasonable manner at my expense
following any commercially reasonable preparation or processing.

 

If
any items not otherwise subject to this Agreement are contained in the Property when you take possession, you may hold these items
for me at my risk and you will not be liable for taking possession of them.

 

G.
 Use and Operation. You may enter upon my premises and take possession of all or any part of my property for the purpose
of preserving the Property or its value, so long as you do not breach the peace. You may use and operate my property for the
length of time you feel is necessary to protect your interest, all without payment or compensation to me.

 

H.
 Waiver. By choosing any one or more of these remedies you do not give up your right to use any other remedy. You do not waive
a default if you choose not to use a remedy. By electing not to use any remedy, you do not waive your right to later consider the
event a default and to use any remedies if the default continues or occurs again.

 

11.  WAIVER
OF CLAIMS. I waive all claims for loss or damage caused by your acts or omissions where you acted reasonably and in good faith.

 

12.  PERFECTION
OF SECURITY INTEREST AND COSTS. I authorize you to file a financing statement and/or security agreement, as appropriate, covering
the Property. I will comply with, facilitate, and otherwise assist you in connection with obtaining perfection or control over
the Property for purposes of perfecting your security interest under the Uniform Commercial Code. I agree to pay all taxes, fees
and costs you pay or incur in connection with preparing, filing or recording any financing statements or other security interest
filings on the Property. I agree to pay all actual costs of terminating your security interest.

 

13.  APPLICABLE
LAW. This Agreement is governed by the laws of Ohio, the United States of America, and to the extent required, by the laws
of the jurisdiction where the Property is located, except to the extent such state laws are preempted by federal law. In the event
of a dispute, the exclusive forum, venue and place of jurisdiction will be in Ohio, unless otherwise required by law.

 

14.  JOINT
AND INDIVIDUAL LIABILITY AND SUCCESSORS. Each Debtor's obligations under this Agreement are independent of the obligations
of any other Debtor. You may sue each Debtor individually or together with any other Debtor. You may release any part of the Property
and I will still be obligated under this Agreement for the remaining Property. Debtor agrees that you and any party to this Agreement
may extend, modify or make any change in the terms of this Agreement or any evidence of debt without Debtor's consent. Such a change
will not release Debtor from the terms of this Agreement. If you assign any of the Secured Debts, you may assign all or any part
of this Agreement without notice to me or my consent, and this Agreement will inure to the benefit of your assignee to the extent
of such assignment. You will continue to have the unimpaired right to enforce this Agreement as to any of the Secured Debts that
are not assigned. This Agreement shall inure to the benefit of and be enforceable by you and your successors and assigns and any
other person to whom you may grant an interest in the Secured Debts and shall be binding upon and enforceable against me and my
personal representatives, successors, heirs and assigns.

 

15.  AMENDMENT,
INTEGRATION AND SEVERABILITY. This Agreement may not be amended or modified by oral agreement. No amendment or modification
of this Agreement is effective unless made in writing and executed by you and me. This Agreement and the other Loan Documents are
the complete and final expression of the understanding between you and me. If any provision of this Agreement is unenforceable,
then the unenforceable provision will be severed and the remaining provisions will still be enforceable.

 

16.  INTERPRETATION.
Whenever used, the singular includes the plural and the plural includes the singular. The section headings are for convenience
only and are not to be used to interpret or define the terms of this Agreement.

 

17.  NOTICE
AND ADDITIONAL DOCUMENTS. Unless otherwise required by law, any notice will be given by delivering it or mailing it by first
class mail to the appropriate party's address listed in the DATE AND PARTIES section, or to any other address designated in writing.
Notice to one Debtor will be deemed to be notice to all Debtors. I will inform you in writing of any change in my name, address
or other application information. I will provide you any other, correct and complete information you request to effectively grant
a security interest on the Property. I agree to sign, deliver, and file any additional documents or certifications that you may
consider necessary to perfect, continue, and preserve my obligations under this Agreement and to confirm your lien status on any
Property. Time is of the essence.

 

	Axion
    Recycled Plastics Incorporated

    Ohio Security Agreement	 	Initials
               
	OH/4XXCHRISO00000000000665015N	Wolters Kluwer Financial
    Services ©1996, 2013 Bankers SystemsTM	Page 3

 

 

    	 

    	 

    

 

18. WAIVER
OF JURY TRIAL. All of the parties to this Agreement knowingly and intentionally, irrevocably and unconditionally, waive any
and all right to a trial by jury in any litigation arising out of or concerning this Agreement or any other Loan Document or related
obligation. All of these parties acknowledge that this section has either been brought to the attention of each party's legal counsel
or that each party had the opportunity to do so.

 

CONFESSION
OF JUDGMENT. If I default, I authorize any attorney to appear in a court of record and confess judgment against me in favor
of you. The confession of judgment may be without process and for any amount due on the Secured Debts including collection costs
and reasonable attorneys' fees. This is in addition to other remedies.

 

SIGNATURES.
By signing, I agree to the terms contained in this Agreement. I also acknowledge receipt of a copy of this Agreement.

 

WARNING:
BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN
AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU
MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.

 

	DEBTOR:	 	 
	 	 	 
	Axion Recycled
    Plastics Incorporated 	 	 
	 	 	 	 	 
	By	 	/s/ Steven L. Silverman        	Date	11/15/2013	 
	Steven
    L. Silverman, CEO	 	 

 

	SECURED
    PARTY:	 	 
	 	 	 
	The
    Community Bank	 	 
	 		 	 
	By	 	/s/ Chris Olney	Date 	11/15/2013	 
	Chris
    Olney, Chief Credit Officer

 

	Axion
    Recycled Plastics Incorporated

    Ohio Security Agreement	 	Initials
               
	OH/4XXCHRISO00000000000665015N	Wolters Kluwer Financial
    Services ©1996, 2013 Bankers SystemsTM	Page 4

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