UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported) November 3, 2015 (October 28, 2015)
AXION INTERNATIONAL HOLDINGS, INC.
(Exact name of registrant
as specified in its charter)
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Colorado
(State or other jurisdiction
of incorporation) |
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0-13111
(Commission File
Number) |
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84-0846389
(IRS Employer
Identification No.) |
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4005 All American Way, Zanesville,
Ohio
(Address of principal
executive offices) |
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43701
(Zip Code) |
Registrant’s telephone number,
including area code: (740) 452-2500
Not Applicable
(Former name or former
address, if changed since last report)
Check the appropriate box below if the Form
8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
(see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 1.01 Entry
into a Material Definitive Agreement.
Effective October 28, 2015 (the “Effective
Date”), Axion International Holdings, Inc. (“Holdings”) entered into an Agreement (the “Agreement”),
by and among Samuel G. Rose, Melvin Lenkin, Edward Lenkin, Julie Walters, RPM Greenbaum and the 401(k) Plan dated December 1, 1992,
Judy Lenkin Lerner, Judy Lenkin Lerner Revocable Trust, ML Dynasty Trust, MLTM Lending, LLC , TM Investments LP, Thomas O. Bowersox,
Southern Management Corporation (all of the foregoing parties collectively and individually referred to as the “Rose Lenkin
SM Parties”), Holdings, Axion International, Inc. (“International”) and Axion Recycled Plastics Incorporated
(collectively with Holdings and International, “Axion”), with the objective of eliminating Axion’s debt obligations
held by the Rose Lenkin SM Parties and reducing the equity interests in Holdings held by the Rose Lenkin SM Parties in order to
facilitate Axion’s ability to restructure its consolidated balance sheet and raise additional capital.
Under the terms of the Agreement, each
of the Rose Lenkin SM Parties has sold to Axion all of its debt obligations in the aggregate of $19.7 million issued by Axion to
such party (‘Cancelled Debt”), for an aggregate total sales price of Two Dollars ($2.00). Excepting (i) for these sales
of Cancelled Debt, (ii) for the shares of common stock in Holdings which such party obtained in exchange for the warrants granted
to them (collectively, “Rose Lenkin SM Parties Warrant Stock”) as set forth below, and (iii) for the preferred shares
of Holdings stock (“Preferred Shares”) as set forth below, each of the Rose Lenkin SM Parties agrees that the remainder
of the Axion shares, interests and rights he, she or it holds are surrendered to Axion for cancellation, including the cancellation
of all other indebtedness owing from Axion to such parties, including any unpaid interest, and the termination of all rights they
possess under any ancillary agreements pertaining to such indebtedness or shares, as well as the full release of all claims which
they may possess against Axion and its respective officers, directors, employees, and representatives.
The Rose Lenkin SM Parties will retain
the shares of Rose Lenkin SM Parties Warrant Stock, being specifically the following shares: 10,864,529 owned by Samuel G. Rose,
10,204,109 shares owned by MLTM, 294,153 shares owned by Edward Lenkin, 364,944 shares owned by Judy Lenkin Lerner, and 717,090
owned by Southern Management. The Rose Lenkin SM Parties agree to return 9.0 million shares of Holdings common stock.
The Rose Lenkin SM Parties have also agreed
to sell, assign and transfer an aggregate of 275,000 of Preferred Shares of Holdings stock to a designee of Axion for an aggregate
total sales price of Two Dollars ($2.00).
Under the Agreement, Holdings agrees to
maintain in full force and effect directors and officers liability insurance policies covering former officers and directors, which
policies shall provide coverage for such parties that is at least as extensive as the coverage under the policies that are in force
as of the date of this Agreement. In the event Holdings is unable to maintain or renew all such policies upon the same or better
terms and conditions with respect to former officers and directors, then Holdings agrees to provide written notice to the Rose
Lenkin SM Parties at least 60 days prior to the expiration, cancellation or other termination of such policies.
Pursuant to a bank term loan to Axion which
was guaranteed by Melvin Lenkin and Samuel G. Rose and another individual, Melvin Lenkin and Samuel G. Rose agree to remain as
guarantors of such loan and agree to cooperate with Axion in regards to possible modifications to such loan. Melvin Lenkin’s
and Samuel G. Rose’s obligations for cooperation are contingent upon the remaining individual similarly agreeing to remain
as a guarantor of such loan and agreeing to cooperate.
Axion in regards to the Rose Lenkin SM
Parties and the Rose Lenkin SM Parties in regards to Axion, have agreed to fully, finally and forever settle and release all claims
that now exist, may exist or previously existed, whether known or unknown.
ITEM 9.01 Financial Statements and Exhibits
(d) Exhibits
| 10.1 | Agreement effective October 28, 2015 and dated October
20, 2015. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: November 3, 2015 |
AXION INTERNATIONAL HOLDINGS, INC. |
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By: |
/s/ Donald W. Fallon |
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Donald W. Fallon
Chief Financial Officer |
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Exhibit Index
| 10.1 | Agreement effective October 28, 2015 and dated October
14, 2015 |
EXHIBIT 10.1
AGREEMENT
This Agreement (“Agreement”)
is made as of the 20th day of October, 2015, by and among Samuel G. Rose, Melvin Lenkin, Edward Lenkin, Julie Walters, RPM Greenbaum
and the 401(k) plan dated December 1, 1992, Judy Lenkin Lerner, Judy Lenkin Lerner Revocable Trust, ML Dynasty Trust, MLTM Lending,
LLC , TM Investments LP, Thomas O. Bowersox, Southern Management Corporation (all of the foregoing parties collectively and individually
referred to as the “Rose Lenkin SM Parties”), Axion International Holdings, Inc. (“Holdings”),
Axion International, Inc. (“International”) and Axion Recycled Plastics Incorporated (collectively with International,
“Axion”), as follows:
WHEREAS, the Rose Lenkin
SM Parties hold debt obligations issued by and equity securities in Holdings;
WHEREAS, the Rose Lenkin
SM Parties desire to cooperate with Holdings with the objective of eliminating the Holdings debt obligations they hold and reducing
their equity interests in order to facilitate Holdings’ ability to restructure its consolidated balance sheet and raise additional
capital; and
WHEREAS, the parties
hereto desire to set forth their mutual agreements and understandings.
NOW, THEREFORE, in
consideration of the recitals set forth above and made a material part of this Agreement, and other good and valuable consideration
acknowledged to have been received, the parties hereto agree:
1. EAGLE BANK LOAN:
Melvin Lenkin and Samuel G. Rose agree to remain as guarantors of Axion’s loan with Eagle Bank and agree to cooperate with
the extension of such loan for an additional two (2) years. Melvin Lenkin’s and Samuel G. Rose’s obligations set forth
in the preceding sentence are contingent upon Allen R. Kronstadt similarly agreeing to remain as a guarantor of such loan and agreeing
to cooperate with the extension of such loan for an additional two (2) years.
2. ROSE, LENKIN,
SOUTHERN MANAGEMENT AND RELATED PARTIES MATTERS: Samuel G. Rose, Melvin Lenkin, Edward Lenkin, Julie Walters, RPM Greenbaum and
the 401(k) plan dated December 1, 1992, Judy Lenkin Lerner, Judy Lenkin Lerner Revocable Trust, TM Investments LP, ML Dynasty Trust,
MLTM Lending, LLC, Thomas O. Bowersox and Southern Management Corporation (defined above individually and collectively as the “Rose
Lenkin SM Parties”) shall do the following, as applicable, and Holdings and Axion shall do the following, as applicable:
(i) RELEASE OF ALL
CLAIMS: The parties shall execute and deliver the Release Agreement in the form attached hereto as Exhibit A contemporaneously
with the execution and delivery of this Agreement. The Release Agreement shall be effective as of the date thereof.
(ii) SALE OF NOTES;
RELEASE OF AXION FROM OTHER OBLIGATIONS: Each of the Rose Lenkin SM Parties shall sell to Axion all of the debt obligations issued
by Axion (or any of its subsidiaries) to such Party, as set forth on the attached Schedule 2(ii), for an aggregate total sales
price of Two Dollars ($2.00). Axion hereby represents to the Rose Lenkin SM Parties that all of such notes are registered in the
books and records of Axion in the names of the Rose Lenkin SM Parties and the transfer of any such notes may be effected only by
surrender of the old instrument and either the reissuance by the issuer of the old instrument to the new holder or the issuance
by the issuer of a new instrument to the new holder. Axion further agrees to not report the purchase of such promissory notes as
capital contributions from the Rose Lenkin SM Parties. Excepting for the sales as described hereinabove in this section 2(ii),
for the Rose Lenkin SM Parties Warrant Stock as set forth in section 2(iii) herein below, and for the Preferred Shares as set forth
in section (iv) herein below, each of the Rose Lenkin SM Parties agrees that the remainder of the Axion shares, interests and rights
he, she or it holds shall be surrendered to Axion for cancellation, including the cancellation of all other indebtedness owing
from Axion to such parties, including any unpaid interest, and the termination of all rights they possess under any ancillary agreements
pertaining to such indebtedness or shares, as well as the full release of all claims which they may possess against Axion and its
respective officers, directors, employees, and representatives pursuant to the Release Agreement attached hereto as Exhibit A.
(iii) RETAINED STOCK
OF ROSE LENKIN SM PARTIES: The Rose Lenkin SM Parties shall retain the shares of common stock in Axion which they obtained in exchange
for the warrants granted to them (collectively, “Rose Lenkin SM Parties Warrant Stock”), being specifically
the following shares: 10,864,529 owned by Samuel G. Rose, 10,204,109 shares owned by MLTM, 294,153 shares owned by Edward Lenkin,
364,944 shares owned by Judy Lenkin Lerner, and 717,090 owned by Southern Management.
(iv) PREFERRED SHARES
OF ROSE LENKIN PARTIES: The Rose Lenkin SM Parties shall sell, assign and transfer all of their preferred shares of Axion stock
(“Preferred Shares”) to a designee of Holdings for an aggregate total sales price of Two Dollars ($2.00).
(v) DIRECTORS AND
OFFICERS LIABILITY INSURANCE: Axion shall maintain in full force and effect directors and officers liability insurance policies
covering former officers and directors, which policies shall provide coverage for such parties that is at least as extensive as
the coverage under the policies that are in force as of the date of this Agreement. In the event Axion is unable to maintain or
renew all such policies upon the same or better terms and conditions with respect to former officers and directors, then Axion
shall provide written notice to the Rose Lenkin SM Parties at least 60 days prior to the expiration, cancellation or other termination
of such policies.
3.
WACO AMIGOS REAL ESTATE LLC:
(i) WACO TRACK AGREEMENT:
Melvin Lenkin and Samuel G. Rose shall use their best efforts to cause Waco Amigos Real Estate, LLC (“Waco Amigos”),
the landlord of the Axion plant in Waco, Texas, to execute the Track Agreement as defined below. Melvin Lenkin’s and Samuel
G. Rose’s obligations set forth in the preceding sentence are contingent upon (1) Allen R. Kronstadt similarly agreeing to
cause Waco Amigos to execute the Track Agreement, and (2) Axion executing the Track Agreement. For purposes of this Section 3(i),
“Track Agreement” means the Industry Track Agreement, the Indemnification Agreement Relating to the Industry
Track Agreement, and the Agreement and Consent to Joint Use of Track, all in the forms attached hereto collectively as Exhibit
B, or in such other form as Waco Amigos and Axion mutually agree.
(ii) NO EFFECT UPON
WACO LEASE: Nothing in this Agreement, or in any releases provided in connection with this Agreement, shall affect or impair any
party’s rights under that certain lease agreement between Axion and Waco Amigos with respect to the Texas Property.
4. MISCELLANEOUS PROVISIONS:
(i) ENTIRE AGREEMENT:
This Agreement contains the entire understanding among the parties hereto and supersedes all prior written or oral agreements among
them respecting the within subject matter, unless otherwise provided herein. There are no representations, agreements, arrangements
or understandings, oral or written, among the parties hereto relating to the subject matter of this Agreement which are not fully
expressed herein.
(ii) FURTHER ASSURANCES:
The parties hereto agree to execute, acknowledge and deliver such further assurances, instruments and documents, and shall take
such further actions, as any party may reasonably request in order to fulfill the intent of this Agreement and the transactions
contemplated hereby.
(iv) COUNTERPARTS: This
Agreement may be executed in one or more counterparts (and by each of the parties on separate counterparts), each of which shall
constitute an original, but all of which together shall constitute one and the same instrument, and photographic copies of such
signed counterparts may be used in lieu of the original for any purpose authorized by this Agreement.
(v) REPRESENTATIONS OF
THE PARTIES: The parties declare that they fully understand the facts and all of their respective legal rights and liabilities;
that this Agreement and all of its terms and conditions were negotiated at arms-length; that each party has entered into this Agreement
in good faith and for valuable consideration, the receipt and sufficiency of which are hereby acknowledged; that they believe the
Agreement to be fair, just, and reasonable; and that they sign the Agreement freely and voluntarily and without fraud, duress,
undue influence or coercion of any kind.
(vi) GOVERNING LAW; VENUE:
This Agreement is made and entered in the State of Maryland and shall in all respects be governed by and construed and enforced
in accordance with the substantive laws of the State of Maryland. The Parties hereby agree that any claims arising from or related
to the enforcement of this Agreement shall be subject to the jurisdiction of the courts of the State of Maryland, and the Parties
specifically agree to the venue of the Circuit Court for Montgomery County, Maryland for such purpose.
(vii) WAIVER OF JURY
TRIAL: THE PARTIES HEREBY EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY FOR ANY DISPUTES ARISING OUT OF THIS AGREEMENT.
(viii) RECITALS: The
recital above is incorporated into the Agreement as a material part.
(ix) HEADINGS: The headings
to this Agreement are for convenience only and in the event of conflict between a heading and the body of the Agreement, the body
of the Agreement shall control.
IN WITNESS WHEREOF, the parties hereto have
set their hands and seals effective as of the date first above written.
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ROSE LENKIN SM PARTIES: |
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/s/ Samuel G. Rose |
(SEAL) |
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Samuel G. Rose |
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/s/ Melvin Lenkin |
(SEAL) |
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Melvin Lenkin |
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/s/ Edward Lenkin |
(SEAL) |
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Edward Lenkin |
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/s/ Julie Walters |
(SEAL) |
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Julie Walters |
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RPM GREENBAUM AND THE 401(K) PLAN DATED DECEMBER 1, 1992 |
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By: /s/ Samuel G. Rose |
(SEAL) |
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Name: Samuel G. Rose |
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Title: Administrator |
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/s/ Judy Lenkin Lerner |
(SEAL) |
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Judy Lenkin Lerner |
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JUDY LENKIN LERNER REVOCABLE TRUST |
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By: /s/ Judy Lenkin Lerner |
(SEAL) |
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Name: Judy Lenkin Lerner |
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Title: Granter |
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ML DYNASTY TRUST |
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By: /s/ Thomas O. Bowersox |
(SEAL) |
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Name: Thomas O. Bowersox |
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Title: Trustee |
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MLTM LENDING, LLC |
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By: /s/ Thomas O. Bowersox |
(SEAL) |
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Name: Thomas O. Bowersox |
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Title: Trustee, ML Dynasty Trust |
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/s/
Thomas O. Bowersox |
(SEAL) |
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Thomas O. Bowersox |
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SOUTHERN MANAGEMENT CORPORATION |
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By: /s/ David H. Hillman |
(SEAL) |
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Name: David H. Hillman |
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Title: CEO |
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TM INVESTMENTS LP |
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By: /s/ Melvin Lenkin |
(SEAL) |
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Name: Melvin Lenkin, President |
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Title: CF Holdings, Inc. General
Partner |
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AXION INTERNATIONAL HOLDINGS, INC: |
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By: /s/ Claude Brown, Jr. |
(SEAL) |
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Name: Claude Brown, Jr. |
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Title: CEO |
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AXION INTERNATIONAL, INC.: |
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By: /s/ Claude Brown, Jr. |
(SEAL) |
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Name: Claude Brown, Jr. |
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Title: CEO |
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AXION RECYCLED PLASTICS INCORPORATED: |
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By: /s/ Claude Brown, Jr. |
(SEAL) |
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Name: Claude Brown, Jr. |
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Title: CEO |
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