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
 
 
 

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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.
 
 
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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.
 
 
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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:
  
 

 
 
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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:
  
 

 
 
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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.
 
 
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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

 
 
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ACCREDITED INVESTOR PROSPECTIVE PARTICIPANT QUESTIONNAIRE

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**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

 
13

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