Exhibit 10.1

     
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 CONFIDENTIAL INFORMATION
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THIS CONSULTING AGREEMENT is made on August 31, 2007 (the "Effective Date")
 
BETWEEN:
 
AXION POWER INTERNATIONAL, INC.
 
3601 Clover Lane, New Castle PA 16105
 
- and -
 
Andrew Carr Conway, Jr. (the "Consultant") dba Conway Enterprises, LLC,

1.
Glossary

 
In this Consulting Agreement, certain words have specific meanings, including
the following:
 

 
(a)
The words "we", "us", "our", or "Axion" means Axion Power International, Inc.
and/or any of its subsidiaries, affiliates, successors or assigns.

 

 
(b)
The words "you" or "your" means the Consultant.

 

 
(c)
The word "Parties" means you and us, jointly.

 

 
(d)
The words "Consulting Agreement" means this Consulting Agreement and all of the
schedules attached to it, and any changes that the Parties may make in writing
to any of the Consulting Agreement or its schedules at any time.

 

 
(e)
The words "Confidentiality Agreement" means the attached Confidentiality and
Intellectual Property Rights Agreement, and any changes that the Parties may
make in writing to it at any time.

 
Other words have the meanings given to them throughout this Consulting
Agreement.
 
This Executive Employment Agreement is entered into this 31th day of August 2007
between Axion Power International, Inc., a Delaware corporation, having a place
of business at 3601 Clover Lane, New Castle Pennsylvania and Andrew Carr Conway,
Jr. (the "Executive").
 
WHEREAS, the Company is engaged in research and development relating to a novel
battery technology that replaces the lead-based negative electrode in a
lead-acid battery with a highly permeable nanoporous carbon electrode; and
 

      Axion Power International, Inc.     3601 Clover Lane, New Castle, PA 16105
www.axionpower.com

 

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WHEREAS, the Company is desirous of making appropriate long-term arrangements
for the management of its business affairs; and
 
WHEREAS, the Company is desirous of retaining the Executive to serve as its
Chief Financial Officer on the conditions set forth herein for the entire term
of this Agreement, and
 
WHEREAS, in such capacity, the Executive will have access to all of the business
methods and confidential information relating to the Company and its business
activities including, but not limited to, its proprietary techniques and
technologies, its operational and financial matters, its business and financial
and development plans, its personnel training and development programs and its
industry relationships.
 
NOW THEREFORE, in consideration of the promises and of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
 

 
1.
Executive Representations and Warranties. The Executive represents and warrants
to the Company that he is free to accept employment hereunder and that he has no
prior or other obligations or commitments of any kind to anyone that would in
any way hinder or interfere with his acceptance of, or the full, uninhibited and
faithful performance of this Agreement, or the exercise of his best efforts as
an executive officer of the Company. Notwithstanding the above Axion recognizes
the Executive has been engaged in the practice of accounting and financial
investigations. Executive has two engagements he must in good conscience
complete for clients:

     

 
a.
Executive performed accounting and investigative services for the lawyer
representing Douglas Glaser, a person indicted for criminal securities fraud by
the state of Colorado. Executive expected to dispose of this matter August 23
and 24, 2007 when Executive returned to Denver at his own expense. This matter
unfortunately ended with a mistrial. Accordingly Executive may be called upon to
render limited services.

     

 
b.
b. Executive is committed to render expert testimony for the Boulder District
Attorney's Office in a criminal matter. Executive previously prepared an
expert's report and is to render expert testimony at trial the week of November
5, 2007. Executive believes the testimony should take no more than one day.

     

 
c.
Executive will travel to complete these matters by traveling at his own expense.
Neither is expected to require substantial time. Executive will prorate his
monthly salary at Axion to take his time away into account.

     

 
d.
Executive expressly agrees he will not accept additional/new engagements while
consulting full time with Axion. Executive notified the firm he previously
worked with, Heartland Dickerson, he will not accept new consulting engagements.

 
2. Employment and Duties. The Company shall employ the Chief Financial Officer
of the Company and its wholly owned subsidiary Axion Power Battery
manufacturing, Inc., a Pennsylvania corporation, or in such other comparable
executive capacity as the Chief Executive officer of the Company shall specify
from time to time. The Executive shall be employed by and will work for the
Company at Company's office in New Castle until such time as the SEC filings are
current. After that filing occurrence, the Executive may choose to perform some
of the CFO's work offsite. The Executive's initial responsibilities shall
include all of the duties and responsibilities of the Chief Financial Officer as
described in the By-laws of the Company (as supplemented by a more detailed job
description contained in this agreement, as the same may be amended from time to
time. In addition, the Executive shall, perform such other mutually agreeable
functions and duties as the Chief Executive Officer may entrust or delegate to
him from time to time.
 
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3. Conduct of Executive. During the entire Term of this Agreement, the Executive
shall devote his business time, effort, skill and attention to the affairs of
the Company and its subsidiaries, will use his best efforts to promote the
interests of the Company, and will discharge his responsibilities in a diligent
and faithful manner, consistent with sound business practices. During the entire
Term of this Agreement, the Executive shall agree to serve as a member of the
Company's Board of Directors if appointed to such position by the board of
directors or elected to such position by the shareholders of the Company. In
furtherance of the foregoing:
 

 
(a)
The Executive understands and agrees that he owes the Company a fiduciary duty,
without limiting any other obligations or requirements that are imposed on the
Executive elsewhere in this Employment Agreement or by law. As such, the
Executive shall occupy a position of and commit to the highest degree of trust,
loyalty, honesty and good faith in all of his dealings with and on behalf of the
Company.

 

 
(b)
The Executive represents that his employment by the Company will not conflict
with any obligations which he has to any other person, firm or entity. The
Executive specifically represents that he has not brought to the Company (during
the period before the signing of this Agreement) and he will not bring to the
Company any materials or documents of a former or present employer, or any
confidential information or property of any other person, firm or entity. Axion
recognizes that Executive uses his own email account for business purposes so
that he can access Axion matters in the apartment provided for him. Executive is
unable to control email sent to him on prior business matters. With this
exception, Executive covenants he will not bring other business matters to
Axion's business premises, including the matters cited above.

 

 
(c)
The Executive shall not, without disclosure to and approval of the Board of
Directors of the Company, directly or indirectly, assist or have an active
interest in (whether as a   principal, stockholder, lender, employee, officer,
director, partner, consultant or otherwise) in any person, firm, partnership,
association, corporation or business organization, entity or enterprise that
competes with or is engaged in a business which is substantially similar to the
business of the Company except that ownership of not more than 1% of the
outstanding securities of any class of any publicly-held corporation shall not
be deemed a violation of this sub-paragraph 3(c).

 
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(d)
The Executive shall promptly disclose to the directors of the Company, in
accordance with the Company's policies, full information concerning any
interests, direct or indirect, he holds (whether as a principal, stockholder,
lender, Executive, director, officer, partner, consultant or otherwise) in any
business which, as reasonably known to the Executive purchases or provides
services or products to the Company or any of its subsidiaries, provided that
the Executive need not disclose any such interest resulting from ownership of
not more than 1% of the outstanding securities of any class of any publicly-held
corporation.

 

 
(e)
he Executive shall not disclose to any person or entity (other than to the
Company's Board of Directors or to others as required, in his judgment, in the
due performance of his duties under this Agreement) any confidential or secret
information with respect to the business or affairs of the Company or any of its
subsidiaries or affiliates.

 
For a period of one year after termination for cause, the Executive shall not
engage in any business or activity that is directly competitive with the
business of the Company, including the activities described above.
Notwithstanding the generality of the foregoing, nothing in this Agreement shall
be deemed to preclude the Executive from participating in other business
opportunities if and to the extent that (i) such business opportunities are not
directly competitive with the business of the Company, (ii) the Executive's
activities with respect to such opportunities do not have a material adverse
effect on the performance of the Executive's duties hereunder, and (iii) the
Executive's activities with respect to such opportunity have been fully
disclosed in writing to the Company's Board of Directors.
 
4. Conditions of Employment.
 

 
(a)
Term of Employment. Unless terminated earlier in accordance with the provisions
of this Agreement, the Company will employ the Executive for a six month period
commencing September 1, 2007 and terminating on February 28, 2008 (the "Term").
Not less than 60 days before the termination of this Agreement, the Company and
the Executive shall open negotiations for a suitable contract renewal if
applicable. In the absence of a renewal contract, this agreement shall be
automatically renewed for an additional six month term.

 

 
(b)
Place of Employment. The Executive shall occupy offices at the Company's
principal executive office in the New Castle Metropolitan Area until the SEC
filings are complete (or at such other Company office as the Company and the
Executive may agree from time to time) which will be maintained for his use by
the Company at the Company's expense. The Executive may perform some of his
duties as CFO at a location other than New Castle once the filings have been
completed although the Executive expressly agrees that regular travel may be
necessary as part of his duties.

 
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(c)
Ownership of Company Records and Reports. The Executive shall not, except in the
performance of his duties hereunder, at any time or in any manner make or cause
to be made any copies, pictures, duplicates, facsimiles, or other reproductions
or recordings or any abstracts or summaries of any reports, studies, memoranda,
correspondence, manuals, records, plans or other written or otherwise recorded
materials of any kind whatever belonging to or in the possession of the Company,
or of any subsidiary or affiliate of the Company, including but not limited to
materials describing or in any way relating to the Company's business activities
including, but not limited to, its proprietary techniques and technologies, its
operational and financial matters, its business and financial and development
plans, its personnel training and development programs and its industry
relationships. The Executive shall have no right, title or interest in any such
material, and the Executive agrees that, except in the performance of his duties
hereunder, he will not, without the prior written consent of the Company remove
any such material from any premises of the Company, or any subsidiary or
affiliate of the Company, and immediately upon the termination of his employment
for any reason whatsoever Executive shall return to the Company all such
material in his possession.

 
2.
What you will do

 
Supervise the ongoing re-statements and various filings required for SEC
compliance.
 
Lead Section 404 compliance.
 
Lead compliance effort on all SEC filings including 10-QSB's and l0-KSB's
 
Manage monthly financial closings, monthly management reviews and participate in
Audit Committee meetings.
 
Develop company accounting control practices.
 
Lead future efforts to develop budgets and meaningful forecasting.
 
Assist in the search for a future permanent CFO.
 
Interpret all SEC and GAAP pronouncements-In connection with these duties,
Executive will be permitted to attend, at Axion's expense, the AICPA National
Conference on Current SEC and PCAOB Developments held in Washington DC from
December 10 to December 12, 2007.
 
Be prepared to speak with current, or future, investors with respect to the
Company's present and future goals.
 
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Any other tasks as assigned to you by the chief executive officer or the board
of directors.
 
The foregoing description may be amended from time to time to refine the scope
of work to include such other matters within your professional competence as we
may mutually agree. In connection with any future amendments that increase the
scope of your responsibilities to us, we will negotiate reasonable adjustments
to the compensation provided for in this agreement.
 
You will not be an employee, of our company and you will perform all services
required by this agreement as an independent contractor. We will not incur any
liability to any third patties as the result of your actions and you will not,
without our written permission, represent to any third party that you are an
employee of our company. You will not be entitled to receive the fringe benefits
generally offered to our full-time employees, but you will be entitled to
participate in our incentive stock plan to the extent that the compensation
committee of our board of directors concludes that such participation is
warranted in light of your contribution to our business.
 
During the course of your engagement as a consultant, you will be responsible
for the following:
 

 
(a)
You will devote whatever time is required to bring the Company into SEC
compliance. You will devote whatever time is required thereafter to fulfill your
fiduciary responsibilities.

 

 
(b)
From time to time you may be called upon to travel in the course of performing
your responsibilities for us.

 

 
(c)
You will not have any authority to sign contracts on our behalf or to bind us to
any purchases, services, or commitments unless you obtain our prior written
approval.

 

 
(d)
You will initially report to and take direction from Mr. Thomas Granville, our
chief executive officer. This may change from time to time at Axion's sole
discretion. You will report to the Audit Committee and take their direction
wherever required to comply with the by-laws of the corporation and applicable
FASB, SEC, PCAOB and stock market listing requirements.

 
3.
Compensation

 
In consideration of your agreement to perform these duties, we will provide you
with a compensation package that includes:
 

 
·
A consulting fee of $15,000. per month for the services contemplated by this
agreement;

 

 
·
Inclusion in the company Workers Compensation Plan;

 
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·
Such additional or supplemental fees and bonuses as we may agree to from time to
time.

 
It is agreed and understood that the foregoing compensation package is based on
our current financial resources and our current expectations respecting the
amount of time you will be required to devote to our planned activities. Since
we recognize the likelihood that the specified compensation levels may prove to
be inadequate if our planned manufacturing activities progress rapidly, we agree
to re-evaluate your participation on a semi annual basis in 2008, should this
contract be extended, and make appropriate adjustments to your compensation to
ensure that your contribution to our planned activities is recognized and that
you will be compensated at a mutually agreeable level..
 
4.
Annual Stock Option

 
In consideration of your agreement to devote the time to accomplish the
requirements listed in this contract we will grant you an option to purchase
80,000 shares of our common stock at an exercise price of $4.50 per share. The
option shall vest 20,000 upon execution of this contract and then at the rate of
10,000 shares per month commencing on September 1, 2007 and continuing for the
term of this contract, If your consulting relationship with us is terminated for
any reason at any time during the first I month, all vested options will be
forfeit. Subject to the foregoing minimum length of service condition, vested
options may be exercised at any time or from time to time, in whole or in part,
for a period of two years. The option agreement attached hereto as "Exhibit F"
shall be executed concurrently with this agreement.
 
5.
Expenses

 
During the course of your engagement as a consultant we will reimburse you for
reasonable expenses actually and properly incurred by you in performing your
duties in connection with our business. You agree not to incur any expenses
without prior approval.
 

 
(a)
Reasonable expenses while traveling on company business include travel fares,
accommodations, meals, tips, telephone and fax charges.

 

 
(b)
You are not authorized to incur entertainment expenses without our prior
approval.

 

 
(c)
All expenses must be reported on our standard expense reimbursement forms,
accompanied by copies of all associated receipts and included with your regular
monthly statement.

 

 
(d)
Living expenses while in New Castle that will include: housing, rental car
allowance, mileage allowance and two round trip air fares home per month while
located frill time at New Castle. Until Axion is current in its filings with the
SEC Executive is expected to devote full time to his duties at Axion without
trips home.

 
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6.
Confidentiality and intellectual Property

 
Given the nature of your consulting engagement and of the products and markets
that we are involved with, it is imperative to our viability and success that we
enter into a Confidentiality and Intellectual Property Agreement with you. This
additional agreement, contained in Schedule "A" — Confidentiality and
Intellectual Property Rights Agreement, survives the termination of this
Consulting Agreement for the periods of time stated within it.
 
7.
Non-Corn petition and Non-Solicitation. Included
 

 
Given the nature of your consulting engagement and of the products and markets
that we are involved with, it is imperative to our viability and success that we
enter into a Confidentiality and Intellectual Property Agreement with you. This
additional agreement, contained in Schedule "B" —Non-Competition/Non
Solicitation Agreement survives the termination of this Consulting Agreement for
the periods of time stated within it.
 
8.
Term and Termination

 

 
(a)
This Consulting Agreement commences on the Effective Date, and continues until
it is terminated.

 

 
(b)
Axion can terminate this Consulting Agreement with cause at any time without
prior notice. Axion can also terminate this Consulting Agreement without cause
as long as we give you four weeks advance written notice. Our failure to give
you said notice in writing will be a breach of this subsection, which may cause
you loss or harm for which we could be liable.

 

 
(c)
If you fail to work in good faith after a notice of termination, Axion can,
acting reasonably, terminate you with cause.

 

 
(d)
You can terminate this Consulting Agreement at any time as long as you give us
at least four weeks prior written notice. Your failure to give us said notice in
writing will be a breach of this subsection.

 
9.
Severability

 
In the event that part or all of any provision of this Consulting Agreement is
determined by an arbitrator or court to be void or invalid, then the remaining
provisions or pails will remain in full force and effect, If any arbitrator or
court determines that pail or all of any provision of this Consulting Agreement
is so broad as to be unenforceable, then it is agreed by both of us that such
provision or part will be interpreted only broadly enough to be deemed
enforceable.
 
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10.
Survival

 
Schedule "A" — Confidentiality and Intellectual Property Rights Agreement and
Schedule "B" — Non-Competition / Non Solicitation Agreement survive the
termination or expiration of this Consulting Agreement, along with any other
part or provision which might be required to survive in order to give effect to
the same.
 
11.
Entire Agreement

 
Without restricting the general intention of this clause, we both agree that
from the Effective Date forward, this Consulting Agreement takes the place of
any other contracts or agreements of the same nature, whether written or verbal,
that may have existed between the both of us, except as may be noted in Schedule
"E" — Other Covenants.
 
12.
Amendment

 
Any change or amendment to this Consulting Agreement must be made in writing and
signed by both of the Parties.
 
13.
Notices

 
Any notice to be given by either us or you may be properly given if delivered
personally or sent by registered mail, postage prepaid, and addressed to the
other at the address stated on page 1 above, and additionally to any address fax
or email address which is known to be a current and valid address for
corresponding with either party. Any notice that you send to us must be
addressed to HR at Axion.
 
14.
Governing Law

 
This Consulting Agreement will be governed by the laws of the Commonwealth of
Pennsylvania.
 
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15.
Signatures

 
Both of us have fully read and understand this Consulting Agreement in its
entirety and have signed it on the dates indicated in the spaces provided below.
 

       
/S/ THOMAS GRANVILLE
   
9/21/07

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Axion Power International, Inc.
   
Date
Per: Thomas Granville
Title: C.E.O.
   

               
/S/ ANDREW CARR CONWAY, JR.
   
9/26/07

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Consultant
   
Date
Per: Andrew Carr Conway, Jr.
        Conway Enterprises, LLC
   

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Schedule "A" — Confidentiality and Intellectual Property Rights Agreement

 
THIS CONFIDENTIALITY AND INTELLECTUAL PROPERTY RIGHTS AGREEMENT is made on July
29, 2007 (the "Effective Date")
 
BETWEEN:
 
AXION POWER INTERNATIONAL, INC.
 
3601 CloverLane, New Castle PA 16105
 
- and -
 
Andrew Carr Conway, Jr. (the "Consultant") dba Conway Enterprises, LLC,
 
1.
Glossary

 
In this Consulting Agreement, certain words have specific meanings, including
the following:
 

 
(a)
The word "Axion" means Axion Power International, Inc. and/or any of its
subsidiaries, affiliates, successors or assigns.

 

 
(b)
The word "Parties" means the Consultant and Axion, jointly.

 

 
(c)
The words "Confidentiality Agreement" means this "Confidentiality and
Intellectual Property Rights Agreement", and any changes that the Parties may
make in writing to it at any time.

 

 
(d)
The words "Confidential Information" means any technical data, trade secrets or
know-how proprietary to or in the possession of Axion, including, but not
limited to, research, product plans, products, services, customer lists
(including, but not limited to, customers of Ax ion on whom the Consultant
called or with whom he/she became acquainted during the term of his/her
employment), markets, software, developments, codes, inventions, processes,
formulas, technology, designs, drawings, equipment or engineering, prototypes,
compilations of information, marketing, finance or other business information
disclosed to the Consultant by Axion either directly or indirectly in writing,
drawings, orally or in electronic form.

 

 
(e)
The words "Prior Inventions" mean inventions, original works of authorship,
developments, improvements, and trade secrets made by the Consultant prior to
his/her employment with Axion.

 
Other words have the meanings given to them throughout this Confidentiality
Agreement.
 
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2.
Background

 
The Parties have entered into a Consulting Agreement (the "Consulting
Agreement") of which this Schedule "A" Confidentiality and Intellectual Property
Rights Agreement forms a part.
 
Axion requires that the Consultant enter into this Confidentiality Agreement as
a condition of employment as part of its ongoing efforts to keep confidential
its information and trade secrets and the information and trade secrets of its
subsidiaries, affiliates, customers and suppliers.
 
The Consultant understands that his acceptance of the terms and conditions
contained in this Agreement are essential to Axion's ability to compete in the
energy storage and be a viable business in that market. The Consultant
acknowledges that this Confidentiality Agreement is a reasonable and appropriate
measure.
 
The Parties agree to the following:
 
3.
Company Information

 
The Consultant agrees, at all times during and after the term of his employment,
to keep secret and not to use any Confidential Information of Axion, except for
the benefit of Axion, or to disclose Confidential Information to any person,
firm or corporation without the written authorization of the supervisor or
his/her designate.
 
4.
Former-employer information

 
The Consultant agrees that, during his/her employment with Axion, he/she will
not improperly use or disclose any proprietary information or trade secrets of
any former employer or other person or entity.
 
5.
Third Party Information

 
Axion has received and will receive from third parties their confidential or
proprietary information on the condition that Axion keep such information
confidential and use it only for certain limited purposes. The Consultant
understands this and agrees to keep secret all such confidential or proprietary
information and not to disclose it to any person, firm or corporation nor use it
except where necessary to carry out his/her work for Axion in a manner
consistent with Axion or Axion's agreements with such third parties. The
Consultant further understands and agrees that he/she may be required from time
to time to confirm the requirements of this position by way of the execution of
a separate agreement for the benefit of third parties.
 
Consultant will continue to be obligated to retain confidentiality even
respecting information improperly released by others.
 
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6.
Inventions Retained and Licenses

 
The Consultant has attached to this Confidentiality Agreement, as Schedule "D" —
Statement of Prior Inventions, a list describing all Prior Inventions which
belong to him/her, which relate to Axion's Business, products or research and
development and which are not assigned to Axion hereunder. The Consultant agrees
that, where no such list is attached, it shall constitute a representation by
him/her that there are no such Prior Inventions.
 
7.
Assignment of Inventions

 
The Consultant agrees to immediately disclose in writing to Axion any and all
inventions, original works of authorship, developments, concepts, improvements
or trade secrets related to Axion's e3 Supercell technology (which is generally
described as a lead-acid-carbon supercapacitor/battery hybrid), whether or not
they are patentable or registerable under copyright or similar laws, which
he/she may conceive of, develop or reduce to practice, or cause to be conceived,
developed, or reduced to practice during his employment with Axion (collectively
referred to as "Inventions"). The Consultant agrees to hold the Inventions in
trust for the sole benefit and right of Axion.
 
8.
Maintenance of Records

 
The Consultant agrees to keep and maintain adequate and up-to-date written
records of all Inventions made by him/her (solely or jointly with another)
during his/her employment with Axion. The Consultant agrees that the records
will be in the form of notes, sketches, drawings, and any other format that may
be specified by Axion and that the records will be available to and remain the
sole property of Axion at all times.
 
9.
Patent and Copyright Registrations

 
The Consultant agrees to assist Axion or its designee, at Axion's expense, in
every proper way to secure Axion's rights in the Inventions and any copyrights,
patents, mask works rights or other intellectual property rights relating
thereto in any and all countries, including the disclosure to Axion of all
pertinent information and data with respect thereto, the execution of all
applications, specifications, oaths, assignments and all other instruments which
Axion shall deem necessary in order to apply for and obtain such rights and in
order to assign and convey to Axion, its successors, assigns and nominees the
sole and exclusive rights, title and interest in and to such Inventions, and any
copyrights, patents, or other intellectual property rights relating thereto.
 
10.
Return of Axion's Documents

 
The Consultant agrees that, at the expiration or termination of the Consulting
Agreement, he/she will immediately deliver upon demand to Axion and not keep in
his/her possession, recreate or deliver to anyone else any devices, records,
data, notes, reports, proposals, lists, correspondence, specifications,
drawings, blueprints, sketches, bill of materials, process flow diagrams,
process sheets, process data, quality control data, materials, equipment, other
documents or property, or any reproductions of any above items stored in any
medium whatsoever developed by him/her pursuant to his/her employment with Axion
or otherwise belonging to Axion. In the event of the termination or expiration
of his/her employment, the Consultant agrees to sign and deliver the
"Termination Certification".
 
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11.
Notification to a new employer

 
When the Consultant ceases to be employed by Axion for whatever reason, the
Consultant promises to Axion that he/she shall notify his/her new employer in
writing about his/her rights and obligations under this Confidentiality
Agreement, and shall provide Axion with a copy of such written notification
immediately upon demand.
 
12.
Representations

 
The Consultant represents he/she has not entered into and agrees that he/she
will not enter into any oral or written agreement that conflicts with his/her
obligations under this Confidentiality Agreement. Axion is relying on these
representations in deciding to enter into this Confidentiality Agreement.
 
13.
Equitable Remedies

 
The Consultant understands and agrees that it may be impossible or inadequate to
measure and calculate Axion's losses or damages from a breach of the covenants
set forth in this Confidentiality Agreement. Accordingly, the Consultant agrees
that if he/she breaches any of such Sections, Axion will have available, in
addition to any other right or remedy available, the right to obtain an
injunction restraining such breach or threatened breach and to specific
performance of any such provision of this Confidentiality Agreement.
 
14.
Applicable Law

 
This Confidentiality Agreement is to be interpreted in accordance with the law
of the Commonwealth of Pennsylvania and the federal laws of the United States of
America.
 
15.
Entire Agreement

 
This Confidentiality Agreement represents the entire agreement on thus subject
between Axion and the Consultant, and supersedes all prior or contemporaneous
oral or written agreements between them, relating to this subject matter. It may
not be amended or altered except in writing signed by both Parties.
 
16.
Binding Effect

 
This Confidentiality Agreement is for the benefit of the Consultant and Axion,
and their respective successors, assigns, heirs, executors, administrators and
legal representatives.
 
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17.
Signatures

 
Both of us have fully read and understand this Confidentiality Agreement in its
entirety and have signed it e dates indicated in the spaces provided below.
 

       
/S/ THOMAS GRANVILLE
   
9/21/07

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Axion Power International, Inc.
   
Date
Per: Thomas Granville
Title: C.E.O.
   

             
/S/ ANDREW CARR CONWAY, JR.
   
9/26/07

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Consultant
   
Date
Per: Andrew Carr Conway, Jr.
        Conway Enterprises, LLC
   

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Schedule "B" — Non-Competition I Non Solicitation Agreement

 
THIS NON-COMPETITION / NON SOLICITATION AGREEMENT is made on August 31, 2007
(the "Effective Date ")
 
BETWEEN:
 
AXION POWER INTERNATIONAL, INC.
 
3601 Clover Lane, New Castle PA 16105
 
- and -
 
Andrew Carr Conway, Jr. (the "Consultant") dba Conway Enterprises, LLC,
 
1.
Glossary

 
In this Consulting Agreement, certain words have specific meanings, including
the following:
 

 
(a)
The word "Axion" means Axion Power International, Inc. and/or any of its
subsidiaries, affiliates, successors or assigns.

 

 
(b)
The word "Parties" means the Consultant and Axion, jointly.

 

 
(c)
The words "Non-Competition Agreement" means this "Schedule "B" — Non-
Competition / Non Solicitation Agreement", and any changes that the Parties may
make in writing to it at any time.

 

 
(d)
The words "Competitive Business" means any business that is involved in the
development of lead-acid-carbon supercapacitor/battery hybrid energy storage
devices and is directly competitive with Axion's business, or in respect of
which it carries on active sales, marketing, distribution, research or
development activities.

 
Other words have the meanings given to them throughout this Confidentiality
Agreement.
 
2.
Non-Competition Covenant

 
During the period commencing on the Effective Date and ending 12 months from the
date of termination or expiration of the Consulting Agreement, the Consultant
agrees not to participate, directly or indirectly in any way, in any Competitive
Business as of the date of such termination or expiration).
 
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The Parties agree that the Consultant shall be in violation of this
Non-Competition Agreement if he/she participates directly or indirectly in a
Competitive Business:
 

 
(a)
as a principal, partner or employee;

 

 
(b)
as an officer, director or similar official of any incorporated or
unincorporated entity (including but not limited to any corporation,
partnership, joint venture, association, syndicate or trust), which is engaged
in any activities included as pail of the Competitive Business ("Other Entity");

 

 
(c)
as a consultant or advisor to or agent of any Other Entity in respect of such
Competitive Business;

 

 
(d)
as a shareholder of any Other Entity, who can vote or act with other
shareholders to exercise effective control of that Other Entity;

 

 
(e)
by canvassing or soliciting on behalf of the Other Entity an order for
Competitive Business; or

 

 
(f)
by providing, directly or indirectly, financial or other assistance to a
business which is substantially similar to or competitive with the Competitive
Business.

 
3.
Non-Solicitation of Personnel

 
Except with Axion's prior written consent, during the term of the Consulting
Agreement and for a period of 12 months after it expires or terminates, the
Consultant agrees that he/she will not solicit, offer or have any discussion
with any employee, consultant, contractor or agent of Axion ("Personnel")
concerning employment or engagement for any work, services, project or business
other than the business of Axion, and the Consultant will not attempt to
influence any Personnel to terminate his or her employment or engagement with Ax
ion.
 
In the event that the Consultant violates the above non-solicitation provision,
the Consultant understands and agrees that Axion will incur costs and suffer
losses that cannot be fully quantified. In addition to any other remedies
contained in this Non-Competition Agreement or at law, the Parties agree that if
the Consultant violates the above non-solicitation provision, he/she shall be
liable for this violation.
 
The Parties agree that this amount represents a genuine pre-estimate of the loss
of such Personnel to Axion, and is not a penalty.
 
4.
Extension During Periods of Violation

 
If the Consultant violates the foregoing non-solicitation provision, he/she
agrees that the period of time specified therein shall not run during the period
of the violation. The Consultant further understands that the purpose of this
clause is to give Axion the protection of the non-solicitation provision for the
full agreed-upon duration.
 
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5.
Representations

 
The Consultant represents he/she has not entered into and agrees that he/she
will not enter into any oral or written agreement that conflicts with his/her
obligations under this Non-Competition Agreement. Axion is relying on these
representations in deciding to enter into this Non-Competition Agreement.
 
6.
Equitable Remedies

 
The Consultant understands and agrees that it may be impossible or inadequate to
measure and calculate Axion's losses or damages from a breach of the covenants
set forth in this Non- Competition Agreement. Accordingly, the Consultant agrees
that if he/she breaches any of such Sections, Axion will have available, in
addition to any other right or remedy available, the right to obtain an
injunction restraining such breach or threatened breach and to specific
performance of any such provision of this Non-Competition Agreement.
 
7.
Applicable Law

 
This Non-Competition Agreement is to be interpreted in accordance with the law
of the Commonwealth of Pennsylvania and the federal law of the United States of
America.
 
8.
Entire Agreement

 
This Non-Competition Agreement represents the entire agreement on that subject
between Axion and the Consultant, and supersedes all prior or contemporaneous
oral or written agreements between them, relating to that subject matter. It may
not be amended or altered except in writing signed by both Parties.
 
9.
Binding Effect

 
This Non-Competition Agreement is for the benefit of the Consultant and Axion,
and their respective successors, assigns, heirs, executors, administrators and
legal representatives.
 
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10.
Signatures

 
Both of us have fully read and understand this Non-Competition Agreement in its
entirety and have signed it on the dates indicated in the spaces provided below.

               
/S/ THOMAS GRANVILLE
    9/21/07

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Axion Power International, Inc.    
Date
Per: Thomas Granville
Title: C.E.O.
                   
/S/ ANDREW CARR CONWAY, JR.
    9/26/07 

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Consultant     Date
Per: Andrew Carr Conway, Jr.
        Conway Enterprises, LLC
     

-19-

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Schedule "C" — Project Description Notes
 
This Schedule may validly be left blank. Any amendment to this Schedule requires
the signatures of both Parties.

           

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Axion Power International, Inc.    

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Date
Per: 
Title:
                   

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Consultant     

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Date
Per:       

 
-20-

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Schedule "D" — Statement of Prior Inventions
 
This Schedule may validly be left blank. Any amendment to this Schedule requires
the signatures of both Parties.

           

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Axion Power International, Inc.    

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Date
Per: 
Title:
                   

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Consultant     

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Date
Per:       

 
-21-

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Schedule "E" — Other Covenants
 
This Schedule may validly be left blank. Any amendment to this Schedule requires
the signatures of both Parties.

           

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Axion Power International, Inc.    

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Date
Per: 
Title:
                   

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Consultant     

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Date
Per:       

 
-22-

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