Axion Power International Inc. announced that it signed a binding Letter of Intent (LOI) for a technology development and licensing program with LCB International Inc. ('LCB'). The LOI defines and confirms the intent of the parties to execute the final agreements within 60 days of the signing the LOI. These agreements will grant LCB the right to manufacture and sell PbC batteries and other Axion products on an exclusive basis in the People's Republic of China, Taiwan, Macao and Hong Kong ("Territory").

Axion will receive a non-refundable payment of $250,000 immediately, and further staged payments after final agreements are signed. Under the terms of the LOI, Axion would receive an aggregate of up to $10 million over a period of two years in a combination of technology license fees, the sale of convertible preferred stock and senior convertible notes. Axion would also be paid royalties for the longer of the last to expire patent licensed or up to 15 years.

Due to the significance of the terms and conditions in the LOI, which are to be incorporated into the final agreements; approvals will be needed from Axion Power shareholders for the potential issuance, upon future fixed-price conversion of the preferred stock and convertible notes, of shares amounting to more than 20% of the Company's issued and outstanding shares. Such approvals will be sought, while Axion and LCB are negotiating the final detailed agreements required by the LOI.