Exhibit 4.14


 


WARRANT AGREEMENT


 


Axion Power International, Inc.


 


and


 


                       
                             ,
as Warrant Agent


 


WARRANT AGREEMENT


 


THIS WARRANT AGREEMENT (this “Agreement”),
dated as of                         ,
2014, is by and between Axion Power International, Inc., a Delaware corporation (the “Company”), and
                                ,
a                                          
   , as Warrant Agent (the “Warrant Agent”).


 


WHEREAS, the Company is engaged in an
initial public offering (the “Offering”) of units consisting of common stock of the Company, par value
$0.005 per share (“Common Stock”) and warrants to purchase shares of Common Stock of the Company (“Warrants”)
and, in connection therewith, has determined to issue and deliver up to                         
Series A Warrants to public investors in the Offering, each such Warrant evidencing the right of the holder thereof to purchase
one share of Common Stock of the Company for $            
per share, subject to adjustment as described herein (the “Series A Warrants”) and up to _________ Series B Warrants
to public investors in the Offering, each such Series B Warrant evidencing the right of the holder, thereof to purchase one share
of Common Stock of the Company for $_________ per share, subject to adjustment as described herein (the A Warrants and B Warrants
are referred to collectively herein as the “Warrants”); and


 


WHEREAS, the Company has filed with the
Securities and Exchange Commission (the “Commission”) a registration statement, as amended, on Form S-1,
No. 333-197978 (the “Registration Statement”) and prospectus (the “Prospectus”),
for the registration, under the Securities Act of 1933, as amended (the “Securities Act”), of the units
to be sold in the Offering, the shares of Common Stock included in the units to be sold in the Offering, the Warrants included
in the units to be sold in the Offering and the shares of Common Stock underlying the Warrants; and


 


WHEREAS, the Company desires the Warrant
Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration,
transfer, exchange and exercise of the Warrants; and


 


WHEREAS, the Company desires to provide
for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights,
limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants (the “Holders”);
and


 


WHEREAS, all acts and things have been
done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on
behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the
execution and delivery of this Agreement.


 


NOW, THEREFORE, in consideration of the
mutual agreements herein contained, the parties hereto agree as follows:


 


	1.	Appointment
    of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and
    the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions
    set forth in this Agreement. 


 






    	 



    	 



    

 


	2.	Warrants.
    


 


	 	2.1	Form
    of Warrant. Each A Warrant and B Warrant shall be issued in registered form only and shall be in substantially the form
    of Exhibit A and B hereto, respectively, the provisions of which are incorporated herein. Each Warrant shall be signed
    by, or bear the facsimile signature of, the Chairman of the Board, President, Chief Executive Officer, Secretary or other
    principal officer of the Company. In the event the person whose facsimile signature has been placed upon any Warrant shall
    have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued
    with the same effect as if he or she had not ceased to be such at the date of issuance. 


 


	 	2.2	Effect
    of Countersignature. Unless and until countersigned by the Warrant Agent pursuant to this Agreement, a Warrant shall be
    invalid and of no effect and may not be exercised by the holder thereof. 


 


	 	2.3	Registration.
    


 


	 	2.3.1	Warrant
    Register. The Warrant Agent shall maintain books (the “Warrant Register”), for the registration
    of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants, the Warrant
    Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise
    in accordance with instructions delivered to the Warrant Agent by the Company. 


 


	 	2.3.2	Registered
    Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem
    and treat the person in whose name such Warrant is registered in the Warrant Register (the “Registered Holder”)
    as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or
    other writing on the Warrant Certificate (as defined below) made by anyone other than the Company or the Warrant Agent), for
    the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected
    by any notice to the contrary. 


 


	3.	Terms and Exercise of Warrants.
    


 


	 	3.1	Exercise
    Price. Each Warrant shall, when countersigned by the Warrant Agent, entitle the Registered Holder thereof, subject to
    the provisions of such Warrant and of this Warrant Agreement, to purchase from the Company the number of shares of Common
    Stock stated therein, at the price of $ 3.25 per share for the A Warrants and $3.00 per share for the B Warrants, subject
    to the adjustments provided herein. The term “Exercise Price” as used in this Warrant Agreement
    shall mean the price per share at which shares of Common Stock may be purchased at the time a Warrant is exercised. 


 






    	 



    	 



    

 


	 	3.2	Duration
    of Warrants. A Warrant may be exercised only during the period (the “Exercise Period”) commencing
    on the date of issuance thereof and ending on the earlier of: (a)                         ,
    2019 for the A Warrants and ______, 2015 for the B Warrants; or (b) upon the dissolution and winding up of the Company
    (the “Expiration Date”); provided, however, that the exercise of any Warrant shall be subject to
    the satisfaction of any applicable conditions, as set forth in subsection 3.3.2 below with respect to an effective registration
    statement. Each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all
    rights in respect thereof under this Agreement shall cease at 5:00 p.m. New York City time on the Expiration Date. 


 


	 	3.3	Exercise
    of Warrants. 


 


	 	3.3.1	Payment.
    Subject to the provisions of the Warrant and this Warrant Agreement, a Warrant, when countersigned by the Warrant Agent, may
    be exercised by the Registered Holder thereof by surrendering it, at the office of the Warrant Agent in the Borough of Manhattan,
    City and State of New York or at the office of its successor as Warrant Agent, in the Borough of Manhattan, City and State
    of New York, with the subscription form, as set forth in the Warrant, duly executed, and by paying in full the Exercise Price
    for each full share of Common Stock as to which the Warrant is exercised and any and all applicable taxes due in connection
    with the exercise of the Warrant, the exchange of the Warrant for the shares of Common Stock and the issuance of such shares
    of Common Stock, in lawful money of the United States, in good certified check or good bank draft payable to the order of
    the Company or by Cashless Exercise in accordance with Section 3.2.2 hereof. 


 


	 	3.3.2	Cashless
    Exercise. 


 


			Notwithstanding anything
                                         contained herein to the contrary, if and only if an effective registration statement
                                         covering the issuance of the shares of Common Stock that are subject to the Exercise
                                         Notice is not available for the issuance of such shares of Common Stock, the Registered
                                         Holder may exercise this Warrant in whole or in part and, in lieu of making the cash
                                         payment otherwise contemplated to be made to the Company upon such exercise in payment
                                         of the aggregate Exercise Price, elect instead to receive upon such exercise the “Net
                                         Number” of shares of Common Stock determined according to the following formula
                                         (a “Cashless Exercise”):



 


	 	 	 	 	 	 	 
	 	 	 Net Number =	 	  (A x B) - (A x C)    	 	 
	 	 	 	 	B	 	 


 


For purposes of the foregoing formula:


 


	 	 	 	 	 
	A	 	=	 	the total number
    of shares with respect to which this Warrant is then being exercised.
	 	 	 
	B	 	=	 	the arithmetic average
    of the Closing Sale Prices (as defined below) of the Common Stock for the five (5) consecutive Trading Days ending on
    the date immediately preceding the date of the Exercise Notice.
	 	 	 
	C	 	=	 	the Exercise Price
    then in effect for the applicable shares of Common Stock at the time of such exercise.


 






    	 



    	 



    

 


The term “Closing Sale Price”
means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security
on the Nasdaq Capital Market, as reported by Bloomberg, or, if the Nasdaq Capital Market begins to operate on an extended hours
basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price or
the last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the
Nasdaq Capital Market is not the principal securities exchange or trading market for such security, the last closing bid price
or last trade price, respectively, of such security on the principal securities exchange or trading market where such security
is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price,
respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average
of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the OTC Link or “pink
sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Sale Price cannot be calculated for a
security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the
fair market value as mutually determined by the Company and the Registered Holder. If the Company and the Registered Holder are
unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 8.3
hereof. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar
transaction during the applicable calculation period


 


For purposes of Rule 144(d) promulgated
under the Securities Act, as in effect on the date hereof, assuming the Registered Holder is not an affiliate of the Company,
it is intended that the shares of Common Stock issued in a Cashless Exercise shall be deemed to have been acquired by the Registered
Holder, and the holding period for the shares of Common Stock shall be deemed to have commenced, on the date this Warrant was
originally issued.


 


	 	3.3.3	Issuance
    of Common Stock on Exercise. As soon as practicable after the exercise of any Warrant and, if applicable, the clearance
    of the funds in payment of the Exercise Price, the Company shall issue to the Registered Holder of such Warrant a certificate
    or certificates for the number of full shares of Common Stock to which he, she or it is entitled, registered in such name
    or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new countersigned
    Warrant for the number of shares as to which such Warrant shall not have been exercised. In no event shall the Company be
    required to net cash settle any Warrant. 


 


	 	3.3.4	Valid Issuance.
    All Common Stock issued or issuable upon the proper exercise of a Warrant in conformity with this Agreement shall be validly
    issued, fully paid and nonassessable. 


 


	 	3.3.5	Date of
    Issuance. Each person in whose name any certificate for the Common Stock is issued shall for all purposes be deemed to
    have become the holder of record of such Common Stock on the date on which the Warrant was surrendered and, other than in
    the case of a Cashless Exercise, payment of the Exercise Price was made, irrespective of the date of delivery of such certificate,
    except that, if the date of such surrender and payment is a date when the share transfer books of the Company are closed,
    such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date
    on which the share transfer books are open. 


 






    	 



    	 



    

 


	 	3.4	Beneficial
    Ownership Limitation on Exercises. The Company shall not effect the exercise of any portion of a Warrant, and the Registered
    Holder of such Warrant shall not have the right to exercise any portion of such Warrant, to the extent that after giving effect
    to such exercise, the Registered Holder (together with the Registered Holder’s affiliates, and any persons acting as
    a group together with the Holder or any Registered Holder’s affiliates) would beneficially own in excess of 9.99% (the
    “Maximum Percentage”) of the Common Stock outstanding immediately after giving effect to such exercise.
    For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such Registered
    Holder and its affiliates shall 
	 	include the number of shares of Common
    Stock issuable upon exercise of the Warrant with respect to which the determination of such sentence is being made, but shall
    exclude shares of Common Stock which would be issuable upon (i) exercise of the remaining, unexercised portion of the
    Warrant beneficially owned by the Registered Holder and its affiliates and (ii) exercise or conversion of the unexercised
    or unconverted portion of any other securities of the Company beneficially owned by the Registered Holder and its affiliates
    (including, without limitation, any convertible notes or convertible preferred stock or warrants) subject to a limitation
    on conversion or exercise analogous to the limitation contained herein beneficially owned by the Registered Holder or any
    of its affiliates. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall
    be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
    Act”). To the extent that the limitation contained in this Section 3.4 applies, the Registered Holder’s
    submission of an Election to Purchase shall be deemed to be the Registered Holder’s determination of whether a Warrant
    is exercisable (in relation to any other securities owned by the Registered Holder together with any affiliates) and of which
    portion of a Warrant is exercisable, in each case subject to the Maximum Percentage, and the Company shall have no obligation
    to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated
    above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
    thereunder. For purposes of the Warrants, in determining the number of outstanding shares of Common Stock, the Registered
    Holder may rely on the number of outstanding shares of Common Stock as reflected in the most recent of (1) the Company’s
    most recent Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the Commission, as the case may be,
    (2) a more recent public announcement by the Company or (3) any other notice by the Company or its transfer agent
    setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written or oral request
    of the Registered Holder, the Company shall within three (3) Trading Days (as hereinafter defined) confirm to the Registered
    Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock
    shall be determined after giving effect to the conversion or exercise of securities of the Company, including any Warrant,
    by the Registered Holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was
    reported. By written notice to the Company, the Registered Holder may from time to time increase the Maximum Percentage to
    any other percentage of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance
    of shares of Common Stock upon exercise of a Warrant and the provisions of this Section 3.4 shall continue to apply;
    provided that (i) any such increase will not be effective until the sixty-first (61st) day after such notice is
    delivered to the Company, and (ii) any such increase will apply only to that Registered Holder. For purposes of clarity,
    the Common Stock underlying any Warrant in excess of the Maximum Percentage for a Registered Holder shall not be deemed to
    be beneficially owned by that Registered Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1)
    of the Exchange Act. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict
    conformity with the terms of this Section 3.4 to the extent necessary to correct this paragraph (or any portion hereof)
    which may be defective or inconsistent with the intended beneficial ownership limitation herein contained or to make changes
    or supplements necessary or desirable to properly give effect to such limitation. 


 






    	 



    	 



    

 


	4.	Adjustments.


 


	 	4.1	Stock
    Dividends.


 


	 	4.1.1	Split-Ups.
    If after the date hereof, and subject to the provisions of Section 4.5 below, the number of outstanding shares of Common
    Stock is increased by a stock dividend payable in Common Stock, or by a split-up of Common Stock or other similar event, then,
    on the effective date of such stock dividend, split-up or similar event, the number of shares of Common Stock issuable on
    exercise of each Warrant shall be increased in proportion to such increase in the outstanding shares of Common Stock and the
    Exercise Price shall be proportionally decreased such that the aggregate Exercise Price, after such adjustments, remains the
    same for each Warrant. 


 


	 	4.1.2	Dividends.
    If the Company, at any time while the Warrants are outstanding and unexpired, shall pay a dividend or make a distribution
    in cash, securities or other assets to the holders of shares of Common Stock on account of such Common Stock (or other shares
    of the Company’s capital stock into which the Warrants are convertible), other than as described in subsection
    4.1.1 above (any such non-excluded event being referred to herein as a “Dividend”), then the Exercise
    Price shall be decreased, effective immediately after the effective date of such Dividend, by the amount of cash and/or the
    fair market value (as determined by the Board, in good faith) of any securities or other assets paid on each share of Common
    Stock in respect of such Dividend. 


 


	 	4.2	Aggregation
    of Shares. If after the date hereof, and subject to the provisions of Section 4.5 hereof, the number of outstanding
    shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of Common Stock
    or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification
    or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased in proportion
    to such decrease in outstanding shares of Common Stock and the Exercise Price shall be proportionally increased such that
    the aggregate Exercise Price, after such adjustments, remains the same for each Warrant. 


 






    	 



    	 



    

 


	 	4.3	Fundamental
    Transactions. If, at any time while the Warrants are outstanding, (i) the Company, directly or indirectly, in one
    or more related transactions effects any merger or consolidation of the Company with or into another person, (ii) the
    Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of
    all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase
    offer, tender offer or exchange offer (whether by the Company or another person) is completed pursuant to which holders of
    Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted
    by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more
    related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory
    share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or
    property, (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase
    agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme
    of arrangement) with another person or group of persons whereby such other person or group acquires more than 50% of the outstanding
    shares of Common Stock (not including any shares of Common Stock held 
	 	by the other person or other persons
    making or party to, or associated or affiliated with the other persons making or party to, such stock or share purchase agreement
    or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise
    of a Warrant, the Registered Holder of each Warrant shall have the right to receive, for each share of Common Stock that would
    have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of
    the Registered Holder (without regard to any limitation in Section 3.4 on the exercise of the Warrants), the number of
    shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and
    any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental
    Transaction by a holder of the number of shares of Common Stock for which a Warrant is exercisable immediately prior to such
    Fundamental Transaction (without regard to any limitation in Section 3.4 on the exercise of the Warrants). For purposes
    of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration
    based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction,
    and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the
    relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice
    as to the securities, cash or property to be received in a Fundamental Transaction, then each Registered Holder shall be given
    the same choice as to the Alternate Consideration such Registered Holder receives upon any exercise of a Warrant following
    such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction that is
    (1) an all cash transaction, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange
    Act, or (3) a Fundamental Transaction involving a person or entity not traded on a national securities exchange, the
    Company shall, at a Registered Holder’s option, exercisable at any time prior to the consummation of the Fundamental
    Transaction, purchase such Registered Holder’s Warrant immediately prior to the consummation of such Fundamental Transaction
    from the Registered Holder by issuing to the Registered Holder a number of shares of Common Stock equal to a fraction, (i) the
    numerator of which shall be the Black Scholes Value of the remaining unexercised portion of such Registered Holder’s
    Warrant immediately prior to the consummation of such Fundamental Transaction, and (ii) the denominator of which shall
    be the sum of the price per share of Common Stock being offered in cash, if any, plus the value of any non-cash consideration,
    if any, being offered in such Fundamental Transaction (the “FMV”). “Black Scholes Value”
    means the value of a Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV” function
    on Bloomberg, L.P. (“Bloomberg”) determined immediately prior to the consummation of the applicable
    Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury
    rate for a period equal to the time between the date of the public announcement of the applicable Fundamental Transaction
    and the Expiration Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained
    from the HVT function on Bloomberg as of the trading day immediately following the public announcement of the applicable Fundamental
    Transaction, (C) the underlying price per share used in such calculation shall be the FMV and (D) a remaining option
    time equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Expiration
    Date. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the
    “Successor Entity”) to assume in writing all obligations of the Company under each Warrant in accordance
    with the provisions of this Section 4.3 pursuant to agreements in form and substance reasonably satisfactory to the Registered
    Holders and approved by the Registered Holder (without unreasonable delay) prior to such Fundamental Transaction and shall,
    at the option of each Registered Holder, deliver to such Registered Holder in exchange for such Registered Holder’s
    Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to
    such Registered Holder’s Warrant which is exercisable for a corresponding number of shares of capital stock of such
    Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of
    such Warrant (without regard to the limitations on exercise set forth in Section 3.4) prior to such Fundamental Transaction,
    and with an exercise price which applies the Exercise Price hereunder to such shares of capital stock (but taking into account
    the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of
    capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic
    value of such Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory
    in form and substance to the Registered Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity
    shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions
    of this Agreement and each Warrant referring to the “Company” shall refer instead to the Successor Entity), and
    may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Agreement
    and each Warrant with the same effect as if such Successor Entity had been named as the Company herein.


 






    	 



    	 



    

 


	 	4.4	Calculations.  All
    calculations under this Section 4 shall be made to the nearest cent or the nearest whole share, as the case may be. For
    purposes of this Section 4, any calculation of the number of shares of Common Stock deemed to be issued and outstanding
    as of a given date shall not include treasury shares, if any. Notwithstanding anything to the contrary in this Section 4,
    no adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least
    1% in such price; provided however, that any adjustments which by reason of the immediately preceding sentence are not required
    to be made shall be carried forward and taken into account in any subsequent adjustment. In any case in which this Section 4
    shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, if the
    Registered Holder exercises a Warrant after such record date, the Company may elect to defer, until the occurrence of such
    event, the issuance of the shares of Common Stock and other capital stock of the Company in excess of the shares of Common
    Stock and other capital stock of the Company, if any, issuable upon such exercise on the basis of the Exercise Price in effect
    prior to such adjustment; provided, however, that in such case the Company or the Warrant Agent shall deliver to the Registered
    Holder a due bill or other appropriate instrument evidencing the Registered Holder’s right to receive such additional
    shares and/or other capital securities upon the occurrence of the event requiring such adjustment. 


 


	 	4.5	Notices
    of Changes in Warrant. Upon every adjustment of the Exercise Price or the number of shares issuable upon exercise of a
    Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Exercise Price resulting
    from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise
    of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.
    Upon the occurrence of any event specified in Sections 4.1, 4.2 or 4.3, the Company shall give written notice of
    occurrence of such event to each Warrant holder, at the last address set forth for such holder in the Warrant Register, of
    the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the
    legality or validity of such event.


 


	 	4.6	No Fractional
    Shares. Notwithstanding any provision contained in this Warrant Agreement to the contrary, the Company shall not issue
    fractional shares upon exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the holder
    of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company
    shall, upon such exercise, round to the nearest whole number, the number of the shares of Common Stock to be issued to such
    holder. 


 


	 	4.7	Form of
    Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants
    issued after such adjustment may state the same Exercise Price and the same number of shares as is stated in the Warrants
    initially issued pursuant to this Agreement; provided, however, that the Company may at any time in its sole discretion make
    any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and
    any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise,
    may be in the form as so changed. 


 


	 	4.8	Other Events.
    In case any event shall occur affecting the Company as to which none of the provisions of preceding subsections of this Section 4 are
    strictly applicable, but which would require an adjustment to the terms of the Warrants in order to (i) avoid an adverse
    impact on the Warrants and (ii) effectuate the intent and purpose of this Section 4, then, in each such case, the
    Company shall appoint a firm of independent public accountants, investment banking or other appraisal firm of recognized national
    standing, which shall give its opinion as to whether or not any adjustment to the rights represented by the Warrants is necessary
    to effectuate the intent and purpose of this Section 4 and, if they determine that an adjustment is necessary, the
    terms of such adjustment. The Company shall adjust the terms of the Warrants in a manner that is consistent with any adjustment
    recommended in such opinion. 


 






    	 



    	 



    

 


	5.	Transfer and Exchange of
    Warrants. 


 


	 	5.1	Registration
    of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant
    Register, upon surrender of such Warrant for transfer, properly endorsed with signatures properly guaranteed and accompanied
    by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of
    Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled shall be delivered
    by the Warrant Agent to the Company from time to time upon request. 


 


	 	5.2	Procedure
    for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange
    or transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the
    Registered Holder of the Warrants so surrendered, representing an equal aggregate number of Warrants. 


 


	 	5.3	Fractional
    Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which shall result
    in the issuance of a warrant certificate for a fraction of a warrant. 


 


	 	5.4	Warrant
    Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with
    the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5. 


 


	6.	Other Provisions Relating
    to Rights of Holders of Warrants. 


 


	 	6.1	No Rights
    as Stockholder. A Warrant does not entitle the Registered Holder thereof to any of the rights of a stockholder of the
    Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights
    to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors
    of the Company or any other matter. 


 


	 	6.2	Lost, Stolen,
    Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant
    Agent may on such terms as to indemnity bond or otherwise as they may in their discretion impose (which shall, in the case
    of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant
    so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the
    Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.
    


 






    	 



    	 



    

 


	 	6.3	Reservation
    of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares
    of Common Stock that shall be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this
    Agreement. 


 


	 	6.4	Registration
    of Common Stock. The Company registered the Warrants and shares of Common Stock underlying the Warrants in the Registration
    Statement. The Company will use its reasonable best efforts to maintain the effectiveness of such Registration Statement and
    the current status of the Prospectus or to file and maintain the effectiveness of another registration statement and another
    current prospectus covering the shares of Common Stock issuable upon exercise of the Warrants at any time that the Warrants
    are exercisable. In addition, the Company agrees to use its reasonable best efforts to register such shares of Common Stock
    under the blue sky laws of the states of residence of the exercising Warrant holders to the extent an exemption from such
    registration is not available. 


 


	7.	Concerning the Warrant
    Agent and Other Matters. 


 


	 	7.1	Payment
    of Taxes. The Company shall from time to time promptly pay all taxes and charges that may be imposed upon the Company
    or the Warrant Agent in respect of the issuance or delivery of shares of Common Stock upon the exercise of the Warrants, but
    the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares. 


 


	 	7.2	Resignation,
    Consolidation, or Merger of Warrant Agent. 


 


	 	7.2.1	Appointment
    of Successor Warrant Agent. The Warrant Agent, or any successor hereafter appointed, may resign its duties and be discharged
    from all further duties and liabilities hereunder after giving 60 days’ notice in writing to the Company. If the
    office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in
    writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within
    a period of thirty (30) days after it has been notified in writing of such resignation or incapacity by the Warrant Agent
    or by the holder of a Warrant (who shall, with such notice, submit his Warrant for inspection by the Company), then the holder
    of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a
    successor Warrant Agent at the Company’s cost. Any successor Warrant Agent, whether appointed by the Company or by such
    court, shall be a corporation in good standing in the State of New York and having its principal office in the Borough of
    Manhattan, City and State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision
    or examination by federal or state authority. After appointment, any successor Warrant Agent shall be vested with all the
    authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally
    named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate,
    the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such
    successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request
    of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing
    for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights,
    immunities, duties, and obligations.


 






    	 



    	 



    

 


	 	7.2.2	Notice
    of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof
    to the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any such
    appointment. 


 


	 	7.2.3	Merger
    or Consolidation of Warrant Agent. Any company into which the Warrant Agent may be merged or with which it may be consolidated
    or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor
    Warrant Agent under this Agreement without any further act. 


 


	 	7.3	Fees
    and Expenses of Warrant Agent. 


 


	 	7.3.1	Remuneration.
    The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and shall,
    pursuant to its obligations under this Agreement, reimburse the Warrant Agent upon demand for all expenditures that the Warrant
    Agent may reasonably incur in the execution of its duties hereunder. 


 


	 	7.3.2	Further
    Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged,
    and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent
    for the carrying out or performing of the provisions of this Agreement. 


 


	 	7.4	Liability
    of Warrant Agent. 


 


	 	7.4.1	Reliance
    on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it
    necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action
    hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed
    to be conclusively proved and established by a statement signed by the President or Chairman of the Board of the Company and
    delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in good faith
    by it pursuant to the provisions of this Agreement. 


 


	 	7.4.2	Indemnity.
    The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. The Company
    agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and
    reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement, except as a
    result of the Warrant Agent’s gross negligence, willful misconduct or bad faith. 


 






    	 



    	 



    

 


	 	7.4.3	Exclusions.
    The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity
    or execution of any Warrant (except its countersignature thereof). The Warrant Agent shall not be responsible for any breach
    by the Company of any covenant or condition contained in this Agreement or in any Warrant. The Warrant Agent shall not be
    responsible to make any adjustments required under the provisions of Section 4 hereof or responsible for the
    manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such
    adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or
    reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any shares
    of Common Stock shall, when issued, be valid and fully paid and nonassessable. 


 


	 	7.5	Acceptance
    of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon
    the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants
    exercised and concurrently account for, and pay to the Company, all monies received by the Warrant Agent for the purchase
    of shares of Common Stock through the exercise of the Warrants. 


 


	8.	Miscellaneous Provisions.
    


 


	 	8.1	Successors.
    All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and
    inure to the benefit of their respective successors and assigns. 


 


	 	8.2	Notices.
    Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by the holder
    of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent
    by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed
    (until another address is filed in writing by the Company with the Warrant Agent), as follows: 


 


Axion Power International, Inc.


3601 Clover Lane


New Castle, PA 16105


 


			Any notice, statement
                                         or demand authorized by this Agreement to be given or made by the holder of any Warrant
                                         or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered
                                         if by hand or overnight delivery or if sent by certified mail or private courier service
                                         within five (5) days after deposit of such notice, postage prepaid, addressed (until
                                         another address is filed in writing by the Warrant Agent with the Company), as follows:



 






    	 



    	 



    

 


	 	8.3	Applicable
    Law. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects
    by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application
    of the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it
    arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York
    or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which
    jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts
    represent an inconvenient forum. 


 


	 	8.4	Persons
    Having Rights under this Agreement. Nothing in this Agreement shall be construed to confer upon, or give to, any person
    or corporation other than the parties hereto and the Registered Holders of the Warrants any right, remedy, or claim under
    or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants,
    conditions, stipulations, promises, and agreements contained in this Warrant Agreement shall be for the sole and exclusive
    benefit of the parties hereto and their successors and assigns and of the Registered Holders of the Warrants. 


 


	 	8.5	Examination
    of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant
    Agent in the Borough of Manhattan, City of New York and State of New York, for inspection by the Registered Holder of any
    Warrant. The Warrant Agent may require any such holder to submit his Warrant for inspection by it. 


 


	 	8.6	Counterparts.
    This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for
    all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
    


 


	 	8.7	Effect
    of Headings. The section headings herein are for convenience only and are not part of this Warrant Agreement and shall
    not affect the interpretation thereof. 


 


	 	8.8	Amendments.
    This Agreement may be amended by the parties hereto without the consent of any Registered Holder for the purpose of curing
    any ambiguity, or curing, correcting or supplementing any defective provision contained herein or adding or changing any other
    provisions with respect to matters arising under this Agreement as the parties may deem necessary or desirable and that the
    parties deem shall not adversely affect the interest of the Registered Holders. All other modifications or amendments shall
    require the written consent of the Company and the Registered Holders holding Warrants to purchase at least 65% of the shares
    of Common Stock underlying the then outstanding Warrants.


 


	 	8.9	Severability.
    This Warrant Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall
    not affect the validity or enforceability of this Warrant Agreement or of any other term or provision hereof. Furthermore,
    in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part
    of this Warrant Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and
    be valid and enforceable. 


 






    	 



    	 



    

 


Exhibit A - Form of A Warrant Certificate


 


Exhibit B - Form of B Warrant Certificate


 


IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.


 


	 	 	 
	AXION POWER INTERNATIONAL, INC.
	 	 
	By:	 	 
	                                    
                , as Warrant Agent
	By:	 	 
	Name:	 	  
	Title:	 	 


 


 


 






    	 



    	 



    

 


EXHIBIT A


 


[FORM OF A WARRANT CERTIFICATE] 


 





 


Number


 


Warrants


 


THIS WARRANT SHALL BE VOID IF NOT EXERCISED
PRIOR TO


THE EXPIRATION OF THE EXERCISE PERIOD
PROVIDED FOR


IN THE WARRANT AGREEMENT DESCRIBED BELOW


 


AXION POWER INTERNATIONAL, INC.


 


Incorporated Under the Laws of the State
of Delaware


 


CUSIP [        ]


 


Warrant Certificate


 


This Warrant Certificate certifies
that , or registered assigns, is the registered holder of warrant(s) (the “Warrants” and each,
a “Warrant”) to purchase shares of Common Stock, no par value (“Common Stock”),
of Axion Power International, Inc., a California corporation (the “Company”).  Each Warrant entitles
the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive from the Company
that number of fully paid and nonassessable shares of Common Stock as set forth below, at the exercise price (the “Exercise
Price”) as determined pursuant to the Warrant Agreement, payable in lawful money (or through “cashless
exercise” as provided for in the Warrant Agreement) of the United States of America upon surrender of this Warrant
Certificate and payment of the Exercise Price at the office or agency of the Warrant Agent referred to below, subject to the conditions
set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have
the meanings given to them in the Warrant Agreement (as defined on the reverse hereof).


 


Each Warrant is initially exercisable for
one fully paid and non-assessable share of Common Stock. The number of the shares of Common Stock issuable upon exercise of the
Warrants is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.


 


The initial Exercise Price per share of
Common Stock for any Warrant is equal to $3.25 per share. The Exercise Price is subject to adjustment upon the occurrence
of certain events set forth in the Warrant Agreement.


 


Subject to the conditions set forth in
the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end
of such Exercise Period, such Warrants shall become void.


 


Reference is hereby made to the further
provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have
the same effect as though fully set forth at this place.


 


This Warrant Certificate shall not be
valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.




 


This Warrant Certificate shall be governed
by and construed in accordance with the internal laws of the State of New York, without regard to conflicts of laws principles
thereof.


 





	 	AXION POWER INTERNATIONAL, INC.
	 	 	 	 
	 	By:	 	 
	 	 	Name: David DiGiacinto
	 	 	Title: Chief Executive Officer
	 	 	 	 
	 	CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as
    Warrant Agent
	 	 	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 


 


 


[Signature Page to Warrant Certificate]






    	A-1



    	 



    

 








[Form of Series A Warrant Certificate]


 


 





[Reverse]


 








The Warrants evidenced by this Warrant
Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive shares of Common Stock
and are issued or to be issued pursuant to a Warrant Agreement dated as of October __, 2014 (the “Warrant Agreement”),
duly executed and delivered by the Company to Continental Stock Transfer & Trust Company, as warrant agent (the “Warrant
Agent”), which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is
hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the
Warrant Agent, the Company and the holders (the words “holders” or “holder”
meaning the Registered Holders or Registered Holder) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder
hereof upon written request to the Company. Defined terms used in this Warrant Certificate but not defined herein shall have the
meanings given to them in the Warrant Agreement.


 





Warrants may be exercised at any time
during the Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate may
exercise them by surrendering this Warrant Certificate, with the form of election to purchase set forth hereon properly completed
and executed, together with payment of the Exercise Price as specified in the Warrant Agreement (or through “cashless
exercise” as provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent.
In the event that upon any exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total
number of Warrants evidenced hereby, there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate
evidencing the number of Warrants not exercised.


 





Notwithstanding anything else in this
Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration statement
covering the shares of Common Stock to be issued upon exercise is effective under the Securities Act and (ii) a prospectus thereunder
relating to the shares of Common Stock is current, except through “cashless exercise” as provided for
in the Warrant Agreement.


 





The Warrant Agreement provides that upon
the occurrence of certain events the number of shares of Common Stock issuable upon exercise of the Warrants set forth on the
face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be entitled
to receive a fractional interest in a share of Common Stock, the Company shall, upon exercise, round up to the nearest whole number
of shares of Common Stock to be issued to the holder of the Warrant.


 





Warrant Certificates, when surrendered
at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative
or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant
Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing
in the aggregate a like number of Warrants.


 





Upon due presentation for registration
of transfer of this Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate or Warrant Certificates of
like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any tax or other
governmental charge imposed in connection therewith.


 





The Company and the Warrant Agent may
deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation
of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s)
hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a stockholder of the Company.


 






    	A-2



    	 



    

 


 




Election to Purchase


  





(To Be Executed Upon Exercise of Warrant)


 





The undersigned hereby irrevocably elects
to exercise the right, represented by this Warrant Certificate, to receive shares of Common Stock and herewith tenders payment
for such shares to the order of Axion Power International, Inc. (the “Company”) in the amount of $  
in accordance with the terms hereof. The undersigned requests that a certificate for such shares be registered in the name of
, whose address is and that such shares be delivered to whose address is . If said number of shares is less than all of the shares
of Common Stock purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance
of such shares be registered in the name of , whose address is , and that such Warrant Certificate be delivered to , whose address
is .


 





In the event that the Warrant is to be
exercised on a “cashless” basis pursuant to Section 7.4 of the Warrant Agreement, the number of shares that
this Warrant is exercisable for shall be determined in accordance with Section 2(c) of the Warrant Agreement.


 





In the event that the Warrant may be exercised,
to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of shares that this Warrant is exercisable
for would be determined in accordance with the relevant section of the Warrant Agreement which allows for such cashless exercise
and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably elects to exercise the right, represented
by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive shares of Common Stock.
If said number of shares is less than all of the shares of Common Stock purchasable hereunder (after giving effect to the cashless
exercise), the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares be registered
in the name of , whose address is , and that such Warrant Certificate be delivered to , whose address is .


 


 





	Date: ____________, 20	 	(Signature)
	 	 	 
	 	 	(Address)
	 	 	 
	 	 	 
	 	 	(Tax Identification Number)
	 	 	 
	Signature Guaranteed:	 	 
	 	 	 
	 	 	 


 


 


THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).


 






    	A-3



    	 



    

  


EXHIBIT B


 


[FORM OF SERIES B WARRANT CERTIFICATE]



 


Number


 


Warrants


 


THIS WARRANT SHALL BE VOID IF NOT EXERCISED
PRIOR TO


THE EXPIRATION OF THE EXERCISE PERIOD
PROVIDED FOR


IN THE WARRANT AGREEMENT DESCRIBED BELOW


 


AXION POWER INTERNATIONAL, INC.


 


Incorporated Under the Laws of the State
of Delaware


  


Warrant Certificate


 


This Warrant Certificate certifies
that , or registered assigns, is the registered holder of warrant(s) (the “Warrants” and each,
a “Warrant”) to purchase shares of Common Stock, no par value (“Common Stock”),
of Axion Power International, Inc., a California corporation (the “Company”).  Each Warrant entitles
the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive from the Company
that number of fully paid and nonassessable shares of Common Stock as set forth below, at the exercise price (the “Exercise
Price”) as determined pursuant to the Warrant Agreement, payable in lawful money (or through “cashless
exercise” as provided for in the Warrant Agreement) of the United States of America upon surrender of this Warrant
Certificate and payment of the Exercise Price at the office or agency of the Warrant Agent referred to below, subject to the conditions
set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have
the meanings given to them in the Warrant Agreement (as defined on the reverse hereof).


 


Each Warrant is initially exercisable for
one fully paid and non-assessable share of Common Stock. The number of the shares of Common Stock issuable upon exercise of the
Warrants is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.


 


The initial Exercise Price per share of
Common Stock for any Warrant is equal to $3.00 per share. The Exercise Price is subject to adjustment upon the occurrence
of certain events set forth in the Warrant Agreement.


 


Subject to the conditions set forth in
the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end
of such Exercise Period, such Warrants shall become void.


 


Reference is hereby made to the further
provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have
the same effect as though fully set forth at this place.


 


This Warrant Certificate shall not be
valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.




 


This Warrant Certificate shall be governed
by and construed in accordance with the internal laws of the State of New York, without regard to conflicts of laws principles
thereof.


 





	 	AXION POWER INTERNATIONAL, INC.
	 	 	 	 
	 	By:	 	 
	 	 	Name: David DiGiacinto
	 	 	Title: Chief Executive Officer
	 	 	 	 
	 	CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as
    Warrant Agent
	 	 	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 


 


 


[Signature Page to Warrant Certificate]






    	B-1



    	 



    

 








[Form of B Warrant
Certificate]


 


 





[Reverse]


 








The Warrants evidenced by this Warrant
Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive shares of Common Stock
and are issued or to be issued pursuant to a Warrant Agreement dated as of October __, 2014 (the “Warrant Agreement”),
duly executed and delivered by the Company to Continental Stock Transfer & Trust Company, as warrant agent (the “Warrant
Agent”), which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is
hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the
Warrant Agent, the Company and the holders (the words “holders” or “holder”
meaning the Registered Holders or Registered Holder) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder
hereof upon written request to the Company. Defined terms used in this Warrant Certificate but not defined herein shall have the
meanings given to them in the Warrant Agreement.


 





Warrants may be exercised at any time
during the Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate may
exercise them by surrendering this Warrant Certificate, with the form of election to purchase set forth hereon properly completed
and executed, together with payment of the Exercise Price as specified in the Warrant Agreement (or through “cashless
exercise” as provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent.
In the event that upon any exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total
number of Warrants evidenced hereby, there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate
evidencing the number of Warrants not exercised.


 





Notwithstanding anything else in this
Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration statement
covering the shares of Common Stock to be issued upon exercise is effective under the Securities Act and (ii) a prospectus thereunder
relating to the shares of Common Stock is current, except through “cashless exercise” as provided for
in the Warrant Agreement.


 





The Warrant Agreement provides that upon
the occurrence of certain events the number of shares of Common Stock issuable upon exercise of the Warrants set forth on the
face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be entitled
to receive a fractional interest in a share of Common Stock, the Company shall, upon exercise, round up to the nearest whole number
of shares of Common Stock to be issued to the holder of the Warrant.


 





Warrant Certificates, when surrendered
at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative
or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant
Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing
in the aggregate a like number of Warrants.


 





Upon due presentation for registration
of transfer of this Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate or Warrant Certificates of
like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any tax or other
governmental charge imposed in connection therewith.


 





The Company and the Warrant Agent may
deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation
of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s)
hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a stockholder of the Company.


 






    	B-2



    	 



    

 


 




Election to Purchase


  





(To Be Executed Upon Exercise of Warrant)


 





The undersigned hereby irrevocably elects
to exercise the right, represented by this Warrant Certificate, to receive shares of Common Stock and herewith tenders payment
for such shares to the order of Axion Power International, Inc. (the “Company”) in the amount of $  
in accordance with the terms hereof. The undersigned requests that a certificate for such shares be registered in the name of
, whose address is and that such shares be delivered to whose address is . If said number of shares is less than all of the shares
of Common Stock purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance
of such shares be registered in the name of , whose address is , and that such Warrant Certificate be delivered to , whose address
is .


 





In the event that the Warrant is to be
exercised on a “cashless” basis pursuant to Section 7.4 of the Warrant Agreement, the number of shares that
this Warrant is exercisable for shall be determined in accordance with Section 2(c) of the Warrant Agreement.


 





In the event that the Warrant may be exercised,
to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of shares that this Warrant is exercisable
for would be determined in accordance with the relevant section of the Warrant Agreement which allows for such cashless exercise
and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably elects to exercise the right, represented
by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive shares of Common Stock.
If said number of shares is less than all of the shares of Common Stock purchasable hereunder (after giving effect to the cashless
exercise), the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares be registered
in the name of , whose address is , and that such Warrant Certificate be delivered to , whose address is .


 


 





	Date: ____________, 20	 	(Signature)
	 	 	 
	 	 	(Address)
	 	 	 
	 	 	 
	 	 	(Tax Identification Number)
	 	 	 
	Signature Guaranteed:	 	 
	 	 	 
	 	 	 


 


 


THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).


 






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