Axion Power International Inc. (NasdaqCM:AXPW) entered into securities purchase agreement for private placement of senior secured convertible notes for gross proceeds of $9,000,000 on November 4, 2015. The transaction will involve participation from accredited investors including lead returning investor, Heights Capital Management for $2,250,000, new investor, Alto Opportunity Master Fund, SPC, a fund managed by Tenor Capital Management Company, LP for $2,083,333.33, and returning investor, Hudson Bay Master Fund Ltd, a fund managed by Hudson Bay Capital Management LP for $2,083,333.33 among others. The notes will be issued at its principal value. The notes will mature in 14 months from the closing date and bear interest at the rate of 9% per annum and are compounded monthly on the first calendar day of each calendar month. The interest rate will increase to 18% per annum upon the occurrence and continuance of an event of default. The notes are convertible into shares of the company at the initial price of $1.23 per share.

The company will also issue warrants to purchase 10,975,608 shares initially exercisable at an exercise price equal to the lower of $1.29 and 85% of the market price at the time of exercise, subject to certain adjustments. The warrants will expire 24 months from the closing date. The investors will not hold more than 4.99% of outstanding shares of the company upon exercising of warrants. The company will issue securities pursuant to exemption provided under Regulation D. The transaction will close on the first business day on which the conditions to the closing are satisfied. Upon closing, the company will receive cash proceeds of $1,850,000 and deposit of an additional $7,150,000 into a series of control accounts in its name. The company will receive approximately $1.60,000,000 in proceeds, net of placement fees and expenses, and will receive seven subsequent monthly tranches in the principal amount of $1,000,000 each and an eighth monthly tranche in the principal amount of $150,000.