8-K

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) March 22, 2011

AXION INTERNATIONAL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Colorado (State or other jurisdiction of incorporation) 0-13111 (Commission File Number) 84-0846389 (IRS Employer Identification No.)

180 South Street, Suite 104, New Providence, New Jersey (Address of principal executive offices) 07974 (Zip Code)

Registrant’s telephone number, including area code: (908) 542-0888

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):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ 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 DEFINITION AGREEMENT.

On March 22, 2011, Axion International Holdings Inc. (the “Company) completed an initial closing of a Private Placement of its 10% Convertible Preferred Stock (the “Preferred Stock”) in an aggregate principal amount of $1,564,980.  The Preferred Stock has a stated value (the “Stated Value”) of $10.00 per share.  The Preferred Stock and any interest thereon may be converted into common shares of the Company at any time by the Investor at the initial conversion rate of $1.25 per common share (the “Conversion Rate”).  The holders of the Preferred Stock shall be entitled to receive dividends at the rate of ten percent (10%) per annum payable quarterly.  The Dividends shall not be declared and paid or set aside for any series or other class of stock ranking junior to the Preferred Stock as to dividends or liquidation rights until all dividends have been paid in full on the Preferred Stock.  The dividends on the Preferred Stock are payable, at the option of the Company, in cash, if permissible, or in additional shares of common stock.  The Preferred Stock is not subject to any anti-dilution provisions other than for stock splits and stock dividends or other similar transactions.  The holders of the Preferred Stock shall have the right to vote with the Company’s stockholders in any matter.  The number of votes that may be cast by a Preferred Shareholder shall equal the Stated Value of the Preferred Stock purchase divided by the Conversion Ratio.  The Preferred Stock shall be redeemable by the Investor any time three (3) years from the initial closing period.  The Preferred Stock may be converted into Company common stock by the Investor at the Conversion Ratio (as adjusted from time to time).  The Preferred Stock may be converted by the Company, provided that the variable weighted average price (“VWAP”) of the Company’s common stock has closed at least at $4.00 per share for sixty (60) consecutive trading days and during such sixty (60) day period, the shares of common stock issuable upon conversion of the Preferred Stock have either been registered for resale or are issuable without restriction pursuant to Rule 144 of the Securities Act of 1933, as amended.

If the Company’s net revenues for the twelve (12) months ended December 31, 2011 are less than $10,000,000 as reported in the Company’s audited financial statements, then the Conversion Ratio shall be reduced to $1.00 (subject to adjustments for stock splits and stock dividends), and Investors shall be entitled to receive warrants (“Warrants”) to purchase a number of shares of common stock of the Company equal to fifty percent (50%) of the number of shares of common stock issuable upon conversion of the Preferred Stock at the Conversion Ratio.  The Warrants shall expire December 31, 2015 and they shall have an initial exercise price of $1.00 per share and shall provide for cashless exercise at any time the underlying shares of common stock have not been registered for resale under the Securities Act of 1933 (the “Securities Act”) or are issuable without restriction pursuant to Rule 144 of the Securities Act.  The common stock underlying the Preferred Stock, the common stock issued as dividends and the common stock underlying the Warrants shall carry incidental “piggyback” registration rights.

The Company paid registered broker/dealers, members of FINRA, a commission of ten percent (10%) of the principal amount of the Preferred Stock placed by them and issued a placement agent warrant to purchase 10% of the number of shares of Preferred Stock sold to such Investors.

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The Company issued the Preferred Stock to Accredited Investors only pursuant to Rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933, as amended.  The securities offered in the Private Placement have not been registered under the Securities Act, or any state securities laws, and unless so registered, may not be sold in the United States except pursuant to an exemption from or in transaction not subject to the registration requirements of the Securities Act and applicable state securities laws.  This is neither an offer to sell nor a solicitation of an offer to buy any of these securities.

The above descriptions are qualified in their entirety by reference to the complete text of the Certificate of Designation of the Preferred Stock and the Form of Subscription Agreement, copies of which are attached as Exhibits 3.1 and 10.1, respectively and are incorporated by reference herein.

ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES.

The information set forth in Item 1.01 as incorporated by reference herein.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(a) Exhibits

Exhibit No.	Description of Exhibit
3.1	Certificate of Designation of 10% Convertible Preferred Stock
10.1	Form of Subscription Agreement

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Axion International Holdings, Inc.
Dated: March 25, 2011	By:	/s/ Donald W. Fallon
		Name:   Donald W. Fallon
		Chief Financial Officer

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EX-3.1

EXHIBIT 3.1

CERTIFICATE OF DESIGNATION

of

10% CONVERTIBLE PREFERRED STOCK

of

AXION INTERNATIONAL HOLDINGS, INC.

AXION INTERNATIONAL HOLDINGS, INC., a corporation organized and existing under the laws of the State of Colorado (the “Corporation”), in accordance with the applicable provisions thereof, DOES HEREBY CERTIFY:

That pursuant to the authority vested in the Board of Directors in accordance with the provisions of the Articles of Incorporation of the Corporation, the Board of Directors on the 21st of March, 2011, adopted the following resolution, among other things, creating a series of shares of Preferred Stock designated as “10% Convertible Preferred Stock”:

TERMS OF PREFERRED STOCK

Section 1.           Definitions.  For the purpose hereof, the following terms shall have the following meanings:

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“Commission” means the United States Securities and Exchange Commission.

“Common Stock” means the Corporation’s Common Stock, no par value per share, and stock of any other class of securities into which such securities may hereafter be reclassified or changed.

“Common Stock Equivalents” means any securities of the Corporation or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“Conversion Amount” means the sum of the Stated Value at issue.

“Conversion Date” shall have the meaning set forth in Section 6(a).

“Conversion Price” shall have the meaning set forth in Section 6(b).

“Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Preferred Stock in accordance with the terms hereof.

“Equity Conditions” means, during the period in question, (a) the Corporation shall have duly honored all conversions scheduled to occur or occurring by virtue of one or more Notices of Conversion of the applicable Holder on or prior to the dates so requested or required, if any, (b) the Corporation shall have paid all amounts owing to the applicable Holder in respect of the Preferred Stock, (c)(i) there is an effective registration statement pursuant to which the Holders are permitted to utilize the prospectus thereunder to resell all of the shares of Common Stock issuable upon conversion of or as dividends on the Preferred Stock or (ii) all of the Conversion Shares issuable pursuant to this Certificate of Designation may be resold pursuant to Rule 144 without restrictions as determined by the counsel to the Corporation, (d) the Common Stock is trading on a Trading Market, all of the outstanding shares of Common Stock are listed or quoted for trading on such Trading Market and all of the Conversion Shares are so listed or quoted subject to notice of issuance, and (e) there is a sufficient number of authorized, but unissued and otherwise unreserved, shares of Common Stock for the issuance of all of the shares then issuable upon the conversion of the Preferred Stock.

“Exchange Act” means the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder.

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“Forced Conversion Date” shall have the meaning set forth in Section 8(a).

“Forced Conversion Notice” shall have the meaning set forth in Section 8(a).

“Forced Conversion Notice Date” shall have the meaning set forth in Section 8(a).

“Holder” means a registered holder of Preferred Stock.

“Junior Securities” means the Common Stock and all other Common Stock Equivalents of the Corporation other than those securities which are explicitly senior or pari passu to the Preferred Stock in dividend rights or liquidation preference.

“Liquidation” shall have the meaning set forth in Section 5.

“Make Good Adjustment” shall have the meaning set forth in Section 7(b).

“New York Courts” shall have the meaning set forth in Section 9(d).

“Notice of Conversion” shall have the meaning set forth in Section 6(a).

“Optional Redemption” shall have the meaning set forth in Section 8(b).

“Optional Redemption Amount” means the sum of (a) the Stated Value and (b) accrued but unpaid dividends.

“Optional Redemption Date” shall have the meaning set forth in Section 8(b).

“Optional Redemption Notice” shall have the meaning set forth in Section 8(b).

“Optional Redemption Notice Date” shall have the meaning set forth in Section 8(b).

“Original Issue Date” means the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such Preferred Stock.

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“PIK Dividends” shall have the meaning set forth in Section 3(a).

“Preferred Stock” shall have the meaning set forth in Section 2.

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“Securities” means the Preferred Stock and the Underlying Shares.

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“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Share Delivery Date” shall have the meaning set forth in Section 6(c).

“Stated Value” shall have the meaning set forth in Section 2.

“Subscription” means the Subscription Agreement executed by each initial Holder and the Corporation.

“Subsidiary” means any direct or indirect subsidiary of the Corporation.

“Threshold Period” shall have the meaning set forth in Section 8(a).

“Trading Day” means a day on which the principal Trading Market is open for business.

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the OTC Bulletin Board, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the NYSE AMEX or the New York Stock Exchange (or any successors to any of the foregoing).

“Transfer Agent” means Computershare Trust Company, N.A., the current transfer agent of the Company, and any successor transfer agent of the Company.

“Underlying Shares” means the shares of Common Stock issued and issuable upon conversion or redemption of the Preferred Stock, and issued and issuable in lieu of the cash payment of dividends on the Preferred Stock in accordance with the terms of this Certificate of Designation.

“VWAP” means, for any date, the price determined by the first of the following clauses applies:  (a) if the Common Stock is then listed or quoted on a Trading Market the daily volume weighted average of the Common Stock for such date on the Trading Market on which the Common Stock is then listed or quoted for trading as reported by Blumberg LP (based on a trading day) from 9:30 a.m. (New York City time) to 4:00 p.m. (New York City time); (b) if the Common Stock is not then quoted for trading on a Trading Market and if prices for the Common Stock are then reported in the “Pink Sheets” (or a similar organization or agency succeeding in its functions or reporting prices) the most recent bid price per share of the Common Stock so reported; or (c) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the applicable Holder and reasonably acceptable to the Company.

Section 2.          Designation, Amount and Par Value. The series of preferred stock shall be designated as 10% Convertible Preferred Stock (the “Preferred Stock”) and the number of shares so designated shall be Eight Hundred Eighty Thousand (880,000). Each share of Preferred Stock shall have no par value per share and a stated value equal to $10, subject to adjustment as set forth below (the “Stated Value”).

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Section 3.            Dividends.

a.           Dividends. Holders shall be entitled to receive, and the Corporation shall pay, cumulative dividends at the rate per share (as a percentage of the Stated Value per share) of 10% per annum.  Dividends on the Preferred Stock shall be paid in cash, or at the option of the Corporation, in substitute in whole or in part for such cash, in fully paid and nonassessable shares of Common Stock legally available for such purpose (such dividends paid in shares being herein called “PIK Dividends”).  Dividends of shares of Common Stock shall be paid by delivering to each record holder of Preferred Stock a number of shares of Common Stock determined by dividing the total amount of the cash dividend which otherwise would be payable on the Dividend Payment Date to such Holder (rounded to the nearest whole cent) by the Stated Value, rounded up to the nearest whole share.  The issuance of any such PIK Dividend in such amount shall constitute full payment of such dividend.  In no event shall the election by the Corporation to pay dividends, in whole or in part, in cash or in shares of Common Stock preclude the Corporation from making a different election with respect to all or a portion of the dividends to be paid on the Preferred Stock on any subsequent Dividend Payment Date.  All dividends (whether payable in cash or in whole or in part in shares of Common Stock) paid pursuant to this paragraph shall be paid in equal pro rata proportions of such cash and/or shares of Common Stock to the Holders entitled thereto.  Dividends on shares of Preferred Stock shall accrue and be cumulative from the date of issuance of such shares.  Dividends shall be payable quarterly when and as declared by the Board of Directors of the Corporation on March 31, June 30, September 30 and December 31 of each year (a “Dividend Payment Date”), commencing on June 30, 2011.  If any Dividend Payment Date occurs on a day that is not a Business Day, any accrued dividends otherwise payable on such Dividend Payment Date shall be paid on the next succeeding Business Day.  Such dividends shall begin to accrue with respect to any shares of Preferred Stock on the date of issuance of such shares. Dividends shall be payable to holders of record, as they appear on the stock books of the Corporation.

b.           Dividend Calculations. Dividends on the Preferred Stock shall accrue daily commencing on the Original Issue Date, and shall be deemed to accrue from such date whether or not earned or declared and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of dividends. Dividends shall cease to accrue with respect to any Preferred Stock converted.

c.           Other Securities. So long as any Preferred Stock shall remain outstanding, the Corporation shall not pay or declare any dividend or make any distribution upon (other than a dividend or distribution described in Section 6 or dividends due and paid in the ordinary course on preferred stock of the Corporation at such times when the Corporation is in compliance with its payment and other obligations hereunder), nor shall any distribution be made in respect of, any Junior Securities as long as any dividends due on the Preferred Stock remain unpaid, nor shall any monies be set aside for or applied to the purchase or redemption (through a sinking fund or otherwise) of any Junior Securities.

Section 4.           Voting Rights.  All of the outstanding shares of Preferred Stock shall be entitled to the number of votes equal to the number of whole shares of Common Stock into which the shares of Preferred Stock held by such Holder are convertible (as suggested from time-to-time hereof), at each meeting of stockholders of the Corporation (and written actions of stockholders in lieu of meetings) with respect to any and all matters presented to the stockholders of the Corporation for their actions or consideration.  Except as provided by law, holders of Preferred Stock shall vote together with the holders of the Common Stock as a single class.

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Section 5.           Liquidation. Upon any liquidation, dissolution, winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), the Holders shall be entitled to receive before any payment shall be made to holders of any Junior Securities out of the assets, whether capital or surplus, of the Corporation an amount per share of Preferred Stock equal to the Stated Value, plus any accrued and unpaid dividends thereon.  If the assets of the Corporation shall be insufficient to pay in full such amounts, then the entire assets to be distributed to the Holders shall be ratably distributed among the Holders in accordance with the respective amounts that would be payable on the shares of Preferred Stock held by such Holders if all amounts payable thereon were paid in full. The merger or consolidation of the Corporation into or with any other corporation in which the Corporation is not the surviving corporation or any other transaction which results in the Corporation’s stockholders immediately prior to such transaction earning less than 50% of the Corporation’s voting power immediately after such transaction, or the sale of all the assets of the Corporation, shall be deemed to be a liquidation, dissolution or winding-up of the Corporation for purposes of this Section 5.

Section 6.            Conversion.

a.           Conversions at Option of Holder. Each share of Preferred Stock shall be convertible, at any time, at the option of the Holder thereof, into that number of shares of Common Stock determined by dividing the Stated Value of such share of Preferred Stock by the Conversion Price. [In addition to the foregoing, simultaneously with the conversion of any shares of Preferred Stock, all accrued but unpaid dividends through the conversion date on such shares shall be converted into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing the aggregate amount of accrued but unpaid dividends through the conversion date by the Conversion Price for such shares, in effect at the time of conversion.] Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A (a “Notice of Conversion”). Each Notice of Conversion shall specify the number of shares of Preferred Stock to be converted, the number of shares of Preferred Stock owned prior to the conversion at issue, the number of shares of Preferred Stock owned subsequent to the conversion at issue and the date on which such conversion is to be effected, which date may not be prior to the date the applicable Holder delivers by facsimile such Notice of Conversion to the Corporation (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder. To effect conversions of shares of Preferred Stock, a Holder shall not be required to surrender the certificate(s) representing the shares of Preferred Stock to the Corporation unless all of the shares of Preferred Stock represented thereby are so converted, in which case such Holder shall deliver the certificate representing such shares of Preferred Stock promptly following the Conversion Date at issue.

b.           Conversion Price. The conversion price for the Preferred Stock shall equal $1.25, subject to adjustment herein (the “Conversion Price”).

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c.           Mechanics of Conversion.

i.           Delivery of Certificate Upon Conversion.  After each Conversion Date (the “Share Delivery Date”), the Corporation shall promptly deliver, or cause to be delivered, to the converting Holder a certificate or certificates representing the Conversion Shares.

ii.          Reservation of Shares Issuable Upon Conversion. The Corporation shall use its best efforts to reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Preferred Stock, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder, not less than such aggregate number of shares of the Common Stock as shall be issuable (taking into account the adjustments) upon the conversion of the then outstanding shares of Preferred Stock. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.

iii.         Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Preferred Stock. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Corporation shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share.

iv.         Transfer Taxes. The issuance of certificates for shares of the Common Stock on conversion of the Preferred Stock shall be made without charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holders of such shares of Preferred Stock and the Corporation shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid.

Section 7.           Certain Adjustments.

a.           Stock Dividends and Stock Splits. If the Corporation, at any time while the Preferred Stock is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation upon conversion of, or payment of a dividend on, the Preferred Stock); (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Corporation, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 7(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

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b.           Make Good Adjustment. If the Corporation’s net revenues for the twelve (12) months ending December 31, 2011 are less than $10,000,000, as reported in the Corporation’s audited financial statements, the Conversion Ratio shall be adjusted to $1.00, subject to adjustment for stock splits and stock dividends, and each Holder shall be entitled to receive, and the Corporation shall promptly issue, one (1) Warrant, substantially in the form and on the terms set forth on the Term Sheet of the Corporation dated January 18, 2011, to purchase a number of shares of Common Stock of the Corporation equal to fifty percent (50%) of the number of shares of Common Stock issuable upon conversion of the Preferred Stock then owned of record by such Holder at the then Conversion Ratio.

c.           Calculations. All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and outstanding.

d.           Notice to the Holders.  Whenever the Conversion Price is adjusted pursuant to any provision of this Section 7, the Corporation shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

Section 8.            Forced Conversion and Optional Redemption.

a.           Forced Conversion. Notwithstanding anything herein to the contrary, if the VWAP for any sixty (60) consecutive Trading Day period (“Threshold Period”), equal to or greater than $4.00 per share, the Corporation may, within ten (10) Trading Days after the end of any such Threshold Period, deliver a written notice to all Holders (a “Forced Conversion Notice” and the date such notice is delivered to all Holders, the “Forced Conversion Notice Date”) to cause each Holder to convert all or part of such Holder’s Preferred Stock (as specified in such Forced Conversion Notice) plus all accrued but unpaid dividends thereon, it being agreed that the “Conversion Date” for purposes of Section 6 shall be deemed to occur on the third Trading Day following the Forced Conversion Notice Date (such third Trading Day, the “Forced Conversion Date”). The Corporation may not deliver a Forced Conversion Notice, and any Forced Conversion Notice delivered by the Corporation shall not be effective, unless all of the Equity Conditions have been met on each Trading Day during the applicable Threshold Period. Any Forced Conversion Notices shall be applied ratably to all of the Holders based on each Holder’s initial purchases of Preferred Stock hereunder, provided that any voluntary conversions by a Holder shall be applied against such Holder’s pro rata allocation, thereby decreasing the aggregate amount forcibly converted hereunder if less than all shares of the Preferred Stock are forcibly converted.

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b.           Optional Redemption at Election of Holder. Subject to the provisions of this Section 8, at any time after the third anniversary of the Original Issue Date of the Preferred Stock, the Holder may deliver a notice to the Corporation (an “Optional Redemption Notice” and the date such notice is deemed delivered hereunder, the “Optional Redemption Notice Date”) of its irrevocable election to redeem some or all of its then owned Preferred Stock, for cash in an amount equal to the Optional Redemption Amount, on the 20th Trading Day following the Optional Redemption Notice Date (such date, the “Optional Redemption Date” and such redemption, the “Optional Redemption”). The Optional Redemption Amount is payable in full on the Optional Redemption Date.

Section 9.            Miscellaneous.

a.           Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Corporation, at the address of the principal executive offices of the Corporation, Attention: Chief Financial Officer, facsimile number (908) 542-0999, or such other facsimile number or address as the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this Section 9. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of such Holder appearing on the books of the Corporation, or if no such facsimile number or address appears on the books of the Corporation, at the principal place of business of such Holder, as set forth in the Subscription of such Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

b.           Lost or Mutilated Preferred Stock Certificate. If a Holder’s Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof reasonably satisfactory to the Corporation.

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c.           Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation shall be governed by and construed and enforced in accordance with the internal laws of the State of Colorado, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the provisions of this Certificate of Designation (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Certificate of Designation and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Certificate of Designation or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

d.           Waiver. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation on any other occasion. Any waiver by the Corporation or a Holder must be in writing.

e.           Severability. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.

f.           Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

g.           Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed to limit or affect any of the provisions hereof.

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h.           Status of Converted or Redeemed Preferred Stock. If any shares of Preferred Stock shall be converted, redeemed or reacquired by the Corporation, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer be designated as Preferred Stock.

RESOLVED, FURTHER, that the Chairman, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation be and they hereby are authorized and directed to prepare and file this Certificate of Designation of Preferences in accordance with the foregoing resolution and the provisions of Colorado law.

IN WITNESS WHEREOF, the undersigned has executed this Certificate this ____ day of _________________ 2011.

AXION INTERNATIONAL HOLDINGS, INC.

By:

Name:

Title:

11

ANNEX A

NOTICE OF CONVERSION

(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF PREFERRED STOCK)

The undersigned hereby elects to convert the number of shares of 10% Convertible Preferred Stock indicated below into shares of Common Stock, no par value per share (the “Common Stock”), of Axion International, Inc., a Colorado corporation (the “Corporation”), according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as may be required by the Corporation. No fee will be charged to the Holders for any conversion, except for any such transfer taxes.

Conversion calculations:

Date to Effect Conversion: 

Number of shares of Preferred Stock owned prior to Conversion: 

Number of shares of Preferred Stock to be Converted: 

State Value of shares of Preferred Stock to be Converted: 

Number of shares of Common Stock to be Issued: 

Applicable Conversion Price: 

Number of shares of Preferred Stock subsequent to Conversion: 

Address of Delivery: 

or

DWAC Instructions:

Broker No.: 

Account No.: 

[HOLDER]

By:

Name:

Title:

12

EX-10.1

Exhibit 10.1

SUBSCRIPTION AGREEMENT

SUBSCRIPTION AGREEMENT (this “Agreement” or “Subscription Agreement”) between AXION INTERNATIONAL HOLDINGS, INC., a Colorado corporation having its principal offices at 180 South Street, New Providence, New Jersey 07974 (the “Company”) and the SUBSCRIBER (“Subscriber”) whose name and address are set forth on the Signature Page to this Agreement.

WHEREAS, on the terms and subject to the conditions hereinafter set forth, the Company is offering (the “Offering”) up to $1,500,000 of its 10% Convertible Preferred Stock (“10% Convertible Preferred Stock”) on a “best efforts all or none basis” and up to an additional $3,500,000 (plus an additional $500,000 to cover over-allotments, if any) of 10% Convertible Preferred Stock on a “best efforts” basis to a limited number of individuals or entities who qualify as “accredited investors” as defined in Rule 501 of Regulation D (“Regulation D”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”) (collectively, the “Investors”), at a stated value of $10.00 per share.  The 10% Convertible Preferred Stock and the shares of Company common stock issuable upon conversion are sometimes hereinafter referred to as the “Securities.”

The Company is offering the 10% Convertible Preferred Stock through European American Equities, Inc., a subsidiary of TerraNova Partners, Inc., as placement agent (the “Placement Agent”), until all of the 10% Convertible Preferred Stock is sold or the Offering period terminates, whichever occurs first. The Offering of the 10% Convertible Preferred Stock is more fully described in the Company’s Confidential Term Sheet dated January 18, 2011 (the “Term Sheet”).

WHEREAS, Subscriber (who, together with all other subscribers to 10% Convertible Preferred Stock in the Offering, are collectively referred to as “Subscribers”) desires to acquire the aggregate number of 10% Convertible Preferred Stock set forth on the signature page hereof.

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows:

Section 1.              Subscription for 10% Convertible Preferred Stock. On the terms and subject to the conditions hereinafter set forth, Subscriber hereby subscribes for and agrees to purchase from the Company, that number of 10% Convertible Preferred Stock as is set forth on the signature page hereof, for the purchase price indicated (the “Purchase Price”).  The Purchase Price is payable by check made payable to “Law Debenture Trust Company of New York, escrow agent for Axion International Holdings.” contemporaneously with the execution and delivery of this Subscription Agreement to the Company or by wire transfer to the following coordinates:

Bank:     Citibank, N.A.

ABA:     021 000 089

Name:    Law Debenture Trust Company NY

A/C:       30832457

Ref:       Axion Escrow A/C

Co: Code:          EU196

Trust Code:       129688

Check Payment & Subscription Mailing Address:

Law Debenture Trust Company of New York

Attn.: Escrow Agent - AXION INT'L ESCROW A/C

400 Madison Avenue, Suite 4D

New York, NY  10017

** Funds on deposit will remain un-invested in accordance with the Escrow Agreement.

Promptly following a closing at which all or part of Subscriber’s subscription is accepted, a 10% Convertible Preferred Stock certificate will be delivered by the Company to Subscriber.

Section 2.            Representations, Warranties and Covenants of Subscriber.  Subscriber hereby represents, warrants and covenants to the Company that:

2.1           Subscriber recognizes that the purchase of the 10% Convertible Preferred Stock involves a high degree of risk in that (i) an investment in the Company is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Securities; (iii) an investor may not be able to readily liquidate its investment; (iv) transferability of the Securities is limited; and (v) Subscriber could sustain the loss of its entire investment.

2.2           Subscriber is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), and Subscriber is able to bear the economic risk of an investment in the 10% Convertible Preferred Stock. In addition, Subscriber has such knowledge and experience in business and financial matters, including prior investments in non-listed and non-registered securities, as is necessary in order to evaluate the merits and risks of its investment in the 10% Convertible Preferred Stock.

2.3           Subscriber has received and has carefully read and considered the Term Sheet, including, without limitation, the information set forth under “Risk Factors” in the Company Annual Report on Form 10-K and the sections of the Term Sheet describing the terms of the Offering.  In evaluating the suitability of an investment in the Company, Subscriber has not relied upon any representations or other information (whether oral or written) received from the Company, its officers, directors, agents, employees or representatives, except information set forth in this Agreement, the Term Sheet or information that is obtained from the Company in order to verify such information. Subscriber has been afforded the opportunity to ask questions of and receive answers from management of the Company concerning the terms and conditions of the Offering and to obtain such additional information as Subscriber deemed necessary in order to evaluate its investment in the 10% Convertible Preferred Stock.

2.4           Subscriber understands that its purchase of the 10% Convertible Preferred Stock may have tax consequences and that Subscriber must retain its own professional advisors to evaluate the tax and other consequences of an investment in the Securities.  Subscriber has independently evaluated the merits of its decision to purchase Shares pursuant to the Transaction Documents, and Subscriber confirms that it has been afforded the opportunity to consult with Subscriber’s business, tax and/or legal counsel in making such decision and has availed itself of that opportunity to the extent deemed advisable by Subscriber.

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2.5           Subscriber acknowledges that the Offering has not been reviewed, endorsed or approved by the United States Securities and Exchange Commission (the “SEC”) and that the 10% Convertible Preferred Stock is being offered without registration under the Securities Act in reliance upon the exemption from registration afforded by Section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder and without registration under any state securities laws. Subscriber understands that a legend may be affixed to each certificate evidencing any of the Securities to the effect that the Securities have not been registered under the Securities Act or any applicable state securities laws and setting forth or referring to the restrictions on transferability and sale thereof.

2.6           Subscriber is purchasing the 10% Convertible Preferred Stock for its own account for investment purposes only and not with a view to or for sale in connection with, or for purposes of, any “distribution” thereof within the meaning of Section 2(11) of the Securities Act.

2.7           Subscriber understands that the Company reserves the right to reject or limit any subscription in its sole discretion and, subject to any minimum offering requirements, to hold one or more closings of the Offering at any time.  Subscriber further understands that the Company shall not have any obligation to sell any 10% Convertible Preferred Stock in any jurisdiction in which the sale of 10% Convertible Preferred Stock would constitute a violation of the securities, “blue sky” or other similar laws of such jurisdiction.

2.8           Subscriber’s address set forth on the signature page hereto is its principal residence if Subscriber is an individual or its principal business address if Subscriber is a corporation or other entity.

2.9           Subscriber is not subscribing for the 10% Convertible Preferred Stock as a result of any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or presented at any seminar or general meeting.

2.10        Subscriber has all requisite legal and other power and authority to execute and deliver this Subscription Agreement and to carry out and perform Subscriber’s obligations hereunder.  This Subscription Agreement constitutes a valid and legally binding obligation of Subscriber, enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other general principals of equity, whether such enforcement is considered in a proceeding in equity or law. The funds provided for this investment are either separate property of Subscriber, community property over which Subscriber has the right of control or are otherwise funds as to which Subscriber has the sole right of management.

2.11         There are no actions, suits, proceedings or investigations pending against Subscriber or Subscriber’s assets (nor, to Subscriber’s knowledge, is there any threat thereof) which would impair Subscriber’s ability to enter into and fully perform Subscriber’s commitments and obligations under this Subscription Agreement or the transactions contemplated hereby.

2.12         The execution, delivery and performance of this Subscription Agreement by Subscriber will not result in any violation of, or conflict with, or constitute a default under, any of Subscriber’s articles of incorporation or by-laws, if applicable, or any agreement to which Subscriber is a party or by which it is bound, nor result in the creation of any mortgage, pledge, lien, encumbrance or charge against any of the assets or properties of Subscriber or on the 10% Convertible Preferred Stock.

2.13         No consent from any other person is required in order for Subscriber to execute this Agreement and perform its obligations hereunder, or such consent has been obtained and a copy has been provided to the Company.

2.14         Subscriber understands that the Company intends to pay compensation in connection with the sale of the 10% Convertible Preferred Stock to the extent described in the Term Sheet.

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2.15         Subscriber has (i) not distributed or reproduced the Term Sheet, in whole or in part, at any time, without the prior written consent of the Company, and (ii) kept confidential the existence of the Offering, the Term Sheet and the information contained therein or made available in connection with any further investigation of the Company.

2.16         Subscriber’s representations and warranties contained in this Subscription Agreement do not contain any untrue statement of a material fact. Subscriber understands that the Company is relying upon the truth and accuracy of the representations, warranties and agreements of Subscriber set forth herein in making its determination that the Offering and sale of the 10% Convertible Preferred Stock is exempt from registration under the Securities Act and state securities laws.

Section 3.             Representations and Warranties of the Company.  The Company represents and warrants to Subscriber that:

3.1           The Company is a corporation duly organized, existing and in good standing under the laws of the State of Colorado and has the power and authority to conduct the business which it conducts and proposes to conduct.

3.2           The Company’s execution, delivery and performance of this Agreement, the escrow agreement and any other agreements executed and delivered by the Company pursuant to this Agreement or in connection herewith (collectively “Transaction Documents”) have been duly authorized, executed and delivered by the Company and are valid and binding agreements enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights generally and to general principles of equity. The Company has full corporate power and authority necessary to enter into and deliver the Transaction Documents and to perform its obligations thereunder.

3.3           No consent, approval, authorization or order of any court, governmental agency or body or arbitrator having jurisdiction over the Company, or any other person is required for the execution by the Company of the Transaction Documents and compliance and performance by the Company of its obligations under the Transaction Documents, including, without limitation, the issuance and sale of the Securities.

3.4           The Securities have been duly authorized and, when issued in accordance with the term of this Agreement and upon payment of the agreed upon consideration therefore:

(i)            will be, free and clear of any security interests, liens, claims or other encumbrances, subject to restrictions upon transfer under the Securities Act and any applicable state securities laws;

(ii)           will be, duly and validly issued, fully paid and non-assessable;

(iii)          will not have been issued or sold in violation of any preemptive or other similar rights of the holders of any securities of the Company;

(iv)          will not subject the holders thereof to personal liability by reason of being such holders; and

The Company has reserved from its duly authorized capital stock the shares of common stock issuable upon conversion of the 10% Convertible Preferred Stock.

4

3.5           The Company has not engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer or sale of the Securities.

Section 4.              Additional Agreements.

4.1           At any time following the date hereof the Company prepares and files a registration statement under the Securities Act with respect to a public offering of its equity securities or any of its securities held by its security holders (other than a registration statement on Form S-4, S-8 or similar form) the Company will include in the registration statement information as required to permit an offering of the shares of the Company’s common stock issuable upon conversion of the 10% Convertible Preferred Stock or as dividends on the 10% Convertible Preferred Stock.  The Company will bear all fees and expenses other than the fees and expenses of counsel to the holders of the 10% Convertible Preferred Stock and any commissions payable to any broker/dealer with respect to the sale of 10% Convertible Preferred Stock holder’s underlying common shares.  Notwithstanding the foregoing, if, in the written opinion of the Company’s underwriter or placement agent, if any for such offering, the inclusion of such shares when added to the securities being registered by the Company or its selling shareholders would it exceed the maximum amount of securities that could be marketed without otherwise materially adversely effecting the entire offering, the Company may reduce or exclude such shares required to be registered so that the total number of securities to be registered is the maximum of shares that, in the written opinion of the underwriter or placement agent, as the case may be, may be marketed or sold not without otherwise materially adversely effecting the entire offering or transaction.  The rights under this Section 4 shall terminate when the Subscriber may sell its shares under Rule 144 of the Securities Act without restriction.

4.2           The Company shall use its reasonable best efforts to disclose publicly “guidance” as to its projected 2011 and 2012 revenues and earnings on or before the shares of common stock underlying the 10% Convertible Preferred Stock are registered for resale or first eligible for sale pursuant to Rule 144 under the Securities Act.

Section 5.              Miscellaneous.

5.1           Any notice or other communication required, permitted or provided for hereunder (each, a “Notice”) shall be effective as between the parties only if given in writing and sent by (a) personal delivery, (b) registered or certified mail (return receipt requested); or (c) internationally recognized express delivery service, to the Company at 180 South Street, New Providence, New Jersey 07974, and to the Subscriber at his address indicated on the signature page of this Subscription Agreement.  Notice shall be deemed to have been duly given and received (i) if personally delivered, on the date of such delivery, (ii) if mailed, on the date set forth on the return receipt, or (iii) if delivered by express delivery, on the date of such delivery (as evidenced by the receipt provided to the express delivery service).  If Notice cannot be delivered because of a changed address of which no Notice was given, or the refusal to accept delivery, the Notice shall be deemed received on the date it is sent (as evidenced by the affidavit of the sender).

5.2           This Subscription Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns.  This Subscription Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.

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5.3           Notwithstanding the place where this Subscription Agreement may be executed by any of the parties hereto, the Company and Subscriber hereby: (a) agree that all questions concerning the construction, validity, enforcement and interpretation of this Subscription Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof, and  (b) all legal proceedings concerning the interpretation, enforcement and defense of this Subscription Agreement shall be commenced in the Courts of the State of New York or the courts of the United States of America, in each case located in the City of New York Borough of Manhattan, and appellate courts from any thereof (the “Courts”), (c) irrevocably submit to the exclusive jurisdiction of the Courts for the adjudication of any dispute hereunder (including with respect to the enforcement of this Subscription Agreement); (d) irrevocably waive and agree not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any of such Courts, or that such suit, action or proceeding is improper; (e) irrevocably waive personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to the other at the address in effect for notices to it under this Subscription Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof (nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law); and (f) irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Subscription Agreement or the transactions contemplated hereby.

5.4           This Subscription Agreement may be executed in counterparts.  Upon the execution and delivery of this Subscription Agreement by the Subscriber, this Subscription Agreement shall become a binding obligation of the Subscriber with respect to the purchase of 10% Convertible Preferred Stock as herein provided; subject, however, to the right hereby reserved to the Company to enter into the same agreements with other subscribers and to add and/or to delete other persons as subscribers.

5.5           If any provision of this Subscription Agreement is declared by a court of competent jurisdiction to be in any way invalid, illegal or unenforceable, the balance of this Subscription Agreement shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances.

5.6           No term or provision contained herein may be modified, amended or waived except by written agreement or consent signed by the party or parties to be bound thereby.  It is agreed that a waiver by either party of a breach of any provision of this Subscription Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party.

5.7           The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Subscription Agreement.

5.8            The obligations of each Subscriber under any Transaction Document are several and not joint with the obligations of any other Subscriber, and no Subscriber shall be responsible in any way for the performance of the obligations of any other Subscriber under any Transaction Document.  The decision of each Subscriber to purchase 10% Convertible Preferred Stock pursuant to the Transaction Documents has been made by such Subscriber independently of any other Subscriber.  Nothing contained herein or in any Transaction Document, and no action taken by any Subscriber pursuant thereto, shall be deemed to constitute the Subscribers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Subscribers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.  Each Subscriber acknowledges that no other Subscriber has acted as agent for such Subscriber in connection with making its investment hereunder and that no Subscriber will be acting as agent of such Subscriber in connection with monitoring its investment in the 10% Convertible Preferred Stock or enforcing its rights under the Transaction Documents.  Each Subscriber shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Subscriber to be joined as an additional party in any proceeding for such purpose.  The Company acknowledges that each of the Subscribers has been provided with the same Transaction Documents for the purpose of closing a transaction with multiple Subscribers and not because it was required or requested to do so by any Subscriber.  If Subscriber is a corporation, limited liability company, partnership, trust or two or more individuals purchasing jointly, Subscriber shall follow the specific instructions for the Certificate of Corporate, Limited Liability Company, Partnership, Trust and Joint Purchases at Page  hereof.

6

5.9.           Subscriber acknowledges that the subscription made hereby is not binding upon the Company until the Company accepts it.  The Company has the right to accept or reject this subscription in whole or in part in its sole and absolute discretion.  If this subscription is rejected in whole, the Company shall return the Purchase Price to Subscriber, without interest, and the Company and Subscriber shall have no further obligation to each other by reason of this Subscription Agreement or the subscription made hereby.  In the event of a partial rejection of this subscription, a proportionate amount of the Purchase Price will be returned to Subscriber, without interest.

[Remainder of Page Intentionally Blank, Signature Page Follows]

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SIGNATURE PAGE FOR INDIVIDUAL INVESTOR

IN WITNESS WHEREOF, this Subscription Agreement has been executed by Subscriber and by the Company on the respective dates set forth below.

Signature		Signature (If 10% Convertible Preferred Stock Purchased Jointly)
Name		Name
	Please Print		Please Print
Address		Address
Telephone #		Telephone #
Fax #		Fax #
Email:		Email:
Social Security #		Social Security #
Date:		Date:

Number of Shares of 10% Convertible Preferred Stock Subscribed For: ______________

Purchase Price: __________________________

Form of joint ownership of Shares of 10% Convertible Preferred Stock (if applicable):

¨ JTTEN                      ¨ JTWROS                      ¨ JTTIC

Exact Name in which 10% Convertible Preferred Stock is to be Registered:  _______________________

Subscription Accepted:

AXION INTERNATIONAL HOLDINGS, INC.
By:
	Name:
	Title:
Date:

8

SIGNATURE PAGE FOR PARTNERSHIP, CORPORATION,

LIMITED LIABILITY COMPANY OR TRUST

IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement on the date set forth below.

Name of partnership, corporation, limited liability
company or trust
By:	Federal Tax ID Number
Name:
Title:	State of Organization
Address:
Telephone:
Fax:
Email:
Date:

Number of Shares of 10% Convertible Preferred Stock Subscribed For: _______________

Purchase Price: __________________________

Exact Name in which 10% Convertible Preferred Stock is to be Registered:  ______________________________

Subscription Accepted:

AXION INTERNATIONAL HOLDINGS, INC.
By:
	Name:
	Title:
Date:

9

SPECIAL SUBSCRIPTION INSTRUCTIONS FOR CORPORATE, PARTNERSHIP, LIMITED LIABILITY COMPANY, TRUST AND JOINT PURCHASERS

If Subscriber is a corporation, partnership, limited liability company, trust, or other entity or joint purchaser, the following additional instructions must be followed.  INFORMATION ADDITIONAL TO THAT REQUESTED BELOW MAY ALSO BE REQUIRED BY THE COMPANY IN SOME CASES.

1.           Certificate.  Subscriber must date and sign the Certificate below, and, if requested by the Company, Subscriber may also be required to provide a copy of (a) the corporation’s articles of incorporation, bylaws and authorizing resolution, (b) the partnership agreement, (c) the limited liability company’s certificate of formation or articles of organization, as applicable, and limited liability company agreement, operating agreement or similar agreement governing the rights and obligations of the members of the limited liability company, or (d) the trust agreement, as applicable.

2.           Subscription Agreement.

(a)           Corporations.  An authorized officer of the corporation must date, sign, and complete the Subscription Agreement with information concerning the corporation.  The officer should print the name of the corporation above his signature, and print his name and office below his signature.

(b)           Partnerships.  An authorized partner must date, sign, and complete the Subscription Agreement with information concerning the partnership.  The partner should print the name of the partnership above his signature, and print his name and the words “general partner” below his signature.

(c)           Limited Liability Companies.  An authorized member or manager must date, sign, and complete the Subscription Agreement with information concerning the limited liability company.  The member or manager should print the name of the limited liability company above his signature, and print his name and the word “member” or “manager” below his signature.

(d)           Trusts.  In the case of a trust, the authorized trustee should date, sign, and complete the Subscription Agreement with information concerning the trust.  The trustee should print the name of the trust above his signature, and print his name and the word “trustee” below his signature.  In addition, an authorized trustee should also provide information requested in the Subscription Agreement as it pertains to him as an individual.

(e)           Joint Ownership.  In all cases, each individual must date, sign, and complete the Subscription Agreement.  Joint investors must state if they are purchasing the Shares as joint tenants with the right of survivorship, tenants in common, or community property, and each must execute the Subscription Agreement signature page.

10

CERTIFICATE FOR CORPORATE, PARTNERSHIP,

LIMITED LIABILITY COMPANY, TRUST, AND JOINT SUBSCRIBERS

If Subscriber is a corporation, partnership, limited liability company, trust, joint purchaser, or other entity, an authorized officer, partner, member, manager or trustee must complete, date and sign this Certificate.

CERTIFICATE

I hereby certify that:

1.           Subscriber has been duly formed is validly and existing and has full power and authority to purchase the 10% Convertible Preferred Stock and make an investment in Axion International Holdings, Inc.

2.                      The Subscription Agreement has been duly and validly authorized, executed, and delivered by Subscriber and constitutes the valid, binding, and enforceable obligation of Subscriber.

Date:
	Name of corporation, partnership, limited liability company, trust or joint purchases (please print)
	Signature and title of authorized officer, partner, member, manager, trustee, or joint purchaser

11

ACCREDITED INVESTOR PROSPECTIVE PARTICIPANT QUESTIONNAIRE

**ALL INFORMATION WILL BE HELD IN STRICTEST CONFIDENCE**

INSTRUCTIONS TO THE PROSPECTIVE INVESTOR: This Questionnaire is being sent to each prospective participant that has indicated an interest in purchasing shares of 10% Convertible Preferred Stock of Axion International Holdings, Inc. (the “Company”). The purpose of this Questionnaire is to assure the Company that each prospective subscriber to its 10% Convertible Preferred Stock (“Subscriber”) will meet the standards imposed by Regulation D, promulgated under the Securities Act of 1933, as amended, and similar exemptions provided by the applicable state securities laws and regulations promulgated there under (the “Securities Laws”), since the shares of 10% Convertible Preferred Stock will not be registered. Each subscriber must complete the following Questionnaire.

The information provided will be used to determine whether the prospective purchaser’s Subscription Agreement to purchase shares of 10% Convertible Preferred Stock will be accepted by the Company in light of the requirements of Securities Laws. In subscribing for shares of 10% Convertible Preferred Stock and furnishing the information requested in this Questionnaire, the Subscriber understands that the Company will rely on the information provided herein for purposes of such determinations. The Subscriber understands that a false representation may constitute a violation of law and that any person who suffers damage as a result of a false representation may have a claim against the Subscriber for damages.

The information provided herein by Subscribers will be kept confidential. However, by signing this Questionnaire, the Subscriber agrees that the Company may present the completed document to such parties as it deems appropriate if called upon to establish the availability under any Securities Laws.

In accordance with the foregoing, the following representations are hereby made and the following information is furnished by the undersigned subscriber.

PART A. GENERAL INFORMATION

NAME(S) OF PROSPECTIVE SUBSCRIBER: 

Social Security Number or Tax I.D. No.: 

PART B. INVESTOR INFORMATION

1. If the prospective Participant is an individual:

(a) Do you have an individual net worth, or joint net worth with your spouse (exclusive of your principal residence) in excess of $1,000,000?

Yes _______    No _______

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(b) (i) Did you have individual income in excess of $200,000 in each of the two most recent years or joint income with your spouse in excess of $300,000 for each of those years?

Yes _______    No _______

(ii)           Do you anticipate for this tax year having individual income in excess of $200,000, or joint income with your spouse in excess of $300,000?

Yes _______    No _______

2. If the prospective Participant is a corporation, partnership, limited liability company, trust or other entity:

(a) Is the entity an accredited investor within the meaning of Regulation D of the Securities Act?

Yes _______    No _______

(b) Does the entity, by reason of its own, or of its management’s business or financial experience, have the capacity to protect its own interests in connection with an investment in the 10% Convertible Preferred Stock?

Yes _______    No _______

(c) Does the entity have substantial experience in evaluating and investing in private placement transactions of securities in entities similar to the Company so that it is capable of evaluating the merits and risks of its investment in the 10% Convertible Preferred Stock?

Yes _______    No _______

I REPRESENT THAT THE ABOVE INFORMATION IS CORRECT. I HEREBY AUTHORIZE THE COMPANY TO VERIFY SUCH INFORMATION WITH MY ATTORNEY, BANKER, ACCOUNTANT OR OTHER ADVISORS(S).

Date:
	Subscriber’s Signature
	Subscriber’s Signature

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