Document:

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

              

      

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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. 

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    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).

            

    

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (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. 

            

    

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (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. 

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    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;

            

    

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              ·

            	
              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.

            

    

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    
      	
              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. 

    
       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

       

    

    
      	
              
                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. 

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

       

      
        	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

            
	
              

              Axion
                Power International, Inc.

            	 	 	
              Date

            
	
              Per: Thomas
                Granville

              Title: C.E.O.

            	 	 	
            

      	 	 	 	 
	 	 	 	 
	
              
                /S/
                  ANDREW CARR CONWAY, JR.

              

            	 	 	
              9/26/07

            
	
              

              Consultant

            	 	 	
              Date

            
	
              Per: Andrew
                Carr Conway, Jr.

                     
                Conway Enterprises, LLC

            	 	 	
            

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    
 

    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.
      

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    
      	
              
                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. 

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    
      	
              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". 

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    
      	
              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. 

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    
      	
              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

            
	
              

              Axion
                Power International, Inc.

            	 	 	
              Date

            
	
              Per: Thomas
                Granville

              Title: C.E.O.

            	 	 	
            

    

    
      	 	 	 	
            
	 	 	 	 
	
              
                /S/
                  ANDREW CARR CONWAY, JR.

              

            	 	 	
              9/26/07

            
	
              
                
Consultant

            	 	 	
              Date

            
	
              Per: Andrew
                Carr Conway, Jr.

                     
                Conway Enterprises, LLC

            	 	 	
            

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    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). 

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

     

    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. 

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    
      	
              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. 

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

     

    
      	
              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
	
              
Axion
              Power International, Inc.	 	 	
              Date

            
	
              Per: Thomas
                Granville

              Title: C.E.O.

            	 	 	
            
	 	 	 	 
	 	 	 	 
	
              /S/
                ANDREW CARR CONWAY, JR.

            	 	 	9/26/07 
	
              
Consultant	 	 	Date
	
              Per: Andrew
                Carr Conway, Jr.

                     
                Conway Enterprises, LLC

            	 	 	 

    

    

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    Schedule
      "C" — Project Description Notes 

     

    This
      Schedule may validly be left blank. Any amendment to this Schedule requires
      the
      signatures of
      both Parties. 

    
      	 	 	 	 
	
            	 	 	
            
	
              
Axion
              Power International, Inc.	 	 	
              
                

              

              Date

            
	
              Per: 

              Title:

            	 	 	
            
	 	 	 	 
	 	 	 	 
	
              
Consultant 	 	 	
              
                

              

              Date

            
	Per: 	 	 	 

    

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

     

    Schedule
      "D" — Statement of Prior Inventions

     

    This
      Schedule may validly be left blank. Any amendment to this Schedule requires
      the
      signatures of
      both Parties. 

    
      
        	 	 	 	 
	
              	 	 	
              
	
                
Axion
                Power International, Inc.	 	 	
                
                  

                

                Date

              
	
                Per: 

                Title:

              	 	 	
              
	 	 	 	 
	 	 	 	 
	
                
Consultant 	 	 	
                
                  

                

                Date

              
	Per: 	 	 	 

      

       

      
        
          
          

        

        
          -21-

          
            

          

        

        
          
          

        

      

    

     

    Schedule
      "E" — Other Covenants

     

    This
      Schedule may validly be left blank. Any amendment to this Schedule requires
      the
      signatures of
      both Parties. 

    
      
        
          	 	 	 	 
	
                	 	 	
                
	
                  
Axion
                  Power International, Inc.	 	 	
                  
                    

                  

                  Date

                
	
                  Per: 

                  Title:

                	 	 	
                
	 	 	 	 
	 	 	 	 
	
                  
Consultant 	 	 	
                  
                    

                  

                  Date

                
	Per: 	 	 	 

        

         

        
          
            
            

          

          
            -22-Exhibit
        10.2

      AMENDMENT
        NO. 1

      TO

      CONSULTING
        AGREEMENT

       

      October
        31, 2007

       

      This
        Amendment No. 1 (this “Amendment”)
        to
        that certain Consulting Agreement effective as of August 31, 2007 (the
“Agreement”)
        is
        made as of October 31, 2007 between Axion Power International, Inc., a
        Delaware corporation (the “Company”),
        and
        Andrew Carr Conway, Jr., an individual (the “Consultant”),
        and
        for the limited purposes of Section 1
        hereof,
        Conway Enterprises, LLC (“CE”
and
        together with the Company and the Consultant, the “Parties”).
        Capitalized terms used and not defined herein shall have the meanings set
        forth
        in the Agreement.

       

      WHEREAS,
        the
        Parties previously entered into the Agreement by which the Consultant agreed
        to
        provide certain financial services to the Company and act as the Company’s Chief
        Financial Officer; and

       

      WHEREAS,
        the
        Parties, among other things, desire to amend certain provisions of the Agreement
        to clarify the vesting schedule of the stock options granted to the Consultant
        by the Company pursuant to the Agreement; and

       

      WHEREAS,
        Section 12
        of the
        Agreement provides that provisions of the Agreement may be amended or modified
        pursuant to a signed, written agreement by the Company and the
        Consultant.

       

      NOW,
        THEREFORE,
        in
        consideration of the premises and for other good and valuable consideration,
        the
        receipt and sufficiency of which hereby are acknowledged, the Parties hereby
        agree as follows:

       

      1. Consultant.
        The
        Parties agree and acknowledge that the parties to the Agreement are the Company
        and the Consultant (as those terms are defined in this Amendment). The Parties
        further agree that the Preamble of the Agreement is hereby amended to change
        the
        name of the Consultant to “Andrew Carr Conway, Jr., an individual” and all
        references to the term “Consultant” in the Agreement shall refer to “Andrew Carr
        Conway, Jr., an individual.” 

       

      2. Amendment.
        Section 4
        of the
        Agreement is hereby amended and restated in its entirety to read as
        follows:

       

      “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 30,000 shares upon execution of this contract and then
        at the
        rate of 10,000 shares per month commencing on October 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 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 currently with this
        agreement.”

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      3. Counterparts.
        This
        Amendment may be executed in any number of counterparts, and each such
        counterpart shall be deemed to be an original instrument, but all such
        counterparts together shall constitute one and the same instrument.

       

      4. Governing
        Law.
        This
        Amendment, pursuant to Section 14
        of the
        Agreement, shall be governed and construed as to its validity, interpretation
        and effect by the laws of the Commonwealth of Pennsylvania notwithstanding
        the
        choice of law rules of Pennsylvania or any other jurisdiction.

       

      [Signature
        Page Follows]

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      IN
        WITNESS WHEREOF, the Parties hereto have caused this Amendment to be duly
        executed as of the day and year first above written.

      
        	 	 	 
	 	COMPANY:
	 	 
	 	AXION POWER INTERNATIONAL,
                INC.
	 	 
	 
 	 
 	 
 
	 	By:  	/s/ Thomas
                G.
                Granville
	 	
                

                Thomas
                  G. Granville

                Chief
                  Executive Officer

              

      

      

        	 	 	 
	 	CONSULTANT:
	 	 
	 
 	 
 	 
 
	 	  	/s/ Andrew Carr Conway, Jr.
	 	
                
ANDREW
                CARR CONWAY,
                JR.

      

       

      

      FOR
        THE LIMITED PURPOSES OF SECTION 1

       

      AGREED
        TO AND ACKNOWLEDGED:

       

      CONWAY
        ENTERPRISES, LLC

      

      
        	 	 	 	 	 
	By:	 /s/ Andrew
                Carr Conway, Jr.	 	 	 
	 	
                

                Andrew
                  Carr Conway, Jr.

                Sole
                  Member

              	 	 	
              

      

       

      
        
           

        

        
          -3-

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